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].

Core Viewpoint - Palmer Square Capital Management has launched two new exchange traded funds (ETFs), the Palmer Square Credit Opportunities ETF (PSQO) and the Palmer Square CLO Senior Debt ETF (PSQA), aimed at providing innovative investment solutions in the credit market [1][2]. Group 1: ETF Details - The Palmer Square Credit Opportunities ETF (PSQO) is an actively managed multi-asset credit strategy that simplifies portfolio construction and enhances access to relative value opportunities across various credit types, including CLOs, investment grade and high yield corporate bonds, ABS, and bank loans [2][3]. - The Palmer Square CLO Senior Debt ETF (PSQA) offers passive access to the CLO market through a proprietary CLO Senior Debt Index (CLOSE), allowing investors to leverage Palmer Square's expertise in the senior tranches of the CLO market [2][3]. Group 2: Company Background - Palmer Square Capital Management, founded in 2009, manages over $32 billion in assets and focuses on opportunistic credit, income strategies, private credit, and CLOs, serving a diverse client base including institutional investors and high net worth individuals [4]. - The firm has established itself as a top issuer in the global CLO market and created the first public Senior and Debt CLO benchmarks in 2015, demonstrating its deep understanding of market complexities [2][4]. Group 3: Market Position and Strategy - The investment philosophy of Palmer Square is consistent across multiple credit cycles, emphasizing the identification of relative value and credit selection through detailed fundamental credit analysis [3]. - The new ETFs are set to begin trading on September 12, 2024, with Palmer Square participating in the opening bell ceremony at the New York Stock Exchange [3].

Financial Data and Key Metrics Changes - Total investment income for Q2 2024 was $36.5 million, a 33% increase from $27.4 million in the prior year [24] - Net investment income for Q2 2024 was $15.8 million or $0.48 per share, compared to $14.2 million or $0.56 per share for the same period last year [24] - NAV per share decreased to $16.85 from $17.16 at the end of Q1 2024 [25] Business Line Data and Key Metrics Changes - The total investment portfolio as of June 30, 2024, had a fair value of approximately $1.43 billion, reflecting a sequential growth of approximately 3% from $1.39 billion at the end of Q1 2024 [16] - The company deployed $189 million of capital in Q2 2024, including 24 new investment commitments [16] - The portfolio is 96% Senior Secured with an average hold size of approximately $6 million [19] Market Data and Key Metrics Changes - Bank loans returned 1.7% during Q2 2024, bringing the year-to-date return to 4.1% [11] - PSBD returned approximately 7.5% year-to-date through July 2024 [11] - The CLO market had a record year with $243 billion issued in the U.S. and $41 billion in Europe as of July 31, 2024 [8] Company Strategy and Development Direction - The company focuses on an opportunistic credit investment strategy, allowing it to invest across liquid and private markets [7] - The strategy emphasizes maintaining exceptional credit quality while seeking to capitalize on market opportunities [6] - The company aims to maintain strong credit quality and avoid adding meaningful risk in the current market environment [14] Management's Comments on Operating Environment and Future Outlook - The U.S. economy has shown signs of modest slowing, with the labor market beginning to show fatigue [10] - Management remains cautiously optimistic about the potential for new borrowers entering the market in the second half of the year [31] - The company is focused on maintaining discipline in investment decisions amid a borrower-friendly environment [13] Other Important Information - The company repurchased 21,352 shares at an average price of $16.22 during Q2 2024 [26] - The Board of Directors declared a third quarter 2024 base dividend of $0.42 per share [26] - PIK income as a percentage of overall net investment income remains low at approximately 0.5% [22] Q&A Session Summary Question: Can you elaborate on the thought process behind the investments sold within the portfolio? - The majority of sales were due to refinancing and spread tightening, where some loans did not meet the required yield [29] Question: What are the latest thoughts on the attractiveness of primary versus secondary loan markets? - The majority of new investments were refinancing transactions, with cautious optimism for new borrowers in the latter half of the year [31] Question: How are covenant and collateral packages trending in recent transactions? - There has been more lender-friendly terms recently, but it is too early to determine the long-term impact [34] Question: Can you clarify the realized gains and unrealized gains in the portfolio this quarter? - Some loans were marked above par due to strong performance, and when repaid at par, it led to a reversal of unrealized gains [37]

Exhibit 99.1 Palmer Square Capital BDC Inc. Announces Second Quarter 2024 Financial Results Declares Third Quarter 2024 Base Dividend of $0.42 Per Share with Supplemental Dividend Expected to be Announced in September MISSION WOODS, Kansas, August 8, 2024 — Palmer Square Capital BDC Inc. (NYSE: PSBD) ("PSBD" or the "Company"), an externally managed business development company, today announced its financial results for the second quarter ended June 30, 2024. Financial and Operating Highlights ● Total invest ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000-56126 Palmer Square Capital BDC Inc. (Exact name of registrant as specified in its charter) | --- | --- | --- | |--------------------------------------------------------------- ...

Palmer Square Capital BDC Inc. (NYSE:PSBD) Q1 2024 Earnings Conference Call May 7, 2024 12:00 PM ET Company Participants Andrew Wedderburn-Maxwell - Investor Relations Chris Long - Chairman and Chief Executive Officer Angie Long - Chief Investment Officer Matt Bloomfield - President Jeff Fox - Chief Financial Officer and Director Conference Call Participants Melissa Wedel - JPMorgan Kenneth Lee - Capital Markets Vilas Abraham - UBS Operator Welcome to Palmer Square Capital BDC’s First Quarter 2024 Earnings ...

Palmer Square Capital BDC Inc. Announces First Quarter 2024 Financial Results and Declares Second Quarter 2024 Base Dividend Distribution of $0.42 Per Share MISSION WOODS, Kansas, May 7, 2024 — 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 Exhibit 99.1 "Palmer Square Capital BDC generated strong first quarter results ...