Pearl Diver Credit Company Inc.

and welcome to the Pearl Diver Credit Company third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A 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. I'd now like to turn the conference over to your host, Emma Little, Investor Relations. Thank you. 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 webpage 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, could materially affect results. Reference is made to the section titled Forward-Looking Statements in the company's press release for the quarter ended September 30, 2025, which is incorporated herein by reference. We know 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. Forward-looking statements are subject to risks, uncertainties, and assumptions, which, if they materialize, could materially affect results, and such forward-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 forward-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'll now turn the call over to Endranil Basu, Chief Executive Officer of Pearl Diver Credit Company.

Thank you to everyone joining us today for your interest in Pearl Diver Credit Company and welcome to our third quarter 2025 earnings call. We'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 Chandrajit Chakraborty, and after our prepared remarks, we'll open it up to any questions. The broader CLO equity market faced some headwinds this quarter, and our results were influenced by that backdrop. Even so, our portfolio continued to generate recurring cash flows comfortably in excess of our distributions and expenses. and we remain focused on disciplined portfolio management and long-term total return. Across the U.S. CLO equity space, performance softened primarily due to spread tightening in the broadly syndicated loans market. The first brand's bankruptcy also attracted attention, so let me address that directly. Our exposure to first brands is small at 22 basis points across the portfolio, slightly below the roughly 24 basis points exposure across the broadly syndicated loan CLO market. The portfolio's average junior OC cushion today stands at 4.5%. while deals with first brands exposure have a slightly higher cushion of 4.6%, well above the market average. The position with the largest first brands exposure represents only 1% of the portfolio, yet it maintains one of the highest par value over collateralization ratios. Given the position size and the risk distribution features inherent in CLO structures, including diversification, CCC limits, and power wheel mechanisms, even a serial loss scenario would have only a limited impact on our NAV. Importantly, we see first brands as an idiosyncratic event rather than evidence of broader deterioration in loan fundamentals. It is also worth briefly highlighting the differences between the broadly syndicated loan market and private credit. Broadly syndicated loans benefit from transparent external pricing, active secondary trading, broad diversification across issuers and industries, and structural protections. Private credit markets, by contrast, typically involve internal marks limited liquidity, and higher concentration risks. These differences matter, particularly during periods of market stress and are part of why Cielo portfolios remain resilient through this episode. Nearly our entire portfolio is composed of CLOs with reinvestment period end dates of 2026 and later, allowing managers to manage exposure to individual credits or sector weaknesses. As CLO equity investors, we view dislocations like these as an opportunity to take advantage. As of September 30, 2025, the rates market had priced in approximately two to three quarter-point rate cuts. We view this development as broadly positive for CLO equity, given its inherent nature as an arbitrage product. In a scenario of orderly, non-shock-driven rate cuts, credit spreads tend to tighten, and lower borrowing costs improve corporate refinancing conditions, and strengthen interest coverage ratios. At the same time, lower rates typically stimulate leveraged buyout activity, leading to increased loan issuance and expanding the pipeline of opportunities available to CLO managers. A healthy and active loan market not only enhances portfolio diversification, but can also modestly widen spreads, improving the arbitrage opportunity for CLI equity and mezzanine tranches while maintaining a robust credit quality. Notably, we have already observed a meaningful uptick in LBO activity this year, with approximately $200 billion in deals announced during the first three quarters of 2025. surpassing the $164 billion recorded for the entirety of 2024. This trend underscores our constructive outlook for CLO equity performance in a gradually easing monetary environment. Throughout the quarter, we remained active in managing the portfolio. We completed eight resets and refinancings. exited two positions where upside had been realized or the risk-reward had diminished, and added eight new positions that offered attractive relative value. This rotation contributed to an increase in the portfolio's weighted average gap yield from 13.07% at quarter end compared to 12.75% as of June 30th. With this refinancing activity, we have now refinanced over 35% of the portfolio as of quarter end valuation. Across these deals, we have reduced the weighted average cost of debt by 31 basis points and reduced triple S spreads by 21 basis points. This acts as a natural hedge to the spread compression seen in the loan markets, boosting the cash flows for the CLO equity positions. Since quarter end, we have closed further refinancings on an additional 5% of the portfolio with a further 4% in the pipeline for Q4. For those newer to Pearl Diver, a core part of our identity is the investment platform we have built over the past 17 years. From early on, we made a deliberate choice to combine machine learning and natural language processing technologies with traditional fundamental credit analysis, giving us a detailed, real-time view of the entire CLO universe. Our systems independently value CLO tranches, monitor loan-level data across more than 2,000 leveraged loans, and integrate thousands of market data points every day. This allows us to rapidly assess relative value across structures, managers, and market conditions, and to identify mispricing when it appears. Importantly, our technology is not standalone. It is embedded into how we manage risk and allocate capital, enabling us to respond with speed, precision, and consistency, particularly during periods of volatility. We believe this infrastructure remains a meaningful competitive advantage in sourcing opportunities and managing the portfolio across cycles. As of September 30th, our portfolio consisted of 53 CLO equity positions managed by 33 distinct CLO managers. The underlying loan portfolios include approximately 1,900 corporate obligors across more than 30 different sectors with no single CLO position representing more than 4.6% of the portfolio and our largest corporate obligor exposure standing at just 60 basis points. Nearly all our investments remain in their investment periods, which gives the managers the flexibility to adjust exposures, reinvest prepayments at attractive levels, and manage sector-specific risks as the market evolves. We believe this diversification and reinvestment flexibility continue to position the portfolio well. With that... I'll now turn the call over to Chandrujit for a more detailed review of our financial highlights for the quarter.