Palmer Square Capital BDC Inc

Current report

We are subject to risks associated with forming CLOs.

Current report

To finance investments, we have in the past and may in the future securitize certain of our secured loans or other investments, including through the formation of one or more CLOs, such as the CLO Transaction, while retaining all or most of the subordinated notes issued in the securitization. This involves contributing a pool of assets to a special purpose entity, and selling debt interests in such entity on a non-recourse or limited-recourse basis to purchasers.

Current report

In connection with the CLO Transaction (and any other CLO we may form in the future), we depend (or will depend) in part on distributions from the CLO’s assets out of its earnings and cash flows to enable us to make distributions to shareholders. The ability of a CLO to make distributions will be, and in connection with the CLO Transaction is, subject to various limitations, including the terms and covenants of the debt it issues. The Subordinated Notes issued by the Issuer and retained by us are the most junior class of notes issued by the Issuer, are subordinated in priority of payment to the other Notes issued by the Issuer and are subject to certain payment restrictions set forth in the indenture governing the Notes issued by Issuer. Therefore, we only receive cash distributions on the Subordinated Notes if the Issuer has made all cash interest payments to all other Notes it has issued.

Current report

Also, a CLO may take actions to retain cash or other assets to satisfy asset coverage requirements or other tests commonly provided for holders of the CLO’s debt, which could impact our ability to receive distributions from the CLO. With respect to the CLO Transaction, if the Issuer does not meet the asset coverage tests or the interest coverage test set forth in the documents governing the CLO Transaction, cash would be diverted from the Subordinated Notes that we hold to first pay the more senior Notes issued by the Issuer in amounts sufficient to cause such tests to be satisfied. If we do not receive cash flow from any such CLO, including in connection with the CLO Transaction, that is necessary to satisfy the annual distribution requirement for maintaining RIC status, and we are unable to obtain cash from other sources necessary to satisfy this requirement, we may not maintain our qualification as a RIC, which would have a material adverse effect on an investment in the shares.

Current report

In addition, a decline in the credit quality of loans in a CLO due to poor operating results of the relevant borrower or increases in defaults, among other things, may result in a reduction of earnings and, in turn, cash potentially available for distribution to us for distribution to shareholders. To the extent that any losses are incurred by the CLO in respect of any collateral, including, with respect to the CLO Transaction, the value of the portfolio of loan investments held by the Issuer, such losses will be borne first by us as owner of equity interests in the CLO and, in the case of the CLO Transaction, the value of the Subordinated Notes that we have retained could be reduced at their redemption and could not be paid in full or at all.

Current report

Dividend Reinvestment Plan

Current report

During the quarter ended June 30, 2024, we issued 35,963 shares of common stock to stockholders in connection with the dividend reinvestment plan.

Current report

Company Rule 10b5-1 Stock Repurchase Plan

Current report

During the quarter ended June 30, 2024, we repurchased 21,352 shares of our common stock pursuant to the Company Rule 10b5-1 Repurchase Plan.

Current report

PSCM Rule 10b5-1 Stock Purchase Plan

Current report

Concurrently with the closing of the IPO, PSCM entered into the PSCM Rule 10b5-1 Stock Purchase Plan to permit the purchase of up to $2.5 million shares of our common stock, if the market price per share of our common stock is below the most recently reported NAV per share, subject to certain limitations. The PSCM Rule 10b5-1 Stock Purchase Plan commenced on March 23, 2024 and will terminate upon the earliest to occur of (i) 12 months from the date of the PSCM Rule 10b5-1 Stock Purchase Plan, (ii) the end of the trading day on which the aggregate purchase price for all shares purchased under the PSCM Rule 10b5-1 Stock Purchase Plan equals $2.5 million, and (iii) the occurrence of certain other events described in the PSCM Rule 10b5-1 Stock Purchase Plan.

Current report

During the quarter ended June 30, 2024, PSCM did not repurchase any shares of our common stock pursuant to the PSCM Rule 10b5-1 Stock Purchase Plan

Current report

None.

Previous report

During the three months ended March 31, 2024, the Company issued and sold 5,450,000 shares at an aggregate purchase price of $89.7 million. These amounts include shares issued in reinvestment. The issuance of the shares of common stock was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) and Rule 506(b) of Regulation D thereof. The Company relied, in part, upon representations from the investors in the subscription agreements that each investor was an accredited investor as defined in Regulation D under the Securities Act. We did not engage in general solicitation or advertising, and did not offer securities to the public, in connection with such issuances and sales.