Private Credit Portfolio Analysis | Palmer Square Capital BDC Expands Investment Portfolio in Q3 2024
- Editor
- Nov 8, 2024
- 2 min read
What's New: Palmer Square Capital BDC Inc. reported significant growth in its investment portfolio for Q3 2024, with total assets increasing to $1.41 billion as of September 30, 2024, up from $1.12 billion at the end of 2023. This expansion was primarily driven by a 25.3% increase in investments owned at fair value, which reached $1.39 billion by the end of the quarter.
Portfolio Dynamics:
The fund's investment portfolio grew by $281 million to $1.39 billion in Q3 2024, a 25.3% increase from $1.11 billion at the end of 2023.
Interest receivable increased by 43.8% to $12.07 million, indicating potential growth in interest-generating investments.
Receivables for investment sales jumped significantly to $8.65 million from $97,141 at the end of 2023, suggesting active portfolio management.
Investment Activity :
The fund made $602.02 million in new investment purchases during the first nine months of 2024.
Proceeds from the sale of securities amounted to $292.41 million in the same period.
Short-term investment activity was substantial, with $671.36 million in purchases and $689.78 million in sales.
Capital Structure:
The fund reduced its line of credit by 19.2% to $518.48 million from $641.83 million at the end of 2023.
Notes payable increased to $305.93 million, up from zero at the end of 2023.
Total liabilities grew to $871.61 million, a 32.1% increase from $659.86 million at the end of 2023.
Performance Profile:
Net income for Q3 2024 was $7.56 million, down from $33.85 million in Q3 2023.
The fund declared $46.59 million in distributions during the first nine months of 2024, up from $41.79 million in the same period of 2023.
Net Asset Value (NAV) per share decreased to $16.61 as of September 30, 2024, from $17.04 at the end of 2023.
Risk & Quality:
The fund reported realized investment losses of $18.27 million for the first nine months of 2024, compared to $2.42 million in the same period of 2023.
Unrealized gains on investments were $6.21 million for the first nine months of 2024, down from $45.71 million in the same period of 2023.
The fund's cash and cash equivalents decreased to $1.79 million from $2.12 million at the end of 2023, potentially indicating reduced liquidity.
The Wrap: Palmer Square Capital BDC Inc. demonstrated significant portfolio growth in Q3 2024, with total assets increasing by 26% since the end of 2023. While the fund expanded its investment base and increased distributions, it also faced challenges such as reduced net income and NAV per share compared to the previous year. The shift in capital structure, including reduced credit line usage and the introduction of notes payable, suggests a strategic realignment of financing sources to support the expanded portfolio.
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