Palmer Square Capital BDC(US:PSBD)2024-02-28 12:00Investment Portfolio - 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[382]. - As of December 31, 2023, total investments amounted to $1.16 billion, with first-lien senior secured debt representing the largest portion at approximately $952.10 million fair value[387]. - The investment portfolio at fair value increased to $1.0 billion as of December 31, 2023, from $966.9 million in 2022[394]. - The company has designated its Investment Advisor as the valuation designee for determining fair value of portfolio investments effective August 11, 2022[435]. - The company measures realized gains or losses based on the difference between net proceeds from sales and the amortized cost basis of investments[439]. Financial Performance - Total investment income for the year ended December 31, 2023, was $112.2 million, an increase of 50.7% from $74.5 million in 2022[391]. - Net investment income for 2023 was $58.0 million, up 41.1% from $41.1 million in 2022[391]. - The weighted average total yield to maturity of debt and income-producing securities at fair value was 10.51% as of December 31, 2023, compared to 11.47% as of December 31, 2022[380][382]. - The weighted average total yield of debt and income-producing securities decreased to 10.51% in 2023 from 11.47% in 2022[390]. - Net expenses for 2023 were $54.2 million, a significant increase from $33.4 million in 2022, primarily due to higher interest expenses[395]. - Interest expense for 2023 was $44.5 million, up from $23.5 million in 2022, reflecting increased average interest rates[396]. Investment Activity - For the year ended December 31, 2023, the company made new investments totaling $273.73 million, while sold investments amounted to $247.08 million, resulting in total new investments of $26.65 million[384]. - The average new investment commitment amount for the year ended December 31, 2023, was $3.80 million, with 67 new investment commitments made[386]. - The weighted average interest rate of new investment commitments was 10.22% for the year ended December 31, 2023[386]. - The percentage of new debt investment commitments at floating rates was 98.82% for the year ended December 31, 2023[386]. Cash and Liquidity - Cash provided by operating activities in 2023 was $19.5 million, with proceeds from the sale of investments totaling $247.1 million[403]. - The company held $63.8 million in fair value of short-term money market funds at the end of 2023[403]. - Average net assets increased from $416.4 million in 2022 to $420.4 million in 2023[396]. - As of December 31, 2023, the company had cash and cash equivalents of $2.1 million, an increase from $1.7 million as of December 31, 2022[407]. - The company maintains sufficient liquidity to fund unfunded commitments, supported by cash and borrowing capacity[443]. Debt and Credit Facilities - The principal outstanding under the BoA Credit Facility was $504.0 million as of December 31, 2023, down from $514.5 million in 2022[407]. - The company had approximately $221.0 million of available commitments under the BoA Credit Facility as of December 31, 2023[416]. - 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[418]. - As of December 31, 2023, the principal outstanding under the WF Credit Facility was approximately $136.3 million[422]. - The asset coverage ratio was 172% as of December 31, 2023, exceeding the required minimum of 150%[409]. Dividends and Distributions - The company intends to distribute quarterly dividends to stockholders, contingent on available income[423]. - The company must distribute at least 90% of its net ordinary income and net short-term capital gains to maintain RIC tax treatment[424]. - The company intends to distribute net capital gains at least annually, but may retain them for investment, incurring corporate-level tax on such gains[427]. - A dividend reinvestment plan has been adopted, allowing stockholders to reinvest dividends into additional shares unless they opt for cash[428]. Commitments and Obligations - The company has significant contractual obligations totaling $641,828,805, with $505,417,357 due within one year and $136,411,448 due in 1-3 years[442]. - As of December 31, 2023, the company had fifteen unfunded commitments totaling $20.1 million, indicating potential future cash requirements[443]. Risk Management - The company is subject to interest rate sensitivity, with a potential increase in net investment income of $4,425,817 if interest rates rise by 100 basis points[447]. - The company may hedge against interest rate and currency exchange rate fluctuations using standard hedging instruments, subject to the requirements of the 1940 Act[449]. - The company has entered into related party transactions with its Investment Advisor, which is majority-owned by PSCM[440].