Palmer Square Capital BDC (PSBD) Q3 2025 earnings summary

Executive summary

• Deployed $138.7 million in capital during Q3 2025, generating total investment income of $31.7 million and net investment income of $13.6 million ($0.43 per share), both down year-over-year, with strong dividend coverage and a NAV per share of $15.39 as of September 30, 2025.

• Portfolio comprised 262 investments in 209 companies, diversified across 42 industries, with 95% senior secured loans and 98% floating rate debt.

• Board declared a Q4 2025 base dividend of $0.36 per share, with a supplemental dividend expected, and maintained a strategy of maximizing cash returns through regular and supplemental dividends.

• Board approved an additional $5 million for open market share repurchases, supplementing ongoing buyback plans, with 756,508 shares repurchased year-to-date.

• Refinanced Wells Fargo credit facility, tightening spread by 55 bps, extending maturity to 2030, and increasing the facility to $200 million.

Financial highlights

• Total investment income for Q3 2025 was $31.7 million, down from $37.3 million year-over-year; net investment income was $13.6 million ($0.43 per share), compared to $15.7 million ($0.48 per share) in Q3 2024.

• Net realized and unrealized losses totaled $10.3 million for Q3 2025, up from $8.2 million in Q3 2024.

• NAV per share declined to $15.39 as of September 30, 2025, from $15.68 at June 30, 2025, and $16.50 at year-end 2024.

• Debt-to-equity ratio increased to 1.53x from 1.51x sequentially.

• Portfolio yield at fair value was 10.07% in Q3 2025.

Outlook and guidance

• Management is cautiously optimistic about improving deal flow and a more active M&A environment, with continued focus on liquid, senior secured, floating rate loans and large private credit opportunities.

• Not dependent on the pace of M&A recovery due to flexibility across liquid and private markets.

• Expect continued refinancing activity, incremental income generation, and anticipate additional Fed easing in 2026.

• Committed to maintaining RIC status and distributing at least 90% of taxable income to shareholders.

• Asset coverage ratio was 165% as of September 30, 2025, above the 150% regulatory minimum.