Pearl Diver Credit Company Inc. Announces Pricing of Its Upsized Initial Public Offering

Rhea-AI Summary

Pearl Diver Credit Company Inc. (NYSE: PDCC) has announced the pricing of its upsized initial public offering. The company is offering 2.2 million shares at $20 per share, expecting to raise net proceeds of approximately $44 million. PDCC has also granted underwriters a 45-day option to purchase up to 330,000 additional shares to cover over-allotments. The offering is set to close on July 19, 2024, subject to customary conditions.

PDCC, a closed-end registered fund, will trade on the NYSE under the ticker 'PDCC'. The company plans to use the proceeds to build a diversified portfolio of senior secured U.S. corporate loans through investments in equity tranches of collateralized loan obligations (CLOs). Kingswood Capital Partners, is acting as the sole bookrunner for the offering.

Positive

• Upsized IPO raising approximately $44 million in net proceeds
• Additional 330,000 shares option granted to underwriters
• Planned investment in diversified portfolio of senior secured U.S. corporate loans

Negative

• Potential shareholder dilution due to additional share issuance

Financial Analyst

The pricing of Pearl Diver Credit Company Inc.'s upsized initial public offering (IPO) at $20 per share is noteworthy, especially given it will generate net proceeds of approximately $44 million. From a financial standpoint, the upsizing suggests robust demand for the shares, which can be seen as a positive indicator of investor confidence. However, potential investors should also note the 45-day option for underwriters to purchase up to an additional 330,000 shares, which could dilute future share value if exercised.

Using the proceeds to build a diversified portfolio of senior secured U.S. corporate loans through investments in equity tranches of collateralized loan obligations (CLOs) signifies an aggressive growth strategy. This approach can offer high returns but comes with significant risks given the volatile nature of CLOs. The success of this strategy will heavily rely on the company's ability to select high-quality loans and manage risks effectively.

Understanding that CLOs are essentially packages of loans sold to investors in different tranches is important. Equity tranches, which the company plans to invest in, are higher-risk but offer higher potential returns. This aligns with seeking high yield, but retail investors should be cautious about the potential for higher losses, especially in uncertain economic environments.

Market Research Analyst

The fact that Pearl Diver Credit Company Inc. is a closed-end fund (CEF) and will trade on the NYSE under the ticker 'PDCC' is something investors should take into account. Closed-end funds have a more fixed number of shares and they often trade at a discount or premium to their net asset value (NAV). This characteristic can create buying opportunities but also risks if the fund trades at a significant discount.

The sector focus on senior secured U.S. corporate loans is an interesting choice. Historically, senior secured loans are less risky than unsecured loans because they are backed by collateral. However, these loans still depend on the overall health of the corporate sector, which can fluctuate with economic cycles. The timing of this IPO could be critical, considering the current economic environment.

Another angle to consider is the role of Kingswood Capital Partners, LLC as the sole bookrunner for the offering. Their involvement can give some confidence regarding the securities' market placement, but potential investors should still scrutinize the preliminary prospectus for details on fees and charges, which can impact overall returns.

NEW YORK and LONDON, July 17, 2024 /PRNewswire/ -- Pearl Diver Credit Company Inc. (NYSE: PDCC) (the "Company") today announced the pricing of its upsized initial public offering of 2.2 million shares at $20 per share, which will result in net proceeds to the Company of approximately $44 million. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 330,000 shares of common stock to cover over-allotments, if any. The Company is a closed-end, registered fund that will trade on the New York Stock Exchange under the ticker "PDCC." The offering is expected to close on July 19, 2024, subject to customary closing conditions.

The Company intends to use the proceeds from the capital raised to build a diversified portfolio of senior secured U.S. corporate loans through investments in equity tranches of collateralized loan obligations (CLOs).

Kingswood Capital Partners, LLC is acting as the sole bookrunner for the offering.

Investors should consider the Company's investment objectives, risks, charges and expenses carefully before investing. The preliminary prospectus, which has been filed with the Securities and Exchange Commission ("SEC"), contains this and other information about the Company and should be read carefully before investing. The information in the preliminary prospectus and this press release is not complete and may be changed. The preliminary prospectus and this press release are not offers to sell these securities and are not soliciting an offer to buy these securities in any state where such offer or sale is not permitted.

A registration statement relating to these securities is on file with and has been declared effective by the SEC. Copies of the preliminary prospectus (and the final prospectus, when available) may be obtained by writing to Kingswood Capital Partners, LLC, 126 East 56^th Street, Suite 22S, New York, NY 10022, or by calling 212-487-1080. Copies may also be obtained by visiting EDGAR on the SEC's website at www.sec.gov.

Forward-Looking Statements

This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the prospectus and the Company's other filings with the SEC. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Media Contact:
Joseph Kuo / Michael Dugan
Haven Tower Group LLC
424 317 4851 or 424 317 4852
jkuo@haventower.com or mdugan@haventower.com

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SOURCE Pearl Diver Credit Company Inc.

FAQ

What is the IPO price for Pearl Diver Credit Company (PDCC) shares?

Pearl Diver Credit Company (PDCC) has priced its initial public offering at $20 per share.

How many shares is PDCC offering in its IPO?

PDCC is offering 2.2 million shares in its upsized initial public offering.

When is the expected closing date for PDCC's IPO?

The offering is expected to close on July 19, 2024, subject to customary closing conditions.

What will PDCC use the IPO proceeds for?

PDCC intends to use the proceeds to build a diversified portfolio of senior secured U.S. corporate loans through investments in equity tranches of collateralized loan obligations (CLOs).

Who is the bookrunner for PDCC's initial public offering?

Kingswood Capital Partners, is acting as the sole bookrunner for PDCC's initial public offering.