Palmer Square Capital BDC (PSBD) Q2 2024 earnings summary

Executive summary

• Total investment income for Q2 2024 was $36.5 million, up from $27.4 million year-over-year, with net investment income at $15.8 million ($0.48/share), and NAV per share at $16.85 as of June 30, 2024.

• Paid $0.47 per share in Q2 2024 distributions, including a $0.05 supplemental, and declared a Q3 base dividend of $0.42 per share, with a supplemental dividend expected in September.

• Portfolio grew to $1.43B–$1.5B fair value, diversified across 209 companies in 39 industries, with 98% of investments in floating rate debt.

• No investments on non-accrual status at quarter end, except for a realized loss on ConvergeOne restructuring.

• Closed a $400.5M CLO in May 2024, providing long-term financing with reinvestment through 2029 and maturity in 2037.

Financial highlights

• Net investment income per share was $0.48; NAV per share at quarter-end was $16.85.

• Total assets reached $1.5B and total net assets were $549M as of June 30, 2024.

• Debt-to-equity ratio increased to 1.49x from 1.42x sequentially.

• Portfolio yield was 9.82% at fair value, down from 11.40% year-over-year.

• Total net realized and unrealized losses were $10.4M for Q2 2024, compared to gains of $9.7M in Q2 2023.

Outlook and guidance

• Management expects continued strong deal flow, supported by private equity activity and refinancing needs, and remains focused on high-quality, liquid credits.

• Supplemental dividend to be announced in September, reflecting excess undistributed net investment income.

• Management anticipates near-term volatility due to macro and political uncertainty but remains confident in the liquid loan strategy.