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Palmer Square Capital BDC Inc. Q2 2025 Earnings Presentation August 2025
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Page 2Palmer Square Capital BDC Inc. This presentation and any information communicated during any delivery of the presentation and any question and answer session and any document or material distributed at or in connection with the presentation (collectively, the “Presentation”) may contain forward-looking statements relating to the business, operations and financial conditions of Palmer Square Capital BDC Inc. (“we”, “us”, “our”, or the “Company”), including but not limited to current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Words such as, but not limited to, “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “objective”, “outlook”, “plan”, “potential”, “predict”, “project”, “should”, “will”, “would” or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes, identify forward-looking statements. These forward-looking statements reflect management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Presentation and are subject to risks and uncertainties. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the Company’s ability to identify attractive investment opportunities; changes in interest rates; regulations governing the Company’s operation as a business development company; the operating results and financial condition of the Company’s portfolio companies; the adequacy of the Company’s protections with respect to its loan portfolio; changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, including the liquidity of certain banks; uncertainty surrounding the financial and political stability of the United States, the United Kingdom, the European Union and China, the conflict in the Red Sea and the conflicts between Russia and Ukraine, and between Israel and Hamas; disruptions related to tariffs and other trade or sanctions issues; the impact of fluctuations in interest rates and foreign exchange rates on the Company’s business and its portfolio companies; rising levels of inflation, and its impact on the Company, its portfolio companies and on the industry in which the Company invests; and risks relating to economic recessions or downturns. Moreover, new risks emerge from time to time and it is not possible for management to predict all risks, nor can the Company assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward- looking statements we may make. More information on these risks and other potential factors that could affect the Company’s financial results, including important factors that could cause actual results to differ materially from plans, estimates or expectations included herein, is included in the Company’s filings with the Securities and Exchange Commission, including the factors set forth as “Risk Factors” in the Company’s annual reports on Form 10-K and quarterly reports on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. The Company qualifies all of the forward-looking statements in this Presentation by these cautionary statements. Except as required by law, the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. This Presentation contains statistics and other data that has been obtained from or compiled from information made available by third-party service providers. We have not independently verified such statistics or data. This Presentation is neither an offer to sell, or a solicitation of an offer to purchase, an interest in the Company. The information presented in this Presentation is as of June 30, 2025, unless indicated otherwise. Forward-looking Statements
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Page 3Palmer Square Capital BDC Inc. 1 Established manager with many years of experience in bank loans, corporate debt and structured credit 2 Differentiated liquid bank loan investment strategy well- positioned to deliver attractive and stable returns 3 Large addressable market opportunity with access to meaningful platform-level deal flow 4 Rigorous investment process focused on downside protection and overall credit quality 5 Highly diversified portfolio with focus on floating rate, senior secured loans 6 Shareholder aligned vehicle appropriately designed for liquid and private credit strategies Investment Highlights
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Page 4Palmer Square Capital BDC Inc. Note: Data as of 6/30/2025. Data presented as a percentage of fair value, where applicable. 1 Includes the fair value of short -term investments. 2 Attributes of First Lien Borrowers. 3Q2 2025 annualized net investment income yield as a percentage of average NAV. 4 As a percentage of long-term investments. 5 Represents a weighted average yield to maturity at fair value for all debt and income producing securities. Palmer Square Capital BDC Inc. Overview $3.3B Invested Capital Since Inception Focused on seeking the best relative value opportunities across corporate and structured credit with a bias for high quality, short duration, liquid credits and large private credit $1.3B Fair Value Investment Portfolio1 $412M Weighted Average LTM EBITDA2 10.8% Net Investment Income Yield3 206 Portfolio Companies 39 Portfolio Industries 98% Floating Rate Debt Investments4 10.10% W.A. Yield on Investments5 Key Portfolio Statistics
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Page 5Palmer Square Capital BDC Inc. 70% 14% 11% 5% Structured Credit Issuance Opportunistic Strategies Income / Short Duration Strategies Private Credit / Structured Credit Issuance Strategies Palmer Square Capital Management LLC Overview Palmer Square Capital Management LLC (“PSCM”) was founded in 2009 by Chris Long and has since grown to 74 employees and over $34.9 billion AUM across strategies, client base and product types Firm AUM: $34.9B Profile Founded 2009 Headquarters Mission Woods, KS AUM $34.9 billion Employees 74 Investment Professionals 32 Ownership 100% management-owned Client Base Foundations & endowments, public/private pensions, family offices, ultra-high net worth individuals, and financial institutions Product Types Private fund, mutual fund, exchange traded fund, CIT, separate account and direct co-investment vehicles Note: AUM as of 5/31/2025; Employment data as of 6/30/2025.
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Page 6Palmer Square Capital BDC Inc. Research Biases and Philosophy Palmer Square Capital Management believes active management in fixed income is paramount, and that by combining our depth of experience and strong research capabilities we can seek to not only capture yield, but also total return. PSCM’s investment philosophy has been consistent throughout multiple credit environments and has always been underpinned by the Firm’s core competencies of locating relative value across corporate and structured credit, and granular, bottom-up fundamental credit analysis. Focus on Higher Quality Assets Minimize Interest Rate Duration Maintain Liquidity Where Possible In everything we do, we subscribe to three key research biases
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Page 7Palmer Square Capital BDC Inc. Investment Strategy Investment Style Loans with an average loan size greater than $1 billion Priority position in the capital structure Small to large private U.S. companies with higher recurring revenue and high customer retention rates ✓ ✓ ✓ Market Segment Asset Focus Borrower Focus Liquid, Leveraged Loan Market & Large Cap Direct Lending Market Companies that have strong structural protections, limited downside, and low long-term beta Senior Secured, Floating Rate Consistent investment philosophy throughout multiple credit environments underpinned by core competencies: locating relative value and granular, bottom-up fundamental credit analysis Attractive risk adjusted returns through a highly liquid strategy
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Page 8Palmer Square Capital BDC Inc. $- $50 $100 $150 $200 $250 Institutional Pro Rata $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 Large Addressable Market Opportunity Strong near-and medium-term supply as issuers continue to access the market for refinancings and long-term supply as private equity dry powder gets deployed S&P/LSTA Leveraged Loan Index U.S. Leveraged Loan Volume $ in Billions $ in Billions Note: Data as of 6/30/2025. Source: LCD, LSTA Leveraged Loan Index.
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Page 9Palmer Square Capital BDC Inc. Second Quarter 2025 Highlights • Total investment income of $31.7 million for the second quarter of 2025 compared to $36.5 million for the prior year period. • Net investment income of $13.8 million or $0.43 per share1 for the second quarter of 2025, as compared to $15.8 million or $0.48 per share for the comparable period last year. • Net asset value of $15.68 per share as of June 30, 2025, compared to $15.85 per share as of March 31, 2025. • Declared cash distributions to stockholders totaling $0.42 per share for the second quarter of 2025. • As of June 30, 2025, total portfolio of long-term investments was $1.2 billion at fair value, with 263 investments in 206 portfolio companies. • As of June 30, 2025, 98% of the investments were at floating rates and there was one long-term investment loan on non- accrual status. • As of June 30, 2025, weighted average total yield to maturity of debt and income producing securities at fair value and amortized cost was 10.10% and 8.27%, respectively. • New investments funded of $92.4 million across 23 new investments for the second quarter of 2025 with $133.3 million aggregate principal amount in sales and repayments. • As of June 30, 2025, total assets were $1.3 billion, and total net assets were $505.2 million. • Debt-to-equity ratio2 as of June 30, 2025, was 1.51x, compared to 1.50x at the end of Q1 2025. • Available liquidity, consisting of cash and undrawn capacity on credit facilities, was approximately $253.5 million as of June 30, 2025, compared to $15.7 million of undrawn investment commitments. Portfolio Activity Earnings Balance Sheet • PIK income as a percentage of total investment income for the second quarter of 2025 remains low at approximately 2.53%, below recent industry averages. • At the end of the second quarter, we had one loan on non-accrual status, representing just 0.19% of total investments at fair value, below recent industry averages. Recent Developments Other Highlights • On August 6, 2025, PSBD’s Board of Directors declared a third quarter 2025 regular distribution of $0.36 per share payable on October 14, 2025, to shareholders of record as of September 26, 2025. PSBD expects to announce an additional quarterly supplemental dividend distribution for the third quarter of 2025 in September. 1 Calculated using weighted average outstanding shares over the period. 2 Net of deferred financing costs and accrued interest.
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Page 10Palmer Square Capital BDC Inc. Financial and Portfolio Highlights ($ in thousands, except per share data) Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Net Investment Income Per Share 1 $0.48 $0.48 $0.45 $0.40 $0.43 Net Investment Income $15,758 $15,729 $14,796 $12,913 $13,842 Dividends Per Share Earned 2 $0.47 $0.47 $0.483 $0.39 $0.42 Net Asset Value Per Share $16.85 $16.61 $16.50 $15.85 $15.68 Total Portfolio At Fair Value $1,431,577 $1,389,801 $1,407,131 $1,334,314 $1,279,793 Number Of Portfolio Companies 209 212 207 209 206 Portfolio Yield 4 9.82% 10.48% 10.65% 10.37% 10.10% Senior Secured Loan 5 96% 96% 96% 96% 96% Investments On Non-Accrual 6 - 0.26% 0.08% 0.24% 0.19% Total Return 7 1.00% 1.43% 2.36% -1.05% 1.85% Net Assets $548,790 $541,937 $537,845 $515,807 $505,213 Debt Outstanding, Net 8 $820,390 $824,412 $804,156 $774,452 $763,217 Debt To Equity, Period End 8 1.49x 1.52x 1.50x 1.50x 1.51x 1 Calculated using weighted average common shares outstanding over the period. 2 Dividend amount reflects dividend earned in period. 3 Dividend Includes $0.03 of spillover income for Q4 2024. 4 Weighted average total yield of debt and income producing securities at fair value. 5 As a percentage of long-term investments, at fair value. 6 As a percentage of total investments, at fair value. 7 Calculated as ending NAV per share plus dividends in the period, divided by the prior period NAV. Total return is not annuali zed. 8 Net of deferred financing costs and accrued interest.
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Page 11Palmer Square Capital BDC Inc. New Portfolio and Investment Activity ($ in thousands, except per share data) Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 New Investments 1 Gross Investments $189,301 $66,240 $171,785 $104,323 $92,362 Less: Sold Investments ($140,027) ($82,822) ($176,357) ($144,369) ($133,282) Total New Investments $49,274 ($16,582) ($4,572) ($40,046) ($40,920) Asset Mix - New Investments 1 First-Lien Senior Secured Debt Investments 80.58% 93.86% 93.45% 93.40% 91.73% Second-Lien Senior Secured Debt Investments 16.60% 6.14% - - 5.40% Corporate Bonds 2.16% - - - 2.17% Convertible Bonds - - - - - Collateralized Securities And Structured Products - - 6.55% - - CLO Equity - - - - - Common Stock 0.66% - - 6.60% 0.05% Preferred Stock - - - - 0.65% New Investment Activity 2 Number Of New Investment Commitments 24 21 28 23 23 Average New Investment Commitment Amount $5,575.30 $2,717.29 $4,457.47 $3,855.34 $3,145.74 W.A. Maturity For New Investment Commitments 6.05 years 5.29 years 6.19 years 5.59 years 5.16 years New Debt Commitments At Floating Rates 97.01% 100.00% 100.00% 100.00% 100.00% New Debt Investment Commitments At Fixed Rates 2.99% - - - - W.A. Interest Rate Of New Investment Commitments 9.96% 9.07% 8.98% 8.52% 8.93% 1 New investments and asset mix calculated at amortized cost. 2 New investment activity calculated at fair value.
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Page 12Palmer Square Capital BDC Inc. 86% 6% 4% 4% First Lien Second Lien Short-Term Investments Other First Lien Focused Portfolio Portfolio Overview – Asset Mix Borrower Attributes2 $412M Wtd Average LTM EBITDA 5.6x Wtd Average 1st Lien Leverage 2.2x W.A. Interest Coverage PSBD Portfolio Attributes 96% Senior Secured Investments3 ~$5.1M Average Hold4 98% Floating Rate3 Focus on liquid loans and large private credit to high-quality companies with strong fundamentals in order to drive strong credit outcomes. 1 Note: Data as of 6/30/2025. Portfolio mix as a percentage of total income producing securities at fair value. 1 Other includes Corporate Bonds, CLO Mezzanine and CLO Equity. 2 Attributes of First Lien Borrowers. 3 As a percentage of long-term investments. 4 Average hold size of first and second lien investments at fair value.
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Page 13Palmer Square Capital BDC Inc. $451 $457 $422 $399 $412 2.1x 2.0x 2.0x 2.1x 2.2x 5.3x 5.5x 5.4x 5.5x 5.6x 2Q24 3Q24 4Q24 1Q25 2Q25 Weighted Average LTM EBITDA Weighted Average Interest Coverage Weighted Average First Lien Leverage Portfolio Company EBITDA & Credit Statistics Note: As of 6/30/2025.
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Page 14Palmer Square Capital BDC Inc. Software 11% Healthcare 10% Professional Services 8% IT Services 6% Chemicals 5% Other Industries 60% Portfolio Highlights – Diversification Highly diversified portfolio by industry and borrower, oriented towards first lien senior secured loans Industry Diversification Borrower Concentration Top 10 positions represent 10.7% of the portfolio Strategically focused on 39 resilient industries Note: Data as of 6/30/2025. Portfolio industry diversification and borrower concentration as a percentage of total income pro ducing securities at fair value.
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Page 15Palmer Square Capital BDC Inc. Rating 2 6.6% Rating 3 27.9% Rating 4 65.5% • As of June 30, 2025, one investment was on non-accrual status and the weighted average internal rating of the portfolio at fair value was 3.6. PSBD Internal Rating System • Positions assigned a score of 5 to 1, updated on an ongoing basis • Analysts incorporate both a fundamental and relative value view The scoring system is as follows: (5) Add Now Where Possible/Outperforming or Compelling Relative Value (4) Performing At or Above Plan/Add on Relative Where Applicable (3) Hold/Fair Value (2) Sell Opportunistically/Don’t Add (1) Sell Now Where Possible/Potential for Impairment Relative Value Scoring System Criteria Liquid nature of the portfolio allows for monthly NAV strikes and provides greater transparency into portfolio fair value Average Rating 3.6
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Page 16Palmer Square Capital BDC Inc. $15.85 $15.68 $0.43 ($0.42) ($0.18) Q1 2025 NAV Per Share Q2 2025 Net Investment Income Q2 2025 Regular & Supplemental Dividend Change in Realized & Unrealized Gain (Loss) Q2 2025 NAV Per Share Net Asset Value Per Share Bridge 1 1 Realized and unrealized gains and losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with the aggregate gains and losses in the Consolidated Statements of Operations due to share transactions duri ng the period.
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Page 17Palmer Square Capital BDC Inc. $855 $926 $279 $274 $774 $197 $(268) $(402) $(314) $(247) $(469) $(278) $586 $525 $(35) $27 $305 $(81) FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 1H 2025 Gross Investments Sold Investments Total Net Investments Investment Fundings Since Inception Liquid nature of the portfolio preserves optionality and allows for opportunistic investments Portfolio companies 212 176 191 207 206181 Note: Data as of 6/30/2025. Investment activity shown in $ millions, calculated at amortized cost.
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Page 18Palmer Square Capital BDC Inc. $463 $237 $300 2025 2026 2027 2028 2037 Drawn Credit Facility Undrawn Credit Facility CLO $523 $521 $503 $473 $463 $177 $179 $197 $227 $237 $300 $300 $300 $300 $300 $78 $47 $72 $60 $65 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Credit Facility (Drawn) Credit Facility (Undrawn) CLO Cash 1.50x 1.50x1.49x 1.52x Debt Obligations and Maturity Ladder Undrawn Investment Commitments ($ in millions) $30.0 $19.6 $21.6 $20.2 $15.7 • Attractive non-mark to market financing terms with high-quality financing partners and substantial capacity to invest. D/E3 ($ in millions) Committed Amount Principal Outstanding Interest Rate Maturity Date BofA Credit Facility $525 $309 S + 140 2/18/2028 Wells Fargo Credit Facility $175 $154 S + 250 12/18/2028 Total Credit Facilities $700 $463 S + 1771 CLO Notes $300 $300 S + 1722 7/15/2037 1.51x Debt Schedule and Maturities Liquidity and Leverage Profile 4 Note: As of 6/30/2025. 1 Blended rate across the two facilities. 2 Weighted average spread of all tranches at time of pricing. 3 D/E (debt-to-equity) calculated net of deferred financing costs and accrued interest. 4 Includes cash & cash equivalents and short-term investments.
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Page 19Palmer Square Capital BDC Inc. $0.37 $0.44 $0.44 $0.64 $0.52 $0.54 $0.56 $0.54 $0.42 $0.42 $0.42 $0.42 $0.36 $0.36 $0.07 $0.05 $0.05 $0.06 $0.03 $0.06 7.4% 10.5% 11.0% 17.1% 12.9%13.1% 13.4% 12.7% 11.4% 11.2% 11.3% 11.6% 9.8% 10.7% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 Regular Dividend Supplemental Dividend Dividend Yield Historical Quarterly Earned Dividends & Yield Note: As of 6/30/2025. 1 Dividend amount reflects dividend earned in period. 2 Dividend yield calculated by dividing the latest annualized quarterly dividend by the respective NAV per share at quarter end. 3 Dividend includes $0.04 of capital gains and $0.07 of spillover income for Q4 2022. 4 Dividend Includes $0.03 of spillover income for Q4 2024. 3 1, 21 4
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Page 20Palmer Square Capital BDC Inc. ($ in thousands, except per share data) Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Assets Investments (At Fair Value) $1,431,577 $1,389,801 $1,407,131 $1,334,314 $1,279,793 Cash And Cash Equivalents $14,789 $1,786 $2,766 $2,872 $16,436 Receivables And Other $12,375 $21,965 $21,146 $25,744 $18,586 Total Assets $1,458,741 $1,413,552 $1,431,043 $1,362,930 $1,314,815 Liabilities Credit Facilities, Net $519,866 $518,483 $501,651 $472,325 $461,058 Notes $300,524 $305,928 $302,505 $302,127 $302,159 Payables $88,247 $46,111 $87,673 $71,696 $45,141 Accrued Other G&A Expenses $1,314 $1,093 $1,369 $975 $1,243 Total Liabilities $909,951 $871,615 $893,198 $847,123 $809,601 Net Assets Total Net Assets $548,790 $541,937 $537,845 $515,807 $505,214 Total Liabilities And Net Assets $1,458,741 $1,413,552 $1,431,043 $1,362,930 $1,314,815 Net Asset Value Per Share $16.85 $16.61 $16.50 $15.85 $15.68 Debt To Equity At Quarter End 1 1.49x 1.52x 1.50x 1.50x 1.51x Quarterly Statements of Financial Condition 1 Calculated net of deferred financing costs and accrued interest.
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Page 21Palmer Square Capital BDC Inc. ($ in thousands, except per share data) Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Investment Income Interest Income $35,278 $35,775 $33,248 $29,820 $30,024 Dividend Income $805 $600 $656 $574 $481 Payment-In-Kind Interest Income $182 $205 $685 $508 $802 Other Income $284 $726 $284 $312 $370 Total Investment Income $36,549 $37,306 $34,873 $31,214 $31,677 Expense Incentive Fees $2,250 $2,230 $2,149 $1,843 $1,940 Interest Expense $14,997 $15,671 $14,159 $12,970 $12,576 Management Fees $2,450 $2,424 $2,414 $2,333 $2,233 Professional Fees $398 $319 $497 $313 $251 Directors Fees $37 $38 $38 $37 $38 Other General And Administrative Expenses $659 $896 $820 $805 $797 Total Expenses $20,791 $21,577 $20,077 $18,301 $17,835 Less: Management Fee Waiver - - - - - Net Investment Income $15,758 $15,729 $14,796 $12,913 $13,842 Total Net Realized Gains/(Losses) ($9,412) ($7,119) $489 ($5,894) ($5,745) Total Net Change In Unrealized Gains/(Losses) ($1,033) ($1,054) ($3,367) ($15,408) ($927) Total Realized & Unrealized Gains /(Losses) ($10,445) ($8,174) ($2,878) ($21,302) ($6,672) Net Increase/(Decrease) In Net Assets $5,313 $7,555 $11,918 ($8,389) $7,170 Shares Outstanding (MM) 33 33 33 33 32 Net Investment Income Per Share 1 $0.48 $0.48 $0.45 $0.40 $0.43 Quarterly Operating Results Detail 1 Calculated using weighted average shares outstanding over the period.
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Investor Relations Investors@palmersquarebdc.com