Palmer Square Capital BDC Inc. Announces Third Quarter 2024 Financial Results
Declares Fourth Quarter 2024 Base Dividend of
MISSION WOODS, Kan.--(BUSINESS WIRE)--Nov. 5, 2024--
Financial and Operating Highlights
-
Total investment income of
$37.3 million for the third quarter of 2024, compared to$28.8 million for the prior year period -
Net investment income of
$15.7 million or$0.48 per share for the third quarter of 2024, as compared to$14.8 million or$0.57 per share for the comparable period last year -
Net asset value of
$16.61 per share as ofSeptember 30, 2024 , compared to$16.85 per share as ofJune 30, 2024 -
Total net realized and unrealized losses of
$8.2 million for the third quarter of 2024, compared to gains of$19.0 million in the third quarter of 2023 -
As of
September 30, 2024 , total assets were$1.4 billion and total net assets were$541.9 million -
Debt-to-equity as of
September 30, 2024 was 1.52x, compared to 1.49x as ofJune 30, 2024 -
Paid cash distributions to stockholders totaling
$0.47 per share for the third quarter of 2024 -
Declared a fourth quarter regular base dividend distribution of
$0.42 per share payable onJanuary 13, 2025 to shareholders of record as ofDecember 27, 2024 . In accordance with our dividend policy, we expect to announce a supplemental dividend in December -
In the third quarter, we had only
$205 thousand of PIK income, or 0.5% of total investment income
“Palmer Square Capital BDC delivered strong third quarter earnings results as we continue to execute our differentiated, opportunistic strategy that allows us to invest across the syndicated, structured and direct lending credit markets to seek out the best relative returns on behalf of our investors,” said
$ in thousands, except per share data |
For the Quarter Ended |
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Financial Highlights |
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Net Investment Income Per Share1 |
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Net Investment Income |
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NAV Per Share |
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Dividends Earned Per Share2 |
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Portfolio Highlights |
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Total Fair Value of Investments |
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Number of Industries |
39 |
39 |
40 |
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Number of Portfolio Companies |
212 |
209 |
184 |
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Portfolio Yield3 |
10.48% |
9.82% |
11.47% |
|||
Senior Secured Loan4 |
96% |
96% |
97% |
|||
Investments on Non-Accrual |
0.26% |
0% |
0% |
|||
Total Return5 |
1.43% |
1.00% |
7.97% |
|||
Debt-to-Equity |
1.52x |
1.49x |
1.42x |
1. |
Net investment income for the period divided by the weighted average share count for the period. |
|
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. |
As a percentage of total investments, at fair value. |
|
6. |
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
As of
Liquidity and Capital Resources
As of
Recent Developments
On
Earnings Conference Call
The Company will host a conference call on
-
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
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. The forward-looking statements may include statements as to our future base and supplemental dividend distributions and the prospects of our portfolio companies. These and other forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “seek,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” “target,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. 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
Financial Highlights |
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For the Nine Months Ended |
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2024 |
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2023 |
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Per Common Share Operating Performance |
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Net Asset Value, Beginning of Period |
|
$ |
17.04 |
|
|
$ |
14.96 |
|
|
|
|
|
|
|
|
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Results of Operations: |
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|
|
|
|
|
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Net Investment Income(1) |
|
|
1.48 |
|
|
|
1.68 |
|
Net Realized and Unrealized Gain (Loss) on Investments(4) |
|
|
(0.48 |
) |
|
|
1.74 |
|
Net Increase (Decrease) in Net Assets Resulting from Operations |
|
|
1.00 |
|
|
|
3.42 |
|
|
|
|
|
|
|
|
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Distributions to Common Stockholders |
|
|
|
|
|
|
||
Distributions from Net Investment Income |
|
|
(1.43 |
) |
|
|
(1.62 |
) |
|
|
|
(1.43 |
) |
|
|
(1.62 |
) |
|
|
|
|
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|
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Net Asset Value, End of Period |
|
$ |
16.61 |
|
|
$ |
16.76 |
|
|
|
|
|
|
|
|
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Shares Outstanding, End of Period |
|
|
32,623,502 |
|
|
|
26,665,813 |
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|
|
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|
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Ratio/Supplemental Data |
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|
|
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Net assets, end of period |
|
$ |
541,937,155 |
|
|
$ |
446,859,594 |
|
Weighted-average shares outstanding |
|
|
32,260,537 |
|
|
|
25,359,324 |
|
Total Return(3) |
|
|
6.23 |
% |
|
|
23.20 |
% |
Portfolio turnover |
|
|
23 |
% |
|
|
19 |
% |
Ratio of operating expenses to average net assets without waiver(2) |
|
|
14.72 |
% |
|
|
13.18 |
% |
Ratio of operating expenses to average net assets with waiver(2) |
|
|
14.70 |
% |
|
|
12.93 |
% |
Ratio of net investment income (loss) to average net assets without waiver(2) |
|
|
11.54 |
% |
|
|
13.59 |
% |
Ratio of net investment income (loss) to average net assets with waiver(2) |
|
|
11.55 |
% |
|
|
13.84 |
% |
(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. |
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Consolidated Statement of Assets and Liabilities |
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|
2024 (Unaudited) |
|
|
2023 |
|
||
Assets: |
|
|
|
|
|
|
||
Non-controlled, non-affiliated investments, at fair value (amortized cost of |
|
$ |
1,389,801,144 |
|
|
$ |
1,108,810,753 |
|
Cash and cash equivalents |
|
|
1,785,799 |
|
|
|
2,117,109 |
|
Receivables: |
|
|
|
|
|
|
||
Receivable for sales of investments |
|
|
8,647,655 |
|
|
|
97,141 |
|
Receivable for paydowns of investments |
|
|
840,486 |
|
|
|
344,509 |
|
Due from investment adviser |
|
|
108,225 |
|
|
|
1,718,960 |
|
Dividend receivable |
|
|
158,001 |
|
|
|
301,637 |
|
Interest receivable |
|
|
12,071,303 |
|
|
|
8,394,509 |
|
Prepaid expenses and other assets |
|
|
139,514 |
|
|
|
30,100 |
|
Total Assets |
|
$ |
1,413,552,127 |
|
|
$ |
1,121,814,718 |
|
|
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
||
Credit facilities (net of deferred financing costs of |
|
$ |
518,483,459 |
|
|
$ |
641,828,805 |
|
Notes (net of deferred financing costs of |
|
|
305,928,313 |
|
|
|
— |
|
Payables: |
|
|
|
|
|
|
||
Payable for investments purchased |
|
|
26,123,384 |
|
|
|
14,710,524 |
|
Distributions payable |
|
|
15,333,270 |
|
|
|
— |
|
Management fee payable |
|
|
2,424,412 |
|
|
|
2,252,075 |
|
Incentive fee payable |
|
|
2,229,576 |
|
|
|
— |
|
Accrued other general and administrative expenses |
|
|
1,092,558 |
|
|
|
1,067,921 |
|
Total Liabilities |
|
$ |
871,614,972 |
|
|
$ |
659,859,325 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net Assets: |
|
|
|
|
|
|
||
Common Shares, |
|
$ |
32,624 |
|
|
$ |
27,103 |
|
Additional paid-in capital |
|
|
611,482,028 |
|
|
|
520,663,106 |
|
Total distributable earnings (accumulated deficit) |
|
|
(69,577,497 |
) |
|
|
(58,734,816 |
) |
Total Net Assets |
|
$ |
541,937,155 |
|
|
$ |
461,955,393 |
|
Total Liabilities and Net Assets |
|
$ |
1,413,552,127 |
|
|
$ |
1,121,814,718 |
|
Net Asset Value Per Common Share |
|
$ |
16.61 |
|
|
$ |
17.04 |
|
The accompanying notes are an integral part of these consolidated financial statements. |
(Note 6) |
|
Security or portion thereof held within |
(Note 9) |
|
As of |
|
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Consolidated Statement of Operations |
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For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment income from non-controlled, non-affiliated investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
$ |
35,775,337 |
|
|
$ |
27,323,754 |
|
|
$ |
104,261,540 |
|
|
$ |
78,943,113 |
|
Dividend income |
|
|
599,667 |
|
|
|
1,297,090 |
|
|
|
2,659,394 |
|
|
|
3,115,974 |
|
Payment-in-kind interest income |
|
|
204,826 |
|
|
|
— |
|
|
|
439,129 |
|
|
|
— |
|
Other income |
|
|
726,171 |
|
|
|
152,846 |
|
|
|
1,280,377 |
|
|
|
341,968 |
|
Total investment income from non-controlled, non-affiliated investments |
|
|
37,306,001 |
|
|
|
28,773,690 |
|
|
|
108,640,440 |
|
|
|
82,401,055 |
|
Total Investment Income |
|
|
37,306,001 |
|
|
|
28,773,690 |
|
|
|
108,640,440 |
|
|
|
82,401,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Incentive fees |
|
|
2,229,576 |
|
|
|
— |
|
|
|
6,404,282 |
|
|
|
— |
|
Interest expense |
|
|
15,670,636 |
|
|
|
11,500,504 |
|
|
|
43,846,496 |
|
|
|
32,697,517 |
|
Management fees |
|
|
2,424,412 |
|
|
|
2,197,758 |
|
|
|
7,290,730 |
|
|
|
6,155,999 |
|
Professional fees |
|
|
318,504 |
|
|
|
143,560 |
|
|
|
954,527 |
|
|
|
562,835 |
|
Directors fees |
|
|
37,705 |
|
|
|
18,904 |
|
|
|
112,295 |
|
|
|
56,096 |
|
Other general and administrative expenses |
|
|
896,437 |
|
|
|
383,771 |
|
|
|
2,277,810 |
|
|
|
1,101,395 |
|
Total Expenses |
|
|
21,577,270 |
|
|
|
14,244,497 |
|
|
|
60,886,140 |
|
|
|
40,573,842 |
|
Less: Management fee waiver (Note 3) |
|
|
— |
|
|
|
(274,720 |
) |
|
|
(50,511 |
) |
|
|
(769,500 |
) |
Net expenses |
|
|
21,577,270 |
|
|
|
13,969,777 |
|
|
|
60,835,629 |
|
|
|
39,804,342 |
|
Net Investment Income (Loss) |
|
|
15,728,731 |
|
|
|
14,803,913 |
|
|
|
47,804,811 |
|
|
|
42,596,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Realized and unrealized gains (losses) on investments and foreign currency transactions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlled, non-affiliated investments |
|
|
(7,119,299 |
) |
|
|
(2,103,618 |
) |
|
|
(18,267,554 |
) |
|
|
(2,423,632 |
) |
Total net realized gains (losses) |
|
|
(7,119,299 |
) |
|
|
(2,103,618 |
) |
|
|
(18,267,554 |
) |
|
|
(2,423,632 |
) |
Net change in unrealized gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-controlled, non-affiliated investments |
|
|
(1,054,247 |
) |
|
|
21,152,793 |
|
|
|
6,210,881 |
|
|
|
45,708,992 |
|
Total net change in unrealized gains (losses) |
|
|
(1,054,247 |
) |
|
|
21,152,793 |
|
|
|
6,210,881 |
|
|
|
45,708,992 |
|
Total realized and unrealized gains (losses) |
|
|
(8,173,546 |
) |
|
|
19,049,175 |
|
|
|
(12,056,673 |
) |
|
|
43,285,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Increase (Decrease) in Net Assets Resulting from Operations |
|
$ |
7,555,185 |
|
|
$ |
33,853,088 |
|
|
$ |
35,748,138 |
|
|
$ |
85,882,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Per Common Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted net investment income per common share |
|
$ |
0.48 |
|
|
$ |
0.57 |
|
|
$ |
1.48 |
|
|
$ |
1.68 |
|
Basic and diluted net increase (decrease) in net assets resulting from operations |
|
$ |
0.23 |
|
|
$ |
1.30 |
|
|
$ |
1.11 |
|
|
$ |
3.39 |
|
Weighted Average Common Shares Outstanding - Basic and Diluted |
|
|
32,613,897 |
|
|
|
26,016,761 |
|
|
|
32,260,537 |
|
|
|
25,359,324 |
|
The accompanying notes are an integral part of these consolidated financial statements. |
(Note 3) |
|
Prior to the IPO, the base management fee was 2.00% of the average value of the weighted average (based on the number of shares outstanding each day in the quarter) of the Company’s total net assets at the end of the two most recently completed calendar quarters. The Investment Advisor, however, during any period prior to the IPO, agreed to waive its right to receive management fees in excess of an annual rate of 1.75% of the average value of the weighted average total net assets at the end of each of our two most recently completed calendar quarters. The Investment Advisor will not be permitted to recoup any base management fees waived for any period of time prior to the IPO. |
|
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Portfolio and Investment Activity |
||||||||||||||||
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
New investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross investments |
|
$ |
66,239,961 |
|
|
$ |
78,271,670 |
|
|
$ |
602,024,188 |
|
|
$ |
188,402,217 |
|
Less: sold investments |
|
|
(82,822,220 |
) |
|
|
(58,480,713 |
) |
|
|
(292,405,569 |
) |
|
|
(194,434,792 |
) |
Total new investments |
|
|
(16,582,259 |
) |
|
|
19,790,957 |
|
|
|
309,618,619 |
|
|
|
(6,032,575 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Principal amount of investments funded: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
First-lien senior secured debt investments |
|
$ |
62,171,592 |
|
|
$ |
74,412,920 |
|
|
$ |
526,804,513 |
|
|
$ |
184,543,467 |
|
Second-lien senior secured debt investments |
|
|
4,068,369 |
|
|
|
3,858,750 |
|
|
|
46,292,869 |
|
|
|
3,858,750 |
|
Convertible bonds |
|
|
— |
|
|
|
— |
|
|
|
4,095,000 |
|
|
|
— |
|
Collateralized securities and structured products - debt |
|
|
— |
|
|
|
— |
|
|
|
23,573,612 |
|
|
|
— |
|
Common stock |
|
|
— |
|
|
|
— |
|
|
|
1,258,194 |
|
|
|
|
|
Total principal amount of investments funded |
|
|
66,239,961 |
|
|
|
78,271,670 |
|
|
|
602,024,188 |
|
|
|
188,402,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Principal amount of investments sold or repaid: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
First-lien senior secured debt investments |
|
$ |
75,231,088 |
|
|
$ |
57,657,965 |
|
|
$ |
253,203,637 |
|
|
$ |
184,842,717 |
|
Second-lien senior secured debt investments |
|
|
1,200,000 |
|
|
|
13,549 |
|
|
|
19,654,359 |
|
|
|
5,013,549 |
|
Corporate Bonds |
|
|
4,020,000 |
|
|
|
— |
|
|
|
4,020,000 |
|
|
|
— |
|
CLO Equity |
|
|
1,121,132 |
|
|
|
809,199 |
|
|
|
9,027,573 |
|
|
|
1,699,051 |
|
Collateralized securities and structured products - debt |
|
|
1,250,000 |
|
|
|
— |
|
|
|
6,500,000 |
|
|
|
2,879,475 |
|
Total principal amount of investments sold or repaid |
|
|
82,822,220 |
|
|
|
58,480,713 |
|
|
|
292,405,569 |
|
|
|
194,434,792 |
|
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Number of new investment commitments |
|
|
21 |
|
|
|
20 |
|
|
|
78 |
|
|
|
45 |
|
Average new investment commitment amount |
|
$ |
2,717,288 |
|
|
$ |
2,889,085 |
|
|
$ |
4,157,481 |
|
|
$ |
3,517,770 |
|
Weighted average maturity for new investment commitments |
|
5.29 years |
|
|
5.61 years |
|
|
5.6 years |
|
|
4.91 years |
|
||||
Percentage of new debt investment commitments at floating rates |
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
100.00 |
% |
Percentage of new debt investment commitments at fixed rates |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
Weighted average interest rate of new investment commitments(1) |
|
|
9.07 |
% |
|
|
10.00 |
% |
|
|
9.58 |
% |
|
|
10.24 |
% |
Weighted average spread over reference rate of new floating rate investment commitments(2) |
|
|
4.17 |
% |
|
|
4.57 |
% |
|
|
4.63 |
% |
|
|
4.82 |
% |
Weighted average interest rate on long-term investments sold or paid down |
|
|
9.50 |
% |
|
|
10.15 |
% |
|
|
10.22 |
% |
|
|
9.49 |
% |
(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/20241104055391/en/
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