Palmer Square Capital BDC Inc.

Second-quarter 2026 total investment income was $27.3 million, down 13.8% from $31.7 million a year ago. Net investment income was $12.0 million, or $0.39 per share, versus $13.8 million, or $0.43 per share, in the prior-year quarter. Total net expenses were $15.3 million versus $17.8 million last year, and total net realized and unrealized losses were $3.6 million versus $6.7 million in Q2 2025. NAV per share ended at $13.21, down from $13.30 at the end of Q1. The portfolio was valued at approximately $1.11 billion at June 30, down from $1.15 billion in Q1, with available liquidity of about $331 million and debt-to-equity of 1.71x. For Q3, the board declared a base dividend of $0.36 per share; management said the supplemental dividend will be set in the normal course.

Chris Long framed the quarter around disciplined capital allocation in a subdued market, noting that the company deployed $72.4 million of capital and still covered the dividend with NII. He emphasized the advantages of Palmer Square’s CLO and syndicated-loan platform, saying it gives PSBD broad visibility and selective access to attractive risk-adjusted returns. He also said the company sees AI-related software disruption as more nuanced than market sentiment suggests, and that disciplined credit selection matters more as vintages mature in a tougher exit and rate environment.

Jeff Fox said income was pressured by lower base rates and some paydown- and fee-related income, which helped explain the decline in total investment income to $27.3 million. He highlighted that net expenses fell to $15.3 million, and that the quarter produced $12.0 million of NII, or $0.39 per share, with NAV ending at $13.21. He also noted total net assets of $406.2 million, leverage of 1.71x, and liquidity of roughly $331 million, while reminding investors that the board declared a $0.36 base dividend and continued the policy of paying supplemental distributions when earnings allow.

Analysts focused on three main topics: the expanded $30 million buyback program, leverage running toward the high end of management’s target, and whether PSBD would take advantage of discounted loan opportunities. Management said roughly $4 million had already been used under the prior program and that buybacks are viewed as a very strong return on equity at current discounts, though leverage will be managed alongside repurchases and deployment. On leverage, management said the balance sheet remains comfortable because the portfolio is largely liquid and that some of the higher leverage reflected Q1 NAV pressure; on discounted loans, they said opportunities are more attractive in broadly syndicated loans and some private credit, but they remain highly selective.