Palmer Square Capital BDC Q1 2025 Earnings Report

Palmer Square Capital BDC EPS Results

• Actual EPS: $0.40
• Consensus EPS: $0.44
• Beat/Miss: Missed by -$0.04
• One Year Ago EPS: N/A

Palmer Square Capital BDC Revenue Results

• Actual Revenue: $31.21 million
• Expected Revenue: $32.55 million
• Beat/Miss: Missed by -$1.34 million
• YoY Revenue Growth: N/A

Palmer Square Capital BDC Announcement Details

• Quarter: Q1 2025
• Date: 5/7/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, May 7, 2025
• Conference Call Time: 1:00PM ET

Palmer Square Capital BDC (NYSE:PSBD) (NYSE: PSBD) is a closed-end, externally managed business development company that provides customized financing solutions to middle-market companies in the United States. The firm offers a broad range of debt and equity products—including first-lien and second-lien senior secured loans, unitranche financings, mezzanine debt and equity co-investments—to support corporate acquisitions, refinancings, growth initiatives and balance sheet restructurings.

PSBD primarily targets established privately owned and sponsored businesses across diverse industries such as healthcare, business services, industrials and consumer products. By tailoring its capital structures to meet specific client needs, the company seeks to deliver attractive risk-adjusted returns through current income and potential capital appreciation while also providing sponsors and management teams with flexible long-term capital.

Since commencing operations in mid-2021, Palmer Square Capital BDC has built a diversified portfolio of direct lending and specialty finance investments. Its disciplined underwriting process emphasizes rigorous credit analysis, active portfolio monitoring and collaboration with management teams to drive operational improvements and support strategic growth objectives.

The firm’s external manager, Palmer Square Capital Management, draws on a team of credit professionals with deep experience in middle-market lending. Headquartered in New York City, PSBD leverages the broader firm’s resources and market relationships to originate, structure and manage bespoke financing transactions for businesses across North America.

Palmer Square Capital BDC Q1 2025 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: Palmer Square Capital BDC reported Q1 2025 net investment income of $12.9 million, or $0.40 per share, and paid a $0.39 per share dividend that included a $0.03 supplemental distribution.
• Negative Sentiment: NAV per share fell to $15.85 from $16.50 in the prior quarter, with management pointing to mark-to-market pressure and unrealized losses tied to late-quarter loan price declines.
• Positive Sentiment: The company said its portfolio remains resilient and well diversified, with 96% senior secured exposure, only three loans on non-accrual representing 0.24% of fair value, and very low PIK income at about 1.63% of investment income.
• Neutral Sentiment: Management emphasized a conservative posture amid tariff and macro uncertainty, saying it has maintained dry powder and is not yet ready to deploy aggressively into secondary loan markets despite widening spreads.
• Positive Sentiment: The board reinstated and extended the share repurchase program, and the company bought back 98,399 shares in Q1 at an average price of $14.89, signaling support for the stock while it trades at a discount to NAV.

Presentation

[Operator]

Welcome to Palmer Square Capital BDC's first quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the prepared remarks. As a reminder, this conference call is being recorded. At this time, I'd like to turn the call over to Jeremy Goff, Managing Director. You may begin.

[Jeremy Goff, Managing Director at Palmer Square Capital Management]

Welcome to Palmer Square Capital BDC's first quarter 2025 earnings call. Joining me this afternoon are Chris Long, Chairman and Chief Executive Officer, Angie Long, Chief Investment Officer, Matt Bloomfield, President, and Jeff Fox, Chief Financial Officer and Director. Palmer Square Capital BDC's first quarter 2025 financial results were released earlier today and can also be accessed on Palmer Square's investor relations website at palmersquarebdc.com. We have also arranged for a replay of today's event that can be accessed on our website. During this call, I want to remind you that the forward-looking statements we make are based on current expectations. The statements on this call that are not truly historical are forward-looking statements.

[Jeremy Goff, Managing Director at Palmer Square Capital Management]

These forward-looking statements are not a guarantee of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements, including and without limitation, market conditions caused by uncertainty surrounding interest rates, changing economic conditions, and other factors we identified in our filings with the SEC. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions can prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions can be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements made during this call are made as of the date hereof, and Palmer Square Capital BDC assumes no obligation to update the forward-looking statements unless required by law. To obtain copies of SEC-related filings, please visit our website at palmersquarebdc.com.

[Jeremy Goff, Managing Director at Palmer Square Capital Management]

With that, I will now turn the call over to Chris Long.

[Chris Long, Chairman and CEO at Palmer Square Capital BDC]

Good afternoon, everyone. Thank you for joining us today for Palmer Square Capital BDC's first quarter 2025 conference call. Today, I will begin by providing an overview of the quarterly highlights and touch on our differentiated market positioning, then turn the call to the team to discuss our market outlook, portfolio, and financial results. During the first quarter, our team deployed $104.3 million of capital and generated total and net investment income of $31.2 million and $12.9 million, respectively. We delivered net investment income of $0.40 per share and paid a $0.39 per share first quarter total dividend, which includes a $0.03 supplemental distribution. In line with our commitment to sector-leading transparency, we recently announced our March NAV per share of $15.85. To reiterate, the unique structure of our portfolio allows us to disclose an enhanced level of transparency.

[Chris Long, Chairman and CEO at Palmer Square Capital BDC]

We are the only public BDC to disclose monthly NAV, providing real-time visibility into the health and value of our portfolio. Before I turn the call over to Angie to discuss our market outlook, I'll touch on the current macro environment and how we are managing our portfolio accordingly. The recent volatility spurred by tariff uncertainty has no impact on our approach to underwriting or how we monitor our portfolio. In fact, in many ways, Palmer Square has its roots in environments that are just like today's. Our investment thesis was built for times like these. We founded Palmer Square Capital Management in the wake of the Great Recession, Our focus on identifying the best relative value across corporate and structured credit has remained unchanged since 2009.

[Chris Long, Chairman and CEO at Palmer Square Capital BDC]

In that span of time, we've navigated numerous periods of volatility, including the COVID-19 pandemic and the regional banking failures while scaling our broader platform to over $34 billion in assets under management. As we have discussed on our previous earnings calls, we attribute the strength of our portfolio and stable credit quality to our rigorous investment process and focus on larger companies with strong fundamentals. Our fundamental investment strategy, rooted in both liquid credit opportunities and senior secured private credit investments, remains fully intact. More importantly, it is underpinned by the resources and platform that Palmer Square Capital Management offers. We have a robust team of investment professionals who work tirelessly to identify opportunities to optimize our portfolio in real time, Our senior leaders average over 20 years of credit investment experience.

[Chris Long, Chairman and CEO at Palmer Square Capital BDC]

Our team has demonstrated a unique ability to combine a top-down and bottom-up investment framework that places a premium on risk management prudently deploys capital across market cycles. Our investment philosophy focuses on finding innovative ways to identify market dislocations while using the flexibility created by our nimble portfolio structure, which spans liquid bank and private credit loans, to carefully take advantage of attractive opportunities as they arise. We believe our strategy was tailor-made to perform during periods of volatility, which is aided by our ability to act quickly on behalf of our fellow shareholders. At our core, we are a client and shareholder-driven organization, We uphold shareholder alignment with the most importance. Our fee structure is lower than most externally managed, publicly traded BDCs, Our annualized dividend payout of 12.3% as of April 30th reinforces our commitment to returning capital to our shareholders.

[Chris Long, Chairman and CEO at Palmer Square Capital BDC]

Finally, we combine the size and scale of our position as a growing global asset manager with our local roots. Clients and investors choose to partner with Palmer Square because we have a global footprint with a specialized approach, but our team is approachable and accessible. Our LPs and investors know that Palmer Square is a team they want to be part of, and we have maintained a high touch approach to client service since our founding. In a time characterized by uncertainty, we are certain that the landscape will continue to shift. We believe that our nimble portfolio construction and ample liquidity enables us to capture the best relative value opportunities across the entire spectrum of corporate and structured credit.

[Chris Long, Chairman and CEO at Palmer Square Capital BDC]

Moving forward, investors will continue to get the full powered breadth of the Palmer Square platform as we work to deliver on our mission to generate attractive risk-adjusted returns through a highly liquid strategy underpinned by excellent credit quality and a shareholder-friendly fee structure. I will now hand the call over to Angie.

[Angie Long, CIO at Palmer Square Capital BDC]

Thank you, Chris. In the first quarter, our portfolio proved resilient against the dynamic macro backdrop, which continued to evolve into April, leading to a significant amount of volatility. As Chris mentioned, Palmer Square was created during an incredibly volatile time in the markets, and our investing philosophy is rooted in managing portfolios to provide investors with strong risk-adjusted returns in all market types. We believe the current backdrop is an incredible opportunity for investors to earn a premium yield of approximately 12.3% in a BDC focused on first lien senior secured loans. Compared to other yields available in the credit markets today, it's very difficult to achieve that type of yield without taking significant credit risk. For example, as of April 30th, the high yield index yields 7.9%.

[Angie Long, CIO at Palmer Square Capital BDC]

The leverage loan index yields 8.1%, and the 10-year treasury yields 4.2%. The excess yield pickup for PSBD relative to the leverage loan index is also near the widest levels since our IPO at approximately 420 basis points of additional yield. While each offers a different type of credit risk profile, we believe the premium yield and spread on PSBD relative to the underlying portfolio risks continue to remain extremely attractive. As we noted on our fourth quarter earnings call, we observed credit spreads tightening across most credit markets, many through their 10-year types. We believe the conservative approach to portfolio management represented a prudent posture to our fellow shareholders.

[Angie Long, CIO at Palmer Square Capital BDC]

While credit spreads have begun to widen due to the heightened market volatility over the past 5 to 6 weeks, we remain more conservatively positioned and believe that maintaining some dry powder is especially wise in the current environment. We are in a fluid situation in terms of how trade policy develops in Washington, and there's a high degree of uncertainty around where the tariff rates will ultimately settle. In the recent past, we have seen concerning moves and volatility in the treasury markets, declines in consumer and CEO confidence, and a slowdown in new issuance in the credit markets as M&A activity remains subdued. Going forward, we anticipate M&A volumes are likely to remain muted due to heightened volatility and the inability for management teams to have conviction in strategic planning while U.S. trade policy continues to evolve.

[Angie Long, CIO at Palmer Square Capital BDC]

Our differentiated investment strategy provides us with the distinct ability to invest in both the private and public side of the debt markets, which is unique across the broader BDC peer set. To put it more plainly, we are not reliant on M&A volumes to drive originations and portfolio activity. Our ability to invest in liquid credit gives us access to the approximately $1.5 trillion secondary market for broadly syndicated loans. We believe the current volatility in the market may create opportunities to invest in high-quality loans at compelling entry points. For the modest amount of new issuance volume we have seen in the syndicated market, spreads are certainly wider. Discounts are larger than they have been in quite some time, and credit documentation has become more lender-friendly.

[Angie Long, CIO at Palmer Square Capital BDC]

Historically, the best times to invest in the primary market have been coming out of bouts of volatility due to that dynamic, and we believe our portfolio is advantageously structured to capitalize on that circumstance when some of the current market dynamics abate. We can do all of this while still maintaining flexibility to increase our private credit allocation should we see compelling investment opportunities there. As Chris mentioned, at Palmer Square Capital, we manage over $34 billion in corporate and structured credit, and the BDC benefits from the size and scale of the entire platform. Our unique investment approach relative to most BDCs gives us more shots on goal as we evaluate investments across the liquid, private, and structured credit markets. This optionality becomes even more valuable during periods of volatility.

[Angie Long, CIO at Palmer Square Capital BDC]

We are confident in our ability to preserve our strong credit quality as we deliver better long-term risk-adjusted rewards for our investors over time. In addition to what we believe is an extremely attractive current yield, the Palmer Square team will continue to uphold our disciplined underwriting standards as we navigate these unique times. As a result of this commitment, our portfolio has among the industry's lowest levels of PIK income and non-accruals. We are confident that we have the right expertise to navigate any situation that arises in the months and quarters ahead. It's in our DNA. With that, I'd like to hand the call over to Matt, who will discuss our portfolio and investment activity.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

Thank you, Angie. Turning to our portfolio and investment activity for the first quarter. Our total investment portfolio as of March 31st, 2025, had a fair value of approximately $1.33 billion across 39 industries that demonstrate strong credit quality, industry and company specific tailwinds, and a diverse mix of core service offerings and end markets. This compares to a fair value of $1.41 billion at the end of the fourth quarter of 2024, reflecting a decrease of approximately 5.2%. In the first quarter, we invested $104.3 million of capital, which included 23 new investment commitments at an average value of approximately $3.9 million. During the same period, we realized approximately $144.4 million through repayments and sales. To echo Angie, towards the back half of 2024 and the first few months of 2025, we observed tightened spreads across the BSL and most other credit markets.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

We managed our portfolio conservatively to monitor risk and to maintain credit quality and liquidity. In many cases, we did not believe we were being adequately compensated for the underlying credit risk, and thus, we chose to either be repaid during refinancings or to sell loans we believed were overvalued. Following the recent market turbulence, we continue to believe in our diligent approach to credit underwriting and portfolio management as we act in the best interest of our investors and portfolio. Before I turn the call over to Jeff, I will provide an overview of our portfolio's performance during the quarter and composition. At the end of the first quarter, our weighted average total yield to maturity of debt and income-producing securities at fair value was 10.37%, and our weighted average total yield to maturity of debt and income-producing securities at amortized cost was 8.48%.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

We continue to see our portfolio diversification as a key differentiator, with our 10 largest investments accounting for just 10.19% of the overall portfolio. Our portfolio is 96% senior secured, with an average hold size of approximately $5.2 million. On a fair value weighted basis, our first lien borrowers have a weighted average EBITDA of $399 million, senior secured leverage of 5.5 times, and interest coverage of 2.1 times. As of March 31st, 2025, we had three loans on non-accrual status, representing 0.24% of fair value, well below reported BDC market averages. In the quarter, new private credit loans comprised 8.6% of overall new investments and were funded at a weighted average spread of 476 basis points over the reference rate. Our PIK income as a percentage of total investment income remains very low relative to the industry, at approximately 1.63%.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

We maintain an average internal rating of 3.6 on a fair value weighted basis for all loan investments. Our rating is based on a unique relative value-based scoring system. We believe this is an increasingly important tool for our portfolio as our ability to find relative value opportunities has historically increased coming out of volatile periods. To reiterate Chris and Angie's comments made earlier, Palmer Square Capital was established during the volatile times of 2009. Our entire credit underwriting mentality centers around risk mitigation and understanding relative value in the credit markets. The recent market volatility only furthers our statements that we made on prior quarters call about being defensive during tight spread environments. We believe the aforementioned qualities position us positively to perform and maintain our strong credit quality throughout the balance of the year.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

Now, I'd like to turn it over to Jeff, who will review our first quarter 2025 financial results.

[Jeff Fox, CFO and Director at Palmer Square Capital BDC]

Thank you, Matt. Total investment income was $31.2 million for the first quarter of 2025, down 10.3% from $34.8 million for the prior year period. We attribute the decrease to the impacts of a falling rate environment on our portfolio, which is predominantly comprised of floating rate loans. Total net expenses for the first quarter were $18.3 million, compared with $18.5 million in the prior year period. Net investment income for the first quarter of 2025 was $12.9 million or $0.40 per share, compared to $16.3 million or $0.52 per share for the comparable period last year. During the first quarter of 2025, the company had total net realized and unrealized losses of $21.3 million, compared to total net realized and unrealized gains of $6.6 million in the [first quarter of 2024].

[Jeff Fox, CFO and Director at Palmer Square Capital BDC]

This consisted of net unrealized depreciation of $21.7 million related to the existing portfolio investments and net unrealized appreciation of $6.3 million related to exited portfolio investments. At the end of the first quarter, NAV per share was $15.85, compared to $16.50 at the end of the fourth quarter of 2024. As a reminder, the NAV also reflects the payment of a $0.39 quarterly distribution comprised of a base dividend of $0.36 and a supplemental dividend of $0.03 per share. Moving to our balance sheet, total assets were $1.4 billion and total net assets were $515.8 million as of March 31st of 2025. At the end of the first quarter, our debt-to-equity ratio was 1.50 times, consistent with the fourth quarter of 2024. Available liquidity consisting of cash and undrawn capacity on our credit facilities was approximately $229.5 million.

[Jeff Fox, CFO and Director at Palmer Square Capital BDC]

This compares to approximately $200 million at the end of the fourth quarter of 2024. As mentioned on our fourth quarter earnings call, our board of directors reinstated and extended our existing stock repurchase plan, which commenced on January 22nd of 2025. The program expires on January 22nd of 2026. During the first quarter, we purchased 98,399 shares at an average price of $14.89 for a total purchase cost of $1.5 million. On May seventh, the board of directors declared a second quarter 2025 base dividend of $0.36 per share, in line with our formalized dividend policy. Given the liquid nature of the portfolio, we plan to announce the supplemental dividend in June, which allows for repayments to settle.

[Jeff Fox, CFO and Director at Palmer Square Capital BDC]

The supplemental distribution will be paid out of the excess of PSBD's quarterly undistributed net investment income above the base quarterly distribution. With that, I'd now like to open up the call for questions.

[Operator]

At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Kenneth Lee with RBC Capital Markets.

[Kenneth Lee, Analyst at RBC Capital Markets]

Hey, good afternoon, thanks for taking my question. Just one on the macro backdrop, obviously it sounds like you're maintaining a conservative discipline. Any kind of updated outlook or thoughts around where leverage could range? Is there still continued possibility of potential de-leveraging over the near term there? Thanks.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

Hi, Ken. It's Matt. Thanks for the question. I think we feel pretty good about where leverage is and where it has trended. I think, on a go-forward basis, we'll certainly see what opportunities come about, both in whether it's in the primary market or secondary market. Kind of given the backdrop with where we're at now, I think we feel pretty comfortable about where we're at.

[Kenneth Lee, Analyst at RBC Capital Markets]

Gotcha. In terms of one follow-up, if I may. In terms of the potential opportunities, the tactical opportunities, especially within the liquid loan markets, are you seeing some early signs of pockets of opportunities at this point? Perhaps, are there any certain sectors or areas that look particularly interesting at this point? Thanks.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

Yeah, good question. I think we feel like it's probably a little bit early to have strong conviction to really start deploying a heavy amount of capital into the secondary market right now. As you've heard and would expect, new deal activity remains pretty slow. There are some opportunities, obviously, in some tariff impacted sectors, which we've tended to avoid or be underweight. They've certainly bore the brunt of some of the volatility. Again, we're doing a lot of work on some individual names within there. I think there most likely will be opportunities, again, I think with the moving pieces on the policy side and on the tariff side, again, we think it's a little bit early to have a lot of conviction in those. I do think there's going to be some opportunities.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

We are looking at some things that I think will be interesting on a go-forward basis.

[Kenneth Lee, Analyst at RBC Capital Markets]

Gotcha. Actually one quick follow-up, if I may. In terms of the pay downs in the quarter, aside from any kind of refinancings or prepayments, were there any discretionary trades or investments that were sold within the portfolio in the quarter? Thanks.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

Yeah. I'd say the vast majority were from refinancing repayments. We kind of alluded to on last quarter's call, with the spread tightening environment, that really kind of persisted into January and February. There was just a lot of instances where we didn't feel like we were being compensated from a spread and yield basis on a go forward. We just took those par pay downs. There were a smaller amount of discretionary sales that we made, more just on a relative value standpoint. The vast bulk of that was just from pay down activity.

[Kenneth Lee, Analyst at RBC Capital Markets]

Gotcha. Very helpful there. Thanks again.

[Operator]

Your next question comes from Melisa Weddle with JPMorgan.

[Melisa Weddle, Analyst at JPMorgan]

Thanks for taking my questions today. Wanted to start on just the earnings power of the portfolio right now. Certainly you talked about spreads starting to widen out on new investments. It also sounds like your appetite to deploy additional capital right now is not totally robust. You're sitting on some dry powder and looking for a little more clarity, it sounds like. As we think about the earnings power of the portfolio going forward, while you guys take a very measured approach to deploying capital into wider spread opportunities, how are you thinking about earnings power relative to Q1 levels?

[Matthew Bloomfield, President at Palmer Square Capital BDC]

Hey, Melissa, thank you for the question. No, I think certainly in the first quarter, given how much repayment activity we saw, you obviously saw us proactively shrinking the portfolio,

[Matthew Bloomfield, President at Palmer Square Capital BDC]

Keeping some dry powder, building some capacity. I certainly think with the macro backdrop now, as you could expect, refinancing activity has come to a very low level. I do think we've seen spread tightening be in the rearview window at this point, which I think all of that bodes well on a go-forward basis. First quarter is also the lowest quarter from a day count standpoint, which does have a bit of an impact as we move to the second quarter. I think we feel good about the moves we made in advance of the April volatility. I think we're definitely open to deploy capital to the right situations. We do continue to see some new opportunities as well. We've got the 1.5 trillion secondary market to continue to look through. I think we want to be somewhat conservative still.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

There's still a lot of uncertainty out there from the macro standpoint. If we find good opportunities, and I do think we will, we're certainly ready to deploy capital into those.

[Melisa Weddle, Analyst at JPMorgan]

Okay. Appreciate that. As you're evaluating opportunities in this very fluid environment, one thing you do know for sure is that where your stock is trading and where your NAV is certainly trading at quite a discount now. Obviously, you've got the repurchase plan there in place. Should we be expecting repurchase activity to pick up to beat the discount to NAV? Thank you.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

Yeah. You're absolutely right. We do have the buyback programs in place. They are formulaic in nature. Should that discount persist, those will continue to be deployed. You're absolutely right. We do think it's at a very attractive level. As Chris notated, we post that monthly NAV. It is a real NAV. It is something investors can believe in. We do think it's a pretty unique opportunity out there right now, both from obviously from a discount price standpoint, but also from the ability to capture that type of yield that Chris and Angie alluded to on the call. We duly noted, and we agree with you. Yes, the buyback programs will continue to be in place.

[Melisa Weddle, Analyst at JPMorgan]

I appreciate that. Thank you.

[Operator]

Again, if you would like to ask a question, press star one on your telephone keypad. We have a follow-up question from Melissa Weddle with JPMorgan.

[Melisa Weddle, Analyst at JPMorgan]

Oh, might as well have just asked it in the first place. Okay. Wanted to touch on the decline in NAVs sort of quarter-over-quarter. I think one of the things that surprised us a little bit was the magnitude of the NAV decline, particularly with how much flexibility you have relative to other BDCs to rotate assets. I heard you say that a lot of the activity in the first quarter was from repayments. You saw some loans trade off and you saw some spreads widen on them. I think we would have expected that you might be a little bit more nimble in making relative value trades within the portfolio. Can you just elaborate on that, on what you saw throughout the quarter? How that decision-making takes place and how we should think about that going forward? Appreciate it.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

Yeah. Certainly. Good question. I think, really January and February there wasn't too much in the way of movement. It was really as we got into March and then particularly the back half of March, with some of the macro and equity volatility, syndicated loan prices did sell off. There were some pretty big ETF outflows that drove that. From our vantage point, unrealized mark to market, I'd say we're not looking to time markets perfectly. From our vantage point, when loans trade down a point or two for what we view as par assets, it's not in our best interest or I think shareholders' best interest for us to necessarily sell those down two points and crystallize losses.

[Matthew Bloomfield, President at Palmer Square Capital BDC]

It was really just the last couple weeks of March, just from a mark-to-market basis in price movements that we fully expect us to recapture over time as loans normalize.

[Melisa Weddle, Analyst at JPMorgan]

Got it. Thank you.

[Operator]

At this time, I would like to turn the call back to Chris Long for closing remarks.

[Chris Long, Chairman and CEO at Palmer Square Capital BDC]

Thank you so much. On behalf of the entire management team, we appreciate you joining us today and your continued support of Palmer Square Capital BDC. We look forward to updating you on our second quarter 2025 financial results in August.

[Operator]

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Angie Long, CIO
• Chris Long, Chairman and CEO
• Jeff Fox, CFO and Director
• Matthew Bloomfield, President

Analysts

• Jeremy Goff, Managing Director at Palmer Square Capital Management
• Kenneth Lee, Analyst at RBC Capital Markets
• Melisa Weddle, Analyst at JPMorgan