PSBD Palmer Square Capital BDC Inc

Palmer Square Capital BDC Inc. (NYSE: PSBD) ("PSBD" or the "Company"), an externally managed business development company, today announced its financial results for the fourth quarter and full year ended December 31, 2023.

Financial and Operating Highlights

• Total investment income of $29.8 million for the fourth quarter of 2023, compared to $23.8 million for the prior year period
• Net investment income of $15.4 million or $0.57 per share for the fourth quarter of 2023, as compared to $12.4 million or $0.51 per share for the comparable period last year
• Net asset value of $17.04 per share as of December 31, 2023, compared to $16.76 per share as of September 30, 2023
• Total realized and unrealized gains of $6.6 million for the fourth quarter of 2023, compared to total realized and unrealized losses of $11.4 million in the fourth quarter of 2022
• As of December 31, 2023, total assets were $1.1 billion and total net assets were $462 million
• Debt-to-equity as of December 31, 2023 was 1.39x, compared to 1.42x as of September 30, 2023
• Paid cash distributions to stockholders totaling $0.54 per share for the fourth quarter of 2023
• January 31, 2024 net asset value of $17.17 per share

“I am pleased to report that Palmer Square Capital BDC Inc. delivered strong fourth quarter and fiscal 2023 results, closing out the year well-positioned to continue to capitalize on opportunities in the liquid debt and private credit markets,” said Christopher D. Long, Chairman and Chief Executive Officer of PSBD. “We are incredibly excited about PSBD’s differentiated investment strategy, which we believe will deliver a compelling yield and long-term total return while mitigating risk due to our active management, higher quality approach, and finally the more liquid nature of the portfolio. We are also incredibly proud of PSBD’s commitment to enhanced transparency and greater shareholder alignment. We look forward to executing our opportunistic credit strategy and delivering shareholder value in the years to come.”

$ in thousands, except per share data

For the Quarter Ended

Financial Highlights

12/31/23

9/30/23

12/31/22

Net Investment Income Per Share1

$0.57

$0.56

$0.51

Net Investment Income

$15,391

$14,804

$12,408

NAV Per Share

$17.04

$16.76

$14.96

Dividends Earned Per Share2

$0.54

$0.56

$0.64

Portfolio Highlights

12/31/23

9/30/23

12/31/22

Total Fair Value of Investments

$1,108,811

$1,104,713

$1,017,212

Number of Industries

38

40

41

Number of Portfolio Companies

191

184

176

Portfolio Yield3

10.51%

11.27%

11.47%

Senior Secured Loan4

96%

97%

96%

Investments on Non-Accrual

0%

0%

0%

Total Return5

4.88%

7.97%

0.21%

Debt-to-Equity

1.39x

1.42x

1.76x

1. Net investment income for the period divided by end of period share count. 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. 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 December 31, 2023, we had 227 investments in 191 portfolio companies with an aggregate fair value of approximately $1.0 billion. Based on total fair value of $1.1 billion including short term investments, the portfolio consisted of 85.9% first lien senior secured debt investments, 5.0% second lien senior secured debt investments, 0.4% corporate bond investments, 2.9% CLO mezzanine and equity investments, and 5.8% short-term investments.

As of December 31, 2023, 98% of the long-term investments based on fair value in our portfolio were at floating rates. At the end of fiscal year 2023, all debt and short-term investments were income producing, and there were no loans on non-accrual status. As of December 31, 2023, the weighted average total yield to maturity of debt and income producing securities at fair value was 10.51%, and weighted average total yield to maturity of debt and income producing securities at amortized cost was 8.93%.

For the fourth quarter of 2023, the principal amount of new investments funded was $85.3 million across 30 new investments. For this period, the Company had $52.6 million aggregate principal amount in sales and repayments.

For the full year ended December 31, 2023, the principal amount of new investments funded was $273.7 million across 67 investments. For this period, the Company had $247 million aggregate principal amount in sales and repayments.

Liquidity and Capital Resources

As of December 31, 2023, the Company had $2.1 million in cash and cash equivalents and approximately $640 million in total aggregate principal amount of debt outstanding. Subject to borrowing base and other restrictions, the Company has available liquidity, consisting of cash and undrawn capacity on credit facilities of approximately $262 million compared to $20.1 million dollars of undrawn investment commitments.

Recent Developments

On January 17, PSBD priced its initial public offering of approximately 5.5 million shares on the New York Stock Exchange at a price of $16.45 per share. Gross proceeds from the IPO totaled approximately $90 million.

Earnings Conference Call

The Company will host a conference call on Wednesday, February 28, 2024 at 11:00 am 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. 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 Period January 23, 2020 (Commencement of Operations) through

 

 

 

For the Year Ended December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

Per Common Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Asset Value, Beginning of Period

 

$

14.96

 

 

$

20.06

 

 

$

20.15

 

 

$

20.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income(1)

 

 

2.26

 

 

 

1.78

 

 

 

1.47

 

 

 

1.32

 

Net Realized and Unrealized Gain (Loss) on

Investments(4)

 

 

1.98

 

 

 

(5.00

)

 

 

(0.18

)

 

 

(0.19

)

Net Increase (Decrease) in Net Assets Resulting from

Operations

 

 

4.24

 

 

 

(3.22

)

 

 

1.29

 

 

 

1.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions to Common Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions from Net Investment Income

 

 

(2.16

)

 

 

(1.85

)

 

 

(1.01

)

 

 

(0.98

)

Distributions from Realized Gains

 

 

-

 

 

 

(0.03

)

 

 

(0.37

)

 

 

-

 

Net Decrease in Net Assets Resulting from Distributions

 

 

(2.16

)

 

 

(1.88

)

 

 

(1.38

)

 

 

(0.98

)

Net Asset Value, End of Period

 

$

17.04

 

 

$

14.96

 

 

$

20.06

 

 

$

20.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares Outstanding, End of Period

 

 

27,102,794

 

 

 

24,286,628

 

 

 

22,570,331

 

 

 

12,562,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio/Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of period

 

$

461,955,393

 

 

$

363,443,482

 

 

$

452,797,588

 

 

 

$253,144,971

 

Weighted-average shares outstanding

 

 

25,700,603

 

 

 

23,130,666

 

 

 

15,494,614

 

 

 

11,156,932

 

Total Return(3)

 

 

29.21

%

 

 

(16.51

%)

 

 

8.10

%

 

 

4.29

%

Portfolio turnover

 

 

25

%

 

 

27

%

 

 

53

%

 

 

63

%

Ratio of operating expenses to average net assets without

waiver(2)

 

 

13.15

%

 

 

8.28

%

 

 

5.54

%

 

 

5.69

%

Ratio of operating expenses to average net assets with

waiver(2)

 

 

12.90

%

 

 

8.03

%

 

 

5.29

%

 

 

5.44

%

Ratio of net investment income (loss) to average net assets

without waiver(2)

 

 

13.54

%

 

 

9.61

%

 

 

6.92

%

 

 

7.18

%

Ratio of net investment income (loss) to average net assets

with waiver(2)

 

 

13.79

%

 

 

9.86

%

 

 

7.17

%

 

 

7.43

%

  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

 

 

 

December 31, 2023

 

 

December 31, 2022

 

Assets:

 

 

 

 

 

 

Non-controlled, non-affiliated investments, at fair value (amortized cost of $1,159,135,422

and $1,120,099,935, respectively)

 

$

1,108,810,753

 

 

$

1,017,211,732

 

Cash and cash equivalents

 

 

2,117,109

 

 

 

1,650,801

 

Receivables:

 

 

 

 

 

 

 

 

Receivable for sales of investments

 

 

97,141

 

 

 

31,014,356

 

Receivable for paydowns of investments

 

 

344,509

 

 

 

136,119

 

Due from investment adviser

 

 

1,718,960

 

 

 

234,102

 

Dividend receivable

 

 

301,637

 

 

 

141,997

 

Interest receivable

 

 

8,394,509

 

 

 

6,465,594

 

Prepaid expenses and other assets

 

 

30,100

 

 

 

598,327

 

Total Assets

 

$

1,121,814,718

 

 

$

1,057,453,028

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Credit facilities, net(1)

 

$

641,828,805

 

 

$

641,309,417

 

Payables:

 

 

 

 

 

 

 

 

Payable for investments purchased

 

 

14,710,524

 

 

 

42,750,748

 

Distributions payable

 

 

-

 

 

 

6,941,066

 

Management fee payable

 

 

2,252,075

 

 

 

1,872,815

 

Accrued other general and administrative expenses

 

 

1,067,921

 

 

 

1,135,500

 

Total Liabilities

 

$

659,859,325

 

 

$

694,009,546

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Assets:

 

 

 

 

 

 

 

 

Common Shares, $0.001 par value; 450,000,000 shares authorized; 27,102,794 and

24,286,628 as of December 31, 2023 and December 31, 2022, respectively issued and

outstanding

 

$

27,103

 

 

$

24,287

 

Additional paid-in capital

 

 

520,663,106

 

 

 

473,921,377

 

Total distributable earnings (accumulated deficit)

 

 

(58,734,816

)

 

 

(110,502,182

)

Total Net Assets

 

$

461,955,393

 

 

$

363,443,482

 

Total Liabilities and Net Assets

 

$

1,121,814,718

 

 

$

1,057,453,028

 

Net Asset Value Per Common Share

 

$

17.04

 

 

$

14.96

 

 

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

  1. Security or portion thereof held within Palmer Square BDC Funding I, LLC (“PS BDC Funding”) and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Bank of America, N.A. (“BofA N.A.”) (see Note 6 to the consolidated financial statements).   2. As of December 31, 2023 and December 31, 2022, the Company had an aggregate of $20.1 million and $2.6 million, respectively, of unfunded commitments to provide debt financing to its portfolio companies. As of each of December 31, 2023 and December 31, 2022, 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 statement of assets and liabilities.

Palmer Square Capital BDC Inc.

Consolidated Statement of Operations

 

 

For the Year Ended December 31

 

 

 

2023

 

 

2022

 

 

2021

 

Income:

 

 

 

 

 

 

 

 

 

Investment income from non-controlled, non-affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

107,739,382

 

 

$

73,705,450

 

 

$

38,897,216

 

Dividend income

 

 

4,066,745

 

 

 

610,203

 

 

 

9,597

 

Other income

 

 

417,480

 

 

 

184,247

 

 

 

778,840

 

Total investment income from non-controlled, non-affiliated investments

 

 

112,223,607

 

 

 

74,499,900

 

 

 

39,685,653

 

Total Investment Income

 

 

112,223,607

 

 

 

74,499,900

 

 

 

39,685,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

44,483,152

 

 

 

23,452,169

 

 

 

8,616,661

 

Management fees

 

 

8,408,074

 

 

 

8,328,713

 

 

 

6,369,583

 

Professional fees

 

 

792,645

 

 

 

741,961

 

 

 

758,435

 

Directors fees

 

 

75,000

 

 

 

75,000

 

 

 

75,000

 

Other general and administrative expenses

 

 

1,528,225

 

 

 

1,862,314

 

 

 

1,827,931

 

Total Expenses

 

 

55,287,096

 

 

 

34,460,157

 

 

 

17,647,610

 

Less: Management fee waiver (1)

 

 

(1,051,009

)

 

 

(1,041,089

)

 

 

(796,198

)

Net expenses

 

 

54,236,087

 

 

 

33,419,068

 

 

 

16,851,412

 

Net Investment Income (Loss)

 

 

57,987,520

 

 

 

41,080,832

 

 

 

22,834,241

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized and unrealized gains (losses) on investments and foreign currency

 

 

 

 

 

 

 

 

 

 

 

 

transactions

Net realized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(2,715,413

)

 

 

(8,130,187

)

 

 

4,753,263

 

Total net realized gains (losses)

 

 

(2,715,413

)

 

 

(8,130,187

)

 

 

4,753,263

 

Net change in unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

52,563,544

 

 

 

(107,432,980

)

 

 

(8,527,786

)

Total net change in unrealized gains (losses)

 

 

52,563,544

 

 

 

(107,432,980

)

 

 

(8,527,786

)

Total realized and unrealized gains (losses)

 

 

49,848,131

 

 

 

(115,563,167

)

 

 

(3,774,523

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Increase (Decrease) in Net Assets Resulting from Operations

 

$

107,835,651

 

 

$

(74,482,335

)

 

$

19,059,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share Data:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net investment income per common share

 

$

2.26

 

 

$

1.78

 

 

$

1.47

 

Basic and diluted net increase (decrease) in net assets resulting from

operations

 

$

4.20

 

 

$

(3.22

)

 

$

1.23

 

Weighted Average Common Shares Outstanding - Basic and Diluted

 

 

25,700,603

 

 

 

23,130,666

 

 

 

15,494,614

 

 

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

  1. As of December 31, 2023, all investments are non-controlled, non-affiliated investments. Non-controlled, non-affiliated investments are defined as investments in which the Company owns less than 5% of the portfolio company’s outstanding voting securities and does not have the power to exercise control over the management or policies of such portfolio company.

Palmer Square Capital BDC Inc.

Portfolio and Investment Activity

 

 

For the Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

December 31, 2021

 

New investments:

 

 

 

 

 

 

 

 

 

Gross investments

 

$

273,733,424

 

 

$

278,951,054

 

 

$

926,351,937

 

Less: sold investments

 

 

(247,083,117

)

 

 

(314,355,643

)

 

 

(401,760,802

)

Total new investments

 

 

26,650,307

 

 

 

(35,404,589

)

 

 

524,591,135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal amount of investments funded:

 

 

 

 

 

 

 

 

 

 

 

 

First-lien senior secured debt investments

 

$

267,272,174

 

 

$

247,233,397

 

 

$

829,591,637

 

Second-lien senior secured debt investments

 

 

3,858,750

 

 

 

19,102,118

 

 

 

57,492,916

 

Corporate bonds

 

 

2,602,500

 

 

 

-

 

 

 

2,883,300

 

Convertible bonds

 

 

-

 

 

 

3,728,288

 

 

 

1,025,000

 

Collateralized securities and structured products - debt

 

 

-

 

 

 

-

 

 

 

14,757,907

 

CLO Equity

 

 

-

 

 

 

8,887,251

 

 

 

20,101,177

 

Common stock

 

 

-

 

 

 

-

 

 

 

500,000

 

Total principal amount of investments funded

 

 

273,733,424

 

 

 

278,951,054

 

 

 

926,351,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal amount of investments sold or repaid:

 

 

 

 

 

 

 

 

 

 

 

 

First-lien senior secured debt investments

 

 

233,535,659

 

 

 

292,852,517

 

 

 

380,386,061

 

Second-lien senior secured debt investments

 

 

8,013,549

 

 

 

11,938,325

 

 

 

12,583,308

 

Corporate Bonds

 

 

-

 

 

 

987,500

 

 

 

-

 

Convertible bonds

 

 

-

 

 

 

4,504,808

 

 

 

3,026

 

CLO Equity

 

 

2,533,909

 

 

 

1,976,080

 

 

 

-

 

Collateralized securities and structured products - debt

 

 

3,000,000

 

 

 

1,501,875

 

 

 

8,788,407

 

Common Stock

 

 

-

 

 

 

594,538

 

 

 

-

 

Total principal amount of investments sold or repaid

 

 

247,083,117

 

 

 

314,355,643

 

 

 

401,760,802

 

The information presented above is at amortized cost unless otherwise indicated.

 

 

For the Year Ended

 

 

 

December 31, 2023

 

 

December 31, 2022

 

 

December 31, 2021

 

Number of new investment commitments

 

 

67

 

 

 

38

 

 

 

155

 

Average new investment commitment amount

 

$

3,802,624

 

 

$

4,784,093

 

 

$

4,521,355

 

Weighted average maturity for new investment commitments

 

 

5.19 years

 

 

 

5.95 years

 

 

 

5.85 years

 

Percentage of new debt investment commitments at floating rates

 

 

98.82

%

 

 

100.00

%

 

 

99.42

%

Percentage of new debt investment commitments at fixed rates

 

 

1.18

%

 

 

0.00

%

 

 

0.58

%

Weighted average interest rate of new investment commitments

 

 

10.22

%

 

 

9.17

%

 

 

4.80

%

Weighted average spread over reference rate of new floating rate investment

commitments

 

 

4.87

%

 

 

4.80

%

 

 

4.39

%

Weighted average interest rate on investment sold or paid down

 

 

9.56

%

 

 

5.45

%

 

 

4.40

%

  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).

 

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Investors Andy Wedderburn-Maxwell Palmer Square Capital BDC Inc. +1 (913)-386-9006 Investors@palmersquarebdc.com

Media Josh Clarkson Prosek Partners PSBD@prosek.com