Pearl Diver Credit Company Inc. Announces Fourth Quarter 2024 Financial Results

Rhea-AI Summary

Pearl Diver Credit Company (NYSE: PDCC) reported its Q4 2024 financial results with a net asset value of $19.89 per share. The company achieved net investment income of $3.4 million ($0.50 per share), comprising $5.4 million in investment income and $2.0 million in expenses.

The company reported an unrealized gain on investments of $0.5 million ($0.07 per share) and a realized loss of $0.5 million ($0.07 per share). Total leverage stood at $35.6 million, representing 19.9% of total assets. The CLO portfolio showed a weighted average effective yield of 14.89%.

PDCC completed a public offering of 1,200,000 shares of 8.00% Series A Term Preferred Stock at $25 per share, with an additional 180,000 shares sold through overallotment in January 2025. The company's CLO investments provided exposure to approximately 1,200 unique corporate obligors across over 1,600 underlying loans, totaling $19.0 billion.

Positive

• Net investment income of $3.4 million ($0.50 per share)
• Strong CLO portfolio yield of 14.89%
• Diverse portfolio exposure to 1,200 corporate obligors
• Successful preferred stock offering raising $30 million plus $4.5 million from overallotment

Negative

• Realized loss on investments of $0.5 million
• Increased leverage with $35.6 million in total debt
• High-cost preferred stock at 8.00% interest rate

Insights

Financial Analyst

Pearl Diver Credit Company delivered a solid Q4 2024 with several noteworthy metrics that warrant attention. The $3.4 million net investment income (NII) represents a robust $0.50 per share, fully covering potential distributions. The company's NAV of $19.89 per share closely aligns with the current market price, suggesting efficient market pricing.

The CLO portfolio's 14.89% weighted average yield is particularly impressive in the current market environment, positioning the company well for sustainable income generation. The leverage ratio of 19.9% is notably conservative for the sector, providing ample flexibility for opportunistic investments while maintaining a strong balance sheet.

The successful placement of $30 million Series A Preferred Stock (including overallotment) at 8.00% demonstrates strong market confidence and provides cost-effective leverage. This financing structure, with a fixed rate through 2029, offers valuable predictability in the company's cost structure.

Portfolio diversification metrics are exceptional, with no single obligor exceeding 0.7% of the portfolio and the top 10 obligors representing only 4.3%. This granular approach significantly mitigates idiosyncratic risk. The offsetting unrealized gains and realized losses ($0.5 million each) suggest active portfolio management and mark-to-market stability.

The $19.0 billion total exposure through CLO investments provides substantial scale benefits and enhanced monitoring capabilities across various sectors. The moderate leverage combined with high-yielding assets positions the company well for potential market volatility while maintaining attractive risk-adjusted returns.

NEW YORK and LONDON, Jan. 28, 2025 /PRNewswire/ -- Pearl Diver Credit Company Inc. (NYSE: PDCC) (the "Company") today announced financial results for the fourth quarter ended December 31, 2024.

Fourth Quarter 2024 Results

• Net asset value per share of common stock $19.89 as of December 31, 2024.
• NII for the quarter ended December 31, 2024 was $3.4 million, or $0.50 per share of common stock, comprised of $5.4 million of investment income, or $0.80 per share, and $2.0 million of expenses, or $0.30 per share.
• For the quarter ended December 31, 2024, unrealized gain on investments was $0.5 million, or a gain of $0.07 per share of common stock. Realized loss on investments in the same period was $0.5 million, or a loss of $0.07 per share of common stock.
• Net income for the quarter ended December 31, 2024 was $3.4 million, or $0.50 per share of common stock.
• The Company had leverage of $35.6 million, or 19.9% of total assets as of December 31, 2024. This was composed of $29.0 million of 8.00% Series A Term Preferred Stock Due 2029, net of unamortized offering costs, and $6.6 million in short-term repurchase agreements.
• As of December 31, 2024:
  • The weighted average effective yield of the Company's collateralized loan obligation ("CLO") portfolio, based on amortized cost, was 14.89%.
• Completed an underwritten public offering of 1,200,000 shares of 8.00% Series A Term Preferred Stock Due 2029 at $25 per share. Additionally, in January 2025 the overallotment option was fully exercised for sale of an additional 180,000 shares.
• As of December 31, 2024, on a look-through basis, and based on the most recent trustee reports received by such date:
  • The Company, through its CLO investments, had indirect exposure to approximately 1,200 unique corporate obligors and over 1,600 underlying loans, totaling $19.0 billion.
  • The largest look-through obligor represented 0.7% of the loans underlying the Company's CLO equity portfolio.
  • The top ten largest look-through obligors together represented 4.3% of the loans underlying the Company's CLO equity portfolio.

Conference Call
As previously announced, Pearl Diver Credit Company Inc. will host a conference call to discuss its fourth quarter 2024 results today, January 28, 2025 at 11:00 a.m. Eastern Time / 4:00pm UK time. The conference call can be accessed by dialing 1-877-407-9208 (US callers) or 1-201-493-6784 (international callers) and asking for the Pearl Diver Credit Company Inc. Fourth Quarter 2024 Earnings Call. A live audio webcast of the conference call will be available on the website at https://pearldivercreditcompany.com/.

A replay of the conference call will be available within two hours of the conclusion of the call and can be accessed online on the website.

About Pearl Diver Credit Company Inc.
Pearl Diver Credit Company Inc. (NYSE: PDCC) is an externally managed, non-diversified, closed-end management investment company. Its primary investment objective is to maximize its portfolio's total return, with a secondary objective of generating high current income. The Company seeks to achieve these objectives by investing primarily in equity and junior debt tranches of CLOs collateralized by portfolios of sub-investment grade, senior secured floating-rate debt issued by a large number of distinct US companies across several industry sectors. The Company is externally managed by Pearl Diver Capital LLP. For more information, visit www.pearldivercreditcompany.com.

Cautionary Statement Regarding Forward-Looking Statements
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the prospectus and the Company's other filings with the SEC. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

Investor Contact:
Info@Pearldivercap.com
UK: +44 (0)20 3967 8032
US: +1 617 872 0945

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SOURCE Pearl Diver Credit Company Inc.

FAQ

What was PDCC's net investment income per share in Q4 2024?

PDCC reported net investment income of $0.50 per share in Q4 2024.

What is the yield of PDCC's CLO portfolio as of December 31, 2024?

The weighted average effective yield of PDCC's CLO portfolio was 14.89% based on amortized cost.

How many shares of Series A Preferred Stock did PDCC issue in Q4 2024?

PDCC issued 1,200,000 shares of 8.00% Series A Preferred Stock, plus 180,000 additional shares through overallotment in January 2025.

What is PDCC's leverage ratio as of Q4 2024?

PDCC's leverage was $35.6 million, representing 19.9% of total assets.

What was PDCC's net asset value per share as of December 31, 2024?

PDCC's net asset value per share was $19.89 as of December 31, 2024.