# PGIM Private Credit Fund

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/fi/companies/PGIM Private Credit Fund).

## Overview

PGIM Private Credit Fund is a U.S.-based closed-end business development company that invests primarily in privately originated private credit instruments. Its portfolio is centered on direct lending to middle-market companies, with a focus on senior secured loans and a limited allocation to other credit instruments and geographies.

## Products & services

• Private credit investments in middle-market companies
• First lien senior secured direct loans
• Second lien, third lien, and unsecured loans
• Floating-rate debt and other credit instruments
• Select liquid credit and cash holdings for liquidity management

- **Senior secured direct lending** (70%) — Privately negotiated first lien loans to middle-market borrowers.
- **Junior and unsecured credit** (15%) — Second lien, third lien, and unsecured debt investments.
- **Other private credit instruments** (10%) — Privately placed bonds, notes, and related credit instruments.
- **Liquid credit and cash** (5%) — Cash, cash equivalents, and broadly syndicated loans used for liquidity.

- Private credit investments in middle-market companies
- First lien senior secured direct loans
- Second lien, third lien, and unsecured loans
- Floating-rate debt and other credit instruments
- Select liquid credit and cash holdings for liquidity management

## Customers

PGIM Private Credit Fund does not sell products to end consumers; it provides capital to privately held companies through debt investments. Its borrowers are typically U.S. middle-market businesses, especially those with defensive business models and strong cash generation. The fund also allocates a portion of assets to borrowers and issuers in Canada, Europe, Australia, and Latin America.

- **U.S. middle-market borrowers** (primary) — Privately held U.S. companies that borrow for growth, refinancing, or acquisitions through direct lending.
- **Senior secured loan borrowers** (primary) — Companies seeking first lien financing with covenant and collateral support.
- **Non-U.S. portfolio companies** (secondary) — Borrowers in Canada, Europe, Australia, and Latin America accessed within the fund's allocation limits.
- **Liquidity sleeve counterparties** (secondary) — Issuers of liquid fixed-income securities and broadly syndicated loans used for cash management.

- U.S. middle-market companies seeking private debt financing
- Borrowers needing senior secured, floating-rate capital
- Companies with defensive sectors and stable cash flow
- Select non-U.S. borrowers in Canada, Europe, Australia, and Latin America

## Geography

The fund is primarily invested in middle-market companies located in the United States. It may allocate up to 30% of total assets to investments in other countries, mainly Canada, Europe, Australia, and Latin America. Geography matters because the portfolio is anchored in U.S. private credit but retains some exposure to cross-border credit and currency conditions.

- **United States** (70%) — Primary investment focus under normal circumstances
- **Canada** (7%) — Part of the non-U.S. allocation
- **Europe** (8%) — Part of the non-U.S. allocation
- **Australia** (5%) — Part of the non-U.S. allocation
- **Latin America** (10%) — Part of the non-U.S. allocation

- Primary exposure is to U.S. middle-market borrowers
- Up to 30% of assets may be invested outside the United States
- Non-U.S. exposure is mainly Canada, Europe, Australia, and Latin America
- Geography affects currency, legal, and credit-risk profiles

## Strategy

The fund's strategy is to generate current income and, to a lesser extent, capital appreciation through privately placed floating-rate debt. It emphasizes first-lien senior secured lending, covenant protection, and investments in defensive sectors with strong free-cash-flow characteristics. The structure also relies on external management and subadvisers to source, underwrite, and monitor portfolio companies.

- **Maintain a senior-secured direct lending focus** (short-term) — First-lien structures and collateral support are intended to improve downside protection.
- **Expand and manage diversified private credit exposure** (medium-term) — Broader sourcing across sectors and geographies can improve deployment and portfolio diversification.
- **Preserve liquidity for portfolio and funding needs** (short-term) — A liquid sleeve helps manage borrowings, commitments, and portfolio cash needs.

- Focus on current income from floating-rate private credit
- Prioritize first-lien senior secured lending
- Use covenants and collateral to reduce downside risk
- Target defensive sectors and cash-generative borrowers
- Maintain a limited allocation to junior and unsecured debt

## Risks

The fund is exposed to credit risk, valuation risk, and leverage risk because it lends to below-investment-grade private borrowers and marks many positions without readily observable market prices. Its returns also depend on borrower cash flow, covenant compliance, and the performance of middle-market companies, which can be sensitive to economic downturns and sector-specific stress. Cross-border investments add currency, legal, and country-specific risks, while external management creates dependence on sourcing and underwriting capabilities.

- **Credit default and deterioration in portfolio companies** [high] — The fund lends to below-investment-grade middle-market borrowers that may face business stress or refinancing risk.
- **Fair value estimation risk** [high] — Many investments lack readily available market quotations and must be valued using judgmental inputs.
- **Leverage and borrowing base constraints** [medium] — The revolving credit facility can magnify asset value changes and is subject to borrowing-base availability.
- **Foreign exposure and currency risk** [medium] — Up to 30% of assets may be invested outside the U.S., creating cross-border and FX exposure.

- Private borrowers can default or breach covenants
- Fair value marks may change materially without market quotes
- Leverage can amplify losses and reduce flexibility
- Non-U.S. investments add currency and legal risk
- Performance depends on underwriting and portfolio monitoring

## Accounting

The most important accounting issue is fair value measurement of portfolio investments, since many loans are not traded in active markets and must be marked using ASC 820 techniques. Interest income may include cash interest, PIK interest, prepayment premiums, and accretion or amortization of discounts and premiums, which can affect reported income timing. Borrowings, unused commitments, and valuation judgments also matter because they influence leverage presentation and net asset value.

- **Fair value of portfolio investments** — Affects net asset value and unrealized gains/losses
- **PIK interest and deferred interest** — Affects reported investment income and accrual quality
- **Original issue discounts and prepayment premiums** — Can create timing differences in income recognition
- **Borrowings and commitment fees** — Affects leverage disclosure and financing cost presentation

- Fair value estimates drive reported portfolio values and NAV
- Illiquid loans require judgment when market quotes are unavailable
- Interest income includes floating-rate cash interest and PIK accruals
- Discounts, premiums, and prepayment fees affect income timing
- Borrowing base and facility usage affect leverage disclosure

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*Last updated: 2026-04-29T04:46:01.374371+00:00*