Palmer Square Capital BDC Reports Decrease in Investment Income for Q2 2025

Palmer Square Capital BDC Inc. reported a decrease in total investment income for the second quarter of 2025, generating $31.7 million compared to $36.5 million in the same period last year. For the first half of 2025, total investment income was $62.9 million, down from $71.3 million in the prior year. The decline in revenue was attributed to a reduction in interest income from floating-rate loans amid a falling interest rate environment. The company’s net investment income for the quarter was $13.8 million, or $0.43 per share, compared to $15.8 million, or $0.48 per share, in the previous year. The net increase in net assets resulting from operations was $7.2 million for the quarter, up from $5.3 million in the same period last year.

In terms of financial position, Palmer Square's total assets decreased to $1.31 billion as of June 30, 2025, down from $1.43 billion at the end of 2024. The company's net assets also fell to $505.2 million from $537.8 million, resulting in a net asset value per share of $15.68, down from $16.50. The decrease in net assets was primarily due to realized and unrealized losses on investments, which totaled $27.9 million for the first half of 2025, compared to a gain of $28.2 million in the same period of 2024.

Operationally, Palmer Square maintained a diversified investment portfolio, with 263 debt and equity investments across 206 portfolio companies, valued at approximately $1.2 billion. The company’s investment strategy focuses on corporate debt securities and collateralized loan obligations (CLOs). As of June 30, 2025, the weighted average total yield of debt and income-producing securities was 10.10%, down from 10.65% at the end of 2024. The company also reported a decrease in its average interest rate on debt investments, which fell to 8.83% from 9.06%.

Strategically, Palmer Square has been active in managing its capital structure, with a focus on maintaining compliance with regulatory asset coverage requirements. As of June 30, 2025, the company had an asset coverage ratio of 166%. The company has also engaged in share repurchase programs, repurchasing 413,444 shares during the first half of 2025. Looking ahead, Palmer Square anticipates that its investment strategy will continue to adapt to market conditions, with a focus on maximizing total return through both current income and capital appreciation. The company remains committed to its dividend policy, intending to distribute quarterly dividends to shareholders as income allows.