Palmer Square Capital BDC Inc

Note 11. Subsequent Events

The Company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that require recognition or disclosure in these consolidated financial statements, except for the following:

Distributions

On March 28, 2024, the Company declared a distribution of $0.49 per share, or $15,950,869, of which a cash distribution of $12,893,635 was payable on April 10, 2024, and the remainder was paid through common stock through the Company’s dividend reinvestment plan.

CLO Transaction

On April 24, 2024, Palmer Square Capital BDC Inc. (the “Company”), through Palmer Square BDC CLO 1, Ltd. (the “Issuer”), an exempted company incorporated with limited liability under the laws of the Cayman Islands and a wholly-owned indirect subsidiary of the Company, priced its $400,500,000 million term debt securitization (the “CLO Transaction”). The CLO Transaction is expected to close on May 23, 2024. The notes offered by the Issuer in the CLO Transaction (the “Palmer Square BDC CLO 1 Secured Notes”) are secured by a diversified portfolio of the Issuer consisting of senior secured loans or participation interests therein with the potential for investment in second lien loans or participation interests therein, corporate bonds or loans made to a debtor-in-possession pursuant to Section 364 of the Bankruptcy Code having the priority allowed by either Section 364(c) or 364(d) of the Bankruptcy Code and fully secured by senior liens or participation interests therein.

The CLO Transaction is expected to be executed through a private placement of the following Palmer Square BDC CLO 1 Secured Notes: $232 million of AAA Class A Notes, which will bear interest at the forward-looking term rate based onthe secured overnight financing rate(“Term SOFR”) plus 1.60%; $58 million of AA Class B-1 Notes, which will bear interest at Term SOFR plus 2.15%; and $10 million of AA Class B-2 Notes, which will bear interest at a fixed rate of 6.33%. The Company is expected to acquire 100% of the subordinated notes issued by the Issuer (the “Subordinated Notes” and, together with the Palmer Square BDC CLO 1 Secured Notes, the “Palmer Square BDC CLO 1 Notes”) and will be required to retain the Subordinated Notes in accordance with the U.S. Risk Retention Rules and the EU/UK Securitization Regulations at and after the closing of the CLO Transaction. The Subordinated Notes do not bear interest and will have a value of approximately $100.5 million at closing of the CLO Transaction. The Company expects that the Palmer Square BDC CLO 1 Notes will be scheduled to mature on July 15, 2037.

The Palmer Square BDC CLO 1 Secured Notes will be the secured obligations of the Issuer, and the indenture governing the Palmer Square BDC CLO 1 Notes includes customary covenants and events of default. The Palmer Square BDC CLO 1 Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from registration. This report is not a solicitation for or an offer to purchase the Palmer Square BDC CLO 1 Notes.

Company Rule 10b5-1 Stock Repurchase Plan

From April 1, 2024 to May 7, 2024, the Company repurchased 17,851 shares of its common stock pursuant to the Company Rule 10b5-1 Repurchase Plan at an aggregate price of $288,261.

Unfunded Capital Commitments

As of May 7, 2024, $775,714 of the outstanding commitment to Accession Risk Management Group, Inc. was funded. The balance of the remaining unfunded commitment is $900,000.

As of May 7, 2024, $250,000 of the outstanding commitment to Patriot Growth Insurance Services, LLC was funded. The balance of the remaining unfunded commitment is $3,950,000.