Palmer Square Capital BDC Inc. Announces First Quarter 2026 Financial Results

Key Terms

payment-in-kind interest income financial

Payment-in-kind (PIK) interest income is interest a lender or investor earns when the borrower pays by increasing the loan balance or issuing more debt instead of sending cash. It matters because it boosts reported income without improving immediate cash flow, can hide rising borrower stress or leverage, and affects valuation and risk assessment much like interest that gets added to a credit-card balance instead of being paid down.

non-accrual financial

A non-accrual loan or asset is one for which a lender has stopped counting expected interest as income because the borrower is very late on payments or in serious financial trouble. For investors, non-accruals signal that future cash from interest is uncertain and that the lender may need to write down the loan’s value or set aside extra reserves, similar to a landlord who stops recording rent when a tenant stops paying.

senior secured loan financial

A senior secured loan is a type of company loan that has first priority to be repaid and is backed by specific company assets as collateral, so lenders can seize or sell those assets if the borrower defaults. For investors, that priority and collateral make these loans safer than unsecured debt, usually meaning lower interest rates and stronger recovery prospects in a default — similar to how a mortgage has first claim on a house while a credit card does not.

collateralized loan obligation financial

A collateralized loan obligation (CLO) is a financial product that bundles many corporate loans into a single pool and then sells pieces of that pool to investors, with each piece offering different levels of risk and return. Think of it like a large box of varied loans sliced into portions so investors can choose higher safety with lower yield or higher reward with more risk; CLO performance matters because it concentrates credit and interest-rate risk and affects income stability for holders.

floating rates financial

Floating rates are interest rates on loans, bonds, or other debt that move up or down over time because they’re tied to a changing reference rate, so the amount of interest paid adjusts as market rates change. Investors care because floating-rate instruments shift interest-rate risk: they can protect income when rates rise but reduce price sensitivity when rates fall, much like a variable mortgage whose payments change with the market.

portfolio turnover financial

Portfolio turnover measures how much of an investment portfolio’s holdings are bought and sold over a set period, usually a year, expressed as a percentage of the total assets. Think of it like how often you swap items in a pantry: higher turnover means frequent trading, which can signal an active strategy but also raises trading costs and taxable events that can lower an investor’s net returns; lower turnover suggests a buy-and-hold approach with fewer transaction-related expenses.

revolving credit facility financial

A revolving credit facility is a type of loan that a business can borrow from whenever it needs money, up to a set limit. It’s like having a credit card for companies—allowing them to borrow, pay back, and borrow again as needed, providing flexibility for managing cash flow or funding short-term expenses.

term debt securitization financial

Term debt securitization is the process of bundling a set of fixed‑term loans or receivables and converting them into tradable securities that investors can buy. Think of it as slicing a loaf of future loan payments into sellable pieces: it gives the original lender immediate cash and shifts repayment risk and priority to bond buyers, which matters to investors because it changes credit exposure, expected yield and liquidity compared with holding the loans directly.

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Declares Second Quarter 2026 Base Dividend of $0.36 Per Share with Supplemental Dividend Expected to be Announced in June

MISSION WOODS, Kan.--(BUSINESS WIRE)-- Palmer Square Capital BDC Inc. (NYSE: PSBD) (“PSBD” or the “Company”), an externally managed business development company, today announced its financial results for the first quarter ended March 31, 2026.

Financial and Operating Highlights

• Total investment income of $26.2 million for the first quarter of 2026, compared to $31.2 million for the prior year period
• Net investment income of $11.0 million or $0.35 per share for the first quarter of 2026, compared to $12.9 million or $0.40 per share for the prior year period
• Net asset value of $13.30 per share as of March 31, 2026, compared to $14.85 per share as of December 31, 2025
• Total net realized and unrealized losses of $48.3 million for the first quarter of 2026, compared to losses of $21.3 million for the first quarter of 2025
• As of March 31, 2026, total assets were $1.2 billion and total net assets were $413.8 million
• Debt-to-equity as of March 31, 2026 was 1.70x, compared to 1.54x as of December 31, 2025
• Paid cash distributions to stockholders totaling $0.37 per share for the first quarter of 2026
• Declared a second quarter regular base dividend distribution of $0.36 per share, payable on July 13, 2026, to stockholders of record as of June 26, 2026. In accordance with our dividend policy, we expect to announce a supplemental dividend in June
• In the first quarter, we had only $431.0 thousand of recurring PIK interest income, or 1.64% of total investment income

“Palmer Square Capital BDC reported solid financial results for the first quarter of 2026, demonstrating resilience amid the volatile macroeconomic backdrop impacting the sector,” said Christopher D. Long, Chairman and Chief Executive Officer of PSBD. “We continue to observe stability across our underlying investments. As conditions are expected to continue to improve beyond April, we believe our portfolio is well positioned to deliver consistent performance while capitalizing on an increasingly attractive opportunity set and more favorable risk-adjusted spreads going forward.”

$ in thousands, except per share data			For the Quarter Ended
		3/31/26			12/31/25			3/31/25
Financial Highlights
Net Investment Income Per Share1		$	0.35		$	0.41		$	0.40
Net Investment Income		$	11,037		$	13,068		$	12,913
NAV Per Share		$	13.30		$	14.85		$	15.85
Dividends Earned Per Share2		$	0.37		$	0.43		$	0.39
		3/31/26			12/31/25				3/31/25
Portfolio Highlights
Total Fair Value of Investments		$	1,154,637		$	1,203,640		$	1,334,314
Number of Industries			44			42			39
Number of Portfolio Companies			214			205			209
Portfolio Yield3			11.73%			11.30%			10.37%
Senior Secured Loan4			96%			95%			96%
Investments on Non-Accrual5			0.00%			0.09%			0.24%
Total Return6			(7.22)%			(0.09)%			(1.05)%
Debt-to-Equity			1.70x			1.54x			1.50x

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. As of March 31, 2026, there was one portfolio company on non-accrual status, which
   represented less than 0.01% of the 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 March 31, 2026, we had 283 investments in 214 portfolio companies with an aggregate fair value of approximately $1.2 billion. Based on a total fair value of $1.2 billion, including short term investments, the portfolio consisted of approximately 87.7% first lien senior secured debt investments, 4.5% second lien senior secured debt investments, 3.6% short-term investments, 2.8% collateralized loan obligation structured credit funds (“CLOs”) mezzanine and equity investments, 0.7% corporate bond investments, and 0.7% equity investments.

As of March 31, 2026, 98% of the long-term investments based on fair value in our portfolio were at floating rates. At the end of the first quarter, there was one portfolio company on non-accrual status. As of March 31, 2026, the weighted average total yield to maturity of debt and income producing securities at fair value was 11.73%, and weighted average total yield to maturity of debt and income producing securities at amortized cost was 8.26%. For the first quarter of 2026, the principal amount of new investments funded was $109.4 million which included 42 investments at an average value of approximately $2.1 million. For this period, the Company had $79.9 million aggregate principal amount in sales and repayments.

Liquidity and Capital Resources

As of March 31, 2026, the Company had $1.5 million in cash and cash equivalents and approximately $702.3 million in total aggregate principal amount of debt outstanding. Subject to borrowing base and other restrictions, the Company had available liquidity, consisting of cash and undrawn capacity on credit facilities of approximately $325.3 million compared to $20.3 million of unfunded investment commitments as of March 31, 2026.

Recent Developments

On May 6, 2026, PSBD’s Board of Directors announced that it had declared a second quarter regular base dividend distribution of $0.36 per share, payable on July 13, 2026, to stockholders of record as of June 26, 2026. We expect to announce an additional quarterly supplemental dividend distribution for the second quarter of 2026 in June.

Earnings Conference Call

The Company will host a conference call on Wednesday, May 6, 2026, at 1:00 pm ET to review its financial performance and conduct a question-and-answer session. To participate in the earnings call, participants should register online at the Palmer Square Investor Relations website. To avoid potential delays, please join at least 10 minutes prior to the start of the call. The conference call can be accessed through the following links:

• 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 Palmer Square Capital BDC Inc.

Palmer Square Capital BDC Inc. (NYSE: PSBD) is an externally managed, non-diversified closed-end management investment company that primarily lends to and invests in corporate debt loans, including but not limited to large private U.S. companies in the broadly syndicated loan market, as well as the direct large cap private credit market. PSBD has elected to be regulated as a business development company under the Investment Company Act of 1940. PSBD’s investment objective is to maximize total return, comprised of current income and capital appreciation. PSBD’s current investment focus is guided by two strategies that facilitate its investment opportunities and core competencies: (1) investing in corporate debt loans and, to a lesser extent, (2) investing in other debt securities which may include collateralized loan obligation debt and equity. PSBD’s investment activities are managed by its investment adviser, Palmer Square BDC Advisor LLC, an affiliate of Palmer Square Capital Management LLC.

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 SEC. PSBD undertakes no duty to update any forward-looking statement made herein unless required by law. All forward-looking statements speak only as of the date of this press release. Although PSBD undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that PSBD may make directly to you or through reports that in the future may be filed with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Financial Highlights
		For the Three Months Ended
		March 31,
		2026				2025
Per Common Share Operating Performance
Net Asset Value, Beginning of Period		$	14.85			$	16.50
Results of Operations:
Net Investment Income(1)			0.35				0.40
Net Realized and Unrealized Gain (Loss) on Investments(4)			(1.53	)			(0.66	)
Net Increase (Decrease) in Net Assets Resulting from Operations			(1.18	)			(0.26	)
Distributions to Common Stockholders
Distributions from Net Investment Income			(0.37	)			(0.39	)
Net Decrease in Net Assets Resulting from Distributions			(0.37	)			(0.39	)
Net Asset Value, End of Period		$	13.30			$	15.85
Shares Outstanding, End of Period			31,120,814				32,534,040
Ratio/Supplemental Data
Net assets, end of period		$	413,782,758			$	515,807,254
Weighted-average shares outstanding			31,187,746				32,602,053
Total Return(3)			(7.22	)%			(1.05	)%
Portfolio turnover			7	%			8	%
Ratio of operating expenses to average net assets without waiver(2)			13.74	%			13.72	%
Ratio of operating expenses to average net assets with waiver(2)			13.74	%			13.72	%
Ratio of net investment income (loss) to average net assets without waiver(2)			9.99	%			9.68	%
Ratio of net investment income (loss) to average net assets with waiver(2)			9.99	%			9.68	%

(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.

Palmer Square Capital BDC Inc. Consolidated Statement of Assets and Liabilities
		March 31, 2026				December 31, 2025
Assets:		(Unaudited)
Non-controlled, non-affiliated investments, at fair value (amortized cost of $1,283,151,468 and $1,294,556,070, respectively)		$	1,154,636,534			$	1,203,640,318
Cash and cash equivalents			1,489,202				3,217,449
Receivables:
Receivable for sales of investments			538,437				2,821,628
Receivable for paydowns of investments			169,510				233,930
Due from investment adviser			616,715				616,715
Dividend receivable			116,781				195,710
Interest receivable			8,495,169				8,608,563
Prepaid expenses and other assets			62,776				41,446
Total Assets		$	1,166,125,124			$	1,219,375,759
Liabilities:
Credit facilities (net of deferred financing costs of $4,624,358 and $5,030,068, respectively) (Note 6)		$	400,443,711			$	414,438,758
Notes (net of deferred financing costs of $1,575,047 and $1,609,420, respectively) (Note 6)			301,867,199				302,075,353
Payables:
Payable for investments purchased			33,566,779				20,366,967
Distributions payable			11,514,701				13,442,214
Management fee payable			1,932,898				2,129,141
Incentive fee payable			1,576,148				1,866,531
Accrued other general and administrative expenses			1,440,930				933,623
Total Liabilities		$	752,342,366			$	755,252,587
Commitments and contingencies (Note 9)
Net Assets:
Common Shares, $0.001 par value; 450,000,000 shares authorized; 31,120,814 and 31,260,963 as of March 31, 2026 and December 31, 2025, respectively issued and outstanding		$	31,121			$	31,261
Additional paid-in capital			592,054,437				593,643,044
Total distributable earnings (accumulated deficit)			(178,302,800	)			(129,551,133	)
Total Net Assets		$	413,782,758			$	464,123,172
Total Liabilities and Net Assets		$	1,166,125,124			$	1,219,375,759
Net Asset Value Per Common Share		$	13.30			$	14.85

The accompanying notes are an integral part of these consolidated financial statements.

(Note 6)		See Note 6 to the consolidated financial statements for a description of the Company’s borrowings, including its revolving credit facility with Bank of America, N.A., its credit facility with Wells Fargo Bank, National Association, and its term debt securitization (CLO transaction).
(Note 9)		As of March 31, 2026 and December 31, 2025, the Company had an aggregate of $20.3 million and $21.5 million, respectively, of unfunded commitments to provide debt financing to its portfolio companies. As of each of March 31, 2026 and December 31, 2025, there were no capital calls or draw requests made by the portfolio companies to fund these commitments. Such commitments are generally up to the Company’s discretion to approve or are subject to the satisfaction of certain financial and nonfinancial covenants and involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Company’s consolidated statements of assets and liabilities and are not reflected in the Company’s consolidated statements of assets and liabilities.

Palmer Square Capital BDC Inc. Consolidated Statement of Operations (unaudited)
		For the Three Months Ended March 31,
		2026				2025
Income:
Investment income from non-controlled, non-affiliated investments:
Interest income		$	25,098,926			$	29,819,663
Dividend income			421,134				574,336
Payment-in-kind interest income			430,961				507,850
Other income			265,693				312,430
Total investment income from non-controlled, non-affiliated investments			26,216,714				31,214,279
Total Investment Income			26,216,714				31,214,279
Expenses:
Incentive fees			1,576,148				1,842,706
Interest expense			10,582,817				12,969,757
Management fees			1,932,888				2,333,675
Professional fees			313,603				312,732
Directors fees			36,986				36,987
Other general and administrative expenses			737,622				805,271
Total Expenses			15,180,064				18,301,128
Less: Management fee waiver (Note 3)			—				—
Net expenses			15,180,064				18,301,128
Net Investment Income (Loss)			11,036,650				12,913,151
Realized and unrealized gains (losses) on investments and foreign currency transactions
Net realized gains (losses):
Non-controlled, non-affiliated investments			(10,674,426	)			(5,894,493	)
Total net realized gains (losses)			(10,674,426	)			(5,894,493	)
Net change in unrealized gains (losses):
Non-controlled, non-affiliated investments			(37,599,190	)			(15,407,869	)
Total net change in unrealized gains (losses)			(37,599,190	)			(15,407,869	)
Total realized and unrealized gains (losses)			(48,273,616	)			(21,302,362	)
Net Increase (Decrease) in Net Assets Resulting from Operations		$	(37,236,966	)		$	(8,389,211	)
Per Common Share Data:
Basic and diluted net increase (decrease) in net assets resulting from operations		$	(1.19	)		$	(0.26	)
Weighted Average Common Shares Outstanding - Basic and Diluted			31,187,746				32,602,053

The accompanying notes are an integral part of these consolidated financial statements.

(Note 3)

On January 22, 2024, PSBD completed its initial public offering (the "IPO"). 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. Palmer Square BDC Advisor LLC (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.

Palmer Square Capital BDC Inc. Portfolio and Investment Activity
		For the Three Months Ended March 31,
		2026				2025
New investments:
Gross investments		$	109,362,638			$	104,323,107
Less: sold investments			(79,939,687	)			(144,369,364	)
Total new investments			29,422,951				(40,046,257	)
Principal amount of investments funded:
First-lien senior secured debt investments		$	103,290,194			$	97,436,250
Second-lien senior secured debt investments			2,500,000				—
Corporate bonds			1,000,000				—
Collateralized securities and structured products - debt			1,406,500				—
Common stock			1,165,944				6,886,857
Preferred Stock			—				—
Total principal amount of investments funded			109,362,638				104,323,107
Principal amount of investments sold or repaid:
First-lien senior secured debt investments		$	67,757,902			$	138,003,373
Second-lien senior secured debt investments			5,584,634				3,203,994
Corporate Bonds			1,011,250				—
Collateralized securities and structured products - debt			5,193,165				2,900,000
CLO Equity			392,736				261,997
Total principal amount of investments sold or repaid		$	79,939,687			$	144,369,364

		For the Three Months Ended March 31,
		2026				2025
Number of new investment commitments			42				23
Average new investment commitment amount		$	2,096,070			$	3,855,336
Weighted average maturity for new investment commitments		5.65 years				5.59 years
Percentage of new debt investment commitments at floating rates			100.00	%			100.00	%
Percentage of new debt investment commitments at fixed rates			0.00	%			0.00	%
Weighted average interest rate of new investment commitments(1)			7.38	%			8.52	%
Weighted average spread over reference rate of new floating rate investment commitments(2)			3.87	%			4.21	%
Weighted average interest rate on long-term investments sold or paid down			8.09	%			8.33	%

(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 determined by reference to 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/20260505081498/en/

Investors
Matt Bloomfield and Jeremy Goff
Palmer Square Capital BDC Inc.
Investors@palmersquarebdc.com

Media
Josh Clarkson
Prosek Partners
PSBD@prosek.com

Source: Palmer Square Capital BDC Inc.