Pearl Diver Credit: Preferred Stock Is The Way To Go

Pearl Diver Credit Company preferred shares offer an 8% yield with a mandatory 2029 call, providing a fixed-term, fixed-yield profile. PDPA boasts a robust 563% dividend coverage ratio and a 338% asset coverage ratio, well above the 200% regulatory minimum despite recent NAV declines. Key risks include further deterioration in CLO equity valuations, which could threaten the asset coverage ratio but currently allow for a 70% additional loss buffer.