Investment Portfolio - As of March 31, 2025, the company had 260 debt and equity investments in 209 portfolio companies with an aggregate fair value of approximately $1.3 billion[201]. - Total investments as of March 31, 2025, amounted to $1.4 billion, a decrease from $1.45 billion as of December 31, 2024[206]. - The investment portfolio at fair value remained unchanged at $1.3 billion from December 31, 2024, to March 31, 2025[210]. - Loans on non-accrual status represented 0.24% of total investments at fair value as of March 31, 2025, up from 0.08% as of December 31, 2024[210]. - The company had 23 unfunded commitments totaling $20.2 million, down from 26 commitments totaling $21.6 million as of December 31, 2024[260]. Financial Performance - Total investment income for the three months ended March 31, 2025, was $31.2 million, down from $34.8 million in the same period of 2024, primarily due to lower interest income from floating rate loans[210]. - Net investment income for the three months ended March 31, 2025, was $12.9 million, compared to $16.3 million in the prior year[209]. - Net unrealized losses on investments for the three months ended March 31, 2025, were $(15.4) million, contrasting with net unrealized gains of $8.3 million in the same period of 2024[216]. - Interest expense for the three months ended March 31, 2025, was $13.0 million, a decrease from $13.2 million in the prior year[211]. - The weighted average total yield to maturity of debt and income-producing securities at fair value was 10.37% as of March 31, 2025[199]. - Weighted average total yield of debt and income-producing securities decreased to 10.37% as of March 31, 2025, from 10.65% as of December 31, 2024[207]. Capital Structure and Financing - The company completed a $400.5 million term debt securitization (CLO Transaction) on May 23, 2024, to provide long-term financing for its portfolio investments[240]. - The Wells Fargo Credit Facility was amended to increase the borrowing amount from $150 million to $175 million and extend the maturity date to December 18, 2028[235]. - As of March 31, 2025, the company had $319.1 million principal outstanding under the Bank of America Credit Facility[233]. - The company has a commitment fee structure for the Bank of America Credit Facility, with fees ranging from 0.50% to 1.30% based on the amount of commitments utilized[229]. - Total contractual obligations related to outstanding indebtedness as of March 31, 2025, amount to $774.45 million, with $317.28 million due within one year and $302.13 million due beyond five years[259]. Cash Flow and Liquidity - Net cash provided by operating activities for the three months ended March 31, 2025, was $46.4 million, with net repayments under credit facilities totaling $29.7 million[218]. - As of March 31, 2025, the company had cash and cash equivalents of $2.9 million, down from $8.3 million as of March 31, 2024[220]. - The company anticipates generating cash from future equity and debt offerings, as well as cash flows from operations[217]. - The company had $40.7 million in net purchases that had not yet settled as of March 31, 2025, which may increase future interest expenses due to additional borrowing[265]. Shareholder Returns - The company intends to distribute quarterly dividends to stockholders, with a goal of distributing at least 90% of net ordinary income and net short-term capital gains to maintain RIC tax treatment[244]. - The company plans to distribute net capital gains at least annually, but may retain them for investment purposes, incurring corporate-level tax on such gains[246]. - The company has adopted a dividend reinvestment plan, allowing stockholders to reinvest dividends in additional shares unless they opt for cash[247]. - During the three months ended March 31, 2025, the company issued and sold 32,662 shares for an aggregate purchase price of $0.5 million, compared to 5,450,000 shares for $89.7 million in the same period of 2024[222]. - The company repurchased 98,399 shares of common stock under the Company Rule 10b5-1 Repurchase Plan during the three months ended March 31, 2025[225]. Risk Factors - The company is subject to financial market risks, particularly interest rate sensitivity, which can significantly impact net investment income due to borrowing costs[262]. - A hypothetical increase of 300 basis points in interest rates could lead to a net increase in investment income of $16.6 million, while a decrease of 300 basis points could result in a decrease of $16.6 million[264]. - Investments denominated in foreign currencies expose the company to risks from currency exchange rate fluctuations, which can lead to significant market volatility[266]. - The company actively measures exposure to interest rate and currency exchange rate fluctuations and may use hedging instruments to mitigate these risks[267]. Regulatory and Compliance - The company has elected to be regulated as a BDC under the 1940 Act and expects to qualify as a RIC annually[193]. - The asset coverage ratio was 167% as of March 31, 2025, exceeding the required minimum of 150%[221]. - The company is in compliance with all applicable covenants under both the Bank of America and Wells Fargo Credit Facilities as of March 31, 2025[233][239]. - The Advisory Agreement with the Investment Advisor includes a base management fee of 1.75% of the average value of total net assets and an incentive fee based on performance[258]. - The Notes from the CLO Transaction are scheduled to mature on July 15, 2037, with potential early redemption options starting July 15, 2026[241].

Financial Data and Key Metrics Changes - Total investment income for Q4 2024 was $34.9 million, up 16.9% from $29.8 million in the prior year period [34] - Net investment income for Q4 2024 was $14.8 million or $0.45 per share, compared to $15.4 million or $0.58 per share for the same period last year [35] - NAV per share at the end of Q4 was $16.50, down from $16.61 at the end of Q3 2024 [36] Business Line Data and Key Metrics Changes - The total investment portfolio as of December 31, 2024, had a fair value of approximately $1.41 billion, reflecting a small increase of approximately 1.2% from $1.39 billion at the end of Q3 2024 [25] - New private credit loans comprised 17% of overall new investments, funded at a weighted average spread of 489 basis points over the reference rate [32] Market Data and Key Metrics Changes - The company reported an 11.6% yield as of December 31, 2024, which remains highly attractive by historical measures [23] - The weighted average total yield to maturity of debt and income-producing securities at fair value was 10.65% [30] Company Strategy and Development Direction - The company aims to maintain a competitive dividend yield while being disciplined in capital deployment for better opportunities in the future [40] - The investment philosophy focuses on delivering attractive risk-adjusted returns through a diversified portfolio that spans both liquid bank loans and private credit loans [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate the evolving macroeconomic backdrop, emphasizing the importance of floating rate senior secured credit in the current environment [16][17] - The company is positioned to act quickly and efficiently when attractive opportunities arise, despite ongoing uncertainty around interest rates [12][20] Other Important Information - The Board and management team recalibrated the base dividend to $0.36 beginning in Q1 2025 to support NAV stability [28] - The company has a stock repurchase plan approved by the Board, allowing for the acquisition of up to $20 million of PSBD stock [39] Q&A Session Summary Question: Outlook for dividends and sustainability - Management indicated that the new dividend level was set conservatively based on various scenarios and the current deal environment [44][46] Question: Potential investment sales or prepayments outlook - Management noted elevated repayment and refinancing activity in Q4, with expectations for continued refinancing rather than new M&A activity in the near term [48][50] Question: Impact of cautious deal opportunities on leverage - Management confirmed that while they would not actively reduce leverage, they would be patient in waiting for more attractive investment opportunities [54] Question: Optimal mix between liquid investments and private credit loans - Management stated that they do not have a prescribed mix but will seek the best opportunities available at any given time [56] Question: Exposure to tariffs and potential impacts - Management assessed that tariff exposure in the portfolio is minimal, with a low single-digit percentage across the portfolio [65][66]

Investment Income - Total investment income for Q4 2024 was $34.9 million, up from $29.8 million in Q4 2023, representing a 17.1% increase[4] - Net investment income for Q4 2024 was $14.8 million or $0.45 per share, compared to $15.4 million or $0.58 per share in Q4 2023, reflecting a decrease of 3.9% in income and 22.4% in per share earnings[4] - Investment income from non-controlled, non-affiliated investments rose to $143,513,299 in 2024, up from $112,223,607 in 2023, marking an increase of about 27.9%[26] - The company reported a net investment income of $62,600,382 for 2024, compared to $57,987,520 in 2023, reflecting an increase of approximately 8.8%[26] Asset and Liability Overview - As of December 31, 2024, total assets were $1.4 billion, and total net assets were $537.8 million[4] - Total assets increased to $1,431,042,759 in 2024 from $1,121,814,718 in 2023, representing a growth of approximately 27.6%[21] - Total liabilities increased to $893,197,790 in 2024 from $659,859,325 in 2023, reflecting a rise of approximately 35.3%[21] - The debt-to-equity ratio as of December 31, 2024, was 1.50x, slightly down from 1.52x as of September 30, 2024[4] Investment Activity - The principal amount of new investments funded in Q4 2024 was $171.8 million, with $176.4 million in aggregate principal amount in sales and repayments[8] - New investments totaled $773,809,544 in 2024, significantly higher than $273,733,424 in 2023, indicating a growth of about 183.5%[30] - The principal amount of investments sold or repaid was $468,762,595 in 2024, compared to $247,083,117 in 2023, which is an increase of approximately 89.7%[30] - The number of new investment commitments increased to 94 in 2024 from 67 in 2023, representing a growth of approximately 40.3%[30] - The weighted average interest rate of new investment commitments was 9.12% in 2024, down from 10.22% in 2023[30] Portfolio Composition - The portfolio consisted of 85.7% first lien senior secured debt investments, with a total fair value of investments at approximately $1.4 billion[7] - The weighted average total yield to maturity of debt and income-producing securities at fair value was 10.65% as of December 31, 2024[8] Dividend Information - The company declared a first quarter regular base dividend of $0.36 per share, payable on April 10, 2025, with a supplemental dividend expected to be announced in March[10] Net Asset Value - Net asset value (NAV) per share decreased to $16.50 as of December 31, 2024, down from $17.04 at the end of 2023, a decline of 3.2%[16] - The net asset value per common share decreased to $16.50 in 2024 from $17.04 in 2023[24] Unfunded Commitments - The company had $21.6 million of unfunded commitments to provide debt financing to its portfolio companies as of December 31, 2024, compared to $20.1 million in 2023[22] Realized and Unrealized Losses - Total net realized and unrealized losses for Q4 2024 were $2.9 million, contrasting with gains of $6.6 million in Q4 2023[4]

Core Insights - Palmer Square Capital BDC Inc. (PSBD) reported revenue of $34.87 million for the quarter ended December 2024, reflecting a 17% increase year-over-year [1] - The earnings per share (EPS) for the quarter was $0.46, down from $0.58 in the same quarter last year [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $34.89 million, resulting in a revenue surprise of -0.05% [1] - The company experienced an EPS surprise of -4.17%, with the consensus EPS estimate being $0.48 [1] Performance Metrics - Investment income from non-controlled, non-affiliated investments showed varied results: - Other income was reported at $0.28 million, below the average estimate of $0.40 million [4] - Dividend income was $0.66 million, compared to the average estimate of $0.70 million [4] - Interest income was reported at $33.25 million, slightly below the average estimate of $33.65 million [4] - Over the past month, shares of Palmer Square Capital BDC Inc. returned -1.9%, compared to a -2.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Performance - Palmer Square Capital BDC Inc. reported quarterly earnings of $0.46 per share, missing the Zacks Consensus Estimate of $0.48 per share, and down from $0.58 per share a year ago, representing an earnings surprise of -4.17% [1] - The company posted revenues of $34.87 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.05%, compared to year-ago revenues of $29.82 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and topped consensus revenue estimates three times [2] Stock Performance and Outlook - Palmer Square Capital BDC Inc. shares have added about 0.5% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.47 on revenues of $34.36 million, and $1.83 on revenues of $134.64 million for the current fiscal year [7] Industry Context - The Financial - SBIC & Commercial Industry, to which Palmer Square Capital BDC Inc. belongs, is currently in the top 22% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5] - The Zacks Rank for Palmer Square Capital BDC Inc. is currently 3 (Hold), suggesting that shares are expected to perform in line with the market in the near future [6]

Investment Portfolio - As of December 31, 2024, the company had 262 debt and equity investments in 207 portfolio companies with an aggregate fair value of approximately $1.3 billion[365]. - As of December 31, 2023, the company had 227 debt and equity investments in 191 portfolio companies with an aggregate fair value of approximately $1.0 billion[366]. - Total investments increased from $1.0 billion as of December 31, 2023 to $1.3 billion as of December 31, 2024, representing a growth of approximately 30%[375]. - The investment portfolio's fair value composition showed a decrease in Software from 14.0% in 2023 to 10.2% in 2024, while Chemicals increased from 2.9% to 5.1%[375]. Investment Performance - Total investment income for the year ended December 31, 2024 was $143.5 million, up from $112.2 million in 2023, reflecting a year-over-year increase of 28%[374]. - Net investment income for 2024 was $62.6 million, compared to $58.0 million in 2023, indicating a growth of approximately 8.5%[374]. - The weighted average total yield of debt and income-producing securities increased to 10.65% in 2024 from 10.51% in 2023[373]. - The weighted average interest rate of new investment commitments was 9.12% in 2024, compared to 10.22% in 2023[369]. - Net change in unrealized gains on investments for 2024 was $2.8 million, a significant decrease from $52.6 million in 2023[383]. - The company reported net realized losses on investments of $17.8 million in 2024, compared to losses of $2.7 million in 2023[374]. Investment Strategy - The company’s investment objective is to maximize total return, which includes current income and capital appreciation, primarily through corporate debt securities[361]. - The company’s investment strategy includes a focus on "Covenant-Lite Loans," which have fewer or no maintenance covenants compared to other loans[361]. Debt and Financing - The principal amount of first-lien senior secured debt investments funded in 2024 was $687.35 million, significantly higher than $267.27 million in 2023[368]. - The company funded portfolio investments of $773.8 million during the year ended December 31, 2024, partially offset by proceeds from the sale of investments totaling $468.8 million[386]. - The company completed a $400.5 million term debt securitization (CLO Transaction) on May 23, 2024, which serves as a source of long-term financing for portfolio investments[408]. - As of December 31, 2024, the company had outstanding indebtedness of $300.0 million under the CLO Transaction[410]. - The BoA Credit Facility has a current commitment amount of $525 million, with the ability to draw until February 11, 2028[397]. - As of December 31, 2024, the company had $352.3 million principal outstanding under the BoA Credit Facility and was in compliance with applicable covenants[401]. - The WF Credit Facility was amended on December 18, 2023, increasing the borrowing amount from $150 million to $175 million and extending the maturity date to December 18, 2028[403]. - As of December 31, 2024, the outstanding loans under the WF Credit Facility amounted to $150.8 million, with $24.2 million of available commitments[407]. Cash and Liquidity - As of December 31, 2024, the company had cash and cash equivalents of $2.8 million and $172.7 million in undrawn capacity under the BoA Credit Facility[389]. - For the year ended December 31, 2024, the company experienced a net increase in cash and cash equivalents of $649 thousand, with net cash used in operating activities amounting to $200.6 million[386]. - Average net assets increased from $420.4 million in 2023 to $801.0 million in 2024, reflecting a substantial growth in asset management[379]. - The company has total contractual obligations of $804,155,659, with $501,650,602 due in 3-5 years and $302,505,057 due beyond 5 years[427]. - The company had $59.7 million in net purchases that had not yet settled as of December 31, 2024[432]. Shareholder Returns - The company intends to distribute quarterly dividends to stockholders, contingent on available income, with a commitment to distribute at least 90% of net ordinary income and net short-term capital gains to maintain RIC tax treatment[411][412]. - The company has adopted a dividend reinvestment plan, allowing stockholders to reinvest dividends in additional shares unless they opt for cash[415]. - During the years ended December 31, 2024, 2023, and 2022, the company issued and sold a total of 5,576,363 shares for an aggregate purchase price of $91.7 million[391]. - The company repurchased 78,964 shares of its common stock under the Company Rule 10b5-1 Repurchase Plan for the year ended December 31, 2024[393]. Risk Management - The company is subject to interest rate sensitivity, which may significantly affect net investment income due to the difference between investment and borrowing rates[430]. - A hypothetical increase of 300 basis points in interest rates could result in a net investment income decrease of $17,415,738[432]. - The company measures exposure to interest rate and currency exchange rate fluctuations and may use hedging instruments to mitigate risks[434]. - The company does not have any off-balance sheet financings or liabilities other than contractual commitments and legal contingencies[429]. Compliance and Governance - The company expects to qualify as a RIC annually under Subchapter M of the Code, which is crucial for its tax treatment[358]. - The company is required to comply with leverage restrictions under the 1940 Act and has made customary representations and warranties regarding its obligations under the WF Credit Facility[406]. - The company has pledged all its assets to U.S. Bank as collateral for the WF Credit Facility, ensuring compliance with various covenants and reporting requirements[406]. - The investment advisor has been designated to determine fair value for portfolio investments, effective August 11, 2022, under the SEC's Rule 2a-5[421]. - The company may engage independent valuation providers to review the valuation of material portfolio investments at least annually[422]. Unfunded Commitments - As of December 31, 2024, the company had 26 unfunded commitments totaling $21.6 million, compared to 15 commitments totaling $20.1 million as of December 31, 2023[428]. - The company’s unfunded commitments may expire without being drawn upon, indicating potential liquidity management strategies[428].

Core Insights - Palmer Square Capital Management is launching three innovative ETFs targeting European institutional investors, expanding its footprint in the European market [1][2][3] - The ETFs will include two passive products focused on EUR and USD denominated AAA and AA CLO debt, and one active multi-strategy ETF [1][2] - The launch reflects the company's commitment to providing advanced solutions in structured credit and meeting rising market demand [2][3] Company Overview - Palmer Square Capital Management was founded in 2009 and manages over $33 billion in assets, focusing on fixed income and credit investments [4] - The firm serves a diverse client base, including institutional investors and high net worth individuals, and offers various investment products such as mutual funds, ETFs, and CLOs [4] - Major offices are located in Kansas City and London, emphasizing a global presence in the investment management industry [4] Product Features - The new ETFs aim to provide capital preservation by targeting cycle-resilient assets with zero historical defaults [2] - The actively managed multi-asset credit allocation product will simplify portfolio construction and enhance access to relative value opportunities across corporate and structured credit [2] - The passive products will leverage Palmer Square's expertise in the senior tranches of the CLO market, offering efficient access to this asset class [2][3] Market Demand - There is a growing institutional appetite for European CLO indices and debt products, indicating strong demand for the new ETFs [3] - The ability to manage and develop these products in-house ensures operational independence and high execution standards [3] - The ETFs are expected to be available in Europe in early 2025, aligning with market trends and investor needs [3]

Investment Income - Total investment income for Q3 2024 was $37.3 million, up from $28.8 million in Q3 2023, representing a 29.1% increase[2] - Investment income from non-controlled, non-affiliated investments for Q3 2024 was $37,306,001, a 30% increase from $28,773,690 in Q3 2023[17] - Interest income for the nine months ended September 30, 2024, reached $104,261,540, up from $78,943,113 in the same period of 2023, reflecting a growth of approximately 32%[17] Net Investment Income - Net investment income for Q3 2024 was $15.7 million or $0.48 per share, compared to $14.8 million or $0.57 per share in the same period last year, indicating a decrease of 7.9% in per share income[2] - Net investment income for Q3 2024 was $15,728,731, compared to $14,803,913 in Q3 2023, showing a slight increase of approximately 6%[17] - Basic and diluted net investment income per common share for Q3 2024 was $0.48, down from $0.57 in Q3 2023, a decrease of about 16%[18] Asset and Net Asset Value - Net asset value (NAV) per share decreased to $16.61 as of September 30, 2024, down from $16.85 as of June 30, 2024[2] - Total assets increased to $1,413,552,127 as of September 30, 2024, up from $1,121,814,718 on December 31, 2023, representing a growth of approximately 26%[14] - Net assets rose to $541,937,155 as of September 30, 2024, compared to $461,955,393 at the end of 2023, indicating an increase of about 17%[15] - The net asset value per common share decreased to $16.61 as of September 30, 2024, from $17.04 at the end of 2023, a decline of approximately 2.5%[15] Losses and Expenses - Total net realized and unrealized losses for Q3 2024 were $8.2 million, contrasting with gains of $19.0 million in Q3 2023[2] - Total expenses for Q3 2024 were $21,577,270, compared to $14,244,497 in Q3 2023, marking a rise of about 52%[17] - The net increase in net assets resulting from operations for Q3 2024 was $7,555,185, down from $33,853,088 in Q3 2023, indicating a decrease of about 78%[18] Debt and Commitments - Debt-to-equity ratio increased to 1.52x as of September 30, 2024, compared to 1.49x as of June 30, 2024[2] - The company had $1.8 million in cash and cash equivalents and approximately $824.4 million in total debt outstanding as of September 30, 2024[5] - The company had $19.6 million in unfunded commitments to provide debt financing to its portfolio companies as of September 30, 2024[14] Investment Portfolio - The portfolio consisted of 258 investments in 212 companies with a total fair value of approximately $1.4 billion, with 87.1% in first lien senior secured debt[4] - The weighted average total yield to maturity of debt and income-producing securities at fair value was 10.48%[4] New Investments - Gross investments for the three months ended September 2023 were $66,239,961, a decrease from $78,271,670 in the same period last year, representing a decline of approximately 15.5%[19] - Total new investments for the nine months ended September 2023 amounted to $309,618,619, compared to a loss of $6,032,575 in the same period last year[19] - The number of new investment commitments increased to 21 for the three months ended September 2023, up from 20 in the same period last year[19] - The weighted average interest rate of new investment commitments was 9.07% for the three months ended September 2023, down from 10.00% in the same period last year[19] - The total principal amount of investments sold or repaid for the three months ended September 2023 was $82,822,220, compared to $58,480,713 in the same period last year, an increase of approximately 41.7%[19] - The average new investment commitment amount decreased to $2,717,288 for the three months ended September 2023, down from $2,889,085 in the same period last year[19] - The weighted average maturity for new investment commitments was 5.29 years for the three months ended September 2023, slightly down from 5.61 years in the same period last year[19] - The percentage of new debt investment commitments at floating rates remained at 100.00% for both the three months ended September 2023 and the same period last year[19] - The weighted average spread over reference rate of new floating rate investment commitments was 4.17% for the three months ended September 2023, down from 4.57% in the same period last year[19] - The principal amount of first-lien senior secured debt investments funded was $62,171,592 for the three months ended September 2023, compared to $74,412,920 in the same period last year, a decrease of approximately 16.5%[19] Dividends - The company declared a fourth quarter base dividend of $0.42 per share, payable on January 13, 2025[6]

Financial Data and Key Metrics Changes - Palmer Square Capital BDC reported total investment income of $37.3 million for Q3 2024, a 30% increase from $28.8 million in the prior year period [40] - Net investment income for Q3 2024 was $15.7 million or $0.48 per share, compared to $14.8 million or $0.57 per share for the same period last year [41] - NAV per share decreased to $16.61 from $16.85 at the end of Q2 2024, driven by realized and mild mark-to-market losses [42] Business Line Data and Key Metrics Changes - The total investment portfolio had a fair value of approximately $1.39 billion as of September 30, 2024, down from $1.43 billion at the end of Q2 2024, reflecting a decline of about 3% [28] - The portfolio is 96% senior secured, with an average hold size of approximately $6 million [35] - New private credit loans comprised 12% of overall new investments, funded at a weighted average spread of 530 basis points over the reference rate [37] Market Data and Key Metrics Changes - The company deployed $66 million of capital during the third quarter, including 21 new investment commitments [9] - The weighted average total yield to maturity of debt and income-producing securities at fair value was 10.48% [32] - Interest coverage ratios in the broadly syndicated loan market remain higher than many analysts would have assumed, indicating a stable market environment [18] Company Strategy and Development Direction - The company aims to maintain a diversified opportunistic portfolio, focusing on high-quality borrowers to drive shareholder value [11] - Palmer Square Capital plans to increase its allocation to large cap private credit, which is now approaching 10% of the portfolio [30] - The management strategy emphasizes maintaining disciplined underwriting standards and a focus on liquid loans to larger companies with strong fundamentals [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's ability to outperform on a credit basis despite an increase in non-accruals across the BDC sector [12] - The company anticipates an increase in deal activity as clarity around the election and rate environment stabilizes [23] - Management noted that the current spread tightening environment presents meaningful opportunities for specialized managers [26] Other Important Information - The company repurchased 9,312 shares at an average price of $16.16 for a total cost of $150,000 [43] - A fourth quarter 2024 base dividend of $0.42 per share was declared, in line with the company's formalized dividend policy [43] Q&A Session Summary Question: Can you discuss the maximum allocation for private credit to maintain liquidity? - The company does not have a hard cap but aims to maintain a meaningful portion of liquid assets for opportunities [45][46] Question: Are there differences in underwriting quality or covenants between markets? - The overall hit ratio remains low, and there is significant demand for floating rate loans, necessitating prudent credit quality management [47][48] Question: What factors influenced the portfolio yield fluctuations? - The yield changes are attributed to refinancing activity and adjustments in the portfolio to maintain yield [51][52] Question: How quickly does the portfolio reprice with declining rates? - The impact of the recent rate cut was minimal in Q3, but future repricing will depend on market conditions [60][62] Question: Should we expect more runoff in short-term investments? - The short-term investments have normalized, and some commitments will be funded in the fourth quarter [64]

Stock Repurchase and Share Issuance - The company repurchased 1,930 shares of its common stock at an aggregate price of $30,585 from October 1, 2024, to November 5, 2024[141]. - During the nine months ended September 30, 2024, the company issued 5,551,372 shares for an aggregate purchase price of $91.3 million, compared to 2,379,185 shares for $39.3 million in the same period of 2023[173]. - The company repurchased 30,664 shares under the Company Rule 10b5-1 Repurchase Plan during the nine months ended September 30, 2024[175]. Investment Performance and Portfolio - The company had 258 debt and equity investments in 212 portfolio companies with an aggregate fair value of approximately $1.3 billion as of September 30, 2024[151]. - The total investments at fair value as of September 30, 2024, reached $1,389,801,144, up from $1,159,135,422 as of December 31, 2023[155]. - The size of the investment portfolio at fair value increased from $1.0 billion as of December 31, 2023, to $1.3 billion as of September 30, 2024[161]. - Loans on non-accrual status represented 0.26% of total investments at fair value as of September 30, 2024, with no loans on non-accrual status as of December 31, 2023[161]. Investment Income and Expenses - Total investment income for the three months ended September 30, 2024, was $37,306,001, compared to $28,773,690 in 2023, and for the nine months, it was $108,640,440, up from $82,401,055 in 2023[161]. - Interest from investments contributed $35,775,337 to total investment income for the three months ended September 30, 2024, compared to $27,323,754 in 2023[161]. - Net expenses for the three months ended September 30, 2024, were $21.6 million, an increase from $14.0 million in the same period of 2023, primarily due to higher interest expenses[163][164]. - Interest expense for the nine months ended September 30, 2024, was $43.8 million, compared to $32.7 million for the same period in 2023, reflecting an increase in average debt balance from $628.2 million to $793.4 million[165]. Debt and Financing - The company had $376.6 million principal outstanding under the BoA Credit Facility as of September 30, 2024, down from $495.0 million in the prior year[171]. - The BoA Credit Facility has a commitment amount of $525 million, with the ability to draw scheduled to terminate on February 11, 2028[178]. - The WF Credit Facility was amended to increase the borrowing amount from $150 million to $175 million and extend the maturity date to December 18, 2028[184]. - As of September 30, 2024, PS BDC Funding had $376.6 million principal outstanding and $148.4 million of available Commitments under the BoA Credit Facility[182]. - As of September 30, 2024, PS BDC Funding II had $144.1 million outstanding and $30.9 million of available Commitments under the WF Credit Facility[188]. Investment Strategy and Management - The company’s investment objective is to maximize total return, which includes current income and capital appreciation[147]. - The company is externally managed by an Investment Advisor registered with the SEC, which oversees day-to-day operations and investment management[146]. - The company has elected to be regulated as a BDC under the 1940 Act and expects to qualify as a RIC annually[144]. Dividends and Tax Treatment - The company intends to distribute quarterly dividends to stockholders, subject to available income and Board approval[191]. - To maintain RIC tax treatment, the company must distribute at least 90% of its net ordinary income and net short-term capital gains[192]. - The company has adopted a dividend reinvestment plan allowing stockholders to reinvest dividends in additional shares unless they opt for cash[195]. - The company plans to primarily use newly-issued shares for its dividend reinvestment plan, with the number of shares determined by the total dollar amount of the dividend divided by the market price per share on the payment date[197]. Interest Rate Sensitivity and Hedging - The company is subject to interest rate sensitivity, with potential impacts on net investment income due to changes in interest rates[208]. - A hypothetical increase of 300 basis points in interest rates could result in a net increase in investment income of $15.3 million[210]. - The company may hedge against interest rate and currency exchange rate fluctuations using standard hedging instruments such as futures, options, swaps, and forward contracts[212]. - Hedging activities may insulate the company against adverse changes in interest rates[212]. - The company acknowledges that hedging may limit its ability to benefit from lower interest rates regarding its portfolio of investments with fixed interest rates[212]. Valuation and Commitments - The company has unfunded commitments totaling $19.6 million as of September 30, 2024, which may expire without being drawn upon[207]. - As of September 30, 2024, the company has total contractual obligations of $824.4 million, including $373.7 million from the BoA Credit Facility and $305.9 million from the CLO Transaction[206]. - The company measures exposure to interest rate and currency exchange rate fluctuations on an ongoing basis[212]. - The company engages independent valuation providers to review the valuation of material portfolio investments at least once annually[201]. - The company measures realized gains or losses based on the difference between net proceeds from sales and the amortized cost basis of investments[203].