Palmer Square Capital BDC Q2 Earnings Call Highlights

Palmer Square Capital BDC reported second-quarter 2026 net investment income of $12 million, or $0.39 per share, matching its total quarterly dividend of $0.39 per share. The payout included a $0.36 base dividend and a $0.03 supplemental distribution. The company said its board declared a third-quarter base dividend of $0.36 per share, while any supplemental dividend will be determined in the normal course. President Matt Bloomfield said the company has generally sought to distribute nearly all income generated over time, although payouts can vary from quarterly net investment income because of spillover income. Chairman and Chief Executive Officer Chris Long said the company deployed $72.4 million during the quarter and viewed share repurchases as an attractive use of capital amid subdued deal activity in private credit and broadly syndicated loans. The company expanded its buyback program by $30 million, after using approximately $4 million of its prior authorization during the second quarter. Total investment income was $27.3 million in the second quarter, down 13.8% from $31.7 million a year earlier. Chief Financial Officer Jeff Fox attributed the decline primarily to lower base rates compared with the prior-year period, along with paydown-related income and fee income. Total net expenses fell to $15.3 million from $17.8 million in the prior-year quarter. Net investment income declined from $13.8 million, or $0.43 per share, in the second quarter of 2025. The company recorded total net realized and unrealized losses of $3.6 million, compared with losses of $6.7 million in the prior-year period. Fox said the quarter included $6.3 million of net unrealized depreciation on existing portfolio investments and $6 million of net unrealized appreciation associated with exited investments. Net asset value per share was $13.21 as of June 30, down from $13.30 at the end of the first quarter. Long said the June NAV reflected fair-value adjustments tied to pricing moves in the broadly syndicated loan market. Palmer Square’s investment portfolio had a fair value of approximately $1.11 billion as of June 30, compared with $1.15 billion at the end of the first quarter. During the quarter, the company made 21 new investment commitments totaling $72.4 million, with an average commitment value of about $3.3 million. It also realized approximately $109.8 million through repayments and sales. Bloomfield said the portfolio was diversified across 45 industries and was 96% senior secured. The company’s 10 largest investments represented 10.74% of the portfolio, while its average hold size was approximately $4.2 million. Weighted average total yield to maturity at fair value was 11.95%. Weighted average total yield to maturity at amortized cost was 8.43%. Non-accruals represented approximately 29 basis points of the portfolio at fair value and 149 basis points.