Question · Q3 2025
Eric Zweck inquired about the mix of opportunities between U.S. and European CLOs and their relative attractiveness. He also questioned Pearl Diver Credit Company's strategy regarding future ATM equity issuance versus share repurchases, given the stock's discount to NAV, and asked about the outlook for potential portfolio growth over the next one to two quarters, considering leverage flexibility.
Answer
Indranil Basu, CEO, Founder, and Managing Partner, noted that the portfolio is primarily focused on the U.S. CLO market, with occasional consideration for European single B positions for NAV protection, though European equity positions currently lack adequate relative value. He stated that while share repurchases are an option, it's too early in the fund's life to prioritize them over ATMs, and they continuously monitor both. Mr. Basu added that portfolio growth and leverage modulation depend on attractive leverage costs and market conditions, with ATM proceeds and excess cash expected to be invested in secondary market CLO equity and European junior mezzanine debt.
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