Palmer Square Capital BDC(PSBD) - 2021 Q2 - Quarterly Report

Investment Performance - As of June 30, 2021, the weighted average total yield to maturity of debt and income-producing securities at fair value was 5.02%[167] - The weighted average total yield to maturity of debt and income-producing securities at amortized cost was 5.35% as of June 30, 2021[167] - The fair value of total investments increased from $640,100,635 as of December 31, 2020, to $721,635,479 as of June 30, 2021, representing a growth of 12.7%[175] - The weighted average total yield of debt and income-producing securities was 5.02% as of June 30, 2021, compared to 4.96% as of December 31, 2020[173] - Total investment income for the three months ended June 30, 2021, was $7,869,228, compared to $6,409,072 for the same period in 2020, reflecting an increase of 22.7%[174] - Net investment income for the six months ended June 30, 2021, was $10,233,952, up from $3,872,987 in the same period of 2020[174] Investment Portfolio - The aggregate fair value of the company's investments as of June 30, 2021, was approximately $653.6 million, consisting of 197 debt and equity investments in 178 portfolio companies[168] - As of December 31, 2020, the aggregate fair value of investments was approximately $600.1 million, with 202 debt and private investments in 181 portfolio companies[169] - The company had no loans on non-accrual status as of June 30, 2021, indicating a stable investment portfolio[176] - The net change in unrealized gains (losses) on investments for the three months ended June 30, 2021, was $(1,871,880), compared to $27,924,433 in the same period of 2020[174] - The net change in unrealized gains (losses) on investments for the three months ended June 30, 2021 was a loss of $1.9 million, compared to a gain of $27.9 million for the same period in 2020[179] Financial Position - As of June 30, 2021, the company had cash and cash equivalents of $1.0 million, up from $0.7 million as of June 30, 2020[184] - The company experienced a net increase in cash and cash equivalents of $336 thousand during the six months ended June 30, 2021[182] - The company had aggregate capital commitments of $9.4 million as of June 30, 2021, with 89% unfunded commitments[185] - The company had $45.6 million in net purchases that had not yet settled as of June 30, 2021, which will affect future interest expenses[225] - The company has total contractual obligations of $413.9 million due within 1-3 years related to its credit facility[219] Debt and Financing - The company bears all out-of-pocket costs and expenses of operations, including interest expense and costs associated with making investments[166] - The company had $415 million principal outstanding under the Credit Facility, compared to approximately $335 million as of June 30, 2020[184] - The Credit Facility has a commitment amount that increased to $475 million as of October 12, 2020, with a maturity date of February 18, 2023[190] - The Wells Fargo Credit Facility has a total Facility Amount of $150 million, maturing on December 18, 2025, with the ability to draw terminating on December 18, 2023[196] - Interest rates for Broadly Syndicated Loans are set at LIBOR or base rate plus 1.85%, while Middle Market Loans are at LIBOR or base rate plus 2.35%[197] Investment Strategy and Management - The company generates revenue primarily from interest and fee income on debt investments, with interest generally payable quarterly or semi-annually[165] - The company has elected to be regulated as a Business Development Company (BDC) under the Investment Company Act of 1940 and expects to qualify as a Regulated Investment Company (RIC) annually[161] - The company is externally managed by an investment advisor registered with the SEC, which provides investment advisory and management services[162] - The company may enter into derivatives transactions to hedge against fluctuations in currency exchange rates and market interest rates[163] - The company may hedge against interest rate and currency exchange rate fluctuations using standard hedging instruments[227] Dividends and Shareholder Returns - The company intends to distribute quarterly dividends to stockholders, with a requirement to distribute at least 90% of net ordinary income and net short-term capital gains to maintain RIC tax treatment[202] - The company has adopted a dividend reinvestment plan, allowing stockholders to reinvest dividends in additional shares unless they opt for cash[204] Risk Management - The company is exposed to financial market risks, including changes in interest rates, which may materially affect net investment income[222] - The company is subject to risks associated with foreign currency investments, including significant fluctuations in currency exchange rates[226] - The company does not have any off-balance sheet financings or liabilities other than contractual commitments and legal contingencies[221] - The company maintains sufficient liquidity to fund unfunded commitments through cash, receivables, and borrowing capacity[220] Investment Commitments - Total new investments for the three months ended June 30, 2021, were $15,609,129, a significant decrease from $236,499,578 in the same period of 2020[171] - The percentage of new debt investment commitments at floating rates was 98.77% for the three months ended June 30, 2021[171] - The average new investment commitment amount increased to $3,005,848 for the three months ended June 30, 2021, from $2,095,848 in the same period of 2020[171] - The number of new investment commitments decreased to 27 for the three months ended June 30, 2021, down from 87 in the same period of 2020[171] - The company has eight unfunded commitments totaling $5.3 million as of June 30, 2021, compared to three unfunded commitments totaling $1.3 million as of December 31, 2020[220]