Palmer Square BDC Flips Mark-to-Market to a Gain

The Tip Desk · November 4, 2026 · 3 min read

Net investment income was $11.6 million, or $0.38 a share, as realized and unrealized results swung to a $2.4 million gain.

Palmer Square Capital BDC Inc. (PSBD), an externally managed business development company, reported net investment income of $11.6 million, or $0.38 a share, for the third quarter ended September 30, 2026, down from $12.0 million, or $0.39 a share, in the second quarter.

The sequential dip followed a second-quarter rise from first-quarter net investment income of $11.0 million, or $0.35 a share. Total investment income was $26.6 million, compared with $27.3 million in the second quarter.

The more consequential turn was in marks. Total net realized and unrealized results were a $2.4 million gain, after a $3.6 million loss in the second quarter and a $48.3 million loss in the first quarter. Net increase in net assets resulting from operations was $14.0 million, or $0.46 a share.

Net asset value per share rose to $13.34 from $13.21 at June 30, reversing a sequential decline from $13.30 at March 31. Total return for the quarter was 5.00%.

The portfolio continued to shrink. Total fair value of investments was $1.09 billion, down from $1.11 billion at June 30. The company had 278 investments in 200 portfolio companies, versus 282 investments in 206 portfolio companies at June 30. Senior secured loans were 97% of long-term investments.

Investments on non-accrual fell to 0.00% of total investments at fair value from 0.29% at June 30. One portfolio company remained on non-accrual, representing less than 0.01% of the book. Weighted average total yield to maturity of debt and income-producing securities at fair value was 11.99%.

Debt-to-equity declined to 1.63x from 1.71x at June 30. Total assets were $1.1 billion and total net assets were $403.4 million. Cash and cash equivalents were $1.9 million, with about $656.9 million of debt outstanding. Subject to borrowing base and other restrictions, available liquidity, including cash and undrawn credit-facility capacity, was about $195.0 million against $19.4 million of unfunded investment commitments.

New investments funded were $115.0 million across 31 commitments at an average of about $3.5 million. Sales and repayments were $165.8 million of principal. Weighted average maturity of new investment commitments was 2.89 years. The weighted average interest rate on those commitments was 8.34%, with a 4.28% spread on new floating-rate deals.

Recurring payment-in-kind interest income was $578.7 thousand, or 2.18% of total investment income. The company repurchased approximately $5.2 million of shares in the quarter.

Chairman and Chief Executive Officer Christopher D. Long said the company delivered strong financial performance supported by active portfolio management and capital allocation, and that it is well-positioned to selectively deploy capital as market conditions evolve.

The board declared a fourth-quarter regular base dividend of $0.36 a share, payable January 13, 2027, to stockholders of record as of December 28, 2026. The company said it expects to announce a supplemental dividend in December.