Pearl Diver Credit Company Inc. Announces Second Quarter 2025 Financial Results

Rhea-AI Summary

Pearl Diver Credit Company (NYSE: PDCC) reported its Q2 2025 financial results, demonstrating resilience amid market volatility. The company's net asset value per share stood at $18.19 as of June 30, 2025, slightly down from $18.33 in Q1. Key financial metrics include GAAP net income of $3.5 million ($0.52 per share) and net investment income of $3.1 million ($0.46 per share).

The company's CLO portfolio maintained a weighted average effective yield of 12.75%, down from 15.57% in Q1 due to market-wide loan spread compression. Notable portfolio characteristics include 95% of CLOs having reinvestment dates from 2026-2030, with exposure to 1,285 unique corporate obligors. The company's leverage stood at $40.4 million, representing 24.3% of total assets.

Looking ahead, PDCC has declared monthly dividends of $0.22 per share for August, September, and October 2025, with July 2025 NAV showing a 1.6% increase to $18.48 per share.

Positive

• Net asset value increased 1.6% to $18.48 in July 2025
• Strong recurring cash flows of $8.0 million ($1.18 per share) from CLO investments
• Diversified portfolio with exposure to 1,285 unique corporate obligors
• 95% of CLOs have reinvestment flexibility through 2026-2030
• Maintained stable monthly dividend of $0.22 per share

Negative

• Net asset value declined from $18.33 to $18.19 in Q2
• Portfolio yield decreased to 12.75% from 15.57% due to loan spread compression
• Leverage ratio increased to 24.3% from 23.2% of total assets

Insights

Financial Analyst specializing in Credit Markets and CLO Investments

Pearl Diver delivered stable Q2 results amid market volatility with solid NAV preservation and continued CLO equity investment strategy momentum.

Pearl Diver Credit Company maintained relative stability in Q2 2025 despite challenging market conditions. The company's NAV per share declined only slightly to $18.19 from $18.33 in the previous quarter, representing a minimal 0.8% decrease. This resilience is noteworthy given the volatility in credit markets.

The company generated GAAP net income of $3.5 million ($0.52 per share) and net investment income of $3.1 million ($0.46 per share). Their investment income for the quarter was $5.5 million, while expenses totaled $2.4 million. The transition from unrealized depreciation of $9.6 million in Q1 to unrealized appreciation of $0.5 million in Q2 signals improving market sentiment for their underlying assets.

Pearl Diver's CLO portfolio generated recurring cash flows of $8.0 million ($1.18 per share), demonstrating the cash-generating capability of their CLO equity positions. However, the weighted average effective yield declined to 12.75% from 15.57% due to market-wide loan spread compression from loan repricing—a significant factor that warrants monitoring.

The company maintained consistent leverage at $40.4 million, though as a percentage of total assets, leverage increased slightly from 23.2% to 24.3%. This modest increase doesn't substantially alter their risk profile but reflects some balance sheet changes.

Looking forward, Pearl Diver's portfolio structure provides flexibility with 95% of CLOs having reinvestment end dates between 2026-2030. This structure allows their CLO managers to capitalize on market volatility by reinvesting in loans at potentially favorable prices. The preliminary July NAV increase of 1.6% to $18.48 suggests this strategy may be bearing fruit in the near term.

The diversification across 1,285 unique corporate obligors with the largest representing only 0.7% of underlying loans demonstrates prudent risk management. Their consistent $0.22 monthly dividend declaration reflects management's confidence in near-term performance stability.

-  Company to Host Conference Call and Webcast at 11:00 AM ET Today  -

NEW YORK and LONDON, Aug. 26, 2025 /PRNewswire/ -- Pearl Diver Credit Company Inc. (NYSE: PDCC, PDPA) (the "Company") today announced financial results for the second quarter ended June 30, 2025.

"The Company delivered a solid second quarter, particularly given the ongoing volatility in the macro environment, and our momentum has carried forward into July," said Indranil Basu, Chief Executive Officer of Pearl Diver Credit Company. "For the quarter, we were able to keep our net asset value per share relatively steady, while our differentiated machine learning and data science-driven approach to CLO equity investing enabled us to add select new positions to our portfolio that we believe will produce attractive risk-adjusted returns. Looking ahead, we remain focused on our tried-and-tested CLO equity investment strategy that we believe will continue to deliver value for our shareholders."

Second Quarter 2025 Highlights

• Net asset value per share of common stock was $18.19 as of June 30, 2025, compared to $18.33 per share as of March 31, 2025.
• GAAP net income for the quarter was $3.5 million, or $0.52 per share.
• Net investment income for the quarter was $3.1 million, or $0.46 per share.
• Investment income for the quarter was $5.5 million, or $0.81 per share.
• Expenses for the quarter were $2.4 million, or $0.35 per share.
• Net change in unrealized appreciation on investments was $0.5 million, or $0.07 per share, compared to unrealized depreciation on investments of $9.6 million, or $1.41 per share, in the preceding quarter.
• Recurring cash flows from CLO investments for the quarter ended June 30, 2025 were $8.0 million, or $1.18 per share.
• The Company had leverage of $40.4 million, or 24.3% of total assets as of June 30, 2025. As of March 31, 2025, leverage was $40.4 million, or 23.2% of total assets.
• As of June 30, 2025:
  • The weighted average effective yield of the Company's collateralized loan obligation ("CLO") portfolio, based on amortized cost, was 12.75%, compared to 15.57% as of March 31, 2025, as a result of market-wide loan spread compression caused by loan repricing.
  • 95% of CLOs in the portfolio have reinvestment end dates from 2026 through 2030, resulting in upside potential as CLO managers can take advantage of market volatility to reinvest in loans at favorable prices.
• As of June 30, 2025, 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 1,285 unique corporate obligors and over 1,800 underlying loans, totaling $24.4 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 4.7% of the loans underlying the Company's CLO portfolio.

Third Quarter 2025 Update

• Net asset value per share of common stock was $18.48 as of July 31, 2025, a 1.6% increase compared to June 30, 2025.
• Declared monthly dividends of $0.22 per share of common stock for August, September and October 2025.

Conference Call

As previously announced, Pearl Diver Credit Company Inc. will host a conference call to discuss its second quarter 2025 results today, August 26, 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. Second Quarter 2025 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, PDPA) 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:
PR.IR@Pearldivercap.com
UK: +44 (0)20 3967 8032
US: +1 617 872 0945

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/pearl-diver-credit-company-inc-announces-second-quarter-2025-financial-results-302538067.html

SOURCE Pearl Diver Credit Company Inc.

FAQ

What were Pearl Diver Credit Company's (PDCC) Q2 2025 earnings per share?

PDCC reported GAAP net income of $0.52 per share and net investment income of $0.46 per share for Q2 2025.

What is PDCC's dividend payment for Q3 2025?

PDCC declared monthly dividends of $0.22 per share for August, September, and October 2025.

How did Pearl Diver's net asset value (NAV) perform in Q2 2025?

PDCC's NAV was $18.19 per share as of June 30, 2025, down from $18.33 in Q1, but subsequently increased to $18.48 by July 31, 2025.

What is the yield on PDCC's CLO portfolio as of Q2 2025?

The weighted average effective yield of PDCC's CLO portfolio was 12.75% as of June 30, 2025, down from 15.57% in Q1 due to loan spread compression.

How diversified is Pearl Diver Credit Company's portfolio?

PDCC's portfolio has exposure to 1,285 unique corporate obligors and over 1,800 underlying loans, with the largest obligor representing only 0.7% of the portfolio.