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1 Q3 2025 Earnings Palmer Square BDC Inc. (NYSE: PSBD) November 2025
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2 Forward–looking Statements 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 September 30, 2025, unless indicated otherwise. Q3 2025 EARNINGS
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3 Established manager with many years of experience in bank loans, corporate debt and structured credit Differentiated liquid bank loan investment strategy well-positioned to deliver attractive and stable returns Large addressable market opportunity with access to meaningful platform-level deal flow Rigorous investment process focused on downside protection and overall credit quality Highly diversified portfolio with focus on floating rate, senior secured loans Shareholder aligned vehicle appropriately designed for liquid and private credit strategies Palmer Square BDC Investment Highlights Q3 2025 EARNINGS 1 2 3 4 5 6
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4 Palmer Square Capital BDC Inc. Overview 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 Q3 2025 EARNINGS $3.4B Invested Capital Since Inception $1.3B Fair Value Investment Portfolio1 $421M Weighted Average LTM EBITDA2 11.0% Net Investment Income Yield3 209 Portfolio Companies 42 Portfolio Industries 98% Floating Rate Debt Investments4 10.1% W.A. Yield on Investments5 Note: Data as of 9/30/2025. 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. 3. Q3 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.
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5 Palmer Square Capital Management LLC Overview Note: AUM as of 8/31/2025; Employment data as of 9/30/2025. Q3 2025 EARNINGS 71% 15% 10% 4% Structured Credit Issuance Opportunistic Strategies Income / Short Duration Strategies Private Credit / Structured Credit Issuance Strategies Palmer Square Capital Management LLC (“PSCM”) was founded in 2009 by Chris Long and has since grown to 75 employees and over $36.6 billion AUM across strategies, client base and product types $36.6B Founded 2009 Headquarters Mission Woods, KS AUM $36.6 billion Employees 75 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 ProfileFirm AUM
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6 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. Q3 2025 EARNINGS 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. 1 Focus on Higher Quality Assets 2 Minimize Interest Rate Duration 3 Maintain Liquidity Where Possible In everything we do, we subscribe to three key pillars Research Biases and Philosophy
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7 Q3 2025 EARNINGS Attractive risk adjusted returns through a highly liquid strategy Consistent investment philosophy throughout multiple credit environments underpinned by core competencies: locating relative value and granular, bottom-up fundamental credit analysis Investment Criteria ✓ Loans with an average overall deal 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 Liquid, Leveraged Loan Market & Large Cap Direct Lending Market Asset Focus Senior Secured, Floating Rate Borrower Focus Companies with strong structural protections, limited downside, and low long-term beta Investment Strategy
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8 S&P/LSTA Leveraged Loan Index U.S. Leveraged Loan Volume Note: Data as of 9/30/2025. Source: LCD, LSTA Leveraged Loan Index. Q3 2025 EARNINGS Large Addressable Market Opportunity $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 $- $50 $100 $150 $200 $250 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 Institutional Pro Rata 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
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9 • On November 5, 2025, PSBD’s Board of Directors declared a fourth quarter 2025 regular distribution of $0.36 per share payable on January 14, 2026, to shareholders of record as of December 29, 2025. PSBD expects to announce an additional quarterly supplemental dividend distribution for the fourth quarter of 2025 in December. • Subsequent to quarter end, PSBD refinanced its Wells Fargo credit facility, lowering the spread by 55 basis points. • Subsequent to quarter end, PSBD’s Board of Directors approved an additional $5 million of open market share repurchases. Third Quarter 2025 Highlights 1. Calculated using weighted average outstanding shares over the period. 2. Net of deferred financing costs and accrued interest. Q3 2025 EARNINGS Earnings $31.7M Total investment income $37.3 million for the prior year period $13.6M Net investment income $15.7 million or $0.48 per share for the comparable period last year $0.43 per share1 $15.39 Net asset value $15.68 per share as of June 30, 2025 Per Share 1.14% PIK income as a percentage of total investment income, below recent industry averages $0.42 Declared cash distributions to stockholders for the third quarter of 2025 Per Share Portfolio Activity $1.2B Total portfolio of long-term investments at fair value 262 investments in 209 portfolio companies 98% Investments at floating rates 10.07% Weighted average total yield to maturity of debt and income producing securities at fair value 8.00% Weighted average total yield to maturity of debt and income producing securities at amortized cost $138.7M New investments funded across 28 new investments $156.0 million aggregate principal amount in sales and repayments Balance Sheet $1.3B Total assets $490.4M Total net assets 1.53x Debt-to-equity ratio2 1.51x at the end of Q2 2025 ~$252.8M Available liquidity, consisting of cash and undrawn capacity on credit facilities $16.4 million of unfunded investment commitments Other Highlights 2 Portfolio companies on non-accrual status representing just 0.40% of total investments at fair value, below recent industry averages Recent Developments
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10 Financial and Portfolio Highlights 1. Calculated using weighted average common shares outstanding over the period. 2. Dividend amount reflects dividend earned in period. 3. Dividend Includes $0.03 of spillover income for Q4 2024. 4. Weighted average total yield of debt and income producing securities at fair value. 5. As a percentage of long-term investments, at fair value. 6. As a percentage of total investments, at fair value. 7. Calculated as ending NAV per share plus dividends in the period, divided by the prior period NAV. Total return is not annualized. 8. Net of deferred financing costs and accrued interest. Q3 2025 EARNINGS ($ in thousands, except per share data) Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Net Investment Income Per Share 1 $0.48 $0.45 $0.40 $0.43 $0.43 Net Investment Income $15,729 $14,796 $12,913 $13,842 $13,641 Dividends Per Share Earned 2 $0.47 $0.483 $0.39 $0.42 $0.42 Net Asset Value Per Share $16.61 $16.50 $15.85 $15.68 $15.39 Total Portfolio At Fair Value $1,389,801 $1,407,131 $1,334,314 $1,279,793 $1,258,988 Number Of Portfolio Companies 212 207 209 206 209 Portfolio Yield 4 10.48% 10.65% 10.37% 10.10% 10.07% Senior Secured Loan 5 96% 96% 96% 96% 95% Investments On Non-Accrual 6 0.26% 0.08% 0.24% 0.19% 0.40% Total Return 7 1.43% 2.36% -1.05% 1.85% 1.41% Net Assets $541,937 $537,845 $515,807 $505,213 $490,445 Debt Outstanding, Net 8 $824,412 $804,156 $774,452 $763,217 $752,350 Debt To Equity, Period End 8 1.52x 1.50x 1.50x 1.51x 1.53x
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11 New Portfolio and Investment Activity 1. New investments and asset mix calculated at amortized cost. 2. New investment activity calculated at fair value. Q3 2025 EARNINGS ($ in thousands, except per share data) Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 New Investments 1 Gross Investments $66,240 $171,785 $104,323 $92,362 $138,666 Less: Sold Investments ($82,822) ($176,357) ($144,369) ($133,282) ($156,028) Total New Investments ($16,582) ($4,572) ($40,046) ($40,920) ($17,362) Asset Mix - New Investments 1 First-Lien Senior Secured Debt Investments 93.86% 93.45% 93.40% 91.73% 87.54% Second-Lien Senior Secured Debt Investments 6.14% - - 5.40% 4.31% Corporate Bonds - - - 2.17% 2.16% Collateralized Securities And Structured Products - 6.55% - - 5.99% CLO Equity - - - - - Common Stock - - 6.60% 0.05% - Preferred Stock - - - 0.65% - New Investment Activity 2 Number Of New Investment Commitments 21 28 23 23 28 Average New Investment Commitment Amount $2,717.29 $4,457.47 $3,855.34 $3,145.74 $4,760.37 W.A. Maturity For New Investment Commitments 5.29 years 6.19 years 5.59 years 5.16 years 6.75 years New Debt Commitments At Floating Rates 100.00% 100.00% 100.00% 100.00% 97.75% New Debt Investment Commitments At Fixed Rates - - - - 2.25% W.A. Interest Rate Of New Investment Commitments 9.07% 8.98% 8.52% 8.93% 8.48%
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12 12 Note: Data as of 9/30/2025. Portfolio mix as a percentage of total income producing securities at fair value. 1. Other includes Corporate Bonds, CLO Mezzanine, CLO Equity and 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. Q3 2025 EARNINGS Portfolio Overview – Asset Mix 86% 5% 4% 5% First Lien Second Lien Short-Term Investments Other First Lien Focused Portfolio Borrower Attributes2 $421M Weighted Average LTM EBITDA 5.5x Weighted Average 1st Lien Leverage 2.5x Weighted Average Interest Coverage PSBD Portfolio Attributes 95% Senior Secured Investments3 ~$5.0M 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
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13 Portfolio Company EBITDA & Credit Statistics Note: Attributes of First Lien Borrowers. Q3 2025 EARNINGS $457 $422 $399 $412 $421 2.0x 2.0x 2.1x 2.2x 2.5x 5.5x 5.4x 5.5x 5.6x 5.5x 3Q24 4Q24 1Q25 2Q25 3Q25 Weighted Average LTM EBITDA Weighted Average Interest Coverage Weighted Average First Lien Leverage
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14 Q3 2025 EARNINGS Strong Value Creation Through Bouts of Uncertainty Note: Data as of 9/30/2025. Portfolio industry diversification and borrower concentration as a percentage of total income producing securities at fair value. Industry Diversification Strategically focused on 42 resilient industries Borrower Concentration Top 10 positions represent 10.6% of the portfolio Highly diversified portfolio by industry and borrower, oriented towards first lien senior secured loans 11% 10% 9% 7% 6% 57% Software Healthcare IT Services Professional Services Diversified Financial Services Other Industries Nexus Buyer LLC 1.3% Delta Topco, Inc. 1.2% Gainwell Acquisition Corp. 1.1% Red Planet Borrower LLC 1.1% US Radiology Specialists, Inc. 1.0% Rocket Software, Inc. 1.0% Ivanti Software, Inc. 1.0% Summer BC Holdco B LLC 1.0% Infinite Bidco, LLC 1.0% Northstar Group Services, Inc. 0.9% Other 89.4%
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15 15 As of September 30, 2025, two portfolio companies were on non- accrual status and the weighted average internal rating of the portfolio at fair value was 3.6. Relative Value Scoring System Criteria ▪ 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 Q3 2025 EARNINGS PSBD Internal Rating System Liquid nature of the portfolio allows for monthly NAV strikes and provides greater transparency into portfolio fair value Rating 2 7.9% Rating 3 27.2% Rating 4 64.9% Average Rating 3.6
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16 Net Asset Value Per Share Bridge 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 during the period. Q3 2025 EARNINGS Q2 2025 NAV Per Share Q3 2025 Net Investment Income Q3 2025 Regular & Supplemental Dividend Change in Realized & Unrealized Gain (Loss) Q3 2025 NAV Per Share ($0.30)($0.42) $0.43$15.68 $15.39 1
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17 Investment Fundings Since Inception Note: Data as of 9/30/2025. Investment activity shown in $ millions, calculated at amortized cost. Q3 2025 EARNINGS Liquid nature of the portfolio preserves optionality and allows for opportunistic investments $855 $926 $279 $274 $774 $335 $(268) $(402) $(314) $(247) $(469) $(433) $586 $525 $(35) $27 $305 $(98) FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 9 Mos. Ended 9/30/2025 Gross Investments Sold Investments Total Net Investments Portfolio companies 181 212 176 191 207 209
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18 ($ in millions) Committed Amount Principal Outstanding Interest Rate Maturity Date BofA Credit Facility $525 $297 S + 140 2/18/2028 Wells Fargo Credit Facility $175 $154 S + 250 12/18/2028 Total Credit Facilities $700 $451 S + 1781 CLO Notes $300 $300 S + 1722 7/15/2037 Q3 2025 EARNINGS Debt Obligations and Maturity Ladder Note: As of 9/30/2025. 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. Debt Schedule and Maturities Liquidity and Leverage Profile Attractive non-mark-to-market financing terms with high-quality financing partners and substantial capacity to invest. $451 $249 $300 2025 2026 2027 2028 2037 Drawn Credit Facility Undrawn Credit Facility CLO $521 $503 $473 $463 $451 $179 $197 $227 $237 $249 $300 $300 $300 $300 $300 $47 $72 $60 $65 $59 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Credit Facility (Drawn) Credit Facility (Undrawn) CLO Cash 1.52x 1.50x 1.50x 1.51xD/E3 $19.6 $21.6 $20.2 $15.7 $16.4 Undrawn Investment Commitments ($ in millions) 4 1.53x
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19 Historical Quarterly Earned Dividends & Yield Note: As of 9/30/2025. 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. Q3 2025 EARNINGS $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 $0.36 $0.07 $0.05 $0.05 $0.06 $0.03 $0.06 $0.06 7.4% 10.5% 11.0% 17.1% 12.9% 13.1% 13.4% 12.7% 11.4% 11.2% 11.3% 11.6% 9.8% 10.7% 10.9% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 Regular Dividend Supplemental Dividend Dividend Yield1 1,2 3 4
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20 Quarterly Statements of Financial Condition 1. Calculated net of deferred financing costs and accrued interest. Q3 2025 EARNINGS ($ in thousands, except per share data) Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Assets Investments (At Fair Value) $1,389,801 $1,407,131 $1,334,314 $1,279,793 $1,258,988 Cash And Cash Equivalents $1,786 $2,766 $2,872 $16,436 $4,201 Receivables And Other $21,965 $21,146 $25,744 $18,586 $18,333 Total Assets $1,413,552 $1,431,043 $1,362,930 $1,314,815 $1,281,522 Liabilities Credit Facilities, Net $518,483 $501,651 $472,325 $461,058 $450,065 Notes $305,928 $302,505 $302,127 $302,159 $302,285 Payables $46,111 $87,673 $71,696 $45,141 $37,571 Accrued Other G&A Expenses $1,093 $1,369 $975 $1,243 $1,156 Total Liabilities $871,615 $893,198 $847,123 $809,601 $791,077 Net Assets Total Net Assets $541,937 $537,845 $515,807 $505,214 $490,445 Total Liabilities And Net Assets $1,413,552 $1,431,043 $1,362,930 $1,314,815 $1,281,522 Net Asset Value Per Share $16.61 $16.50 $15.85 $15.68 $15.39 Debt To Equity At Quarter End 1 1.52x 1.50x 1.50x 1.51x 1.53x
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21 Quarterly Operating Results Detail 1. Calculated using weighted average shares outstanding over the period. Q3 2025 EARNINGS ($ in thousands, except per share data) Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Investment Income Interest Income $35,775 $33,248 $29,820 $30,024 $30,432 Dividend Income $600 $656 $574 $481 $657 Payment-In-Kind Interest Income $205 $685 $508 $802 $361 Other Income $726 $284 $312 $370 $235 Total Investment Income $37,306 $34,873 $31,214 $31,677 $31,685 Expense Incentive Fees $2,230 $2,149 $1,843 $1,940 $1,950 Interest Expense $15,671 $14,159 $12,970 $12,576 $12,757 Management Fees $2,424 $2,414 $2,333 $2,233 $2,243 Professional Fees $319 $497 $313 $251 $229 Directors Fees $38 $38 $37 $38 $38 Other General And Administrative Expenses $896 $820 $805 $797 $827 Total Expenses $21,577 $20,077 $18,301 $17,835 $18,044 Net Investment Income $15,729 $14,796 $12,913 $13,842 $13,641 Total Net Realized Gains/(Losses) ($7,119) $489 ($5,894) ($5,745) ($1,244) Total Net Change In Unrealized Gains/(Losses) ($1,054) ($3,367) ($15,408) ($927) ($9,044) Total Realized & Unrealized Gains /(Losses) ($8,174) ($2,878) ($21,302) ($6,672) ($10,288) Net Increase/(Decrease) In Net Assets $7,555 $11,918 ($8,389) $7,170 $3,353 Shares Outstanding (MM) 33 33 33 32 32 Net Investment Income Per Share 1 $0.48 $0.45 $0.40 $0.43 $0.43
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Palmer Square BDC Investor Relations investors@palmersquarebdc.com