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 first quarter ended March 31, 2024.

Financial and Operating Highlights

• Total investment income of $34.8 million for the first quarter of 2024, compared to $26.2 million for the prior year period

• Net investment income of $16.3 million or $0.52 per share for the first quarter of 2024, as compared to $13.6 million or $0.55 per share for the comparable period last year

• Net asset value of $17.16 per share as of March 31, 2024, compared to $17.04 per share as of December 31, 2023

• Total net realized and unrealized gains of $6.6 million for the first quarter of 2024, compared to $14.5 million in the first quarter of 2023

• As of March 31, 2024, total assets were $1.4 billion and total net assets were $559 million

• Debt-to-equity as of March 31, 2024 was 1.42x, compared to 1.39x as of December 31, 2023

• Paid cash distributions to stockholders totaling $0.49 per share for the first quarter of 2024

• Declared a second quarter regular base dividend distribution of $0.42 per share payable on July 16, 2024 to shareholders of record as of June 28, 2024

“Palmer Square Capital BDC generated strong first quarter results demonstrating the power of our differentiated investment strategy that enables us to capitalize on opportunities across both the syndicated and private credit markets,” said Christopher D. Long, Chairman and Chief Executive Officer of PSBD. “Due to our high-quality portfolio of shorter duration and liquid credits, our team remains confident in our ability to navigate any market environment while opportunistically rotating investments with agility. Looking ahead, we believe that we are strategically positioned to deliver industry-leading credit performance with compelling risk-adjusted returns for our shareholders.”

$ in thousands, except per share data

For the Quarter Ended

Financial Highlights

3/31/24

12/31/23

3/31/23

Net Investment Income Per Share1

$0.52

$0.58

$0.55

Net Investment Income

$16,318

$15,391

$13,593

NAV Per Share

$17.16

$17.04

$16.12

Dividends Earned Per Share2

$0.49

$0.54

$0.52

Portfolio Highlights

3/31/24

12/31/23

3/31/23

Total Fair Value of Investments

$1,393,192

$1,108,811

$1,042,644

Number of Industries

39

38

40

Number of Portfolio Companies

211

191

169

Portfolio Yield3

10.11%

10.51%

11.25%

Senior Secured Loan4

96%

96%

96%

Investments on Non-Accrual

0%

0%

0%

Total Return5

3.70%

4.88%

7.75%

Debt-to-Equity

1.42x

1.39x

1.53x

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. 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, 2024, we had 256 investments in 211 portfolio companies with an aggregate fair value of approximately $1.3 billion. Based on a total fair value of $1.4 billion, including short term investments, the portfolio consisted of 87.0% first lien senior secured debt investments, 4.3% second lien senior secured debt investments, 0.3% corporate bond investments, 3.8% collateralized loan obligation structured credit funds (“CLOs”) mezzanine and equity investments, and 4.6% short-term investments.

As of March 31, 2024, 98% of the long-term investments based on fair value in our portfolio were at floating rates. At the end of the first quarter, all debt and short-term investments were income producing, and there were no loans on non-accrual status. As of March 31, 2024, the weighted average total yield to maturity of debt and income producing securities at fair value was 10.11%, and weighted average total yield to maturity of debt and income producing securities at amortized cost was 9.12%.

For the first quarter of 2024, the principal amount of new investments funded was $346 million across 36 investments. For this period, the Company had $69.6 million aggregate principal amount in sales and repayments.

Liquidity and Capital Resources

As of March 31, 2024, the Company had $8.3 million in cash and cash equivalents and approximately $798.3 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 $110.0 million compared to $30.8 million of undrawn investment commitments as of March 31, 2024.

Recent Developments

On April 24, 2024, PSBD, along with Bank of America as arranging partner, priced Palmer Square BDC CLO I (“PSBD CLO”), a $400.5 million CLO secured by broadly syndicated loans held by PSBD. The CLO will have a reinvestment period through 2029 and will mature in 2037, with flexibility to refinance if spreads tighten in the future. The offering is scheduled to close on May 23, 2024. PSBD will use the PSBD CLO as a source of long-term balance sheet financing of its portfolio investments. In connection with the closing of the offering, PSBD will transfer broadly syndicated loans (the “Collateral Loans”) held by it to PSBD CLO and receive the equity and economic residual interests in PSBD CLO in partial consideration thereof. In turn, PSBD CLO will issue notes secured by the Collateral Loans held by it to one or more institutional investors. The net cash proceeds from the sale of the notes by PSBD CLO are then used by PSBD CLO to pay PSBD for the balance of the purchase price of the Collateral Loans.

On May 7, 2024, PSBD’s Board of Directors announced that it had declared a second quarter regular base dividend distribution of $0.42 per share payable on July 16, 2024, to shareholders of record as of June 28, 2024. We expect to announce an additional quarterly supplemental dividend distribution for the second quarter of 2024 in June.

Earnings Conference Call

The Company will host a conference call on Tuesday, May 7, 2024 at 12:00 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; the prospects of our portfolio companies; and the expected closing of the PSBD CLO offering. 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,

 

 

 

2024

 

 

2023

 

Per Common Share Operating Performance

 

 

 

 

 

 

Net Asset Value, Beginning of Period

 

$

17.04

 

 

$

14.96

 

 

 

 

 

 

 

 

 

 

Results of Operations:

 

 

 

 

 

 

 

 

Net Investment Income(1)

 

 

0.52

 

 

 

0.55

 

Net Realized and Unrealized Gain (Loss) on Investments(4)

 

 

0.09

 

 

 

0.61

 

Net Increase (Decrease) in Net Assets Resulting from Operations

 

 

0.61

 

 

 

1.16

 

 

 

 

 

 

 

 

 

 

Net Decrease in Net Assets Resulting from Distributions

 

 

(0.49

)

 

 

-

 

 

 

 

 

 

 

 

 

 

Net Asset Value, End of Period

 

$

17.16

 

 

$

16.12

 

 

 

 

 

 

 

 

 

 

Shares Outstanding, End of Period

 

 

32,552,794

 

 

 

24,975,302

 

 

 

 

 

 

 

 

 

 

Ratio/Supplemental Data

 

 

 

 

 

 

 

 

Net assets, end of period

 

$

558,537,164

 

 

$

402,636,029

 

Weighted-average shares outstanding

 

 

31,594,552

 

 

 

24,591,581

 

Total Return(3)

 

 

3.70

%

 

 

7.75

%

Portfolio turnover

 

 

6

%

 

 

7

%

Ratio of operating expenses to average net assets without waiver(2)

 

 

13.70

%

 

 

13.42

%

Ratio of operating expenses to average net assets with waiver(2)

 

 

13.66

%

 

 

13.17

%

Ratio of net investment income (loss) to average net assets without waiver(2)

 

 

12.03

%

 

 

13.97

%

Ratio of net investment income (loss) to average net assets with waiver(2)

 

 

12.07

%

 

 

14.22

%

(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,

2024

 

 

December 31,

2023

 

Assets:

 

(Unaudited)

 

 

 

 

Non-controlled, non-affiliated investments, at fair value (amortized cost of $1,435,202,874 and $1,159,135,422, respectively)

 

$

1,393,192,087

 

 

$

1,108,810,753

 

Cash and cash equivalents

 

 

8,255,216

 

 

 

2,117,109

 

Receivables:

 

 

 

 

 

 

 

 

Receivable for sales of investments

 

 

84,257

 

 

 

97,141

 

Receivable for paydowns of investments

 

 

450,778

 

 

 

344,509

 

Due from investment adviser

 

 

84,627

 

 

 

1,718,960

 

Dividend receivable

 

 

357,253

 

 

 

301,637

 

Interest receivable

 

 

10,032,505

 

 

 

8,394,509

 

Prepaid expenses and other assets

 

 

85,517

 

 

 

30,100

 

Total Assets

 

$

1,412,542,240

 

 

$

1,121,814,718

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Credit facilities, net (1)

 

$

795,184,728

 

 

$

641,828,805

 

Payables:

 

 

 

 

 

 

 

 

Payable for investments purchased

 

 

37,584,094

 

 

 

14,710,524

 

Distributions payable

 

 

15,950,869

 

 

 

-

 

Management fee payable

 

 

2,416,239

 

 

 

2,252,075

 

Incentive fee payable

 

 

1,924,752

 

 

 

-

 

Accrued other general and administrative expenses

 

 

944,394

 

 

 

1,067,921

 

Total Liabilities

 

$

854,005,076

 

 

$

659,859,325

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Assets:

 

 

 

 

 

 

 

 

Common Shares, $0.001 par value; 450,000,000 shares authorized; 32,552,794 and 27,102,794, issued and outstanding as of March 31, 2024 and December 31, 2023

 

$

32,553

 

 

$

27,103

 

Additional paid-in capital

 

 

610,310,156

 

 

 

520,663,106

 

Total distributable earnings (accumulated deficit)

 

 

(51,805,545

)

 

 

(58,734,816

)

Total Net Assets

 

$

558,537,164

 

 

$

461,955,393

 

Total Liabilities and Net Assets

 

$

1,412,542,240

 

 

$

1,121,814,718

 

Net Asset Value Per Common Share

 

$

17.16

 

 

$

17.04

 

 

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 March 31, 2024 and December 31, 2023, the Company had an aggregate of $30.8 million and $20.1 million, respectively, of unfunded commitments to provide debt financing to its portfolio companies. As of each of March 31, 2024 and December 31, 2023, 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

 

 

 

2024

 

 

2023

 

Income:

 

 

 

 

 

 

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

 

 

 

 

 

 

Interest income

 

$

33,259,959

 

 

$

25,452,738

 

Dividend income

 

 

1,254,696

 

 

 

676,868

 

Other income

 

 

270,288

 

 

 

55,896

 

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

 

 

34,784,943

 

 

 

26,185,502

 

Total Investment Income

 

 

34,784,943

 

 

 

26,185,502

 

 

 

 

 

 

 

 

 

 

Incentive fees

 

 

1,924,752

 

 

 

-

 

Interest expense

 

 

13,178,830

 

 

 

10,322,130

 

Management fees

 

 

2,416,239

 

 

 

1,912,228

 

Professional fees

 

 

237,943

 

 

 

211,994

 

Directors fees

 

 

37,295

 

 

 

18,493

 

Other general and administrative expenses

 

 

722,166

 

 

 

367,006

 

Total Expenses

 

 

18,517,225

 

 

 

12,831,851

 

Less: Management fee waiver

 

 

(50,511

)

 

 

(239,028

)

Net expenses

 

 

18,466,714

 

 

 

12,592,823

 

Net Investment Income (Loss)

 

 

16,318,229

 

 

 

13,592,679

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Net realized gains (losses):

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(1,736,331

)

 

 

(317,446

)

Total net realized gains (losses)

 

 

(1,736,331

)

 

 

(317,446

)

Net change in unrealized gains (losses):

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

8,298,242

 

 

 

14,813,089

 

Total net change in unrealized gains (losses)

 

 

8,298,242

 

 

 

14,813,089

 

Total realized and unrealized gains (losses)

 

 

6,561,911

 

 

 

14,495,643

 

 

 

 

 

 

 

 

 

 

Net Increase (Decrease) in Net Assets Resulting from Operations

 

$

22,880,140

 

 

$

28,088,322

 

 

 

 

 

 

 

 

 

 

Per Common Share Data:

 

 

 

 

 

 

 

 

Basic and diluted net investment income per common share

 

$

0.52

 

 

$

0.55

 

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

 

$

0.72

 

 

$

1.14

 

Weighted Average Common Shares Outstanding - Basic and Diluted

 

 

31,594,552

 

 

 

24,591,581

 

 

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

Palmer Square Capital BDC Inc.

Portfolio and Investment Activity

   

 

 

For the Three Months

Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

New investments:

 

 

 

 

 

 

Gross investments

 

$

346,482,823

 

 

$

63,457,688

 

Less: sold investments

 

 

(69,556,336

)

 

 

(102,138,907

)

Total new investments

 

 

276,926,487

 

 

 

(38,681,219

)

 

 

 

 

 

 

 

 

 

Principal amount of investments funded:

 

 

 

 

 

 

 

 

First-lien senior secured debt investments

 

$

312,111,711

 

 

$

63,457,688

 

Second-lien senior secured debt investments

 

 

10,797,500

 

 

 

-

 

Collateralized securities and structured products - debt

 

 

23,573,612

 

 

 

-

 

CLO Equity

 

 

-

 

 

 

-

 

Total principal amount of investments funded

 

 

346,482,823

 

 

 

63,457,688

 

 

 

 

 

 

 

 

 

 

Principal amount of investments sold or repaid:

 

 

 

 

 

 

 

 

First-lien senior secured debt investments

 

 

54,991,776

 

 

 

99,163,344

 

Second-lien senior secured debt investments

 

 

9,060,000

 

 

 

-

 

Corporate Bonds

 

 

-

 

 

 

-

 

Convertible bonds

 

 

-

 

 

 

-

 

CLO Equity

 

 

4,254,628

 

 

 

96,089

 

Collateralized securities and structured products - debt

 

 

1,249,932

 

 

 

2,879,474

 

Common Stock

 

 

-

 

 

 

-

 

Total principal amount of investments sold or repaid

 

 

69,556,336

 

 

 

102,138,907

 

 

 

For the Three Months

Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Number of new investment commitments

 

 

36

 

 

 

15

 

Average new investment commitment amount

 

$

4,052,057

 

 

$

3,742,311

 

Weighted average maturity for new investment commitments

 

 

6.18 years

 

 

 

5.52 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)

 

 

10.19

%

 

 

9.71

%

Weighted average spread over reference rate of new floating rate investment commitments(2)

 

 

4.81

%

 

 

4.88

%

Weighted average interest rate on long-term investments sold or paid down

 

 

7.99

%

 

 

8.09

%

(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/20240506597151/en/

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

Media Josh Clarkson Prosek Partners PSBD@prosek.com