PSBD Palmer Square Capital BDC Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 05, 2024

 

 

Palmer Square Capital BDC Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Maryland			814-01334	84-3665200
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
1900 Shawnee Mission Parkway, Suite 315
Mission Woods, Kansas				66205
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 816 994-3200

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		PSBD		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On November 5, 2024, Palmer Square Capital BDC Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.02 of this Current Report on Form 8-K, and Exhibit 99.1 attached hereto, is being furnished by the Company in satisfaction of the public disclosure requirements of Item 2.02 of Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information included in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference into any filing made by the Company under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”).

Item 7.01 Regulation FD Disclosure.

Additionally, on November 5, 2024, the Company made available on its website, www.palmersquarebdc.com, a supplemental investor presentation with respect to the third quarter 2024 earnings release. The information furnished in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act or the Exchange Act

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

99.1		Press Release, dated November 5, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Palmer Square Capital BDC Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			PALMER SQUARE CAPITAL BDC INC.
Date:	November 5, 2024	By:	/s/ Jeffrey D. Fox
			Jeffrey D. Fox, Chief Financial Officer

 

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Palmer Square Capital BDC Inc. Announces Third Quarter 2024 Financial Results

Declares Fourth Quarter 2024 Base Dividend of $0.42 Per Share with Supplemental Dividend

Expected to be Announced in December

MISSION WOODS, Kansas, November 5, 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 third quarter ended September 30, 2024.

Financial and Operating Highlights

“Palmer Square Capital BDC delivered strong third quarter earnings results as we continue to execute our differentiated, opportunistic strategy that allows us to invest across the syndicated, structured and direct lending credit markets to seek out the best relative returns on behalf of our investors,” said Christopher D. Long, Chairman and Chief Executive Officer of PSBD. “During the quarter, we invested in a wide range of high quality borrowers across the primary and secondary markets. As we look ahead, we believe our more liquid investment approach relative to other BDC peers puts us in a position of strength as we can not only capitalize on new deal activity, but also trade the portfolio to take advantage of spread movements. We believe PSBD’s ability to act quickly across liquid and private markets will continue to drive shareholder value."

 

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$ in thousands, except per share data			For the Quarter Ended
		9/30/24			6/30/24			9/30/23
Financial Highlights
Net Investment Income Per Share1		$	0.48		$	0.48		$	0.57
Net Investment Income		$	15,729		$	15,758		$	14,804
NAV Per Share		$	16.61		$	16.85		$	16.76
Dividends Earned Per Share2		$	0.47		$	0.47		$	0.56
			9/30/24			6/30/24			9/30/23
Portfolio Highlights
Total Fair Value of Investments		$	1,389,801		$	1,431,577		$	1,104,713
Number of Industries			39			39			40
Number of Portfolio Companies			212			209			184
Portfolio Yield3			10.48%			9.82%			11.47%
Senior Secured Loan4			96%			96%			97%
Investments on Non-Accrual5			0.26%			0%			0%
Total Return6			1.43%			1.00%			7.97%
Debt-to-Equity			1.52x			1.49x			1.42x

Portfolio and Investment Activity

As of September 30, 2024, we had 258 investments in 212 portfolio companies with an aggregate fair value of approximately $1.3 billion. Based on a total fair value of $1.4 billion, including short term investments, the portfolio consisted of 87.1% first lien senior secured debt investments, 6.2% second lien senior secured debt investments, 3.2% short-term investments, 3.1% collateralized loan obligation structured credit funds (“CLOs”) mezzanine and equity investments, 0.3% corporate bond investments, and 0.1% equity investments.

As of September 30, 2024, 99% of the long-term investments based on fair value in our portfolio were at floating rates. At the end of the third quarter, 99.74% of the portfolio at fair value was income producing. There were two loans on non-accrual status. As of September 30, 2024, the weighted average total yield to maturity of debt and income producing securities at fair value was 10.48%, and weighted average total yield to maturity of debt and income producing securities at amortized cost was 9.41%. For the third quarter of 2024, the principal amount of new investments funded was $66.2 million which included 21 investments at an average value of approximately 2.7 million. For this period, the Company had $82.8 million aggregate principal amount in sales and repayments.

Liquidity and Capital Resources

As of September 30, 2024, the Company had $1.8 million in cash and cash equivalents and approximately $824.4 million in total aggregate principal amount of debt outstanding. Subject to borrowing base and other restrictions, the Company had available liquidity, consisting of cash and undrawn capacity on credit facilities of approximately $181.1 million compared to $19.6 million of undrawn investment commitments as of September 30, 2024.

Recent Developments

On November 5, 2024, PSBD’s Board of Directors announced that it had declared a fourth quarter regular base dividend distribution of $0.42 per share payable on January 13, 2025, to shareholders of record as of December 27, 2024. We expect to announce an additional quarterly supplemental dividend distribution for the fourth quarter of 2024 in December.

Earnings Conference Call

The Company will host a conference call on Tuesday, November 5, 2024 at 1:00 pm ET to review its financial performance and conduct a question-and-answer session. To participate in the earnings call, participants should register online at the Palmer Square Investor

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Relations website. To avoid potential delays, please join at least 10 minutes prior to the start of the call. The conference call can be accessed through the following links:

A replay of the live conference call will be available shortly after the conclusion of the event and accessible on the events and presentations section of the Palmer Square Investor Relations website.

About Palmer Square Capital BDC Inc.

Palmer Square Capital BDC Inc. (NYSE: PSBD) is an externally managed, non-diversified closed-end management investment company that primarily lends to and invests in corporate debt loans, including but not limited to large private U.S. companies in the broadly syndicated loan market, as well as the direct large cap private credit market. PSBD has elected to be regulated as a business development company under the Investment Company Act of 1940. PSBD’s investment objective is to maximize total return, comprised of current income and capital appreciation. PSBD’s current investment focus is guided by two strategies that facilitate its investment opportunities and core competencies: (1) investing in corporate debt loans and, to a lesser extent, (2) investing in other debt securities which may include collateralized loan obligation debt and equity. PSBD’s investment activities are managed by its investment adviser, Palmer Square BDC Advisor LLC, an affiliate of Palmer Square Capital Management LLC.

Forward-Looking Statements

Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. The forward-looking statements may include statements as to our future base and supplemental dividend distributions and the prospects of our portfolio companies. These and other forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” “target,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in PSBD’s filings with the SEC. PSBD undertakes no duty to update any forward-looking statement made herein unless required by law. All forward-looking statements speak only as of the date of this press release. Although PSBD undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that PSBD may make directly to you or through reports that in the future may be filed with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Contacts

Investors

Andy Wedderburn-Maxwell

Palmer Square Capital BDC Inc.

+1 (913)-386-9006

Investors@palmersquarebdc.com

Media

Josh Clarkson

Prosek Partners

PSBD@prosek.com

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Financial Highlights

		For the Nine Months Ended
		September 30,
		2024				2023
Per Common Share Operating Performance
Net Asset Value, Beginning of Period		$	17.04			$	14.96
Results of Operations:
Net Investment Income(1)			1.48				1.68
Net Realized and Unrealized Gain (Loss) on Investments(4)			(0.48	)			1.74
Net Increase (Decrease) in Net Assets Resulting from Operations			1.00				3.42
Distributions to Common Stockholders
Distributions from Net Investment Income			(1.43	)			(1.62	)
Net Decrease in Net Assets Resulting from Distributions			(1.43	)			(1.62	)
Net Asset Value, End of Period		$	16.61			$	16.76
Shares Outstanding, End of Period			32,623,502				26,665,813
Ratio/Supplemental Data
Net assets, end of period		$	541,937,155			$	446,859,594
Weighted-average shares outstanding			32,260,537				25,359,324
Total Return(3)			6.23	%			23.20	%
Portfolio turnover			23	%			19	%
Ratio of operating expenses to average net assets without waiver(2)			14.72	%			13.18	%
Ratio of operating expenses to average net assets with waiver(2)			14.70	%			12.93	%
Ratio of net investment income (loss) to average net assets without waiver(2)			11.54	%			13.59	%
Ratio of net investment income (loss) to average net assets with waiver(2)			11.55	%			13.84	%

 

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Palmer Square Capital BDC Inc.

Consolidated Statement of Assets and Liabilities

		September 30, 2024 (Unaudited)				December 31, 2023
Assets:
Non-controlled, non-affiliated investments, at fair value (amortized cost of $1,433,876,560 and $1,159,135,422, respectively)		$	1,389,801,144			$	1,108,810,753
Cash and cash equivalents			1,785,799				2,117,109
Receivables:
Receivable for sales of investments			8,647,655				97,141
Receivable for paydowns of investments			840,486				344,509
Due from investment adviser			108,225				1,718,960
Dividend receivable			158,001				301,637
Interest receivable			12,071,303				8,394,509
Prepaid expenses and other assets			139,514				30,100
Total Assets		$	1,413,552,127			$	1,121,814,718
Liabilities:
Credit facilities (net of deferred financing costs of $5,775,000 and $3,211,510, respectively) (Note 6)		$	518,483,459			$	641,828,805
Notes (net of deferred financing costs of $1,783,958) (Note 6)			305,928,313				—
Payables:
Payable for investments purchased			26,123,384				14,710,524
Distributions payable			15,333,270				—
Management fee payable			2,424,412				2,252,075
Incentive fee payable			2,229,576				—
Accrued other general and administrative expenses			1,092,558				1,067,921
Total Liabilities		$	871,614,972			$	659,859,325
Commitments and contingencies (Note 9)
Net Assets:
Common Shares, $0.001 par value; 450,000,000 shares authorized; 32,623,502 and 27,102,794 as of September 30, 2024 and December 31, 2023, respectively issued and outstanding		$	32,624			$	27,103
Additional paid-in capital			611,482,028				520,663,106
Total distributable earnings (accumulated deficit)			(69,577,497	)			(58,734,816	)
Total Net Assets		$	541,937,155			$	461,955,393
Total Liabilities and Net Assets		$	1,413,552,127			$	1,121,814,718
Net Asset Value Per Common Share		$	16.61			$	17.04

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

 

(Note 6)		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).
(Note 9)		As of September 30, 2024 and December 31, 2023, the Company had an aggregate of $19.6 million and $20.1 million, respectively, of unfunded commitments to provide debt financing to its portfolio companies. As of each of September 30, 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.

 

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Palmer Square Capital BDC Inc.

Consolidated Statement of Operations

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2024				2023				2024				2023
Income:
Investment income from non-controlled, non-affiliated    investments:
Interest income		$	35,775,337			$	27,323,754			$	104,261,540			$	78,943,113
Dividend income			599,667				1,297,090				2,659,394				3,115,974
Payment-in-kind interest income			204,826				—				439,129				—
Other income			726,171				152,846				1,280,377				341,968
Total investment income from non-controlled, non-affiliated    investments			37,306,001				28,773,690				108,640,440				82,401,055
Total Investment Income			37,306,001				28,773,690				108,640,440				82,401,055
Expenses:
Incentive fees			2,229,576				—				6,404,282				—
Interest expense			15,670,636				11,500,504				43,846,496				32,697,517
Management fees			2,424,412				2,197,758				7,290,730				6,155,999
Professional fees			318,504				143,560				954,527				562,835
Directors fees			37,705				18,904				112,295				56,096
Other general and administrative expenses			896,437				383,771				2,277,810				1,101,395
Total Expenses			21,577,270				14,244,497				60,886,140				40,573,842
Less: Management fee waiver (Note 3)			—				(274,720	)			(50,511	)			(769,500	)
Net expenses			21,577,270				13,969,777				60,835,629				39,804,342
Net Investment Income (Loss)			15,728,731				14,803,913				47,804,811				42,596,713
Realized and unrealized gains (losses) on investments and foreign currency transactions
Net realized gains (losses):
Non-controlled, non-affiliated investments			(7,119,299	)			(2,103,618	)			(18,267,554	)			(2,423,632	)
Total net realized gains (losses)			(7,119,299	)			(2,103,618	)			(18,267,554	)			(2,423,632	)
Net change in unrealized gains (losses):
Non-controlled, non-affiliated investments			(1,054,247	)			21,152,793				6,210,881				45,708,992
Total net change in unrealized gains (losses)			(1,054,247	)			21,152,793				6,210,881				45,708,992
Total realized and unrealized gains (losses)			(8,173,546	)			19,049,175				(12,056,673	)			43,285,360
Net Increase (Decrease) in Net Assets Resulting from Operations		$	7,555,185			$	33,853,088			$	35,748,138			$	85,882,073
Per Common Share Data:
Basic and diluted net investment income per common share		$	0.48			$	0.57			$	1.48			$	1.68
Basic and diluted net increase (decrease) in net assets resulting from operations		$	0.23			$	1.30			$	1.11			$	3.39
Weighted Average Common Shares Outstanding - Basic and    Diluted			32,613,897				26,016,761				32,260,537				25,359,324

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

 

(Note 3)		Prior to the IPO, the base management fee was 2.00% of the average value of the weighted average (based on the number of shares outstanding each day in the quarter) of the Company’s total net assets at the end of the two most recently completed calendar quarters. The Investment Advisor, however, during any period prior to the IPO, agreed to waive its right to receive management fees in excess of an annual rate of 1.75% of the average value of the weighted average total net assets at the end of each of our two most recently completed calendar quarters. The Investment Advisor will not be permitted to recoup any base management fees waived for any period of time prior to the IPO.

 

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Palmer Square Capital BDC Inc.

Portfolio and Investment Activity

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2024				2023				2024				2023
New investments:
Gross investments		$	66,239,961			$	78,271,670			$	602,024,188			$	188,402,217
Less: sold investments			(82,822,220	)			(58,480,713	)			(292,405,569	)			(194,434,792	)
Total new investments			(16,582,259	)			19,790,957				309,618,619				(6,032,575	)
Principal amount of investments funded:
First-lien senior secured debt investments		$	62,171,592			$	74,412,920			$	526,804,513			$	184,543,467
Second-lien senior secured debt investments			4,068,369				3,858,750				46,292,869				3,858,750
Convertible bonds			—				—				4,095,000				—
Collateralized securities and structured products - debt			—				—				23,573,612				—
Common stock			—				—				1,258,194
Total principal amount of investments funded			66,239,961				78,271,670				602,024,188				188,402,217
Principal amount of investments sold or repaid:
First-lien senior secured debt investments		$	75,231,088			$	57,657,965			$	253,203,637			$	184,842,717
Second-lien senior secured debt investments			1,200,000				13,549				19,654,359				5,013,549
Corporate Bonds			4,020,000				—				4,020,000				—
CLO Equity			1,121,132				809,199				9,027,573				1,699,051
Collateralized securities and structured products - debt			1,250,000				—				6,500,000				2,879,475
Total principal amount of investments sold or repaid			82,822,220				58,480,713				292,405,569				194,434,792

 

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2024				2023				2024				2023
Number of new investment commitments			21				20				78				45
Average new investment commitment amount		$	2,717,288			$	2,889,085			$	4,157,481			$	3,517,770
Weighted average maturity for new investment    commitments		5.29 years				5.61 years				5.6 years				4.91 years
Percentage of new debt investment commitments at    floating rates			100.00	%			100.00	%			100.00	%			100.00	%
Percentage of new debt investment commitments    at fixed rates			0.00	%			0.00	%			0.00	%			0.00	%
Weighted average interest rate of new investment    commitments(1)			9.07	%			10.00	%			9.58	%			10.24	%
Weighted average spread over reference rate of new    floating rate investment commitments(2)			4.17	%			4.57	%			4.63	%			4.82	%
Weighted average interest rate on long-term investments    sold or paid down			9.50	%			10.15	%			10.22	%			9.49	%

 

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v3.24.3

Document And Entity Information	Nov. 05, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 05, 2024
Entity Registrant Name	Palmer Square Capital BDC Inc.
Entity Central Index Key	0001794776
Entity Emerging Growth Company	true
Entity File Number	814-01334
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	84-3665200
Entity Address, Address Line One	1900 Shawnee Mission Parkway, Suite 315
Entity Address, City or Town	Mission Woods
Entity Address, State or Province	KS
Entity Address, Postal Zip Code	66205
City Area Code	816
Local Phone Number	994-3200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Ex Transition Period	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	PSBD
Security Exchange Name	NYSE

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