Pearl Diver Credit Company Inc.

Greetings, and welcome to the Pearl Diver Credit Company second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Peter Skissa of ICR. Thank you, sir. You may begin.

Good day, ladies and gentlemen. Thank you for standing by. Pearl Diver Credit Company refers participants on this call to the investor webpages for the press release, investor information, and filings with the SEC for discussion of the risks that affect the business. Pearl Diver Credit Company specifically refers participants to the presentation furnished today with the SEC and to remind participants that some of the comments may contain forward-looking statements and as such be subject to risks and uncertainties which, if they materialize, can materially affect results. References made to the section titled Forward-Looking Statements in the company's press release for the quarter ended June 30, 2025, which is incorporated herein by reference. We note forward-looking statements, whether written or oral, include, but are not limited to, Pearl Diver Credit Company's expectations or predictions of financial or business performance and conditions, as well as its competitive and industry outlook. Photo looking statements are subject to risks, uncertainties, and assumptions, which, if they materialize, can materially affect results. And such photo looking statements do not guarantee performance, and as such, Pearl Diver Credit Company does not give such assurances. Pearl Diver Credit Company is under no obligation, expressly disclaims any obligation to update, alter, or otherwise revise any photo looking statement as a result of new information, future events, or otherwise, except as required by law. In addition, historical data pertaining to the operating results and other performance indicators applicable to Pearl Diver Credit Company are not necessarily indicative of results to be achieved in succeeding periods. I will now turn the call over to Indranil Basu, Chief Executive Officer of Pearl Diver Credit Company.

Thank you, everyone, for joining us today and for your interest in Pearl Diver Credit Company, and welcome to our second quarter 2025 earnings call. I'd like to invite you to download our investor presentation from our website, which provides additional information about the company and our portfolio. With me today is our Chief Financial Officer Chandruji Chakraborty, and after our prepared remarks, we'll open it up to any questions. I am pleased to report that the company delivered solid second quarter results. reflecting the strength of our total return strategy, portfolio management activities, and successful execution of our strategic initiatives. To recap, the second quarter started with Liberation Day in the US, with President Trump imposing a new tariff regime that led to widespread macro uncertainty. As we expected, The CLO market remained resilient during this volatile period and has since rebounded from this period of high uncertainty. Loan fundamentals remain strong and managers with CLOs in the reinvestment period were able to quickly adapt to the news, reducing exposure to tariff-sensitive issuers while taking advantage of the market dip to purchase loans below par. Through this uncertainty, we maintained a proactive approach and closely monitored our portfolio and the underlying loans within the CLOs. We actioned one reset in the period, traded out of one position for risk management purposes, and added four new positions that we identified as attractive opportunities. The strength of our investment process and strategy can be seen in our portfolio. We recorded an unrealized gain on our investments of half a million dollars and preserved NAV while navigating a volatile market environment. This has continued into the third quarter with our NAV per share as of July 31st higher than where it stood prior to the tariff announcements on April 2nd. However, the weighted average gap yield on the portfolio was 12.75% as of June 30th, compared to 15.57% as of March 31st. The reduction in yield was largely due to market-wide loan spread compression in the quarter caused by loan repricings affecting not just the CLOs in the company's portfolio, but pretty much the entire CLO market. Notably, our performance while weathering the volatility in the second quarter is a further testament to our data-driven, differentiated investment approach that we believe allows us to remain highly agile while seeking out relative value in the CLO space. For those of you who may be new to Pearl Diver, let me take a minute to explain how we have utilized our machine learning technology and data science driven proprietary algorithms to consistently deliver performances at or near the top of the CLO equity space. Over our 17 year history, we have leveraged our collective quantitative and engineering expertise to build a multifaceted investment platform that utilizes machine learning algorithms and natural language processing, coupled with fundamental trade analysis to enable us to build a real-time view of the universe of all CLO crunches in the market. We are able to capture real-time trade data, scrape trust reports, as well as price each of the over 2,000 leverage loans that are packaged within the CLOs, and ultimately, independently, value each and every CLO tranche in the market on a daily basis. In our view, this unique infrastructure would likely take years for others to build, giving our firm a significant edge over competitors. Over the next few quarters, we'll share insights into various components of our platform that incorporate multiple key pieces of proprietary technology. This quarter, I'd like to highlight our automated investment origination engine, which allows our team to analyze and understand the current market on a daily basis. The CLO market is an over-the-counter market. with trades typically done directly with broker-dealers or via auction processes known as BWICs or bids wanted in competition. Over 11 billion of CLO positions are offered every month, with detail arising via email, instant messaging, or posts on individual bank web portals. As a result, we can receive over 800 such messages per day, all with varying structures and data formats. Our origination engine utilizes natural language processing technologies to ingest this vast volume of unstructured information into actionable insights, extracting trading prices, offers, and updates in real time. We are able to link this information with the monitoring data that we already hold on the universe of CLO tranches, taking advantage of information asymmetry when it exists and quickly identify mispricings and attractive investment opportunities. The data from our origination engine also allows us to run further analysis on the market, creating more accurate pricing models. Consider this. We have the entire pricing history of every single CLO tranche that ever traded going back more than a decade, allowing us to visualize changing market dynamics over time. This is crucial as the key drivers of market dynamics change over time, and by identifying these drivers, we are able to get ahead of shifting market trends. We have built a portfolio of CLO investments as of June 30th, diversified across 52 unique CLO positions. The underlying corporate loan portfolios within these CLOs are managed by 31 distinct CLO manager platforms. Across our CLOs, the underlying loan portfolios consist of approximately 1,800 unique loans spread over 30-plus industry sectors. PornDiver credit company is well diversified across various manager styles, balancing conservative CLO managers with liquid portfolios with others who capitalize on higher loan spreads through less liquid holdings. Our largest manager exposure is 12.1% of the portfolio, while the single largest CLO equity position is only 5%. Our positions are spread across different manager strategies and over different durations, varying from some short-duration CLO equity to newly issued longer-duration CLO equity. There is no significant concentration in any single CLO. We believe the portfolio is well diversified and not overly exposed to idiosyncratic risk. Additionally, our largest single corporate obligor exposure is limited to just 70 basis points of the portfolio. 95% of the investments in the portfolio are in the reinvestment period, allowing CLO managers to take advantage of current market conditions and reinvest repayments into loans at favorable prices, as well as reduce exposure to vulnerable issuers or sectors. With that, I'll now turn over the call to Chandrujeet for a more detailed review of our financial highlights for the quarter.