Press Release: Palmer Square Capital BDC Inc. Announces First Quarter 2025 Financial Results

Dow Jones
07 May

Palmer Square Capital BDC Inc. Announces First Quarter 2025 Financial Results

Declares Second Quarter 2025 Base Dividend of $0.36 Per Share with Supplemental Dividend Expected to be Announced in June

MISSION WOODS, Kansas--(BUSINESS WIRE)--May 07, 2025-- 

Palmer Square Capital BDC Inc. (NYSE: PSBD) ("PSBD" or the "Company"), an externally managed business development company, today announced its financial results for the first quarter ended March 31, 2025.

Financial and Operating Highlights

   -- Total investment income of $31.2 million for the first quarter of 2025, 
      compared to $34.8 million for the prior year period 
 
   -- Net investment income of $12.9 million or $0.40 per share for the first 
      quarter of 2025, as compared to $16.3 million or $0.52 per share for the 
      comparable period last year 
 
   -- Net asset value of $15.85 per share as of March 31, 2025, compared to 
      $16.50 per share as of December 31, 2024 
 
   -- Total net realized and unrealized losses of $21.3 million for the first 
      quarter of 2025, compared to gains of $6.6 million in the first quarter 
      of 2024 
 
   -- As of March 31, 2025, total assets were $1.4 billion and total net assets 
      were $515.8 million 
 
   -- Debt-to-equity as of March 31, 2025 was 1.50x, unchanged from 1.50x as of 
      December 31, 2024 
 
   -- Paid cash distributions to stockholders totaling $0.39 per share for the 
      first quarter of 2025 
 
   -- Declared a second quarter regular base dividend distribution of $0.36 per 
      share payable on July 14, 2025, to shareholders of record as of June 27, 
      2025. In accordance with our dividend policy, we expect to announce a 
      supplemental dividend in June 
 
   -- In the first quarter, we had only $507.9 thousand of PIK income, or 1.63% 
      of total investment income 

"In the first quarter of 2025, Palmer Square Capital BDC demonstrated the strength and flexibility of its investment strategy, rooted in both liquid credit opportunities and senior-secured private credit investments," said Christopher D. Long, Chairman and Chief Executive Officer of PSBD. "While macro uncertainty persists, Palmer Square was purpose built to perform during times of volatility. We founded Palmer Square Capital Management in the wake of the Great Financial Crisis, and we've since scaled the broader platform to more than $34 billion in assets under management. Similarly, we established PSBD with a focus on shareholder alignment, providing a differentiated fee structure and prioritizing transparency in our monthly NAV and quarterly portfolio disclosure. We believe the current discount to NAV provides for great value. And, importantly, Palmer Square's investment team is continuing to find opportunities, which we believe preserve our BDC's leading credit quality while delivering attractive yield and creating long-term value for our fellow shareholders."

 
$ in thousands, except per 
share data                           For the Quarter Ended 
                               --------------------------------- 
                               3/31/25     12/31/24    3/31/24 
                              ----------  ----------  ---------- 
Financial Highlights 
Net Investment Income Per 
 Share(1)                     $     0.40  $     0.45  $     0.52 
Net Investment Income         $   12,913  $   14,796  $   16,318 
NAV Per Share                 $    15.85  $    16.50  $    17.16 
Dividends Earned Per 
 Share(2)                     $     0.39  $     0.48  $     0.49 
 
                                3/31/25    12/31/24     3/31/24 
                               ---------   ---------   --------- 
Portfolio Highlights 
Total Fair Value of 
 Investments                  $1,334,314  $1,407,131  $1,393,192 
Number of Industries                  39          38          39 
Number of Portfolio 
 Companies                           209         207         211 
Portfolio Yield(3)                10.37%      10.65%      10.11% 
Senior Secured Loan(4)               96%         96%         96% 
Investments on 
 Non-Accrual(5)                    0.24%       0.08%       0.00% 
Total Return(6)                  (1.05)%       2.36%       3.70% 
Debt-to-Equity                     1.50x       1.50x       1.42x 
 
   1. Net investment income for the period divided by the weighted average 
      share count for the period. 
 
   2. Dividend amount reflects dividend earned in period. 
 
   3. Weighted average total yield of debt and income producing securities at 
      fair value. 
 
   4. As a percentage of long-term investments, at fair value. 
 
   5. As a percentage of total investments, at fair value. 
 
   6. Total return is calculated as the change in net asset value ("NAV") per 
      share during the period, plus distributions per share (if any), divided 
      by the beginning NAV per share. Total return is not annualized. Assumes 
      reinvestment of distributions. 

Portfolio and Investment Activity

As of March 31, 2025, we had 260 investments in 209 portfolio companies with an aggregate fair value of approximately $1.3 billion. Based on a total fair value of $1.3 billion, including short term investments, the portfolio consisted of 86.2% first lien senior secured debt investments, 5.4% second lien senior secured debt investments, 4.3% short-term investments, 3.3% collateralized loan obligation structured credit funds ("CLOs") mezzanine and equity investments, 0.3% corporate bond investments, and 0.5% equity investments.

As of March 31, 2025, 98% of the long-term investments based on fair value in our portfolio were at floating rates. At the end of the first quarter, 99.76% of the portfolio at fair value was income producing. There were three loans on non-accrual status. As of March 31, 2025, the weighted average total yield to maturity of debt and income producing securities at fair value was 10.37%, and weighted average total yield to maturity of debt and income producing securities at amortized cost was 8.48%. For the first quarter of 2025, the principal amount of new investments funded was $104.3 million which included 23 investments at an average value of approximately $3.9 million. For this period, the Company had $144.4 million aggregate principal amount in sales and repayments.

Liquidity and Capital Resources

As of March 31, 2025, the Company had $2.9 million in cash and cash equivalents and approximately $774.5 million in total aggregate principal amount of debt outstanding. Subject to borrowing base and other restrictions, the Company had available liquidity, consisting of cash and undrawn capacity on credit facilities of approximately $229.5 million compared to $20.2 million of undrawn investment commitments as of March 31, 2025.

Recent Developments

On May 07, 2025, PSBD's Board of Directors announced that it had declared a second quarter regular base dividend distribution of $0.36 per share payable on July 14, 2025, to shareholders of record as of June 27, 2025. We expect to announce an additional quarterly supplemental dividend distribution for the second quarter of 2025 in June.

Earnings Conference Call

The Company will host a conference call on Wednesday, May 07, 2025, at 1:00 pm ET to review its financial performance and conduct a question-and-answer session. To participate in the earnings call, participants should register online at the Palmer Square Investor Relations website. To avoid potential delays, please join at least 10 minutes prior to the start of the call. The conference call can be accessed through the following links:

   -- United States: +1 (888) 596-4144 
 
   -- International: +1 (646) 968-2525 
 
   -- Event Plus Entry Passcode: 1803382# 
 
   -- Live Audio Webcast 

A replay of the live conference call will be available shortly after the conclusion of the event and accessible on the events and presentations section of the Palmer Square Investor Relations website.

About Palmer Square Capital BDC Inc.

Palmer Square Capital BDC Inc. (NYSE: PSBD) is an externally managed, non-diversified closed-end management investment company that primarily lends to and invests in corporate debt loans, including but not limited to large private U.S. companies in the broadly syndicated loan market, as well as the direct large cap private credit market. PSBD has elected to be regulated as a business development company under the Investment Company Act of 1940. PSBD's investment objective is to maximize total return, comprised of current income and capital appreciation. PSBD's current investment focus is guided by two strategies that facilitate its investment opportunities and core competencies: (1) investing in corporate debt loans and, to a lesser extent, (2) investing in other debt securities which may include collateralized loan obligation debt and equity. PSBD's investment activities are managed by its investment adviser, Palmer Square BDC Advisor LLC, an affiliate of Palmer Square Capital Management LLC.

Forward-Looking Statements

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. The forward-looking statements may include statements as to our future base and supplemental dividend distributions and the prospects of our portfolio companies. These and other forward-looking statements can be identified by the use of forward-looking terminology such as "may," "will," "should," "seek," "expect," "anticipate," "project," "estimate," "intend," "continue," "target," or "believe" or the negatives thereof or other variations thereon or comparable terminology. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in PSBD's filings with the SEC. PSBD undertakes no duty to update any forward-looking statement made herein unless required by law. All forward-looking statements speak only as of

the date of this press release. Although PSBD undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that PSBD may make directly to you or through reports that in the future may be filed with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

 
                           Financial Highlights 
                                             For the Three Months Ended 
                                                     March 31, 
                                            ---------------------------- 
                                                2025           2024 
                                            -------------  ------------- 
Per Common Share Operating Performance 
Net Asset Value, Beginning of Period               $16.50         $17.04 
 
Results of Operations: 
    Net Investment Income(1)                         0.40           0.52 
    Net Realized and Unrealized Gain 
     (Loss) on Investments(4)                      (0.66)           0.09 
                                            -------------  ------------- 
Net Increase (Decrease) in Net Assets 
 Resulting from Operations                         (0.26)           0.61 
                                            -------------  ------------- 
 
Distributions to Common Stockholders 
    Distributions from Net Investment 
     Income                                        (0.39)         (0.49) 
                                            -------------  ------------- 
Net Decrease in Net Assets Resulting from 
 Distributions                                     (0.39)         (0.49) 
                                            -------------  ------------- 
 
Net Asset Value, End of Period                     $15.85         $17.16 
                                            =============  ============= 
 
Shares Outstanding, End of Period              32,534,040     32,552,794 
 
Ratio/Supplemental Data 
Net assets, end of period                    $515,807,254   $558,537,164 
Weighted-average shares outstanding            32,602,053     31,594,552 
Total Return(3)                                   (1.05)%          3.70% 
Portfolio turnover                                     8%             6% 
Ratio of operating expenses to average net 
 assets without waiver(2)                          13.72%         13.70% 
Ratio of operating expenses to average net 
 assets with waiver(2)                             13.72%         13.66% 
Ratio of net investment income (loss) to 
 average net assets without waiver(2)               9.68%         12.03% 
Ratio of net investment income (loss) to 
 average net assets with waiver(2)                  9.68%         12.07% 
 

(1) The per common share data was derived by using weighted average shares outstanding.

(2) The ratios reflect an annualized amount.

(3) Total return is calculated as the change in net asset value ("NAV") per share during the period, plus distributions per share (if any), divided by the beginning NAV per share. Total return is not annualized. Assumes reinvestment of distributions.

(4) Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Consolidated Statements of Operations due to share transactions during the period.

 
                   Palmer Square Capital BDC Inc. 
          Consolidated Statement of Assets and Liabilities 
                                    March 31, 
                                       2025         December 31, 
                                    (Unaudited)         2024 
                                  --------------   -------------- 
Assets: 
Non-controlled, non-affiliated 
 investments, at fair value 
 (amortized cost of 
 $1,397,203,293 and 
 $1,454,611,467, respectively)    $1,334,314,263   $1,407,130,945 
Cash and cash equivalents              2,872,420        2,766,409 
Receivables: 
    Receivable for sales of 
     investments                      14,162,616        7,799,523 
    Receivable for paydowns of 
     investments                         846,451        1,347,516 
    Due from investment adviser          462,835          248,110 
    Dividend receivable                  200,827          259,625 
    Interest receivable               10,007,932       11,458,267 
Prepaid expenses and other 
 assets                                   62,378           32,364 
                                   -------------    ------------- 
    Total Assets                  $1,362,929,722   $1,431,042,759 
                                   -------------    ------------- 
 
Liabilities: 
Credit facilities (net of 
 deferred financing costs of 
 $4,985,647 and $5,375,986, 
 respectively) (Note 6)           $  472,325,212   $  501,650,602 
Notes (net of deferred financing 
 costs of $1,714,449 and 
 $1,748,822, respectively) (Note 
 6)                                  302,126,552      302,505,057 
Payables: 
    Payable for investments 
     purchased                        54,828,596       67,460,523 
    Distributions payable             12,691,089       15,649,925 
    Management fee payable             2,333,675        2,413,798 
    Incentive fee payable              1,842,706        2,149,132 
Accrued other general and 
 administrative expenses                 974,638        1,368,753 
                                   -------------    ------------- 
    Total Liabilities             $  847,122,468   $  893,197,790 
                                   -------------    ------------- 
 
Commitments and contingencies 
(Note 9) 
 
Net Assets: 
Common Shares, $0.001 par value; 
 450,000,000 shares authorized; 
 32,534,040 and 32,600,193 as of 
 March 31, 2025 and December 31, 
 2024, respectively issued and 
 outstanding                      $       32,534   $       32,600 
Additional paid-in capital           610,164,815      611,122,164 
Total distributable earnings 
 (accumulated deficit)               (94,390,095)     (73,309,795) 
                                   -------------    ------------- 
    Total Net Assets              $  515,807,254   $  537,844,969 
                                   -------------    ------------- 
    Total Liabilities and Net 
     Assets                       $1,362,929,722   $1,431,042,759 
                                   -------------    ------------- 
    Net Asset Value Per Common 
     Share                        $        15.85   $        16.50 
                                   =============    ============= 
 

The accompanying notes are an integral part of these consolidated financial statements.

 
(Note 6)    See Note 6 to the consolidated financial statements for a 
            description of the Company's borrowings, including its revolving 
            credit facility with Bank of America, N.A., its credit facility 
            with Wells Fargo Bank, National Association, and its term debt 
            securitization (CLO transaction). 
(Note 9)    As of March 31, 2025 and December 31, 2024, the Company had an 
            aggregate of $20.2 million and $21.6 million, respectively, of 
            unfunded commitments to provide debt financing to its portfolio 
            companies. As of each of March 31, 2025 and December 31, 2024, 
            there were no capital calls or draw requests made by the portfolio 
            companies to fund these commitments. Such commitments are 
            generally up to the Company's discretion to approve or are subject 
            to the satisfaction of certain financial and nonfinancial 
            covenants and involve, to varying degrees, elements of credit risk 
            in excess of the amount recognized in the Company's consolidated 
            statements of assets and liabilities and are not reflected in the 
            Company's consolidated statements of assets and liabilities. 
 
 
                    Palmer Square Capital BDC Inc. 
                 Consolidated Statement of Operations 
                              For the Three Months Ended March 31, 
                          -------------------------------------------- 
                                  2025                   2024 
                          --------------------      --------------- 
Income: 
Investment income from 
non-controlled, 
non-affiliated 
investments: 
    Interest income       $         29,819,663      $    33,259,959 
    Dividend income                    574,336            1,254,696 
    Payment-in-kind 
     interest income                   507,850                    - 
    Other income                       312,430              270,288 
                              ----------------       -------------- 
Total investment income 
 from non-controlled, 
 non-affiliated 
 investments                        31,214,279           34,784,943 
                              ----------------       -------------- 
Total Investment Income             31,214,279           34,784,943 
 
Expenses: 
    Incentive fees                   1,842,706            1,924,752 
    Interest expense                12,969,757           13,178,830 
    Management fees                  2,333,675            2,416,239 
    Professional fees                  312,732              237,943 
    Directors fees                      36,987               37,295 
    Other general and 
     administrative 
     expenses                          805,271              722,166 
                              ----------------       -------------- 
Total Expenses                      18,301,128           18,517,225 
    Less: Management fee 
     waiver (Note 3)                        --              (50,511) 
                              ----------------       -------------- 
    Net expenses                    18,301,128           18,466,714 
                              ----------------       -------------- 
Net Investment Income 
 (Loss)                             12,913,151           16,318,229 
                              ----------------       -------------- 
 
Realized and unrealized 
gains (losses) on 
investments and foreign 
currency transactions 
Net realized gains 
(losses): 
    Non-controlled, 
     non-affiliated 
     investments                    (5,894,493)          (1,736,331) 
                              ----------------       -------------- 
Total net realized gains 
 (losses)                           (5,894,493)          (1,736,331) 
                              ----------------       -------------- 
Net change in 
unrealized gains 
(losses): 
    Non-controlled, 
     non-affiliated 
     investments                   (15,407,869)           8,298,242 
                              ----------------       -------------- 
Total net change in 
 unrealized gains 
 (losses)                          (15,407,869)           8,298,242 
                              ----------------       -------------- 
Total realized and 
 unrealized gains 
 (losses)                          (21,302,362)           6,561,911 
                              ----------------       -------------- 
 
Net Increase (Decrease) 
 in Net Assets Resulting 
 from Operations          $         (8,389,211)     $    22,880,140 
                              ----------------       -------------- 
 
Per Common Share Data: 
Basic and diluted net 
 investment income per 
 common share             $               0.40      $          0.52 
                              ----------------       -------------- 
Basic and diluted net 
 increase (decrease) in 
 net assets resulting 
 from operations          $              (0.26)     $          0.72 
                              ----------------       -------------- 
Weighted Average Common 
 Shares Outstanding - 
 Basic and Diluted                  32,602,053           31,594,552 
                              ================       ============== 
 

The accompanying notes are an integral part of these consolidated financial statements.

 
(Note 3)    Prior to the IPO, the base management fee was 2.00% of the average 
            value of the weighted average (based on the number of shares 
            outstanding each day in the quarter) of the Company's total net 
            assets at the end of the two most recently completed calendar 
            quarters. The Investment Advisor, however, during any period prior 
            to the IPO, agreed to waive its right to receive management fees 
            in excess of an annual rate of 1.75% of the average value of the 
            weighted average total net assets at the end of each of our two 
            most recently completed calendar quarters. The Investment Advisor 
            will not be permitted to recoup any base management fees waived 
            for any period of time prior to the IPO. 
 
 
                   Palmer Square Capital BDC Inc. 
                  Portfolio and Investment Activity 
                           For the Three Months Ended March 31, 
                         ---------------------------------------- 
                                 2025                  2024 
                         ---------------------   ---------------- 
New investments: 
    Gross investments    $         104,323,107   $    346,482,823 
    Less: sold 
     investments                  (144,369,364)       (69,556,336) 
                             -----------------    --------------- 
Total new investments              (40,046,257)       276,926,487 
 
Principal amount of 
investments funded: 
    First-lien senior 
     secured debt 
     investments         $          97,436,250   $    312,111,711 
    Second-lien senior 
     secured debt 
     investments                            --         10,797,500 
    Corporate bonds                         --                 -- 
    Convertible bonds                       --                 -- 
    Collateralized 
     securities and 
     structured 
     products - debt                        --         23,573,612 
    CLO Equity                              --                 -- 
    Common stock                     6,886,857                 -- 
                             -----------------    --------------- 
Total principal amount 
 of investments funded             104,323,107        346,482,823 
 
Principal amount of 
investments sold or 
repaid: 
    First-lien senior 
     secured debt 
     investments         $         138,003,373   $     54,991,776 
    Second-lien senior 
     secured debt 
     investments                     3,203,994          9,060,000 
    Corporate Bonds                         --                 -- 
    Convertible bonds                       --                 -- 
    Collateralized 
     securities and 
     structured 
     products - debt                 2,900,000          1,249,932 
    CLO Equity                         261,997          4,254,628 
Common Stock                                --                 -- 
                             -----------------    --------------- 
Total principal amount 
 of investments sold or 
 repaid                            144,369,364         69,556,336 
 
 
                                     For the Three Months Ended March 31, 
                                    -------------------------------------- 
                                           2025                2024 
                                    ------------------  ------------------ 
Number of new investment 
 commitments                                        23                  36 
Average new investment commitment 
 amount                                     $3,855,336          $4,052,057 
Weighted average maturity for new 
investment commitments                      5.59 years          6.18 years 
Percentage of new debt investment 
 commitments at floating rates                 100.00%             100.00% 
Percentage of new debt investment 
 commitments at fixed rates                      0.00%               0.00% 
Weighted average interest rate of 
 new investment commitments(1)                   8.52%              10.19% 
Weighted average spread over 
 reference rate of new floating 
 rate investment commitments(2)                  4.21%               4.81% 
Weighted average interest rate on 
 long-term investments sold or 
 paid down                                       8.33%               7.99% 
 

(1) New CLO equity investments do not have an ascribed interest rate and are therefore excluded from the calculation.

(2) Variable rate loans bear interest at a rate that may be determined by reference to either a) LIBOR (which can include one-, two-, three- or six-month LIBOR) or b) the CME Term Secured Overnight Financing Rate ("SOFR" or "S") (which can include one-, three-, or six-month SOFR), which resets periodically based on the terms of the loan agreement. At the borrower's option, loans may instead reference an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate), which also resets periodically based on the terms of the loan agreements. Loans that reference SOFR may include a Credit Spread Adjustment ("CSA"), where the CSA is a defined additional spread amount based on the tenor of SOFR the borrower selects (making the reference rate S+CSA).

View source version on businesswire.com: https://www.businesswire.com/news/home/20250506424843/en/

 
    CONTACT:    Investors 

Matt Bloomfield and Jeremy Goff

Palmer Square Capital BDC Inc.

Investors@palmersquarebdc.com

Media

Josh Clarkson

Prosek Partners

PSBD@prosek.com

 
 

(END) Dow Jones Newswires

May 07, 2025 07:00 ET (11:00 GMT)

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