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Palmer Square Capital BDC Inc. Announces Fourth Quarter and Full Year 2024 Financial Results

February 27, 2025 7:00 AM

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

MISSION WOODS, Kan.--(BUSINESS WIRE)-- 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, 2024.

Financial and Operating Highlights

“In 2024, Palmer Square Capital BDC drove strong financial performance through its differentiated portfolio strategy composed of both liquid and private credit investments,” said Christopher D. Long, Chairman and Chief Executive Officer of PSBD. “Against a market backdrop characterized by ongoing rate uncertainty and tightening credit spreads, we grew our portfolio of broadly syndicated public debt and large private credit borrowers in a disciplined, credit-specific fashion. Looking ahead, we believe the PSBD portfolio will continue to deliver attractive returns while maintaining exceptional credit quality.”

$ in thousands, except per share data

For the Quarter Ended

12/31/24

9/30/24

12/31/23

Financial Highlights

Net Investment Income Per Share1

$

0.45

$

0.48

$

0.58

Net Investment Income

$

14,796

$

15,729

$

15,391

NAV Per Share

$

16.50

$

16.61

$

17.04

Dividends Earned Per Share2

$

0.48

$

0.47

$

0.54

12/31/24

9/30/24

12/31/23

Portfolio Highlights

Total Fair Value of Investments

$

1,407,131

$

1,389,801

$

1,108,811

Number of Industries

38

39

38

Number of Portfolio Companies

207

212

191

Portfolio Yield3

10.65%

10.48%

10.51%

Senior Secured Loan4

96%

96%

96%

Investments on Non-Accrual5

0.08%

0.26%

0.00%

Total Return6

2.36%

1.43%

4.88%

Debt-to-Equity

1.50x

1.52x

1.39x

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 December 31, 2024, we had 262 investments in 207 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 85.7% first lien senior secured debt investments, 5.5% second lien senior secured debt investments, 4.9% short-term investments, 3.4% collateralized loan obligation structured credit funds (“CLOs”) mezzanine and equity investments, 0.3% corporate bond investments, and 0.1% equity investments.

As of December 31, 2024, 99% of the long-term investments based on fair value in our portfolio were at floating rates. At the end of the fourth quarter, 99.92% of the portfolio at fair value was income producing. There were two loans on non-accrual status. As of December 31, 2024, the weighted average total yield to maturity of debt and income producing securities at fair value was 10.65%, and weighted average total yield to maturity of debt and income producing securities at amortized cost was 9.06%. For the fourth quarter of 2024, the principal amount of new investments funded was $171.8 million which included 28 investments at an average value of approximately $4.5 million. For this period, the Company had $176.4 million aggregate principal amount in sales and repayments.

Liquidity and Capital Resources

As of December 31, 2024, the Company had $2.8 million in cash and cash equivalents and approximately $804.2 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 $199.7 million compared to $21.6 million of undrawn investment commitments as of December 31, 2024.

Recent Developments

On February 27, 2025, PSBD’s Board of Directors announced that it had declared a first quarter regular base dividend distribution of $0.36 per share payable on April 10, 2025, to shareholders of record as of March 28, 2024. We expect to announce an additional quarterly supplemental dividend distribution for the first quarter of 2025 in March.

Earnings Conference Call

The Company will host a conference call on Thursday, February 27, 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:

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 Period January 23, 2020 (Commencement of Operations) through

For the Year Ended December 31,

December 31,

2024

2023

2022

2021

2020

Per Common Share Operating Performance

Net Asset Value, Beginning of Period

$17.04

$14.96

$20.06

$20.15

$20.00

Results of Operations:

Net Investment Income(1)

1.93

2.26

1.78

1.47

1.32

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

(0.56)

1.98

(5.00)

(0.18)

(0.19)

Net Increase (Decrease) in Net Assets Resulting from Operations

1.37

4.24

(3.22)

1.29

1.13

Distributions to Common Stockholders

Distributions from Net Investment Income

(1.91)

(2.16)

(1.85)

(1.01)

(0.98)

Distributions from Realized Gains

-

-

(0.03)

(0.37)

-

Net Decrease in Net Assets Resulting from Distributions

(1.91)

(2.16)

(1.88)

(1.38)

(0.98)

Net Asset Value, End of Period

$16.50

$17.04

$14.96

$20.06

$20.15

Shares Outstanding, End of Period

32,600,193

27,102,794

24,286,628

22,750,331

12,562,805

Ratio/Supplemental Data

Net assets, end of period

$537,844,969

$461,955,393

$363,443,482

$452,797,588

$253,144,971

Weighted-average shares outstanding

32,353,615

25,700,603

23,130,666

15,494,614

11,156,932

Total Return(3)

8.74%

29.21%

(16.51)%

8.10%

4.29%

Portfolio turnover

36%

25%

27%

53%

63%

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

14.68%

13.15%

8.28%

5.54%

5.69%

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

14.67%

12.90%

8.03%

5.29%

5.44%

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

11.34%

13.54%

9.61%

6.92%

7.18%

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

11.35%

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,

2024

December 31,

2023

Assets:

Non-controlled, non-affiliated investments, at fair value (amortized cost of $1,454,611,467 and $1,159,135,422, respectively)

$

1,407,130,945

$

1,108,810,753

Cash and cash equivalents

2,766,409

2,117,109

Receivables:

Receivable for sales of investments

7,799,523

97,141

Receivable for paydowns of investments

1,347,516

344,509

Due from investment adviser

248,110

1,718,960

Dividend receivable

259,625

301,637

Interest receivable

11,458,267

8,394,509

Prepaid expenses and other assets

32,364

30,100

Total Assets

$

1,431,042,759

$

1,121,814,718

Liabilities:

Credit facilities (net of deferred financing costs of $5,375,986 and $3,211,510, respectively) (Note 6)

$

501,650,602

$

641,828,805

Notes (net of deferred financing costs of $1,748,822) (Note 6)

302,505,057

-

Payables:

Payable for investments purchased

67,460,523

14,710,524

Distributions payable

15,649,925

-

Management fee payable

2,413,798

2,252,075

Incentive fee payable

2,149,132

-

Accrued other general and administrative expenses

1,368,753

1,067,921

Total Liabilities

$

893,197,790

$

659,859,325

Commitments and contingencies (Note 9)

Net Assets:

Common Shares, $0.001 par value; 450,000,000 shares authorized; 32,600,193 and 27,102,794 as of December 31, 2024 and December 31, 2023, respectively issued and outstanding

$

32,600

$

27,103

Additional paid-in capital

611,122,164

520,663,106

Total distributable earnings (accumulated deficit)

(73,309,795

)

(58,734,816

)

Total Net Assets

$

537,844,969

$

461,955,393

Total Liabilities and Net Assets

$

1,431,042,759

$

1,121,814,718

Net Asset Value Per Common Share

$

16.50

$

17.04

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 December 31, 2024 and December 31, 2023, the Company had an aggregate of $21.6 million and $20.1 million, respectively, of unfunded commitments to provide debt financing to its portfolio companies. As of each of December 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 Year Ended December 31,

2024

2023

2022

Income:

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

Interest income

$

137,508,964

$

107,739,382

$

73,705,450

Dividend income

3,315,849

4,066,745

610,203

Payment-in-kind interest income

1,123,611

-

-

Other income

1,564,875

417,480

184,247

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

143,513,299

112,223,607

74,499,900

Total Investment Income

143,513,299

112,223,607

74,499,900

Expenses:

Incentive fees

8,553,414

-

-

Interest expense

58,006,112

44,483,152

23,452,169

Management fees

9,704,528

8,408,074

8,328,713

Professional fees

1,451,419

792,645

741,961

Directors fees

150,000

75,000

75,000

Other general and administrative expenses

3,097,955

1,528,225

1,862,314

Total Expenses

80,963,428

55,287,096

34,460,157

Less: Management fee waiver (Note 3)

(50,511

)

(1,051,009

)

(1,041,089

)

Net expenses

80,912,917

54,236,087

33,419,068

Net Investment Income (Loss)

62,600,382

57,987,520

41,080,832

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

Net realized gains (losses):

Non-controlled, non-affiliated investments

(17,778,119

)

(2,715,413

)

(8,130,187

)

Total net realized gains (losses)

(17,778,119

)

(2,715,413

)

(8,130,187

)

Net change in unrealized gains (losses):

Non-controlled, non-affiliated investments

2,843,502

52,563,544

(107,432,980

)

Total net change in unrealized gains (losses)

2,843,502

52,563,544

(107,432,980

)

Total realized and unrealized gains (losses)

(14,934,617

)

49,848,131

(115,563,167

)

Net Increase (Decrease) in Net Assets Resulting from Operations

$

47,665,765

$

107,835,651

$

(74,482,335

)

Per Common Share Data:

Basic and diluted net investment income per common share

$

1.93

$

2.26

$

1.78

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

$

1.47

$

4.20

$

(3.22

)

Weighted Average Common Shares Outstanding - Basic and Diluted

32,353,615

25,700,603

23,130,666

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 Year Ended December 31,

2024

2023

2022

New investments:

Gross investments

$

773,809,544

$

273,733,424

$

278,951,054

Less: sold investments

(468,762,595

)

(247,083,117

)

(314,355,643

)

Total new investments

305,046,949

26,650,307

(35,404,589

)

Principal amount of investments funded:

First-lien senior secured debt investments

$

687,351,131

$

267,272,174

$

247,233,397

Second-lien senior secured debt investments

46,287,869

3,858,750

19,102,118

Corporate bonds

4,095,000

2,602,500

-

Convertible bonds

-

-

3,728,288

Collateralized securities and structured products - debt

34,817,350

-

-

CLO Equity

-

-

8,887,251

Common stock

1,258,194

-

-

Total principal amount of investments funded

773,809,544

273,733,424

278,951,054

Principal amount of investments sold or repaid:

First-lien senior secured debt investments

$

416,686,491

$

233,535,659

$

292,852,517

Second-lien senior secured debt investments

24,881,614

8,013,549

11,938,325

Corporate Bonds

4,020,000

-

987,500

Convertible bonds

-

-

4,504,808

CLO Equity

11,174,490

2,533,909

1,976,080

Collateralized securities and structured products - debt

12,000,000

3,000,000

1,501,875

Common Stock

-

-

594,538

Total principal amount of investments sold or repaid

$

468,762,595

247,083,117

314,355,643

For the Year Ended December 31,

2024

2023

2022

Number of new investment commitments

94

67

38

Average new investment commitment amount

$

4,419,385

$

3,802,624

$

4,784,093

Weighted average maturity for new investment commitments

5.6 years

5.19 years

5.95 years

Percentage of new debt investment commitments at floating rates

100.00

%

98.82

%

100.00

%

Percentage of new debt investment commitments at fixed rates

0.00

%

1.18

%

0.00

%

Weighted average interest rate of new investment commitments(1)

9.12

%

10.22

%

9.17

%

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

4.62

%

4.87

%

4.80

%

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

9.68

%

9.56

%

5.45

%

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).

Investors

Matt Bloomfield and Jeremy Goff

Palmer Square Capital BDC Inc.

[email protected]

Media

Josh Clarkson

Prosek Partners

[email protected]

Source: Palmer Square Capital BDC Inc.

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