SecProbe.io

June 14, 2024
VIA E-MAIL

Jo Ann Quinif
Diamond Hill Securitized Credit Fund 325 John H. McConnell Blvd., Suite 200 Columbus, OH  43215

Re: Diamond Hill Securitized Credit Fund
 Initial Registration Statement on Form N-2
 File Nos. 333-279166; 811-23964

Dear Ms. Quinif,

On May 7, 2024, Diamond Hill Securitized Credit Fund (the “Fund”) filed a Registration
Statement on Form N-2 (the “Registration Statement”) under the Securities Act of 1933, as amended
(the “1933 Act”) and the Investment Company Act of 1940, as amended (the “1940 Act”). We have
reviewed the filing and our comments are set forth below. All capitalized terms not otherwise
defined herein have the meaning given to them in the Registration Statement.  References, if any,
to item and instruction numbers in this letter, unless otherwise specified, are to items instructions or guidelines in Form N-2.  References to rules are to rules under the 1940 Act.

GENERAL COMMENTS

1. We note that the Registration Statement is missing information and exhibits and contains
sections that indicate that they will be added, completed or updated by amendment. We may have additional comments on such portions when you complete them in a pre-effective amendment, as well as on disclosures made in response to this letter, on supplemental information provided, or on exhibits filed with any pre-effective amendment.

2. Where a comment is made with regard to disclosure in one location, it is applicable to all
similar disclosure appearing elsewhere in the Registration Statement. Please make all conforming changes.

3. Please advise whether the Fund intends to seek initially, or subsequently, any application(s)
for exemptive relief or no-action relief, in addition to the application filed on May 7, 2024, for multi-class and related relief, in connection with  the Registration Statement, and if so,
the anticipated timing of any applications or requests for relief.

4. Please tell us if you have presented or will present any “test the waters” materials to
potential investors in connection with this offering. If so, please provide us with copies of such materials.

5. If indicated in response to Accounting Comments below that the Fund plans to incur

Jo Ann Quinif
June 14, 2024
Page 2
leverage or issue preferred shares within a year from the effectiveness of the Registration Statement, please include additional disclosures of risks to stockholders in the event of a preferred shares offering.  Please also consider the impact such events may have on other disclosures, such as the Fee Table and revise throughout as appropriate.

PROSPECTUS

Cover page

6. Given that the Fund’s investments in mortgage-backed securities and other securitized credit
instruments may be of any credit quality, including high yield or junk instruments and
distressed securities, please add an additional bullet point highlighting the risks of default, potential illiquidity and valuation difficulties associated with such investments, and consider including a cross reference to sections in the Registration Statement discussing such risks.  In addition, we are aware of recent news reports suggesting that certain types of securitized vehicles, such as MBS, CMBS, and CLOs are under stress due to economic factors and trends, such as higher than expected interest rates, property vacancies, and consumer stress.  Please consider adding a brief “Current Market Environment” section to the Summary of Terms explaining these factors and trends and the impact they may have on the Fund, its investments, and how it implements its strategy.
7. The Fund’s strategy references investing in securities that are distressed or in default.  Later
in the Prospectus, please discuss the Fund’s intentions and capabilities with respect to investing, holding, restructuring, and existing such investments.

8. In the sixth bullet pointed risk on the Cover Page ( page 2 ), and elsewhere in the Prospectus, the
disclosure states that the Fund may pay distributions from offering proceeds or borrowings.
Please confirm in correspondence to the staff that the Board will approve the use of offering
proceeds for this purpose.

Summary of Terms (Pages 5-14)

Investment Policies and Strategies (pages 5-6)

9. Please add to the first sentence in this secti on, parenthetically, that the Fund invests at least
80% of its net assets “ (plus borrowings for investment purposes)”  in securitized bond
investments (and also add the same on page 16 ).

10. The staff notes that “securitized bond investments” are defined by the Fund for purposes of
its 80% investment policy to include, among other things, “secured loans” backed by commercial or residential real estate, or by co mmercial or consumer loans.  Please explain
in your response how the inclusion of such types of investments would be consistent with the plain English meaning or established industry usage of the term “securitized bond” or “securitization.”  Please revise the disclosed definition of “securitized bond investments” accordingly.

11. Please confirm in correspondence that the Fund’s investments in other fixed-income
instruments, including bonds, debt or credit securities and other similar instruments, and any investments in REITs, will not be counted towards its 80% investment in “securitized bond investments.”

Jo Ann Quinif
June 14, 2024
Page 3
12. Please explain in correspondence how the Fund will count investments in any other closed-
end funds, ETFs or other investment companies for purposes of compliance with its policy to invest 80% of its net assets in “securitized bond investments.”

13. Please clarify in the disclosure ( page 5 , 4th paragraph under “ Investment Policies and
Strategies ”) whether the reference to “structured finance vehicles” in which the Fund intends
to invest is referring to the earlier defined “securitized bond investments”, “structured product securities” or “structured products”, or if such vehicles differ from the earlier described investment types, add an explanation or examples of structured finance vehicles and how they relate to structured bond investments.  Also include in the disclosure an explanation of what is meant by references to the junior debt and residual or equity tranches of such vehicles.

14. To the extent practicable, please provide in the disclosure estimates of anticipated percentage
ranges within the Fund’s investment portfolio that will be allocated to the securities of non-U.S. issuers, to high yield securities / junk bonds and to private placements or other types of illiquid securities.

15. This section of the Registration Statement states that under normal circumstances the Fund
will concentrate its investments “in mortgage-related assets issued by government agencies or other governmental entities or by private obligors or issuers.”  This appears to contradict the Fund’s statement of fundamental investment policy in the SAI that it will not concentrate in any particular industry (with the exception of obligations issued or guaranteed by the U.S. government, its agencies and instrumentalities, or repurchase agreements with respect thereto).  Please revise the disclosure to be consistent in this regard.  In respect of the Fund’s fundamental concentration policy, as applied to its stated investment strategy, please also respond to the following.
a. To the extent the Fund concentrates its investments in “mortgage related assets” as an
industry or group of industries, describe in correspondence how the Adviser defines this industry classification, including whether it relies on internally developed or third-party industry classifications.
b. Add disclosure to clarify how the Fund considers the investments of underlying ETFs
or other investment companies in determining compliance with its concentration policy, and also how the Fund determines industry classifications with respect to asset-backed securities in light of each such security’s underlying receivables ( e.g., mortgage loans, consumer loans,
etc.).  If the Fund does not consider asset-backed securities to represent interests in any
industry or group of industries, explain to the staff in correspondence how this is consistent with Sections 8(b)(1)(E) and 13(a) of the 1940 Act.

 Portfolio Composition (pages 6-8)

16. Covenant-lite loans are not identified in the disclosure as being among the primary
components of the Fund’s portfolio.  If the Fund may invest in such loans directly or indirectly through its investments in ABS, CLOs, CMOs or other structured investments, please clarify in the disclosure and add discussion of risks associated with investments in covenant-lite loans.

17. In the disclosure, please clarify whether the Fund will invest in other affiliated  investment
companies, and if so, include appropriate disclosure of risks and conflicts of interest associated with investments in affiliated investment companies.

Jo Ann Quinif
June 14, 2024
Page 4

18. At the conclusion of the disclosure regarding the Fund’s intended investments in REMICs,
CMOs and other types of mortgage-backed securities ( pages 6-7 ), you state that the Fee
Table and Financial Highlights sections of the Registration Statement do not include expenses of structured or synthetic products relying on Section 3(c)(1) or 3(c)(7) of the 1940 Act.  Please confirm in correspondence to the staff that the Fund does not intend to invest more than 15% of its net ass ets in private funds that are excluded from the definition of
investment company by Section 3(c)(1) or Section 3(c)(7) of the 1940 Act.  Also, please add in footnote disclosure to the Fee Table a description of these and any other types of portfolio investments for which the Fund will bear fees and expenses that will not be reflected in the Fee Table.

19. Please advise in correspondence whether the Fund's expected use of derivatives will result
in it being a "general derivatives user" subject to the VaR testing and other requirements of Rule 18f-4 under the 1940 Act, or if the Fund expects to be a "limited derivatives user" under the Rule.  If the Fund will be a general derivatives user under the Rule, please also add to the disclosure in the Registration Statement appropriate risk factors relative to the Fund’s use of
derivatives and potential impacts to the Fund of compliance, or lack thereof, with the
requirements of Rule 18f-4.   Please tailor such risk factors such that they address the risks posed by derivative instruments which are identified in the Prospectus as being principal investments of the Fund.  See Barry Miller letter to ICI (2010).

20. With respect to the statement that the Fund will invest in short term funding arrangements
rated “in one of the three highest rating categories” ( page 7 ), please provide specifics
regarding such rating category ranges deemed the highest, and identify the associated rating agencies (similar to disclosure elsewhere describing what is meant by below investment grade in the context of high yield securities / junk bonds).

21. In the description of variable and floating rate instruments ( page 8 ), please also address how
fluctuations in interest rates will affect such instruments.

22. With respect to the Fund’s proposed investments in zero-coupon, delayed interest, pay-in-
kind (“PIK”) and capital appreciation securities ( page 8 ), as well as OID securities (as
referenced in the tax-related sections), please add disclosure to the Prospectus, or move relevant disclosure from the SAI to the Prospectus, as applicable, to address the risks presented by such investments, including the following:

a. Interest payments deferred are subject to the risk that the borrower may default when
the deferred payments are due in cash at the maturity of the loan;
b. Interest rates are higher to reflect the time-value of money on deferred interest payments
and the higher credit risk of borrowers who may need to defer interest payments;
c. Market prices are more volatile because they are affected to a greater extent by interest
rate changes than instruments that pay interest periodically in cash;
d. Such instruments may have unreliable valuations because their accruals require
judgments about ultimate collectability of deferred payments and the value of the associated collateral; and
e. Such securities may provide certain benefits to the Fund's Adviser including increasing
management fees.

Jo Ann Quinif
June 14, 2024
Page 5
                       Administrator, Fund Account and Transfer Agent (page 9)

23. Please state explicitly in the disclosure that Diamond Hill Capital Management, Inc. will
serve as both the Adviser to the Fund and as Administrator of the Fund, and that the Fund will be compensating it in each capacity pursuant to separate advisory and administration agreements.  Please also add a discussion of potential conflicts of interest arising from Diamond Hill Capital Management, Inc. acting as both Adviser and Administrator to the Fund for compensation.

24. The staff notes that Diamond Hill Capital Management, Inc., as the Adviser, has entered into
an Expense Limitation Agreement with the Fund to waive its advisory fee and/or reimburse certain Fund expenses (other than certain categories of excluded expenses) in order to limit the Fund’s Total Annual Fund Operating Expenses.  Diamond Hill Capital Management, Inc., as the Administrator, has entered into an Administration Agreement with the Fund whereby it assumes and pays all ordinary expenses of the Fund, other than certain categories of expenses which appear to be the same categories of expenses excluded from the Expense Limitation Agreement.   In the disclosure, please clarify how these separate agreements with
the same counterparty providing for the reimbursement of certain Fund expenses will impact
the aggregate operating expenses ultimately paid by the Fund.

     Summary of Risks (pages 12-14) / Risk Factors (pages 20-24)

25. Please review the risk factors throughout the disclosure in the “Summary of Risks” and “Risk
Factors” sections of the Prospectus to ensure that each identified risk corresponds to the types of investments that the Fund has referenced as part of its principal investment strategy as described in the “Investment Policies and Strategies” sections of the Prospectus.

                       Summary of Fees and Expenses / Fee Table (page 15)

26. Please include in the text preceding the Fee Table, or in a footnote to the table, that
shareholders acquiring shares through a financial intermediary may also pay commissions or other fees to such intermediaries which are not reflected in the table or example.

27. Please confirm in correspondence that the Expense Limitation Agreement will not terminate
until at least one year after the effectiveness of this Registration Statement.

The Fund

28. Please revise the first sentence on page 17  to clarify that the Fund cannot invest directly in
indices.

29. Please confirm supplementally whether the Fund intends to “warehouse” any investments
prior to launch, and if so, the staff may have additional questions in this regard.

                 The Investment Process

30. Please expand the disclosure ( pages 19-20 ) of the Adviser’s investment process to describe
the types of information and techniques the Adviser will rely on to inform the risk/reward analysis, the nature of the inefficiencies it believes exist in fixed income markets, and how the Adviser will take advantage of them in its management of the Fund’s assets.

Jo Ann Quinif
June 14, 2024
Page 6
                 Conflicts of Interest

31. Please include a discussion of conflicts of interest arising from the effects of borrowing or
other forms of leverage utilized by the Fund on the fees received by the Adviser and/or its affiliates.

32. Under the sub-heading “Personal Securities Trading by Portfolio Managers” ( page 28 ),
please clarify in the disclosure how the recited elements of the Adviser’s code of ethics fo