Pearl Diver Credit Company Inc. (PDCC) Q1 2026 Earnings Call Transcript – Image for illustrative purposes only (Image credits: Unsplash)
New York – May 19, 2026 – Pearl Diver Credit Company Inc. disclosed its first-quarter results before the market opened today, showing a widened net loss tied to unrealized declines in its collateralized loan obligation holdings. The closed-end fund, which invests primarily in CLO equity, reported a GAAP net loss of $22.5 million, or $3.28 per share, for the period ended March 31. Net asset value per common share fell to $10.48 from $14.42 at the end of 2025. Management will review the figures and strategy during an 11:00 a.m. Eastern Time conference call and webcast later this morning.
Quarterly Results Show Mixed Performance
Net investment income came in at $2.6 million, or $0.39 per share, compared with $3.4 million, or $0.49 per share, in the prior quarter. Investment income reached $4.8 million while expenses totaled $2.1 million. The larger loss stemmed mainly from $25.1 million in net unrealized depreciation on investments, or $3.67 per share. Recurring cash flows from the CLO portfolio rose to $10.4 million, or $1.53 per share, up from $9.8 million, or $1.44 per share, in the fourth quarter of 2025. The weighted average effective yield on the CLO holdings, measured at amortized cost, stood at 11.27 percent, down from 12.99 percent at year-end. Leverage increased to 35.0 percent of total assets from 28.7 percent previously.
Portfolio Exposure and Market Context
As of March 31, the CLO portfolio offered indirect exposure to 1,382 unique corporate obligors and more than 1,700 underlying loans with a total value of $27.2 billion. The largest single obligor accounted for 0.7 percent of the loans, while the top ten represented 4.2 percent. Nearly all of the CLO positions carry reinvestment end dates between 2026 and 2030. Through May 15, recurring cash flows for the second quarter reached $8.4 million, or $1.21 per share. The company also issued additional shares through its at-the-market program, generating roughly $0.7 million in net proceeds during the period.
Dividend Reset and Capital Preservation
The board declared monthly dividends of $0.13 per share for June, July, and August, a reduction from the previous $0.22 level. The adjustment aligns payouts more closely with near-term net investment income expectations while preserving capital for new investments. Chief Executive Officer Indranil Basu noted the focus on proactive portfolio management amid a challenging environment for CLO equity. He highlighted that spreads remain tight and net asset value has continued to compress, yet recurring cash flows stayed solid and the firm added positions offering attractive risk-adjusted returns. Basu added that the dividend reset supports capital preservation for further deployment aimed at stabilizing and growing net asset value over time.
Conference Call and Next Steps
Investors can access the earnings call by dialing 1-877-407-9208 for U.S. participants or 1-201-493-6784 for international callers. A live webcast will stream on the company website, with a replay available shortly after the event concludes. The results underscore the ongoing volatility in CLO equity markets and the trade-offs between income generation and capital preservation that Pearl Diver Credit continues to navigate.