CLO owner and CEF Pearl Diver Credit (PDCC) has announced they are selling a new term preferred stock issue with a mandatory redemption in 2029.
PDCC is new to me and certainly to the exchange traded preferred marketplace–this is their 1st issuance. The fund just went public in July, 2024 when they sold 2.2 million shares at $20/share.
PDCC held net assets of approximately $127 million after their public offering–no leverage was employed at this time. At the time of this new term preferred offering net assets were $134 million–with no leverage employed.
It is expected that net assets will be around $161 million after giving effect to this new term preferred offering. So the new offering is expected to be around 1 million shares.
The preliminary prospectus can be read here.
Pearl Diver appear to specialize in the lowest ranked, highest-yielding part of CLO credits, equity and junior debt. That seems similar to ECC Eagle Point Credit’s self-description, although Pearl is a fraction of Eagle’s size.
PDCC – “…investing primarily in equity and junior debt tranches of CLOs collateralized by portfolios of sub-investment grade, senior secured floating-rate debt issued by a large number of distinct US companies across several industry sectors.”
Investor presentation
https://secure.alpsinc.com/MarketingAPI/api/v1/Content/pearldivercreditcompany/pearl-diver-credit-company-llc-pres-20240930.pdf
Fact Sheet – October 2024
https://secure.alpsinc.com/MarketingAPI/api/v1/Content/pearldivercreditcompany/pearl-diver-credit-company-llc-fs-20241112.pdf
CLO ETFs and CEFs are quite trendy these days. This is the third one I’ve seen in the last two days. I owned a preferred or two in the Eagle family. They paid well but I was nervous every day until call. My main interest if I re-up would be an ETF like JAAA or PAAA which holds the top rated AAA parts of CLO’s. JMO, DYODD.
I just cannot get excited about all the BDC options that have been coming out lately. I am not sure if they are terribly risky or what not but I wish we would see a bit more quality in some fashion. It is hard to get excited about buying corp bonds paying 4.9% or something. Might as well buy municipal which I have been doing.
Maybe 2025 will have something for me because I have absolutely no business buying PDCC preferred. I just do not need that kind of stuff now days.
Excuse me. I mentioned BDC above but PDCC is a closed end fund. I kind of lump them all together for some reason in my mind.
Tim-
I think you meant to say July 2024.
Thanks Rocks–tweaked.
ADS Analytics wrote on this one on 11/7 at SA. He notes the common div is automatically enrolled in a drip- nothing about avoiding it. Thinks this issue will be well north of 8%. Common yld ~ 13%.
not interested
( Started by a bunch of greasy-spoon cafe dishwashers ? Just speculating)
Always gives me pause when a fund is “externally managed” by the same guys who started the fund. Seems a guaranteed way to make money whether investors do or not, so they like they start off with a built-in conflict of interest
Personally I find your comment disrespectful and disheartening to every dishwasher trying their best to make ends meet. It may be their only job or their 2nd or 3rd job to keep the kids fed. Maybe the next time you eat out look around and see who is doing the hardest job for the least pay. Who is washing dishes, taking the garbage out and mopping the floors in more than likely extreme heat. Think twice about who you should be tipping and hand it to the dishwasher yourself with a smile and a thank you. Food prep/dishwasher demographics research summary. Zippia estimates food prep/dishwasher demographics and statistics in the United States by using a database of 30 million profiles. Our food prep/dishwasher estimates are verified against BLS, Census, and current job openings data for accuracy. Zippia’s data science team found the following key facts about food prep/dishwashers after extensive research and analysis:
There are over 520,830 food prep/dishwashers currently employed in the United States.
20.1% of all food prep/dishwashers are women, while 79.9% are men.
The average food prep/dishwasher age is 36 years old.
The most common ethnicity of food prep/dishwashers is White (58.0%), followed by Hispanic or Latino (17.9%), Black or African American (11.3%) and Asian (6.9%).
In 2022, women earned 98% of what men earned.
6% of all food prep/dishwashers are LGBT.
Hey ra – this is for you: https://youtu.be/bwUlkKfR_NI
I’m assuming your post was supposed to be a joke. If so, very funny parody!
I guess I should have said- … ” by a bunch of greasy spoon cafe pearl divers”
( no offense to those Pacific islanders chasing oysters with grit in their mantle).
Thanks for the deep ‘dive’. I do respect them.