Palmer Square Capital BDC Inc. (NYSE: PSBD) ("PSBD" or the
"Company"), an externally managed business development company,
today announced its financial results for the fourth quarter and
full year ended December 31, 2023.
Financial and Operating
Highlights
- Total investment income of $29.8 million for the fourth quarter
of 2023, compared to $23.8 million for the prior year period
- Net investment income of $15.4 million or $0.57 per share for
the fourth quarter of 2023, as compared to $12.4 million or $0.51
per share for the comparable period last year
- Net asset value of $17.04 per share as of December 31, 2023,
compared to $16.76 per share as of September 30, 2023
- Total realized and unrealized gains of $6.6 million for the
fourth quarter of 2023, compared to total realized and unrealized
losses of $11.4 million in the fourth quarter of 2022
- As of December 31, 2023, total assets were $1.1 billion and
total net assets were $462 million
- Debt-to-equity as of December 31, 2023 was 1.39x, compared to
1.42x as of September 30, 2023
- Paid cash distributions to stockholders totaling $0.54 per
share for the fourth quarter of 2023
- January 31, 2024 net asset value of $17.17 per share
“I am pleased to report that Palmer Square Capital BDC Inc.
delivered strong fourth quarter and fiscal 2023 results, closing
out the year well-positioned to continue to capitalize on
opportunities in the liquid debt and private credit markets,” said
Christopher D. Long, Chairman and Chief Executive Officer of PSBD.
“We are incredibly excited about PSBD’s differentiated investment
strategy, which we believe will deliver a compelling yield and
long-term total return while mitigating risk due to our active
management, higher quality approach, and finally the more liquid
nature of the portfolio. We are also incredibly proud of PSBD’s
commitment to enhanced transparency and greater shareholder
alignment. We look forward to executing our opportunistic credit
strategy and delivering shareholder value in the years to
come.”
$ in thousands, except per share data
For the Quarter Ended
Financial Highlights
12/31/23
9/30/23
12/31/22
Net Investment Income Per Share1
$0.57
$0.56
$0.51
Net Investment Income
$15,391
$14,804
$12,408
NAV Per Share
$17.04
$16.76
$14.96
Dividends Earned Per Share2
$0.54
$0.56
$0.64
Portfolio Highlights
12/31/23
9/30/23
12/31/22
Total Fair Value of Investments
$1,108,811
$1,104,713
$1,017,212
Number of Industries
38
40
41
Number of Portfolio Companies
191
184
176
Portfolio Yield3
10.51%
11.27%
11.47%
Senior Secured Loan4
96%
97%
96%
Investments on Non-Accrual
0%
0%
0%
Total Return5
4.88%
7.97%
0.21%
Debt-to-Equity
1.39x
1.42x
1.76x
1. Net investment income for the period divided by end of period
share count. 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.
Portfolio and Investment
Activity
As of December 31, 2023, we had 227 investments in 191 portfolio
companies with an aggregate fair value of approximately $1.0
billion. Based on total fair value of $1.1 billion including short
term investments, the portfolio consisted of 85.9% first lien
senior secured debt investments, 5.0% second lien senior secured
debt investments, 0.4% corporate bond investments, 2.9% CLO
mezzanine and equity investments, and 5.8% short-term
investments.
As of December 31, 2023, 98% of the long-term investments based
on fair value in our portfolio were at floating rates. At the end
of fiscal year 2023, all debt and short-term investments were
income producing, and there were no loans on non-accrual status. As
of December 31, 2023, the weighted average total yield to maturity
of debt and income producing securities at fair value was 10.51%,
and weighted average total yield to maturity of debt and income
producing securities at amortized cost was 8.93%.
For the fourth quarter of 2023, the principal amount of new
investments funded was $85.3 million across 30 new investments. For
this period, the Company had $52.6 million aggregate principal
amount in sales and repayments.
For the full year ended December 31, 2023, the principal amount
of new investments funded was $273.7 million across 67 investments.
For this period, the Company had $247 million aggregate principal
amount in sales and repayments.
Liquidity and Capital
Resources
As of December 31, 2023, the Company had $2.1 million in cash
and cash equivalents and approximately $640 million in total
aggregate principal amount of debt outstanding. Subject to
borrowing base and other restrictions, the Company has available
liquidity, consisting of cash and undrawn capacity on credit
facilities of approximately $262 million compared to $20.1 million
dollars of undrawn investment commitments.
Recent Developments
On January 17, PSBD priced its initial public offering of
approximately 5.5 million shares on the New York Stock Exchange at
a price of $16.45 per share. Gross proceeds from the IPO totaled
approximately $90 million.
Earnings Conference Call
The Company will host a conference call on Wednesday, February
28, 2024 at 11:00 am 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 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:
- United States: +1 (888) 596-4144
- International: +1 (646) 968-2525
- Event Plus Entry Passcode: 1803382#
- Live Audio Webcast
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. 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.
Financial Highlights
For the Period January 23,
2020 (Commencement of Operations) through
For the Year Ended December
31,
December 31,
2023
2022
2021
2020
Per Common Share
Operating Performance
Net Asset Value, Beginning of Period
$
14.96
$
20.06
$
20.15
$
20.00
Results of Operations:
Net Investment Income(1)
2.26
1.78
1.47
1.32
Net Realized and Unrealized Gain (Loss)
on
Investments(4)
1.98
(5.00
)
(0.18
)
(0.19
)
Net Increase (Decrease) in Net Assets
Resulting from
Operations
4.24
(3.22
)
1.29
1.13
Distributions to Common Stockholders
Distributions from Net Investment
Income
(2.16
)
(1.85
)
(1.01
)
(0.98
)
Distributions from Realized Gains
-
(0.03
)
(0.37
)
-
Net Decrease in Net Assets Resulting from
Distributions
(2.16
)
(1.88
)
(1.38
)
(0.98
)
Net Asset Value, End of Period
$
17.04
$
14.96
$
20.06
$
20.15
Shares Outstanding, End of Period
27,102,794
24,286,628
22,570,331
12,562,805
Ratio/Supplemental Data
Net assets, end of period
$
461,955,393
$
363,443,482
$
452,797,588
$253,144,971
Weighted-average shares outstanding
25,700,603
23,130,666
15,494,614
11,156,932
Total Return(3)
29.21
%
(16.51
%)
8.10
%
4.29
%
Portfolio turnover
25
%
27
%
53
%
63
%
Ratio of operating expenses to average net
assets without
waiver(2)
13.15
%
8.28
%
5.54
%
5.69
%
Ratio of operating expenses to average net
assets with
waiver(2)
12.90
%
8.03
%
5.29
%
5.44
%
Ratio of net investment income (loss) to
average net assets
without waiver(2)
13.54
%
9.61
%
6.92
%
7.18
%
Ratio of net investment income (loss) to
average net assets
with waiver(2)
13.79
%
9.86
%
7.17
%
7.43
%
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
December 31, 2023
December 31, 2022
Assets:
Non-controlled, non-affiliated
investments, at fair value (amortized cost of $1,159,135,422
and $1,120,099,935, respectively)
$
1,108,810,753
$
1,017,211,732
Cash and cash equivalents
2,117,109
1,650,801
Receivables:
Receivable for sales of investments
97,141
31,014,356
Receivable for paydowns of investments
344,509
136,119
Due from investment adviser
1,718,960
234,102
Dividend receivable
301,637
141,997
Interest receivable
8,394,509
6,465,594
Prepaid expenses and other assets
30,100
598,327
Total Assets
$
1,121,814,718
$
1,057,453,028
Liabilities:
Credit facilities, net(1)
$
641,828,805
$
641,309,417
Payables:
Payable for investments purchased
14,710,524
42,750,748
Distributions payable
-
6,941,066
Management fee payable
2,252,075
1,872,815
Accrued other general and administrative
expenses
1,067,921
1,135,500
Total Liabilities
$
659,859,325
$
694,009,546
Commitments and contingencies(2)
Net Assets:
Common Shares, $0.001 par value;
450,000,000 shares authorized; 27,102,794 and
24,286,628 as of December 31, 2023 and
December 31, 2022, respectively issued and
outstanding
$
27,103
$
24,287
Additional paid-in capital
520,663,106
473,921,377
Total distributable earnings (accumulated
deficit)
(58,734,816
)
(110,502,182
)
Total Net Assets
$
461,955,393
$
363,443,482
Total Liabilities and Net
Assets
$
1,121,814,718
$
1,057,453,028
Net Asset Value Per Common
Share
$
17.04
$
14.96
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 December
31, 2023 and December 31, 2022, the Company had an aggregate of
$20.1 million and $2.6 million, respectively, of unfunded
commitments to provide debt financing to its portfolio companies.
As of each of December 31, 2023 and December 31, 2022, 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
statement of assets and liabilities.
Palmer Square Capital BDC
Inc.
Consolidated Statement of
Operations
For the Year Ended December
31
2023
2022
2021
Income:
Investment income from non-controlled,
non-affiliated investments:
Interest income
$
107,739,382
$
73,705,450
$
38,897,216
Dividend income
4,066,745
610,203
9,597
Other income
417,480
184,247
778,840
Total investment income from
non-controlled, non-affiliated investments
112,223,607
74,499,900
39,685,653
Total Investment Income
112,223,607
74,499,900
39,685,653
Expenses:
Interest expense
44,483,152
23,452,169
8,616,661
Management fees
8,408,074
8,328,713
6,369,583
Professional fees
792,645
741,961
758,435
Directors fees
75,000
75,000
75,000
Other general and administrative
expenses
1,528,225
1,862,314
1,827,931
Total Expenses
55,287,096
34,460,157
17,647,610
Less: Management fee waiver (1)
(1,051,009
)
(1,041,089
)
(796,198
)
Net expenses
54,236,087
33,419,068
16,851,412
Net Investment Income (Loss)
57,987,520
41,080,832
22,834,241
Realized and unrealized gains (losses)
on investments and foreign currency
transactions
Net realized gains (losses):
Non-controlled, non-affiliated
investments
(2,715,413
)
(8,130,187
)
4,753,263
Total net realized gains
(losses)
(2,715,413
)
(8,130,187
)
4,753,263
Net change in unrealized gains
(losses):
Non-controlled, non-affiliated
investments
52,563,544
(107,432,980
)
(8,527,786
)
Total net change in unrealized gains
(losses)
52,563,544
(107,432,980
)
(8,527,786
)
Total realized and unrealized gains
(losses)
49,848,131
(115,563,167
)
(3,774,523
)
Net Increase (Decrease) in Net Assets
Resulting from Operations
$
107,835,651
$
(74,482,335
)
$
19,059,718
Per Common Share
Data:
Basic and diluted net investment income
per common share
$
2.26
$
1.78
$
1.47
Basic and diluted net increase
(decrease) in net assets resulting from
operations
$
4.20
$
(3.22
)
$
1.23
Weighted Average Common Shares
Outstanding - Basic and Diluted
25,700,603
23,130,666
15,494,614
The accompanying notes are an
integral part of these consolidated financial statements.
1. As of December 31, 2023, all investments are
non-controlled, non-affiliated investments. Non-controlled,
non-affiliated investments are defined as investments in which the
Company owns less than 5% of the portfolio company’s outstanding
voting securities and does not have the power to exercise control
over the management or policies of such portfolio company.
Palmer Square Capital BDC
Inc.
Portfolio and Investment
Activity
For the Year Ended
December 31, 2023
December 31, 2022
December 31, 2021
New investments:
Gross investments
$
273,733,424
$
278,951,054
$
926,351,937
Less: sold investments
(247,083,117
)
(314,355,643
)
(401,760,802
)
Total new investments
26,650,307
(35,404,589
)
524,591,135
Principal amount of investments
funded:
First-lien senior secured debt
investments
$
267,272,174
$
247,233,397
$
829,591,637
Second-lien senior secured debt
investments
3,858,750
19,102,118
57,492,916
Corporate bonds
2,602,500
-
2,883,300
Convertible bonds
-
3,728,288
1,025,000
Collateralized securities and structured
products - debt
-
-
14,757,907
CLO Equity
-
8,887,251
20,101,177
Common stock
-
-
500,000
Total principal amount of investments
funded
273,733,424
278,951,054
926,351,937
Principal amount of investments sold or
repaid:
First-lien senior secured debt
investments
233,535,659
292,852,517
380,386,061
Second-lien senior secured debt
investments
8,013,549
11,938,325
12,583,308
Corporate Bonds
-
987,500
-
Convertible bonds
-
4,504,808
3,026
CLO Equity
2,533,909
1,976,080
-
Collateralized securities and structured
products - debt
3,000,000
1,501,875
8,788,407
Common Stock
-
594,538
-
Total principal amount of investments sold
or repaid
247,083,117
314,355,643
401,760,802
The information presented above is at
amortized cost unless otherwise indicated.
For the Year Ended
December 31, 2023
December 31, 2022
December 31, 2021
Number of new investment commitments
67
38
155
Average new investment commitment
amount
$
3,802,624
$
4,784,093
$
4,521,355
Weighted average maturity for new
investment commitments
5.19 years
5.95 years
5.85 years
Percentage of new debt investment
commitments at floating rates
98.82
%
100.00
%
99.42
%
Percentage of new debt investment
commitments at fixed rates
1.18
%
0.00
%
0.58
%
Weighted average interest rate of new
investment commitments
10.22
%
9.17
%
4.80
%
Weighted average spread over reference
rate of new floating rate investment
commitments
4.87
%
4.80
%
4.39
%
Weighted average interest rate on
investment sold or paid down
9.56
%
5.45
%
4.40
%
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).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240227258463/en/
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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