Palmer Square Capital BDC Inc. Announces First Quarter 2024 Financial Results and Declares Second Quarter 2024 Base Dividend Distribution of $0.42 Per Share

$ in thousands, except per share data

For the Quarter Ended

Financial Highlights

3/31/24

12/31/23

3/31/23

Net Investment Income Per Share 1

$0.52

$0.58

$0.55

Net Investment Income

$16,318

$15,391

$13,593

NAV Per Share

$17.16

$17.04

$16.12

Dividends Earned Per Share 2

$0.49

$0.54

$0.52

Portfolio Highlights

3/31/24

12/31/23

3/31/23

Total Fair Value of Investments

$1,393,192

$1,108,811

$1,042,644

Number of Industries

39

38

40

Number of Portfolio Companies

211

191

169

Portfolio Yield 3

10.11%

10.51%

11.25%

Senior Secured Loan 4

96%

96%

96%

Investments on Non-Accrual

0%

0%

0%

Total Return 5

3.70%

4.88%

7.75%

Debt-to-Equity

1.42x

1.39x

1.53x

1. Net investment income for the period divided by the weighted average share count for the period.
2. Dividend amount reflects dividend earned in period.
3. Weighted average total yield of debt and income producing securities at fair value.
4. As a percentage of long-term investments, at fair value.
5. Total return is calculated as the change in net asset value (“NAV”) per share during the period, plus distributions per share (if any), divided by the beginning NAV per share. Total return is not annualized. Assumes reinvestment of distributions.

Financial Highlights

For the Three Months Ended

March 31,

2024

2023

Per Common Share Operating Performance

Net Asset Value, Beginning of Period

$

17.04

$

14.96

Results of Operations:

Net Investment Income (1)

0.52

0.55

Net Realized and Unrealized Gain (Loss) on Investments (4)

0.09

0.61

Net Increase (Decrease) in Net Assets Resulting from Operations

0.61

1.16

Net Decrease in Net Assets Resulting from Distributions

(0.49

)

-

Net Asset Value, End of Period

$

17.16

$

16.12

Shares Outstanding, End of Period

32,552,794

24,975,302

Ratio/Supplemental Data

Net assets, end of period

$

558,537,164

$

402,636,029

Weighted-average shares outstanding

31,594,552

24,591,581

Total Return (3)

3.70

%

7.75

%

Portfolio turnover

6

%

7

%

Ratio of operating expenses to average net assets without waiver (2)

13.70

%

13.42

%

Ratio of operating expenses to average net assets with waiver (2)

13.66

%

13.17

%

Ratio of net investment income (loss) to average net assets without waiver (2)

12.03

%

13.97

%

Ratio of net investment income (loss) to average net assets with waiver (2)

12.07

%

14.22

%

(1)

The per common share data was derived by using weighted average shares outstanding.

(2)

The ratios reflect an annualized amount.

(3)

Total return is calculated as the change in net asset value ("NAV") per share during the period, plus distributions per share (if any), divided by the beginning NAV per share. Total return is not annualized. Assumes reinvestment of distributions.

(4)

Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Consolidated Statements of Operations due to share transactions during the period.

Palmer Square Capital BDC Inc.

Consolidated Statement of Assets and Liabilities

March 31,

2024

December 31,

2023

Assets:

(Unaudited)

Non-controlled, non-affiliated investments, at fair value (amortized cost of $1,435,202,874 and $1,159,135,422, respectively)

$

1,393,192,087

$

1,108,810,753

Cash and cash equivalents

8,255,216

2,117,109

Receivables:

Receivable for sales of investments

84,257

97,141

Receivable for paydowns of investments

450,778

344,509

Due from investment adviser

84,627

1,718,960

Dividend receivable

357,253

301,637

Interest receivable

10,032,505

8,394,509

Prepaid expenses and other assets

85,517

30,100

Total Assets

$

1,412,542,240

$

1,121,814,718

Liabilities:

Credit facilities, net (1)

$

795,184,728

$

641,828,805

Payables:

Payable for investments purchased

37,584,094

14,710,524

Distributions payable

15,950,869

-

Management fee payable

2,416,239

2,252,075

Incentive fee payable

1,924,752

-

Accrued other general and administrative expenses

944,394

1,067,921

Total Liabilities

$

854,005,076

$

659,859,325

Commitments and contingencies (2)

Net Assets:

Common Shares, $0.001 par value; 450,000,000 shares authorized; 32,552,794 and 27,102,794, issued and outstanding as of March 31, 2024 and December 31, 2023

$

32,553

$

27,103

Additional paid-in capital

610,310,156

520,663,106

Total distributable earnings (accumulated deficit)

(51,805,545

)

(58,734,816

)

Total Net Assets

$

558,537,164

$

461,955,393

Total Liabilities and Net Assets

$

1,412,542,240

$

1,121,814,718

Net Asset Value Per Common Share

$

17.16

$

17.04

The accompanying notes are an integral part of these consolidated financial statements.

(1)

Security or portion thereof held within Palmer Square BDC Funding I, LLC (“PS BDC Funding”) and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Bank of America, N.A. (“BofA N.A.”) (see Note 6 to the consolidated financial statements).

(2)

As of March 31, 2024 and December 31, 2023, the Company had an aggregate of $30.8 million and $20.1 million, respectively, of unfunded commitments to provide debt financing to its portfolio companies. As of each of March 31, 2024 and December 31, 2023, there were no capital calls or draw requests made by the portfolio companies to fund these commitments. Such commitments are generally up to the Company’s discretion to approve or are subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Company’s consolidated statements of assets and liabilities and are not reflected in the Company’s consolidated statements of assets and liabilities.

Palmer Square Capital BDC Inc.

Consolidated Statement of Operations

For the Three Months

Ended March 31

2024

2023

Income:

Investment income from non-controlled, non-affiliated investments:

Interest income

$

33,259,959

$

25,452,738

Dividend income

1,254,696

676,868

Other income

270,288

55,896

Total investment income from non-controlled, non-affiliated investments

34,784,943

26,185,502

Total Investment Income

34,784,943

26,185,502

Incentive fees

1,924,752

-

Interest expense

13,178,830

10,322,130

Management fees

2,416,239

1,912,228

Professional fees

237,943

211,994

Directors fees

37,295

18,493

Other general and administrative expenses

722,166

367,006

Total Expenses

18,517,225

12,831,851

Less: Management fee waiver

(50,511

)

(239,028

)

Net expenses

18,466,714

12,592,823

Net Investment Income (Loss)

16,318,229

13,592,679

Realized and unrealized gains (losses) on investments and foreign currency transactions

Net realized gains (losses):

Non-controlled, non-affiliated investments

(1,736,331

)

(317,446

)

Total net realized gains (losses)

(1,736,331

)

(317,446

)

Net change in unrealized gains (losses):

Non-controlled, non-affiliated investments

8,298,242

14,813,089

Total net change in unrealized gains (losses)

8,298,242

14,813,089

Total realized and unrealized gains (losses)

6,561,911

14,495,643

Net Increase (Decrease) in Net Assets Resulting from Operations

$

22,880,140

$

28,088,322

Per Common Share Data:

Basic and diluted net investment income per common share

$

0.52

$

0.55

Basic and diluted net increase (decrease) in net assets resulting from operations

$

0.72

$

1.14

Weighted Average Common Shares Outstanding - Basic and Diluted

31,594,552

24,591,581

The accompanying notes are an integral part of these consolidated financial statements.

Palmer Square Capital BDC Inc.

Portfolio and Investment Activity

For the Three Months

Ended March 31,

2024

2023

New investments:

Gross investments

$

346,482,823

$

63,457,688

Less: sold investments

(69,556,336

)

(102,138,907

)

Total new investments

276,926,487

(38,681,219

)

Principal amount of investments funded:

First-lien senior secured debt investments

$

312,111,711

$

63,457,688

Second-lien senior secured debt investments

10,797,500

-

Collateralized securities and structured products - debt

23,573,612

-

CLO Equity

-

-

Total principal amount of investments funded

346,482,823

63,457,688

Principal amount of investments sold or repaid:

First-lien senior secured debt investments

54,991,776

99,163,344

Second-lien senior secured debt investments

9,060,000

-

Corporate Bonds

-

-

Convertible bonds

-

-

CLO Equity

4,254,628

96,089

Collateralized securities and structured products - debt

1,249,932

2,879,474

Common Stock

-

-

Total principal amount of investments sold or repaid

69,556,336

102,138,907

For the Three Months

Ended March 31,

2024

2023

Number of new investment commitments

36

15

Average new investment commitment amount

$

4,052,057

$

3,742,311

Weighted average maturity for new investment commitments

6.18 years

5.52 years

Percentage of new debt investment commitments at floating rates

100.00

%

100.00

%

Percentage of new debt investment commitments at fixed rates

0.00

%

0.00

%

Weighted average interest rate of new investment commitments (1)

10.19

%

9.71

%

Weighted average spread over reference rate of new floating rate investment commitments (2)

4.81

%

4.88

%

Weighted average interest rate on long-term investments sold or paid down

7.99

%

8.09

%

(1)

New CLO equity investments do not have an ascribed interest rate and are therefore excluded from the calculation.

(2)

Variable rate loans bear interest at a rate that may be determined by reference to either a) LIBOR (which can include one-, two-, three- or six-month LIBOR) or b) the CME Term Secured Overnight Financing Rate (“SOFR” or “S”) (which can include one-, three-, or six-month SOFR), which resets periodically based on the terms of the loan agreement. At the borrower’s option, loans may instead reference an alternate base rate (which can include the Federal Funds Effective Rate or the Prime Rate), which also resets periodically based on the terms of the loan agreements. Loans that reference SOFR may include a Credit Spread Adjustment (“CSA”), where the CSA is a defined additional spread amount based on the tenor of SOFR the borrower selects (making the reference rate S+CSA).