Companies

Palmer Square Narrows Mark Losses After a Heavy First Quarter

The Tip Desk · August 5, 2026 · 3 min read

Net investment income was $12.0 million, or $0.39 a share, as the company declared a $0.36 third-quarter base dividend.

Palmer Square Capital BDC Inc. (PSBD) posted $12.0 million of net investment income, or $0.39 a share, for the quarter ended June 30, 2026, reversing a sequential drop from $11.0 million, or $0.35 a share, in the first quarter. Total investment income was $27.3 million.

The externally managed business development company said it increased and extended its share repurchase program in the second quarter and took steps to improve its liability structure and lower its cost of capital. Chairman and Chief Executive Officer Christopher D. Long said those moves “will position PSBD to generate greater earnings power beginning in the fourth quarter and continuing into 2027.”

Mark losses narrowed sharply. Total net realized and unrealized losses were $3.6 million, after $48.3 million of losses in the first quarter. Net increase in net assets resulting from operations was $8.5 million, or $0.27 a share.

Net asset value per share was $13.21 at June 30, 2026, down from $13.30 at March 31. Total assets were $1.1 billion and total net assets were $406.2 million. Debt-to-equity was 1.71x. Cash and cash equivalents were $2.4 million, with about $696.5 million of debt outstanding. Available liquidity, including cash and undrawn credit-facility capacity, was about $331.0 million against $21.5 million of unfunded investment commitments.

The portfolio’s fair value was $1.11 billion across 206 companies in 45 industries. About 87.3% of the book, including short-term investments, was first-lien senior secured debt; 98% of long-term investments were floating rate. Weighted average total yield to maturity of debt and income-producing securities at fair value was 11.95%. Two companies were on non-accrual, or 0.29% of investments at fair value. About 99.7% of the portfolio was income producing.

New investments funded were $72.4 million across 21 deals, averaging about $3.3 million. Sales and repayments were $109.8 million, leaving a net reduction of $37.5 million. The weighted average interest rate on new commitments was 8.26%, with a 4.65% spread on new floating-rate loans. Recurring payment-in-kind interest was $373.7 thousand, or 1.37% of total investment income.

Interest income was $25.8 million. Interest expense was $10.6 million. Management fees were $1.8 million and incentive fees were $1.7 million.

On July 15, 2026, PSBD completed a $300 million reset of the Palmer Square BDC CLO 1 term securitization, issuing $228.0 million of AAA Class A-R notes at SOFR plus 1.27% and $72.0 million of AA Class B-R notes at Term SOFR plus 1.75%. On July 1 it cut Bank of America facility commitments to $350 million from $525 million.

The board declared a third-quarter 2026 base dividend of $0.36 a share, payable October 13 to holders of record September 25. The company said it expects to announce a supplemental dividend in September.