Core Insights - Palmer Square Capital Management celebrates the 10-year anniversary of its CLO indices, which were first introduced on May 29, 2015, providing daily performance benchmarks for the CLO market [1][2] Company Overview - Palmer Square Capital Management was founded in 2009 and manages over $34.2 billion in fixed income and credit investments as of March 31, 2025 [7] - The firm focuses on Opportunistic Credit, Income Strategies, Private Credit, and CLOs, offering various investment products including mutual funds and private partnerships [7] Industry Insights - The CLO market has grown significantly from approximately $400 million a decade ago to over $1 trillion in market value, highlighting the rapid expansion of this asset class [4] - Palmer Square's daily performance indices have contributed to the transparency and growth of the CLO market, allowing investors to benchmark performance effectively [4] Performance Data - The Palmer Square CLO Senior Debt Index (CLOSE) has shown varied performance over the years, with a year-to-date return of 1.57% in 2025 and a peak return of 9.01% in 2023 [3] - The Palmer Square CLO Debt Index (CLODI) has also demonstrated strong performance, achieving a return of 13.22% in 2024 and 17.40% in 2023 [3]

[First Quarter 2025 Financial Results Announcement](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results%20Announcement) [Overview and Key Highlights](index=1&type=section&id=Overview%20and%20Key%20Highlights) Q1 2025 results show decreased investment income and NAV per share, with a declared Q2 base dividend and expected supplemental dividend - Palmer Square Capital BDC Inc. announced its financial results for the first quarter ended March 31, 2025, and declared a second quarter 2025 base dividend of **$0.36 per share**[1](index=1&type=chunk) Key Financial Highlights | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :-------------------------------- | :-------- | :-------- | :----------- | | Total Investment Income | $31.2M | $34.8M | -$3.6M | | Net Investment Income | $12.9M | $16.3M | -$3.4M | | Net Investment Income Per Share | $0.40 | $0.52 | -$0.12 | | Net Asset Value Per Share (as of period end) | $15.85 (Mar 31, 2025) | $16.50 (Dec 31, 2024) | -$0.65 (QoQ) | | Total Net Realized & Unrealized | -$21.3M | $6.6M | -$27.9M | | Total Assets (as of period end) | $1.4B | N/A | N/A | | Total Net Assets (as of period end) | $515.8M | N/A | N/A | | Debt-to-Equity (as of period end) | 1.50x | 1.50x (Dec 31, 2024) | Unchanged | | Cash Distributions Paid (Q1 2025) | $0.39/share | N/A | N/A | | Declared Q2 Base Dividend | $0.36/share | N/A | N/A | | PIK Income (% of Total Inv. Income) | 1.63% | N/A | N/A | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Christopher D. Long highlighted the company's flexible investment strategy and shareholder alignment, seeing value in the current NAV discount - CEO Christopher D. Long stated that Palmer Square Capital BDC's investment strategy, rooted in liquid credit opportunities and senior-secured private credit, demonstrated strength and flexibility in Q1 2025, particularly during macro uncertainty[3](index=3&type=chunk) - The company was established with a focus on shareholder alignment, offering a differentiated fee structure and prioritizing transparency in monthly NAV and quarterly portfolio disclosure[3](index=3&type=chunk) - The CEO believes the current discount to NAV provides great value and that the investment team continues to find opportunities that preserve credit quality, deliver attractive yield, and create long-term shareholder value[3](index=3&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) [Per Common Share Operating Performance](index=2&type=section&id=Per%20Common%20Share%20Operating%20Performance) Q1 2025 saw declines in Net Investment Income and NAV per share, with negative total return and decreased net assets Per Common Share Operating Metrics | Metric | Q1 2025 | Q4 2024 | Q1 2024 | Change (QoQ) | Change (YoY) | | :------------------------------------ | :-------- | :-------- | :-------- | :----------- | :----------- | | Net Investment Income Per Share | $0.40 | $0.45 | $0.52 | -$0.05 | -$0.12 | | NAV Per Share (End of Period) | $15.85 | $16.50 | $17.16 | -$0.65 | -$1.31 | | Dividends Earned Per Share | $0.39 | $0.48 | $0.49 | -$0.09 | -$0.10 | | Net Realized & Unrealized Gain (Loss) per Share | -$0.66 | N/A | $0.09 | N/A | -$0.75 | | Net Increase (Decrease) in Net Assets from Operations per Share | -$0.26 | N/A | $0.61 | N/A | -$0.87 | | Distributions to Common Stockholders per Share | -$0.39 | N/A | -$0.49 | N/A | $0.10 | | Total Return (%) | (1.05)% | 2.36% | 3.70% | -3.41% | -4.75% | | Shares Outstanding (End of Period) (count) | 32,534,040 | 32,600,193 | 32,552,794 | -66,153 | -18,754 | | Net Assets (End of Period) | $515,807,254 | $537,844,969 | $558,537,164 | -$22,037,715 | -$42,729,910 | - The ratio of operating expenses to average net assets with waiver remained stable at **13.72%** in Q1 2025 compared to **13.66%** in Q1 2024[16](index=16&type=chunk) - The ratio of net investment income to average net assets with waiver decreased to **9.68%** in Q1 2025 from **12.07%** in Q1 2024[16](index=16&type=chunk) [Consolidated Statement of Assets and Liabilities](index=6&type=section&id=Consolidated%20Statement%20of%20Assets%20and%20Liabilities) Total assets and liabilities decreased in Q1 2025, primarily due to reduced non-affiliated investments, leading to lower net assets Consolidated Assets and Liabilities | Asset/Liability | March 31, 2025 | December 31, 2024 | Change (QoQ) | | :------------------------------------------------ | :------------- | :---------------- | :----------- | | Non-controlled, non-affiliated investments (fair value) | $1,334,314,263 | $1,407,130,945 | -$72,816,682 | | Cash and cash equivalents | $2,872,420 | $2,766,409 | $106,011 | | Total Assets | $1,362,929,722 | $1,431,042,759 | -$68,113,037 | | Credit facilities (net) | $472,325,212 | $501,650,602 | -$29,325,390 | | Notes (net) | $302,126,552 | $302,505,057 | -$378,505 | | Payable for investments purchased | $54,828,596 | $67,460,523 | -$12,631,927 | | Distributions payable | $12,691,089 | $15,649,925 | -$2,958,836 | | Total Liabilities | $847,122,468 | $893,197,790 | -$46,075,322 | | Total Net Assets | $515,807,254 | $537,844,969 | -$22,037,715 | | Net Asset Value Per Common Share | $15.85 | $16.50 | -$0.65 | - The company had **$20.2 million** in unfunded commitments to portfolio companies as of March 31, 2025, a slight decrease from **$21.6 million** at December 31, 2024[22](index=22&type=chunk) [Consolidated Statement of Operations](index=7&type=section&id=Consolidated%20Statement%20of%20Operations) Q1 2025 total investment income and net investment income declined, with significant net realized and unrealized losses impacting net assets Consolidated Statement of Operations Summary | Income/Expense Item | Q1 2025 | Q1 2024 | Change (YoY) | | :------------------------------------ | :----------- | :----------- | :----------- | | Interest income | $29,819,663 | $33,259,959 | -$3,440,296 | | Dividend income | $574,336 | $1,254,696 | -$680,360 | | Payment-in-kind interest income | $507,850 | $0 | $507,850 | | Total Investment Income | $31,214,279 | $34,784,943 | -$3,570,664 | | Incentive fees | $1,842,706 | $1,924,752 | -$82,046 | | Interest expense | $12,969,757 | $13,178,830 | -$209,073 | | Management fees | $2,333,675 | $2,416,239 | -$82,564 | | Total Expenses | $18,301,128 | $18,517,225 | -$216,097 | | Net Investment Income (Loss) | $12,913,151 | $16,318,229 | -$3,405,078 | | Net realized gains (losses) | -$5,894,493 | -$1,736,331 | -$4,158,162 | | Net change in unrealized gains (losses) | -$15,407,869 | $8,298,242 | -$23,706,111 | | Total realized and unrealized gains (losses) | -$21,302,362 | $6,561,911 | -$27,864,273 | | Net Increase (Decrease) in Net Assets from Operations | -$8,389,211 | $22,880,140 | -$31,269,351 | | Basic and diluted net investment income per common share | $0.40 | $0.52 | -$0.12 | - The company recorded **$507,850** in Payment-in-kind (PIK) interest income in Q1 2025, compared to none in Q1 2024[24](index=24&type=chunk) [Portfolio and Investment Activity](index=2&type=section&id=Portfolio%20and%20Investment%20Activity) [Portfolio Composition and Characteristics](index=2&type=section&id=Portfolio%20Composition%20and%20Characteristics) The Q1 2025 portfolio, valued at $1.3 billion, comprised 260 investments, mostly floating-rate senior secured debt across 209 companies Portfolio Composition and Key Characteristics | Metric | As of March 31, 2025 | As of December 31, 2024 | As of March 31, 2024 | | :------------------------------------ | :------------------- | :-------------------- | :------------------- | | Total Fair Value of Investments | $1,334,314,000 | $1,407,131,000 | $1,393,192,000 | | Number of Industries | 39 | 38 | 39 | | Number of Portfolio Companies | 209 | 207 | 211 | | Portfolio Yield (%) | 10.37% | 10.65% | 10.11% | | Senior Secured Loan % (%) | 96% | 96% | 96% | | Investments on Non-Accrual % (%) | 0.24% | 0.08% | 0.00% | - As of March 31, 2025, the portfolio's fair value composition included **86.2%** first lien senior secured debt, **5.4%** second lien senior secured debt, **4.3%** short-term investments, **3.3%** CLOs mezzanine and equity, **0.3%** corporate bonds, and **0.5%** equity investments[6](index=6&type=chunk) - **98%** of long-term investments were at floating rates, and **99.76%** of the portfolio at fair value was income producing. The weighted average total yield to maturity of debt and income producing securities at fair value was **10.37%**, and at amortized cost was **8.48%**[7](index=7&type=chunk) [Investment Transaction Details](index=8&type=section&id=Investment%20Transaction%20Details) Q1 2025 saw $104.3 million in new investments, offset by $144.4 million in sales/repayments, resulting in a net decrease in total investments Investment Transaction Summary | Investment Activity | Q1 2025 | Q1 2024 | Change (YoY) | | :------------------------------------ | :----------- | :----------- | :----------- | | Gross investments funded | $104,323,107 | $346,482,823 | -$242,159,716 | | Investments sold/repaid | $144,369,364 | $69,556,336 | $74,813,028 | | Total new investments (net) | -$40,046,257 | $276,926,487 | -$316,972,744 | | Number of new investment commitments (count) | 23 | 36 | -13 | | Average new investment commitment amount (USD) | $3,855,336 | $4,052,057 | -$196,721 | | Weighted average maturity for new commitments (years) | 5.59 years | 6.18 years | -0.59 years | | % of new debt investments at floating rates (%) | 100.00% | 100.00% | 0.00% | | Weighted average interest rate of new commitments (%) | 8.52% | 10.19% | -1.67% | | Weighted average spread over reference rate of new floating rate commitments (%) | 4.21% | 4.81% | -0.60% | | Weighted average interest rate on long-term investments sold/paid down (%) | 8.33% | 7.99% | 0.34% | - New investments funded in Q1 2025 primarily consisted of **$97.4 million** in first-lien senior secured debt investments and **$6.9 million** in common stock[29](index=29&type=chunk) - Sales and repayments in Q1 2025 were predominantly from first-lien senior secured debt investments (**$138.0 million**)[29](index=29&type=chunk) [Liquidity and Capital Resources](index=2&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held $2.9 million in cash and $229.5 million in available liquidity against $20.2 million in undrawn investment commitments Liquidity and Capital Resources Overview | Metric | As of March 31, 2025 | As of December 31, 2024 | | :------------------------------------ | :------------------- | :-------------------- | | Cash and cash equivalents | $2.9 million | $2.8 million | | Total aggregate principal debt outstanding | $774.5 million | N/A | | Available liquidity (cash + undrawn credit) | $229.5 million | N/A | | Undrawn investment commitments | $20.2 million | $21.6 million | [Recent Developments](index=2&type=section&id=Recent%20Developments) The Board declared a Q2 2025 base dividend of $0.36 per share, payable July 14, 2025, with an additional supplemental dividend expected - On May 07, 2025, PSBD's Board of Directors declared a Q2 2025 regular base dividend of **$0.36 per share**, payable on July 14, 2025, to shareholders of record as of June 27, 2025[9](index=9&type=chunk) - The company expects to announce an additional quarterly supplemental dividend distribution for the second quarter of 2025 in June[9](index=9&type=chunk) [Additional Information](index=4&type=section&id=Additional%20Information) [About Palmer Square Capital BDC Inc.](index=4&type=section&id=About%20Palmer%20Capital%20BDC%20Inc.) PSBD is an externally managed BDC aiming to maximize total return through corporate debt loans in syndicated and direct large-cap private credit - PSBD is an externally managed, non-diversified closed-end management investment company regulated as a BDC[12](index=12&type=chunk) - The company's investment objective is to maximize total return, comprising current income and capital appreciation[12](index=12&type=chunk) - PSBD primarily invests in corporate debt loans, including large private U.S. companies in the broadly syndicated loan market and direct large-cap private credit market, and to a lesser extent, other debt securities like CLO debt and equity[12](index=12&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The press release contains forward-looking statements on future performance and dividends, subject to risks, not guarantees, and not updated unless legally required - The press release includes forward-looking statements about future base and supplemental dividend distributions and the prospects of portfolio companies[13](index=13&type=chunk) - These statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially[13](index=13&type=chunk) - PSBD undertakes no duty to update any forward-looking statement unless required by law[13](index=13&type=chunk) [Earnings Conference Call & Contacts](index=4&type=section&id=Earnings%20Conference%20Call%20%26%20Contacts) An earnings conference call is scheduled for May 07, 2025, at 1:00 pm ET, with online registration and contact details provided - A conference call to review financial performance and conduct a Q&A session will be held on Wednesday, May 07, 2025, at 1:00 pm ET[11](index=11&type=chunk) - Participants can register online via the Palmer Square Investor Relations website, and a replay will be available after the event[11](index=11&type=chunk) - Contact details for investor relations (Matt Bloomfield and Jeremy Goff) and media (Josh Clarkson of Prosek Partners) are provided[14](index=14&type=chunk)

Core Insights - Palmer Square Capital BDC Inc. reported a revenue of $31.21 million for the quarter ended March 2025, reflecting a year-over-year decline of 10.3% and an EPS of $0.40, down from $0.52 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $32.5 million by 3.95%, while the EPS also missed the consensus estimate of $0.44 by 9.09% [1] Financial Performance - Investment income from non-controlled, non-affiliated investments showed varied results: Other income was $0.31 million against an estimate of $0.41 million, Dividend income was $0.57 million compared to an estimate of $0.58 million, and Interest income was $29.82 million versus an estimate of $30.83 million [4] - Over the past month, shares of Palmer Square Capital BDC Inc. returned +4%, while the Zacks S&P 500 composite increased by +10.6% [3]

Financial Performance - Palmer Square Capital BDC Inc. reported quarterly earnings of $0.40 per share, missing the Zacks Consensus Estimate of $0.44 per share, and down from $0.52 per share a year ago, representing an earnings surprise of -9.09% [1] - The company posted revenues of $31.21 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 3.95%, and down from $34.79 million year-over-year [2] - Over the last four quarters, the company has not surpassed consensus EPS estimates and has topped consensus revenue estimates only twice [2] Stock Performance - Shares of Palmer Square Capital BDC Inc. have lost about 16.4% since the beginning of the year, compared to a decline of -4.7% for the S&P 500 [3] - The current consensus EPS estimate for the coming quarter is $0.43 on revenues of $32.01 million, and for the current fiscal year, it is $1.75 on revenues of $128.35 million [7] Industry Outlook - The Financial - SBIC & Commercial Industry, to which Palmer Square Capital BDC Inc. belongs, is currently in the bottom 37% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the company's stock performance may be influenced by these revisions [5]

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].