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Palm Square Capital Management has priced its first CLO, Palmer Square BDC CLO 1, worth $400.5 million, which is secured by broadly syndicated loans. This marks the 71st CLO issuance for the platform, managed by Palmer Square Capital BDC Inc. The transaction is the first CLO from PSBD, trading on the NYSE, investing in syndicated loans. With 46 CLOs totaling over $20 billion in assets managed, Palmer Square has a 5-year reinvestment period and a final maturity date in 2037. The deal was arranged by Bank of America. Palmer Square has issued $3.2 billion in CLOs year-to-date, showcasing disciplined credit selection and active portfolio management.
Palm Square Capital Management ha quotato il suo primo CLO, Palmer Square BDC CLO 1, del valore di 400,5 milioni di dollari, garantito da prestiti ampiamente sindacati. Questo rappresenta la 71esima emissione di CLO per la piattaforma, gestita da Palmer Square Capital BDC Inc. La transazione è il primo CLO di PSBD, quotato alla NYSE, e investe in prestiti sindacati. Con 46 CLO che ammontano a oltre 20 miliardi di dollari in asset gestiti, Palmer Square ha un periodo di reinvestimento di 5 anni e una scadenza finale nel 2037. L'operazione è stata organizzata da Bank of America. Palmer Square ha emesso CLO per 3,2 miliardi di dollari da inizio anno, dimostrando una selezione creditizia disciplinata e una gestione attiva del portafoglio.
Palm Square Capital Management ha fijado el precio de su primer CLO, Palmer Square BDC CLO 1, por un valor de 400,5 millones de dólares, que está asegurado por préstamos sindicados de forma amplia. Esto marca la 71ª emisión de CLO para la plataforma, administrada por Palmer Square Capital BDC Inc. La transacción es el primer CLO de PSBD, que cotiza en la NYSE, invirtiendo en préstamos sindicados. Con 46 CLOs que totalizan más de 20 mil millones de dólares en activos gestionados, Palmer Square tiene un período de reinversión de 5 años y una fecha de vencimiento final en 2037. El acuerdo fue organizado por Bank of America. Palmer Square ha emitido 3,2 mil millones de dólares en CLOs en lo que va del año, demostrando una selección de crédito disciplinada y una gestión activa de la cartera.
Palm Square Capital Management은 첫 CLO인 Palmer Square BDC CLO 1을 4억 500만 달러에 가격 책정했으며, 이는 널리 신디케이트된 대출에 의해 확보됩니다. 이는 Palmer Square Capital BDC Inc.가 관리하는 플랫폼의 71번째 CLO 발행을 표시합니다. 거래는 PSBD의 첫 CLO로, NYSE에서 거래되며 신디케이트 대출에 투자합니다. 46개의 CLO가 200억 달러 이상의 자산을 관리하고 있으며, Palmer Square는 5년 재투자 기간과 2037년 최종 만기일을 가지고 있습니다. 거래는 뱅크 오브 아메리카가 주선했습니다. Palmer Square는 올해 들어 CLO에서 32억 달러를 발행하여 규율 있는 신용 선택과 적극적인 포트폴리오 관리를 보여주었습니다.
Palm Square Capital Management a fixé le prix de son premier CLO, Palmer Square BDC CLO 1, à 400,5 millions de dollars, sécurisé par des prêts largement syndiqués. Cela représente la 71e émission de CLO pour la plate-forme, gérée par Palmer Square Capital BDC Inc. La transaction est le premier CLO de PSBD, coté à la NYSE, investissant dans des prêts syndiqués. Avec 46 CLO totalisant plus de 20 milliards de dollars en actifs gérés, Palmer Square a une période de réinvestissement de 5 ans et une date de maturité finale en 2037. L'affaire a été arrangée par Bank of America. Palmer Square a émis pour 3,2 milliards de dollars de CLO depuis le début de l'année, montrant une sélection de crédits disciplinée et une gestion active du portefeuille.
Palm Square Capital Management hat seinen ersten CLO, Palmer Square BDC CLO 1, im Wert von 400,5 Millionen Dollar bewertet, der durch breit syndizierte Darlehen gesichert ist. Dies markiert die 71. CLO-Emission für die Plattform, verwaltet von Palmer Square Capital BDC Inc. Die Transaktion ist der erste CLO von PSBD, der an der NYSE gehandelt wird und in syndizierte Darlehen investiert. Mit 46 CLOs, die über 20 Milliarden Dollar an verwalteten Vermögenswerten umfassen, hat Palmer Square eine fünfjährige Reinvestitionsperiode und ein Endfälligkeitsdatum im Jahr 2037. Das Geschäft wurde von der Bank of America arrangiert. Palmer Square hat seit Jahresbeginn CLOs im Wert von 3,2 Milliarden Dollar ausgegeben, was eine disziplinierte Kreditwahl und aktives Portfoliomanagement zeigt.
Positive
Priced first CLO, Palmer Square BDC CLO 1, worth $400.5 million
Managed 71st CLO issuance for the platform
First CLO issued from PSBD, trading on the NYSE
Active management of 46 CLOs totaling over $20 billion in assets
Demonstrates ability to diversify financing sources and lock-in term rate financing
Issued $3.2 billion in CLOs year-to-date, showing growth potential
Negative
None.
Insights
Palmer Square Capital Management's recent announcement of a $400.5 million collateralized loan obligation (CLO) issuance is a strategic move that underscores the firm's ability to leverage its public business development company (BDC), Palmer Square Capital BDC Inc. (PSBD). This issuance marks the first CLO under PSBD, expanding its financial toolkit following a successful IPO. The coupling of a 5-year reinvestment period with a long final maturity in 2037 indicates a robust confidence in the firm's credit selection strategies and asset management capabilities.
The transaction also highlights a significant scale of operation, as this CLO contributes to a portfolio of 46 active CLOs. The sheer volume of CLOs managed—totaling over $20 billion—speaks to Palmer Square's expertise and established presence in the credit market. For investors, the firm's active management approach and opportunistic credit strategy suggest an aggressive stance in seeking returns, albeit coupled with the inherent risks associated with broadly syndicated loans.
The launch of PSBD's inaugural CLO introduces several credit risk considerations. The focus on broadly syndicated loans signifies a heavy reliance on larger, more liquid and diversified credits, potentially mitigating concentration risk. However, the creditworthiness of underlying assets remains paramount. The BDC's opportunistic strategy, while potentially lucrative, calls for a vigilant assessment of the portfolio's default risk and recovery rates.
The arrangement by Bank of America and the captured reinvestment period until 2029 allow Palmer Square to capitalize on favorable credit conditions and navigate interest rate environments, a critical aspect as the market contemplates economic fluctuations. For retail investors, understanding the implications of this CLO's structure on the BDC's interest income and capital appreciation potential is essential, particularly in the context of the current credit cycle.
Diversifying financing sources via CLO issuance allows PSBD to broaden its investment capabilities. The CLO's structure, heavily reliant on broadly syndicated loans, illustrates an inclination towards large corporate borrowings, which may offer both stability and attractive yields. Investors should appreciate the firm's tactical approach to financing, actively seeking to lock in term rate financing at a cost deemed attractive by the management.
Longer-term maturity profiles can align with patient capital, suggesting an alignment with investors seeking sustained performance over the horizon. Furthermore, the BDC's commitment to disciplined credit selection and proactive portfolio management may bolster investor confidence in the potential for steady long-term total returns.
Transaction marks the platform’s 71st CLO issuance
MISSION WOODS, Kan.--(BUSINESS WIRE)--
Palmer Square Capital Management (together with its affiliates, “Palmer Square”), a credit-focused asset management firm with over $30 billion in assets, has announced the pricing of Palmer Square BDC CLO 1, a $400.5 million collateralized loan obligation (“CLO”). The vehicle is secured by broadly syndicated loans held by Palmer Square Capital BDC Inc. (NYSE: PSBD) and will be managed by Palmer Square Capital BDC Inc. Palmer Square BDC CLO 1 is the first CLO transaction to be issued out of New York Stock Exchange-traded PSBD, which invests meaningfully in broadly syndicated loans as part of its opportunistic credit / total return investment strategy. With the pricing of this CLO, the Palmer Square platform is actively managing 46 CLOs outstanding, totaling over $20 billion in assets (as of 4/8/24).
The deal was arranged by Bank of America and has a 5-year reinvestment period running through July 15, 2029, and a final maturity of July 15, 2037. Palmer Square has issued 71 CLO transactions since inception. Year to date, Palmer Square has issued approximately $3.2 billion in CLOs including 2 new issue CLOs, 3 reset CLOs, and 1 refinanced CLO.
Palmer Square Chairman and CEO Christopher Long said, “On the heels of the successful IPO in January of our business development company, we are excited to announce PSBD’s first CLO transaction. The issuance’s innovative structure, which consists entirely of broadly syndicated loans, demonstrates PSBD’s ability to utilize the CLO market as a way to diversify its financing sources as well as lock-in term rate financing at an attractive cost. With PSBD’s disciplined credit selection and active portfolio management, we believe we are well-positioned to drive continued growth and deliver long-term total return.”
About Palmer Square Capital Management
Founded in 2009 by Chris Long with major offices in Kansas City and London, Palmer Square Capital Management manages over $30 billion in fixed income/credit investments on behalf of a diverse client base inclusive of institutional investors, wealth management firms, and high net worth individuals (as of 3/31/24). The firm primarily focuses on Opportunistic Credit, Income Strategies, Private Credit, and CLOs while offering many product opportunities including mutual funds, separately managed accounts, private partnerships (including investments focused on the CLO market), CLOs, and a publicly-listed Business Development Company, Palmer Square Capital BDC (NYSE: PSBD).
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.
