Palmer Square Capital BDC Inc. (PSBD) SEC Filings & Earnings Calls

Falling Rate Environment Pressure on NII

“Total investment income is lower for the six months ended June 30, 2026 compared to the prior year period due to the investment portfolio primarily consisting of floating rate loans in a falling rate environment.” · word for word

Credit Quality Deterioration

“As of June 30, 2026, loans on non-accrual status represented 0.29% of the total investments at fair value (or 1.49% at amortized cost). As of December 31, 2025, loans on non-accrual status represented 0.09% of the total investments at fair value (or 1.34% at amortized cost).” · word for word

Debt-to-equity ratio of 1.71x is relatively high, indicating elevated leverage

“Debt-to-equity as of June 30, 2026 was 1.71x” · word for word

Non-accrual investments increased to 0.29% from 0.00% prior quarter

“Investments on Non-Accrual 0.29% as of June 30, 2026, compared to 0.00% as of March 31, 2026”

CLO structures carry refinancing and credit risk, but no specific terms disclosed.

“Supplemental Indenture and Note Purchase Agreement for CLO.”

CLO notes are unregistered and subject to market liquidity risk.

“The Palmer Square BDC CLO 1 Secured Notes have not been, and will not be, registered under the Securities Act”

Declining net investment income and NAV per share may pressure future dividends.

“Net investment income $0.35/share vs $0.40 prior year; NAV $13.30 vs $14.85.”

Increased leverage (debt-to-equity 1.70x vs 1.54x) amplifies risk in volatile markets.

“Debt-to-equity as of March 31, 2026 was 1.70x, compared to 1.54x as of December 31, 2025.” · word for word

Falling interest rate environment reduces investment income

“Total investment income is lower for the three months ended March 31, 2026 compared to the prior year period due to the investment portfolio primarily consisting of floating rate loans in a falling rate environment.” · word for word

Significant unrealized losses on portfolio investments

“Net change in unrealized gains (losses) on investments $ (37,599,190) for Q1 2026.” · word for word

Credit risk from non-accrual loans

“As of March 31, 2026, loans on non-accrual status represented less than 0.01% of the total investments at fair value (or 0.90% at amortized cost).” · word for word

Leverage and asset coverage risk

“As of March 31, 2026, our asset coverage ratio was 159% (minimum 150% required).” · word for word

Declining net asset value per share from $16.50 (Dec 2024) to $14.85 (Dec 2025)

“NAV per share $14.85 as of Dec 31, 2025, compared to $16.50 as of Dec 31, 2024.”

Significant net realized and unrealized losses in Q4 2025 ($18.4M vs $2.9M prior year)

“Total net realized and unrealized losses of $18.4 million for Q4 2025, compared to losses of $2.9 million in Q4 2024.”

Leverage Risk

“The use of leverage magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.” · word for word

Interest Rate Risk

“Because we borrow money to make investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds and the rate at which we invest those funds.” · word for word

Credit Risk / Default Risk

“Many of the portfolio companies in which we have invested or expect to make investments are likely to be susceptible to economic slowdowns or recessions and may be unable to repay our loans during such periods.” · word for word

Covenant-Lite Loan Risk

“A significant portion of the loans in which we may invest or get exposure to through its investments in CDOs or other types of structured securities are Covenant-Lite Loans” · word for word

CLO Investment Risk

“CLO vehicles that we invest in are typically very highly levered, and therefore, the junior debt and equity tranches that we invest in are subject to a higher degree of risk of total loss.” · word for word

Falling rate environment compressing portfolio yield

“Total investment income is lower for the nine months ended September 30, 2025 compared to the prior year period due to the investment portfolio primarily consisting of floating rate loans in a falling rate environment.” · word for word

Rising non-accruals and credit losses

“As of September 30, 2025, loans on non-accrual status represented 0.40% of the total investments at fair value (or 1.01% at amortized cost). As of December 31, 2024, loans on non-accrual status represented 0.08% of the total investments at fair value (or 0.46% at amortized cost).” · word for word

Leverage and asset coverage risk

“As of September 30, 2025, our asset coverage ratio was 165%, above the 150% minimum but leaving limited headroom.” · word for word

NAV per share declined sequentially and YoY, indicating potential credit or valuation pressure.

“Net asset value of $15.39 per share as of September 30, 2025, compared to $15.68 per share as of June 30, 2025 and $16.61 a year ago”

Non-accrual investments increased to 0.40% from 0.19% QoQ, signaling slight credit deterioration.

“Investments on Non-Accrual 0.40% as of 9/30/25 vs 0.19% as of 6/30/25”