Pearl Diver Credit Q1 Earnings Call Highlights

Key Points

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• Pearl Diver Credit reported a first-quarter nett loss driven mostly by $25.1 cardinal successful unrealized concern losses, adjacent though nett concern income was $2.6 million. Management emphasized these losses were non-cash and tied to marketplace volatility successful CLO equity.

• Recurring currency travel stayed strong, with $10.5 cardinal from the CLO portfolio exceeding distributions and expenses by $0.56 per share. The institution said underlying indebtedness fundamentals remained constructive and defaults stayed low.

• The institution chopped its dividend starting successful June to $0.13 per stock from $0.22, saying the determination amended matches near-term nett concern income and preserves superior for aboriginal deployment and NAV support.

Pearl Diver Credit (NYSE:PDCC) reported a first-quarter nett nonaccomplishment arsenic market-driven unrealized losses weighed connected results, portion absorption said recurring currency flows from its CLO portfolio remained beardown capable to transcend distributions and expenses.

Chief Executive Officer Indranil Basu said the broader CLO equity marketplace “remained challenged” during the quarter, with choky spreads aboriginal successful the play followed by accrued volatility tied to geopolitical risks, including the warfare successful the Middle East, higher lipid prices and renewed concerns astir near-term inflation. He said the company’s quarterly results were “mostly driven by unrealized losses,” which helium described arsenic non-cash and based connected marketplace movements.

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Despite that pressure, Basu said the portfolio continued to make “strong recurring currency flows” and that underlying indebtedness fundamentals remained constructive, with default rates inactive debased and weakness concentrated alternatively than broad-based.

Quarterly results pressured by unrealized losses

Chief Financial Officer Chandrajit Chakraborty said Pearl Diver Credit generated concern income of $4.8 million, oregon $0.70 per communal share, for the 4th ended March 31, 2026, compared with $5.7 cardinal successful the anterior quarter. Total expenses were $2.1 million, oregon $0.31 per share, down from $0.37 per stock successful the erstwhile quarter.

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The institution recorded nett unrealized losses connected investments of $25.1 million, oregon $3.67 per share, and a nett realized nonaccomplishment of $24,000. Net concern income totaled $2.6 million, oregon $0.39 per share, portion the institution posted a nett nonaccomplishment of $22.5 million, oregon $3.28 per share.

Recurring currency flows from the CLO portfolio totaled $10.5 million, oregon $1.53 per share, exceeding distributions and expenses by $0.56 per share. That compared with recurring currency flows of $9.8 million, oregon $1.44 per share, successful the anterior quarter.