Pearl Diver Credit Company Inc.

Good morning and welcome to the Pearl Diver Credit Company Incorporated First Quarter Earnings Conference Call. At this time, all participants are on 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. Please note this conference is being recorded. I would now like to turn the conference over to your host, Melissa Lynn from 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 webpages for the press release, investor information, and filings for 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 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 March 31, 2026, 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. 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 Pearl Diver Credit Company does not give such assurances. Pearl Diver Credit Company is under no obligation expressively 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 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 to everyone joining us today for your interest in Pearl Diver Credit Company and welcome to our first quarter 2026 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, Chandruji Chakraborty, and after our prepared remarks, we'll open it up to any questions. The broader CLO equity market remained challenged in the first quarter, with spreads remaining relatively tight. As a quarter progressed, geopolitical risks spiked with the war in the Middle East, pushing oil prices higher and causing concern once again regarding near-term inflation. Our results for the quarter were mostly driven by unrealized losses, which are non-cash in nature, and driven by market-based movements. The portfolio continues to generate strong recurring cash flows, once again, comfortably in excess of our distributions and expenses. The first quarter brought a more challenging backdrop in the loan markets, with a loan index declining from 96.64 to 94.63, amid concerns around AI-exposed sectors and geopolitical tensions. Serious CLO debt tranches held up well, while the equity returns reflected the move in loans with longer reinvestment period positions are performing shorter profiles. Despite the above, underlying fundamentals remain constructive. Default rates in loans are still low and weaknesses have been concentrated rather than broad-based. Loan price softness also makes new CLO equity more attractive with assets available at meaningfully lower prices. 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 this as a chance to take advantage. Both loan and CLO liability spreads tightened through January and February as risk sentiment remained constructive coming into the year. On our last call in February, we noted we were becoming more optimistic about the CLO environment after a difficult 2025. Shortly after our call, The war in the Middle East began and cast a shadow over the macro environment. Inflation fears returned, while the potential for additional rate cuts were quickly taken off the table. CLO liability spreads followed loans wider, with AAA and AA tranches remaining relatively well anchored, while BBB and BBB spreads widened more meaningfully, before partially retracing into early April. Underlying loan portfolio spreads were modestly tighter quarter over quarter, reflecting elevated repricing activity through January and February before the tightening pace stalled in March. On the new issue front, primary CLO activity totaled approximately 39 billion in Q1, with volumes building through the quarter even as spreads widened in March, a reflection of continued investor demand and improved entry point on loan assets. Refinancing and reset activity totaled approximately $48 billion, though the pace moderated meaningfully in March as wider primary spreads reduced the economics of refinancing existing liabilities. Looking ahead, a substantial pipeline of 2024 vintage CLOs that exit their non-call periods over the course of 26, which, assuming spreads continue to stabilize, should support a pickup in refinancing and reset activity later in the year. We completed four resets and refinancings, approximately 6% of the portfolio, and added one new position that offered attractive relative value. Across these deals, we have reduced the weighted average cost of debt by 22 basis points and reduced AAA spreads by 18 basis points. This rotation partially has offset a slight decrease in the portfolio's Voted average gap yield to 11.27% at quarter end compared to 12.99% as of December 31st. As of March 31st, our portfolio consisted of 60 CLO equity positions managed by 33 distinct CLO managers. The underlying loan portfolios are include approximately 1,400 obligors across more than 30 sectors with no single CLO position representing more than 4.8% of the portfolio and our largest corporate obligor exposure at just 70 basis points. Nearly all our investments remain in their reinvestment periods, which gives managers the flexibility to adjust exposures reinvest repayments 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. While the first quarter was marked by geopolitical volatility and pressure in certain areas of the loan market, recent data points to a more stable backdrop for CLO equity. with broadly syndicated loan CLO equity distributions beginning to stabilize and weighted average spread compression slowing. We believe this creates a more supportive environment for disciplined CLO equity investing. Underlying trade performance remains broadly resilient, with loan defaults contained and Moody's projecting U.S. speculative grid defaults to decline to 3% by October 2026, from 5.3% a year earlier. Against this backdrop, we believe CLO equity remains well-positioned to generate attractive cash flows, supported by active collateral management and disciplined trade selection. We will continue to monitor the macro environment closely and deploy capital selectively where we see attractive risk-adjusted opportunities. We remain constructive on CLOs and believe our data-driven approach to manager selection and portfolio construction is well-suited to this environment. Our focus remains the same, concentrate on discipling portfolio management invest opportunistically when we find attractive risk-adjusted positions, and drive long-term total return. With that, I will now turn the call over to Chandrajit for a more detailed review of our financial highlights for the quarter.