Q4 2025 Palmer Square Capital BDC Inc Earnings Call

February 26, 2026

Speaker #2: Welcome to Palmer Square Capital BDC’s fourth quarter and year-end 2025 earnings call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the prepared remarks.

Operator: Welcome to Palmer Square Capital BDC's Q4 and year-end 2025 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the prepared remarks. As a reminder, this conference call is being recorded. At this time, I'd like to turn the call over to Jeremy Goff, Managing Director. You may begin.

Speaker #2: As a reminder, this conference call is being recorded. At this time, I'd like to turn the call over to Jeremy Goff, Managing Director. You may begin.

Speaker #3: Welcome to Palmer Square Capital BDC's fourth quarter and year-end 2025 earnings call. Joining me this afternoon are Chris Long, Chairman and Chief Executive Officer; Angie Long, Chief Investment Officer; Matt Bloomfield, President; and Jeff Fox, Chief Financial Officer and Director.

Jeremy Goff: Welcome to Palmer Square Capital BDC's Q4 and year-end 2025 Earnings Call. Joining me this afternoon are Chris Long, Chairman and Chief Executive Officer, Angie Long, Chief Investment Officer, Matt Bloomfield, President, and Jeff Fox, Chief Financial Officer and Director. Palmer Square Capital BDC's Q4 and fiscal year ended 2025 financial results were released earlier today and can also be accessed on Palmer Square's investor relations website at palmersquarebdc.com. We have also arranged for a replay of today's event that can be accessed on our website. During this call, I want to remind you that the forward-looking statements we make are based on current expectations. The statements on this call that are not purely historical are forward-looking statements.

Speaker #3: Palmer Square Capital BDC's fourth quarter-and-fiscal-year-end-end end 2025 financial results were released earlier today and can also be accessed on palmersquaresinvestorrelations website at palmersquarebdc.com. We have also arranged for a replay of today's event that can be accessed on our website.

Speaker #3: During this call, I want to remind you that the forward-looking statements we make are based on current expectations. The statements on this call that are not purely historical are forward-looking statements.

Speaker #3: These forward-looking statements are not a guarantee of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements, including and without limitation, market conditions, caused by uncertainty surrounding interest rates, changing economic conditions, and other factors we identified in our filings with the SEC.

Jeremy Goff: These forward-looking statements are not a guarantee of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements, including, and without limitation, market conditions caused by uncertainty surrounding interest rates, changing economic conditions, and other factors we identified in our filings with the SEC. Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions can prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions can be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements made during this call are made as of the date hereof, and Palmer Square Capital BDC assumes no obligation to update the forward-looking statements unless required by law. To obtain copies of SEC-related filings, please visit our website at palmersquarebdc.com.

Speaker #3: Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions can prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions can be incorrect.

Speaker #3: You should not place undue reliance on these forward-looking statements. The forward-looking statements made during this call are made as of the date hereof, and Palmer Square Capital BDC assumes no obligation to update the forward-looking statements unless required by law.

Speaker #3: To obtain copies of SEC-related filings, please visit our website at palmersquarebdc.com. With that, I will turn the call over to Chris Long.

Jeremy Goff: With that, I will turn the call over to Chris Long.

Speaker #4: Good afternoon, everyone. Thank you for joining us today for Palmer Square Capital BDC's fourth quarter and year-end 2025 conference call. On today's call, I will provide an overview of our fourth quarter results and full-year highlights.

Chris Long: Good afternoon, everyone. Thank you for joining us today for Palmer Square Capital BDC's Q4 and year-end 2025 Conference Call. On today's call, I will provide an overview of our Q4 results and full year highlights, touch on our market outlook and competitive positioning, then turn the call to the teams to discuss the current industry dynamics at play, our portfolio activity, and financial results. During the Q4, our team deployed $91.4 million of capital and generated total and net investment income of $29.8 million and $13.1 million, respectively. We delivered net investment income of $0.41 per share, covering our $0.36 per share Q4 base dividend, and paid a $0.43 per share total dividend, which includes a $0.07 supplemental distribution.

Speaker #4: Touch on our market outlook and competitive positioning, and then turn the call to the teams to discuss the current industry dynamics at play: our portfolio activity and financial results.

Speaker #4: During the fourth quarter, our team deployed $91.4 million of capital and generated total and net investment income of $29.8 million and $13.1 million, respectively.

Speaker #4: We delivered net investment income of $0.41 per share, covering our $0.36-per-share fourth-quarter-based dividend, and paid a $0.43-per-share total dividend, which includes a $0.07 supplemental distribution.

Speaker #4: As we previously emphasized, we follow a distribution strategy that maximizes cash returns to our investors. In that spirit, we continue to aim to pay out nearly all of our excess earnings in the form of a supplemental dividend.

Chris Long: As we previously emphasized, we follow a distribution strategy that maximizes cash returns to our investors. In that spirit, we continue to aim to pay out nearly all of our excess earnings in the form of a supplemental dividend. Additionally, we recently announced our January NAV per share of $14.48. As the only publicly traded BDC to disclose NAV on a monthly basis, we believe we provide a unique level of transparency and accountability, giving shareholders regular insight into our performance and the evolving market. Throughout 2025, uncertainty was the norm, shaped by tariff policy, evolving geopolitical dynamics, and a heightened focus on the trajectory of rate cuts. We also saw reasons to be optimistic toward the end of the year, including an improvement in deal momentum and increasing sponsor engagement.

Speaker #4: Additionally, we recently announced our January NAV per share of $14.48. As the only publicly traded BDC to disclose NAV on a monthly basis, we believe we provide a unique level of transparency and accountability, giving shareholders regular insight into our performance and the evolving market.

Speaker #4: Throughout 2025, uncertainty was the norm, shaped by tariff policy, evolving geopolitical dynamics, and a heightened focus on the trajectory of rate cuts. We also saw reasons to be optimistic toward the end of the year, including an improvement in deal momentum and increasing sponsor engagement.

Speaker #4: Most notably, the $55 billion take-private of Electronic Arts, which will require approximately $20 billion in debt financing, and the approximately $18 billion take-private of Hologic.

Chris Long: Most notably, the $55 billion take private of Electronic Arts, which will require approximately $20 billion in debt financing and the approximately $18 billion take private of Hologic. Before I hand it over to Angie, I want to spend some time discussing why we feel confident in our software portfolio despite the heightened concerns around AI-driven disruption in recent weeks. For background, our investment preference in software has skewed towards mission-critical enterprise platforms in areas such as cybersecurity, IT infrastructure, and ERP systems. Within these subsectors, we are lending to large, highly scaled, and deeply embedded providers that have meaningful profitability and cash flow. We found that these large enterprise platforms tend to be backed by large, sophisticated private equity sponsors and believe their capital structure provide meaningful equity cushions below our senior secured loans.

Speaker #4: Before I hand it over to Angie, I want to spend some time discussing why we feel confident in our software portfolio, despite the heightened concerns around AI-driven disruption in recent weeks.

Speaker #4: For background, our investment preference in software has skewed towards mission-critical enterprise platforms in areas such as cybersecurity, IT infrastructure, and ERP systems. Within these subsectors, we are lending to large highly scaled and deeply embedded providers that have meaningful profitability and cash flow.

Speaker #4: We found that these large enterprise platforms tend to be backed by large, sophisticated private equity sponsors, and believe their capital structure provides meaningful equity cushions below our senior secured loans.

Speaker #4: We are most comfortable with these mission-critical enterprise platforms, given they are ingrained across entire organizations and have a high cost of failure with tangible failure risk.

Chris Long: We are most comfortable with these mission-critical enterprise platforms, given they are ingrained across entire organizations, have a high cost of failure with tangible failure risk. In many cases, are systems of record and require nearly 100% uptime and accuracy levels. Given there is little room for margin of error in these types of platforms, we believe they have a very large moat surrounding them, regardless of the trajectory of AI. Additionally, in our experience, these providers frequently have a higher incumbency advantage and a longer lead time to develop in-house AI solutions and react to market changes, most of which are already in advanced stages. We believe another advantage is the fact that all of the data these software companies have collected across industries will, in theory, make their AI better than their more nascent peers.... as data quality underpins all AI inference.

Speaker #4: In many cases, our systems of record require nearly 100% uptime and accuracy levels. Given there is little room for margin of error in these types of platforms, we believe they have a very large moat surrounding them, regardless of the trajectory of AI.

Speaker #4: Additionally, in our experience, these providers frequently have a higher incumbency advantage and a longer lead time to develop in-house AI solutions and react to market changes.

Speaker #4: Most of which are already in advanced stages. We believe another advantage is the fact that all of the data these software companies have collected across industries will, in theory, make their AI better than their more nascent peers, as data quality underpins all AI inference.

Speaker #4: Further, as it relates to sector exposure, I'd like to reiterate that PSBD's portfolio is highly diversified by industry and size, with 42 different industries represented, and our 10 largest investments comprising just 10.9% of the overall portfolio.

Chris Long: Further, as it relates to sector exposure, I'd like to reiterate that PSBD's portfolio is highly diversified by industry and size, with 42 different industries represented, and our 10 largest investments comprising just 10.9% of the overall portfolio. At present, software comprises less than 11% of our overall portfolio. As we kick off 2026, our investment strategy and approach to portfolio management that has served us well for nearly 2 decades, remains unchanged. We believe that active credit management, when executed properly, can generate attractive total returns in excess of yield alone, and that our focus on credit selection, combined with our core competency of locating relative value, will drive strong outcomes. With that, I will hand the call over to Angie.

Speaker #4: At present, software comprises less than 11% of our overall portfolio. As we kick off 2026, our investment strategy and approach to portfolio management that has served us well for nearly two decades remains unchanged.

Speaker #4: We believe that active credit management, when executed properly, can generate attractive total returns in excess of yield alone, and that our focus on credit selection, combined with our core competency of locating relative value, will drive strong outcomes.

Speaker #4: With that, I will hand the call over to Angie.

Speaker #5: Thank you, Chris. We are pleased with PSBD's fourth-quarter results and our broader positioning entering the new year. While market activity improved modestly through the end of 2025, January and February of 2026 have served as reminders that volatility and uncertainty remain elevated throughout financial markets.

Angie Long: Thank you, Chris. We are pleased with PSBD's Q4 results and our broader positioning entering the new year. While market activity improved modestly through the end of 2025, January and February of 2026 have served as reminders that volatility and uncertainty remain elevated throughout financial markets. Despite that backdrop, we believe PSBD's portfolio continues to be resilient and deliver strong results across shifting environments. In terms of deal volume, M&A activity is beginning to show signs of the gradual improvement we alluded to last quarter, though the recovery remains uneven. Activity has been much more prevalent at the upper end of the market, while sponsor-to-sponsor deals in the $1 billion to 5 billion enterprise value range have been slower to reemerge. Spread compression continued through the Q4 across many parts of the market.

Speaker #5: Despite that backdrop, we believe PSBD's portfolio continues to be resilient and delivers strong results across shifting environments. In terms of deal volume, M&A activity is beginning to show signs of the gradual improvement we alluded to last quarter.

Speaker #5: Though the recovery remains uneven, activity has been much more prevalent at the upper end of the market, while sponsor-to-sponsor deals and the $1 billion to $5 billion enterprise value range have been slower to reemerge.

Speaker #5: Spread compression continued through the fourth quarter across many parts of the market on the private credit side. It appears to be moderating. While tightening in the broadly syndicated market has continued, in light of this, we are maintaining our defensive posture while staying invested.

Angie Long: On the private credit side, it appears to be moderating, while tightening in the broadly syndicated market has continued. In light of this, we are maintaining our defensive posture while staying invested. We believe the recent volatility may present high-quality opportunities at attractive entry points, and in those cases, we would actively look to rotate into those opportunities. As expected, activity slowed entering Q1, which is typically the shortest and seasonally weakest period, and January has tracked in line with historical patterns. That said, our team's engagement with sponsors and capital market desks continues to increase, and pipelines in both the private credit and broadly syndicated markets feel healthier than earlier in 2025. We believe the market is still some distance away from a sustained and meaningful increase in overall transaction volumes.

Speaker #5: However, we believe the recent volatility may present high-quality opportunities at attractive entry points. And in those cases, we would actively look to rotate into those opportunities.

Speaker #5: As expected, activity slowed entering the first quarter, which is typically the shortest and seasonally weakest period, and January has tracked in line with historical patterns.

Speaker #5: That said, our team's engagement with sponsors and capital market deaths continues to increase. And pipelines in both the private credit and broadly syndicated markets feel healthier than earlier in 2025.

Speaker #5: However, we believe the market is still some distance away from a sustained and meaningful increase in overall transaction volumes. Recent transactions continue to highlight the evolving relationship between the broadly syndicated loan and private credit markets, with the recent Hologic take-private serving as a prime example of these dynamics at play.

Angie Long: Recent transactions continue to highlight the evolving relationship between the broadly syndicated loan and private credit markets, with the recent Hologic take private serving as a prime example of these dynamics at play. As has been reported, Palmer Square's comprehensive platform participated as a private credit provider in the second lien tranche, initially committing $100 million and ultimately funding $75 million after the transaction was resized, following a strong first lien syndication process. More importantly, the Hologic transaction demonstrates the breadth of our platform. We were able to support the sponsors with early and sizable commitments, and ultimately participate across both the private second lien and the syndicated first lien tranches in US dollars and euros. We applied a similar approach with the MacLean Power Systems transaction.

Speaker #5: As has been reported, Palmer Square's comprehensive platform participated as a private credit provider in the second-lien tranche, initially committing $100 million and ultimately funding $75 million after the transaction was resized following a strong first-lien syndication process.

Speaker #5: More importantly, the Hologic transaction demonstrates the breadth of our platform. We were able to support the sponsors with early and sizable commitments and ultimately participate across both the private second-lien and the syndicated first-lien tranches in US dollars and euros.

Speaker #5: We applied a similar approach with the McLean Power System transaction. We believe our platform's flexibility will serve as an important competitive advantage for PSBD, as we continue to see transactions move between public and private markets, often within the same capital structure.

Angie Long: We believe our platform's flexibility will serve as an important competitive advantage for PSBD, as we continue to see transactions move between public and private markets, often within the same capital structure. As referenced previously, volatility has returned meaningfully since the beginning of the year. While this has been driven by a number of factors, including macro uncertainty and geopolitical developments, the past few weeks have been defined by renewed concerns around the pace and scope of AI-driven disruption, which has weighed on sentiment across both equity and credit markets. Since there's been scrutiny around BDCs through this lens, we believe it's worth providing some additional context for our investors, while reiterating that approximately 11% of PSBD's portfolio was invested in software-related credits as of quarter end, which is substantially lower than the 20% average BDC exposure level reported in the press.

Speaker #5: As referenced previously, volatility has returned meaningfully since the beginning of the year. While this has been driven by a number of factors, including macro uncertainty and geopolitical developments, the past few weeks have been defined by renewed concerns around the pace and scope of AI-driven disruption, which has weighed on sentiment across both equity and credit markets.

Speaker #5: Since there's been scrutiny around BDCs through this lens, we believe it's worth providing some additional context for our investors while reiterating that approximately 11% of PSBD's portfolio was invested in software-related credits as of quarter-end, which is substantially lower than the 20% average BDC exposure level reported in the press.

Speaker #5: Our average position size in software is approximately 4.6 million, and to echo Chris, our exposure is intentionally skewed towards mission-critical enterprise platforms that tend to be backed by very large, sophisticated, private equity sponsors and that we believe have meaningful equity cushions below our senior secured loans.

Angie Long: Our average position size in software is approximately $4.6 million, and to echo Chris, our exposure is intentionally skewed towards mission-critical enterprise platforms that tend to be backed by very large, sophisticated private equity sponsors, and that we believe have meaningful equity cushions below our senior secured loans. We intentionally avoid lending to fast-growing but negative cash flow businesses, or companies in more commoditized subsectors, such as customer marketing automation, for example, which we believe are more vulnerable to disintermediation by AI. Although recent market sentiment has been pronounced, we believe the genesis of the concern is not necessarily that current credit fundamentals are deteriorating or at risk, but rather the underlying question of what the terminal value of some of these software businesses will be 5, 10, or 20 years down the line.

Speaker #5: We intentionally avoid lending to fast-growing but negative cash flow businesses, or companies in more commoditized subsectors such as customer marketing automation, for example, which we believe are more vulnerable to disintermediation by AI.

Speaker #5: Although recent market sentiment has been pronounced, we believe the genesis of the concern is not necessarily that current credit fundamentals are deteriorating or at risk, but rather the underlying question of what the terminal value of some of these software businesses will be 5, 10, or 20 years down the line.

Speaker #5: There are undoubtedly going to be winners and losers in the software space, which was also the case before AI. As we have seen in past bouts of volatility over the years and decades, tremendous opportunities can arise to invest in great companies at meaningful discounts to their intrinsic value.

Angie Long: There are undoubtedly going to be winners and losers in the software space, which was also the case before AI. As we have seen in past bouts of volatility over the years and decades, tremendous opportunities can arise to invest in great companies at meaningful discounts to their intrinsic value. We believe the current backdrop in certain pockets of loans and high-yield bonds may help our investment team uncover opportunities to generate attractive returns, as some credits have traded down 5 to 10 points or more, with no apparent fundamental changes to the underlying business performance. As always, we will continue to be diligent in our deployment as we monitor each corner of the market and leverage our platform's flexibility to rotate into the most appealing risk-adjusted opportunities as they emerge. Turning to our portfolio, credit performance remained solid across the board.

Speaker #5: We believe the current backdrop in certain pockets of loans and high-yield bonds may help our investment team uncover opportunities to generate attractive returns, as some credits have traded down 5 to 10 points or more, with no apparent fundamental changes to the underlying business performance.

Speaker #5: As always, we will continue to be diligent in our deployment as we monitor each corner of the market and leverage our platform's flexibility to rotate into the most appealing risk-adjusted opportunities as they emerge.

Speaker #5: Turning to our portfolio, credit performance remains solid across the board. As discussed during our last call, first brands represented the most notable credit-specific development, given some uncertainty around the sales process and deteriorating customer sentiment.

Angie Long: As discussed during our last call, First Brands represented the most notable credit-specific development. Given some uncertainty around the sales process and deteriorating customer sentiment, we reduced most of our exposure in January and chose not to commit any additional capital. We retained a small residual position as option value should conditions improve. In terms of our balance sheet, we refinanced our private credit facility with Wells Fargo during Q4, reducing the spread by approximately 55 basis points and increasing the overall capacity of the facility. We will continue to evaluate additional right-side balance sheet optimization opportunities in the first half of 2026, including a potential CLO refinancing and other initiatives. As a reminder, we also put in place a new $5 million open market share repurchase authorization during Q4.

Speaker #5: We reduced most of our exposure in January, and chose not to commit any additional capital. We retain a small residual position as option value should conditions improve.

Speaker #5: In terms of our balance sheet, we refinanced our private credit facility with Wells Fargo during the fourth quarter. Reducing the spread by approximately 55 basis points and increasing the overall capacity of the facility.

Speaker #5: We will continue to evaluate additional right-side balance sheet optimization opportunities in the first half of 2026, including a potential CLO refinancing and other initiatives.

Speaker #5: As a reminder, we also put in place a new $5 million open market share repurchase authorization during the fourth quarter. While we have not yet utilized this authorization due to blackout restrictions, we continue to believe PSBD's valuation represents an attractive opportunity.

Angie Long: While we have not yet utilized this authorization due to blackout restrictions, we continue to believe PSBD's valuation represents an attractive opportunity, and we will judiciously deploy capital to support the stock. Additionally, we expect to continue discussions with the board regarding future use of the 10b5-1 program following the full utilization of the prior plan. For added context, PSBD shares were yielding 15.7% as of February 2026, a significant premium to the 11.6% on NAV. Given the quality and conservative positioning of PSBD's portfolio, we believe this is a compelling yield, even while taking into consideration the volatile market environment we've experienced as of late. As we look forward to the rest of 2026, we remain discerning but cautiously optimistic.

Speaker #5: And we will judiciously deploy capital to support the stock. Additionally, we expect to continue discussions with the board regarding future use of the 10(b)(5)(1) program following the full utilization of the prior plan.

Speaker #5: For added context, PSBD shares were yielding 15.7% as of February 2026, a significant premium to the 11.6% on NAV. Given the quality and conservative positioning of PSBD's portfolio, we believe this is a compelling yield, even while taking into consideration the volatile market environment we've experienced as of late.

Speaker #5: As we look forward to the rest of 2026, we remain discerning but cautiously optimistic. While near-term sentiment across certain sectors remains fragile, we believe the long-term fundamentals supporting the credit markets remain intact, particularly for platforms with disciplined underwriting and conservative portfolio construction.

Angie Long: While near-term sentiment across certain sectors remains fragile, we believe the long-term fundamentals supporting the credit markets remain intact, particularly for platforms with disciplined underwriting and conservative portfolio construction. PSBD's ability to invest across both liquid and private markets allows us to remain flexible and patient as conditions evolve and opportunities arise. With that, I'll turn the call over to Matt to discuss our portfolio and investment activity in more detail.

Speaker #5: PSBD's ability to invest across both liquid and private markets allows us to remain flexible and patient as conditions evolve and opportunities arise. With that, I'll turn the call over to Matt to discuss our portfolio and investment activity in more detail.

Speaker #1: Thank you, Angie. Turning to our portfolio and investment activity for the fourth quarter, our total investment portfolio as of December 31, 2025, had a fair value of approximately $1.2 billion.

Matt Bloomfield: Thank you, Angie. Turning to our portfolio and investment activity for Q4. Our total investment portfolio as of 31 December 2025 had a fair value of approximately $1.2 billion across 42 industries that demonstrate strong credit quality, industry and company-specific tailwinds, and a diverse mix of end markets. This compares to a fair value of $1.26 billion at the end of Q3 2025, reflecting a decrease of approximately 4.4%. In Q4, we invested $91.4 million of capital, which included 24 new investment commitments at an average value of approximately $3.4 million. During the same period, we realized approximately $148.3 million through repayments and sales.

Speaker #1: Across 42 industries that demonstrate strong credit quality, industry and company-specific tailwinds, and a diverse mix of end markets. This compares to a fair value of $1.26 billion at the end of the third quarter of 2025, reflecting a decrease of approximately 4.4%.

Speaker #1: In the fourth quarter, we invested $91.4 million of capital, which included 24 new investment commitments at an average value of approximately $3.4 million. During the same period, we realized approximately $148.3 million through repayments and sales.

Speaker #1: As you will notice, we continue to think about diversification as we allocate new capital in the portfolio. To recap key portfolio highlights, at the end of the fourth quarter, our weighted average total yield-to-maturity of debt and income-producing securities at fair value was 11.30%.

Matt Bloomfield: As you will notice, we continue to think about diversification as we allocate new capital in the portfolio. To recap key portfolio highlights, at the end of Q4, our weighted average total yield to maturity of debt and income-producing securities at fair value was 11.30%, and our weighted average total yield to maturity of debt and income-producing securities at amortized cost was 8.15%. We believe our focus on first lien loans and diversification by industry and size contribute to a strong credit profile, with 42 different industries represented in our investment mix. Further, our 10 largest investments account for just 10.9% of the overall portfolio, and our portfolio is 95% senior secured, with an average hold size of approximately $4.7 million.

Speaker #1: And our weighted average total yield-to-maturity of debt and income-producing securities at amortized cost was 8.15%. We believe our focus on first lien loans and diversification by industry and size contribute to a strong credit profile, with 42 different industries represented in our investment mix.

Speaker #1: Further, our 10 largest investments account for just 10.9% of the overall portfolio, and our portfolio is 95% senior secured, with an average hold size of approximately $4.7 million.

Speaker #1: Again, we believe this position sizing is an important risk management tool for PSBD. On a fair-valuated basis, our first lien borrowers have a weighted average EBITDA of $436 million.

Matt Bloomfield: Again, we believe this position sizing is an important risk management tool for PSBD. On a fair valuated basis, our first lien borrowers have a weighted average EBITDA of $436 million, senior secured leverage of 5.5x, and interest coverage of 2.6x. Additionally, new private credit loans comprised 14.7% of overall new investments and were funded at a weighted average spread of 463 basis points over the reference rate. While credit quality is a focus across the sector, non-accruals continue to be low at PSBD. On a fair value basis, it is only 9 basis points, and on an at-cost basis, only 134 basis points. Our PIK income, as a percentage of total investment income, remains well below our largest peers and below the industry at approximately 1.45%.

Speaker #1: Senior secured leverage of 5.5 times, and interest coverage of 2.6 times. Additionally, new private credit loans comprise 14.7% of overall new investments and were funded at a weighted average spread of 463 basis points over the reference rate.

Speaker #1: While credit quality is a focus across the sector, non-accruals continue to be low at PSBD. On a fair value basis, it is only 9 basis points, and on an at-cost basis, only a few points.

Speaker #1: Our PIC income as a percentage of total investment income remains the industry at approximately 1.45%. We believe this will give our shareholders greater confidence in the quality of our disclosed investment income.

Matt Bloomfield: We believe this will give our shareholders greater confidence in the quality of our disclosed investment income. We've maintained an average internal rating of 3.6 on a fair valuated basis for all loan investments. Our rating is derived from a unique relative value-based scoring system. We believe credit performance within the portfolio remains strong. Our non-accruals remain very low by industry standards, and the underlying credit metrics of our borrowers appear encouraging. We continue to see stability in both leverage levels and loan-to-value ratios across our portfolio companies. As both Chris and Angie mentioned, we believe our portfolio is well diversified for the dynamic markets that we participate in. As we've talked about many times in the past, we believe larger borrowers provide for better credit outcomes for myriad reasons.

Speaker #1: We've maintained an average internal rating of 3.6 on a fair valuated basis for all loan investments. Our rating is derived from a unique relative value-based scoring system.

Speaker #1: We believe credit performance within the portfolio remains strong. Our non-accruals remain very low by industry standards, and the underlying credit metrics of our borrowers appear encouraging.

Speaker #1: We continue to see stability in both leverage levels and loan-to-value ratios across our portfolio companies. As both Chris and Angie mentioned, we believe our portfolio is well diversified for the dynamic markets that we participate in.

Speaker #1: As we've talked about many times in the past, we believe larger borrowers provide for better credit outcomes for myriad reasons. We think this will apply to AI as well, in that larger companies may be able to invest in and ultimately benefit from the tools and efficiencies that AI can provide.

Matt Bloomfield: We think this will apply to AI as well, that larger companies may be able to invest in and ultimately benefit from the tools and efficiencies that AI can provide. As previously disclosed, during the quarter, we took further strides in optimizing the right side of our balance sheet by refinancing the Wells Fargo credit facility, tightening the spread by 55 basis points. Additionally, we extended the maturity of the facility to November 2030 and increased the facility amount to $200 million from $175 million. We believe this exemplifies our focus on driving earnings power to the BDC through active balance sheet management in addition to active portfolio management. Lastly, as discussed on the Q3 earnings call, our board has approved an additional $5 million of open market share repurchases at PSBD.

Speaker #1: As previously disclosed, during the quarter we took further strides in optimizing the right side of our balance sheet by refinancing the Wells Fargo credit facility.

Speaker #1: Tightening the spread by 55 basis points. Additionally, we extended the maturity of the facility to November 2030 and increased the facility amount to $200 million from $175 million.

Speaker #1: We believe this exemplifies our focus on driving earnings power to the BDC through active balance sheet management, in addition to active portfolio management. Lastly, as discussed on our third-quarter earnings call, our board has approved an additional $5 million of open market share repurchases at PSBD.

Speaker #1: We have not yet utilized the program due to an ongoing lockup period. Given the market-level discounts to NAV in the BDC space, we believe this could be an accretive tool to further shareholder return in the future.

Matt Bloomfield: We have not yet utilized the program due to an ongoing lockup period. Given the market level discounts to NAV in the BDC space, we believe this could be an accretive tool to further shareholder return in the future. As we navigate current market dynamics, we remain aligned with the priorities of our shareholders and will continue to provide transparent visibility into our performance. Now, I'd like to turn the call over to Jeff, who will review our Q4 2025 financial results.

Speaker #1: As we navigate current market dynamics, we remain aligned with the priorities of our shareholders and will continue to provide transparent visibility into our performance.

Speaker #1: Now, I'd like to turn the call over to Jeff, who will review our fourth-quarter 2025 financial results.

Speaker #2: Thank you, Matt. Total investment income was $29.8 million for the fourth quarter of 2025, down 14.5% from $34.9 million for the comparable prior-year period.

Jeff Fox: Thank you, Matt. Total investment income was $29.8 million for Q4 2025, down 14.5% from $34.9 million for the comparable prior year period. Income generation during the quarter reflected a mix of contractual interest income, paydown related income, and select fee income from the new deal activity. Total net expenses for Q4 were $16.8 million, compared to $20.1 million in the prior year period. Net investment income for Q4 2025 was $13.1 million, or $0.41 per share, compared to $14.8 million, or $0.45 per share for the comparable period last year.

Speaker #2: Income generation during the quarter reflected a mix of contractual, interest income, paydown-related income, and select fee income from new deal activity. Total net expenses for the fourth quarter were $16.8 million, compared to $20.1 million in the prior-year period.

Speaker #2: Net investment income for the fourth quarter of 2025 was $13.1 million, or $0.41 per share, compared to $14.8 million, or $0.45 per share, for the comparable period last year.

Speaker #2: During the fourth quarter of 2025, the company had total net realized and unrealized losses of $18.4 million, compared to the total net and unrealized losses of $2.9 million, in the fourth quarter of 2024.

Jeff Fox: During Q4 2025, the company had total net realized and unrealized losses of $18.4 million, compared to the total net and unrealized losses of $2.9 million in Q4 2024. This consisted of net unrealized depreciation of $20 million related to the existing portfolio investments and net unrealized appreciation of $2 million related to exited portfolio investments. At the end of Q4, NAV per share was $14.85, compared to $15.39 at the end of Q3 2025. Moving to our balance sheet. Total assets were $1.2 billion, and total net assets were $464.1 million as of 31 December 2025.

Speaker #2: This consisted of net unrealized depreciation of $20 million related to the existing portfolio investments and net unrealized appreciation of $2 million related to exited portfolio investments.

Speaker #2: At the end of the fourth quarter, NAV per share was $14.85, compared to $15.39 at the end of the third quarter of 2025. Moving to our balance sheet, total assets were $1.2 billion, and total net assets were $464.1 million, as of December 31, 2025.

Speaker #2: At the end of the fourth quarter, our debt-to-equity ratio was 1.54 times, very slightly up from the 1.53 times at the end of the third quarter of 2025.

Jeff Fox: At the end of Q4, our debt-to-equity ratio was 1.54 times, very slightly up from the 1.53 times at the end of Q3 2025. Available liquidity, consisting of cash and undrawn capacity on our credit facilities, was approximately $311.3 million. This compares to approximately $252.8 million at the end of Q3 2025. Finally, on 26 February 2026, the board of directors declared a Q1 2026 base dividend of $0.36 per share, in line with our formalized dividend policy. Furthermore, our policy continues to be distributing excess earnings in the form of a quarterly supplemental distribution. With that, I'd now like to open the call up for questions.

Speaker #2: Available liquidity, consisting of cash and undrawn capacity on our credit facilities, was approximately $311.3 million. This compares to approximately $252.8 million at the end of the third quarter of 2025.

Speaker #2: Finally, on February 26, the board of directors declared a first-quarter 2026 base dividend of $0.36 per share, in line with our formalized dividend policy.

Speaker #2: Furthermore, our policy continues to be distributing excess earnings in the form of a quarterly supplemental distribution. With that, I'd now like to open the call up for questions.

Speaker #3: We will now begin the question-and-answer session. To ask a question, press star, then the number 1 on your telephone keypad. Our first question will come from the line of Rick Shane with JPMorgan.

Operator: We will now begin the question-and-answer session. To ask a question, press star, then the number one on your telephone keypad. Our first question will come from the line of Rick Shane with J.P. Morgan. Please go ahead.

Speaker #3: Please go ahead.

Speaker #4: Hey, guys. Thanks for taking my question. Look, you've alluded to the repurchase. I'm looking at the leverage levels. As you think about capital deployment—and again, you've indicated, hey, we see some marginal at the margin, we see potentially some opportunity—are you going to keep dry powder or, given where the stock is trading, does it just make sense to buy stock, given it's probably hard to find something that generates comparable return?

Rick Shane: Hey, guys. Thanks for taking my question. Look, you know, you've alluded to the repurchase. I'm looking at the leverage levels. As you think about capital deployment, and again, you've indicated, "Hey, we see some at the margin, we see potentially some opportunity," are you going to keep dry powder, or given where the stock is trading, does it just make sense to buy stock, given it's probably hard to find something that generates comparable return?

Matt Bloomfield: Hey, Rick, it's Matt. Thanks for the question. You know, I think from the management team's perspective and the board, you know, we're certainly looking at all avenues in front of us. To your point, it's certainly, you know, accretive from a stockholder standpoint, given where the discount's trading, undoubtedly. You know, we also mentioned some of the dislocations in the market that we've seen, you know, are likely going to provide some great opportunities, you know, in the secondary investing side as well. All that being said, we do think, you know, from a new underwriting origination standpoint, spreads should be more conducive than they've been in quite some time.

Speaker #5: Hey, Rick. It's Matt. Thanks for the question. I think from the management team's perspective and the board, we're certainly looking at all avenues in front of us.

Speaker #5: To your point, it's certainly accretive from a stockholder standpoint, given where the discount's trading. Undoubtedly, we also mentioned some of the dislocations in the market that we've seen are likely going to provide some great opportunities.

Speaker #5: In the secondary investing side as well, all that being said, we do think from a new underwriting origination standpoint, spreads should be more conducive than they've been.

Speaker #5: And quite some time. So we're really trying to look across all the avenues of opportunity set in front of us and make not just the best near-term, but obviously the best long-term decision for shareholders.

Matt Bloomfield: We're really trying to look across all the avenues of opportunity set in front of us, and make not just the best near term, but obviously the best long-term decision for shareholders. You know, taking a look at everything that's on the table, and there's certainly a lot to, you know, to investigate at this stage. I think we'll try to be as prudent as we can across all those facets. Undoubtedly, to your point, you know, the shares look, you know, really attractive to us at this level.

Speaker #5: So, taking a look at everything that's on the table—and there's certainly a lot to investigate at this stage—I think we'll try to be as prudent as we can across all those facets.

Speaker #5: But undoubtedly, to your point, the shares look really attractive to us at this level.

Rick Shane: Got it. Look, you know, obviously, in the equity markets, we're seeing similar dislocations. In some ways, what we've seen is sectors move from being potentially at the high end of their valuation range, potentially into a more normal sort of average range. Generally speaking, things don't just sort of mean revert, they typically over-correct. We're thinking about that in terms of stocks more broadly. Where do you think we are in the cycle on the credit side? If we're just sort of moving back to normal pricing as opposed to really, really tight spreads, is it really the time to weigh in, or do you actually think we're approaching historically attractive pricing?

Speaker #4: Got it. And look, obviously, in the equity markets, we're seeing similar dislocations. In some ways, what we've seen is sectors move from being potentially at the high end of their valuation range, potentially into a more normal, sort of average range.

Speaker #4: Generally speaking, things don't just sort of mean revert. They typically over-correct. And we're thinking about that in terms of stocks more broadly. Where do you think we are on the cycle on the credit side?

Speaker #4: And if we're just sort of moving back to normal pricing as opposed to really, really tight spreads, is it really the time to weigh in, or do you actually think we're approaching historically attractive pricing?

Matt Bloomfield: Another really fair point. You know, I think it certainly in credit depends on sector. Undoubtedly, the focus, right, of the past several weeks has been specifically on software and then AI, you know, related risks across certain industries. You know, I think the credit markets have definitely, you know, bifurcated amongst those. You haven't really seen, you know, much in the way of spread widening, you know, outside of AI worried industries. You know, and on the public credit side versus the private credit side, you know, private credit obviously moves slower from a spread reaction. I don't know that, to your point, that we're gonna see this, you know, massive opportunity set of, you know, much wider spreads just across all credit.

Speaker #5: Another really fair point. I think it's certainly in credit depends on sector. Undoubtedly, the focus of the past several weeks has been specifically on software and then AI, related risks across certain industries.

Speaker #5: I think the credit markets have definitely bifurcated amongst those. And so you haven't really seen much in the way of spread widening outside of AI-worried industries.

Speaker #5: And on the public credit side versus the private credit side, private credit obviously moves slower from a spread reaction. So I don't know that, to your point, that we're going to see this massive opportunity set of much wider spreads just across all credit.

Matt Bloomfield: I don't think that's gonna occur, you know, barring some more broad-based macro uncertainty. You know, I don't think anybody would argue that in the software credit space, that spreads aren't meaningfully wider. I think, you know, there'll be interesting opportunity sets within there, right? As we look across some of these, you know, kind of deeply embedded software companies, where I think, you know, in the past couple of days, maybe the narrative has changed a little bit, as you've seen some of the, you know, NVIDIA CEO comments about, you know, layering those type of AI products on top of embedded software. Which I think is what most people have been trying to communicate on the credit side as of late.

Speaker #5: I don't think that's going to occur barring some more broad-based macro uncertainty. I don't think anybody would argue that in the software credit space, that spreads aren't meaningfully wider.

Speaker #5: So, I think there’ll be interesting opportunity sets within there, right, as we look across some of these kind of deeply embedded software companies, where I think in the past couple of days, maybe the narrative has changed a little bit as you’ve seen some of the NVIDIA CEO comments about layering those types of AI products on top of embedded software—which I think is what most people have been trying to communicate on the credit side as of late.

Matt Bloomfield: I think we're definitely gonna see some opportunities in some of those impacted where, you know, things have just gotten to levels that, I think a lot of people would agree, just don't make sense. We wanna be prudent about getting over our skis there. I do think there's some interesting opportunities there. Outside of those type of sectors, you know, I hope, I hope we start to see some more normalized spreads. You know, I think it makes sense with all the, you know, just macro uncertainty in general. I think those will move a little bit slower because there's still, you know, there's still a lot of dry powder on the sidelines that wants to be deployed.

Speaker #5: So I think we're definitely going to see some opportunities in some of those impacted, where things have just gotten to levels that I think a lot of people would agree just don't make sense.

Speaker #5: And so we want to be prudent about getting over our skis there. But I do think there's some interesting opportunities there. And then outside of those type of sectors, I hope we start to see some more normalized spreads.

Speaker #5: I think it makes sense with all the just macro uncertainty in general. But I think those will move a little bit slower because there's still a lot of dry powder on the sidelines that wants to be deployed, so I think it's going to take a little bit more for spreads to widen holistically to levels where we're kind of through longer-term averages, per se.

Matt Bloomfield: I think it's gonna take a little bit more for spreads to widen holistically to levels where it's, you know, we're kind of through longer term averages per se.

Speaker #4: Terrific. I really do appreciate the answer, guys. Thank you.

Rick Shane: Terrific. I really do appreciate the answer, guys. Thank you.

Speaker #3: Our next question will come from the line of Doug Harter with UBS. Please go ahead.

Operator: Our next question will come from the line of Doug Harter with UBS. Please go ahead.

Doug Harter: Thanks. Just kind of piggybacking on Rick's question. You know, how do you weigh, you know, kind of the, you know, opportunity to maybe buy some of those software loans where you might feel comfortable in it, you know, versus obviously the perception of increasing risk and, you know, the potential volatility that comes with that before kind of markets settle down?

Speaker #6: Thanks. Just kind of piggybacking on Rick's question, how do you weigh the opportunity to maybe buy some of those software loans where you might feel comfortable in it?

Speaker #6: Versus, obviously, the perception of increasing risk and the potential volatility that comes with that before, kind of, markets settle down?

Speaker #5: Yeah. It's a balanced process, I think. We definitely don't necessarily just want to outright increase exposure holistically to the sector. There's just obviously enough noise going on and, quite frankly, I think we just need to be really fundamentally sound in kind of how we're analyzing these specific businesses on a company-by-company basis.

Matt Bloomfield: Yeah, it's, you know, it's a balanced process. I think, you know, we definitely don't necessarily just wanna outright increase exposure, you know, holistically to the sector. There's just obviously enough noise going on, and quite frankly, I think we just need to be really fundamentally sound in kind of how we're analyzing these specific businesses on a company-by-company basis. But I think we've done enough work and have had enough conversations with management teams, with sponsors, you know, with others in the industry, where, you know, we do think there's gonna be some opportunities. Our whole relative value process within PSBD, you know, being differentiated from just kind of traditional private credit BDCs, you know, we do wanna be able to take advantage of those opportunities in the liquid secondary market.

Speaker #5: But I think we've done enough work and have had enough conversations with management teams, with sponsors, with others in the industry, where we do think there's going to be some opportunities.

Speaker #5: And our whole relative value process within PSBD, being differentiated from just kind of traditional private credit BDCs, we do want to be able to take advantage of those opportunities in the liquid secondary market.

Matt Bloomfield: It's something we've done, you know, really well historically across a lot of different strategies. We're not going to be, you know, scared, per se, just because something's labeled software, if we think it, you know, exhibits, you know, very strong total return opportunities. Also wanna be cognizant of, and I think everybody needs to be, you know, somewhat humble in that, you know, AI is moving very, very quickly. And, you know, there's a lot of, you know, unknown unknowns 3, 5, 10 years down the road. We wanna make the best decisions we can, but, definitely think there's some interesting opportunity sets that we're taking a look at.

Speaker #5: It's something we've done really well historically across a lot of different strategies. So we're not going to be scared, per se, just because something's labeled software if we think it exhibits very strong total return opportunities.

Speaker #5: But I also want to be cognizant of—and I think everybody needs to be somewhat humble in—that AI is moving very, very quickly.

Speaker #5: And there's a lot of unknown unknowns—three, five, ten years down the road. So we want to make the best decisions we can, but definitely think there's some interesting opportunity sets that we're taking a look at.

Doug Harter: If I could get your perspective on, you know, you talked about deal activity. You know, do you think that this market volatility and, you know, as you just said, the unknown unknowns, you know, does that have the potential to kind of limit deal activity, limit lending activity, and kind of keep people on the sidelines? Or do you think the market is gonna find the ability to work through that?

Speaker #6: And then, if I could get your perspective on—you talked about deal activity. Do you think that this market volatility and, as you just said, the unknown unknowns—does that have the potential to kind of limit deal activity, limit lending activity, and kind of keep people on the sidelines?

Speaker #6: Or do you think the market is kind of buying the ability to work through that?

Speaker #5: Yeah, I mean, volatility never helps dealmaking in general, whether that's M&A, IPO activity—which, obviously, all those things felt like they were starting the year off on the right foot, finally.

Matt Bloomfield: Yeah, I mean, you know, volatility never helps deal-making in general, whether that's M&A, you know, IPO activity, which obviously all those things felt like they were starting the year off on the right foot finally. I think we all were kind of thinking the same thing, that to start 2025 and, you know, then we had the tariff issues, a couple of years back with some of the regional banking issues. You know, it doesn't take a lot for, I think, at least things to slow down. I do think we're, you know, far enough along in a prolonged M&A drought. We've had 175 basis points of rate cuts, over the past year and a half.

Speaker #5: And I think we all were kind of thinking the same thing to start 2025. And then we had the tariff issues a couple of years back with some of the regional banking issues.

Speaker #5: So it doesn't take a lot for, I think at least, things to slow down. But I do think we're far enough along in a prolonged M&A drought.

Speaker #5: We've had 175 basis points of rate cuts over the past year and a half, so I think there's still a lot of those reasons why we felt M&A was going to pick up still exist.

Matt Bloomfield: I think there's still a lot of those reasons why we felt M&A was going to pick up, still exist. Maybe in the software sector, that's probably going to slow down. I think it'll be maybe a near-term slowdown, but we're still having conversations, still seeing deals talked about at early to middle stages. Maybe we don't see an acceleration from here per se, but it definitely feels like there's still appetite for things to get done. Certainly outside of software, AI-related issues, other industries are still, I think, pretty ripe for transacting.

Speaker #5: And maybe in the software sector, that's probably going to slow down. So I think it'll be maybe a near-term slowdown, but we're still having conversations, still seeing deals talked about it early to middle stages so maybe we don't see an acceleration from here per se.

Speaker #5: But it definitely feels like there's still appetite for things to get done. And certainly outside of software, AI-related issues, other industries are still, I think, pretty ripe for transacting.

Speaker #5: And just in general, in the sponsor, private equity-backed community, I think it's been a dry patch for so long that I think naturally you're just going to see transaction activity pick up.

Matt Bloomfield: Just in general, in the, you know, sponsor private equity-backed community, I think it's been a dry patch for so long, and I think naturally you're just gonna see transaction activity pick up. All that being said, I would be surprised too, if we don't see some transactions in the software space, as valuations have, you know, rerated immensely in the public markets. I'll be surprised if we don't see some sponsor activity to take advantage of some of these levels that, you know, quite frankly, from a valuation, just haven't been seen in quite some time.

Speaker #5: All that being said, I will be surprised too if we don't see some transactions in the software space as valuations of rerated immensely in the public markets I'll be surprised if we don't see some sponsor activity to take advantage of some of these levels that, quite frankly, from a valuation, just haven't been seen in quite some time.

Matt Bloomfield: That was a long-winded way of saying, We'll see. I think it'll continue, maybe just not at the pace, people were anticipating coming in, you know, coming out of 2025 and into early 2026.

Speaker #5: So that was a long-winded way of saying we'll see. But I think it'll continue maybe just not at the pace people were anticipating coming out of 2025 and into early 2026.

Chris Long: Makes sense. Appreciate the thoughts.

Doug Harter: Makes sense. Appreciate the thoughts.

Speaker #6: Makes sense. Appreciate the thoughts.

Speaker #3: Again, for questions, press star one on your telephone keypad and our next question will come from the line of Kenneth Lee with RBC Capital Markets.

Operator: Again, for questions, press star 1 on your telephone keypad. Our next question will come from the line of Kenneth Lee with RBC Capital Markets. Please go ahead.

Operator: Again, for questions, press star one on your telephone keypad. Our next question will come from the line of Kenneth Lee with RBC Capital Markets. Please go ahead.

Speaker #3: Please go ahead.

Speaker #4: Hey, good afternoon and thanks for taking my question. Just given the prepared remarks around spreads, tightening within the liquid side versus being a little bit more stable on the private side, how do you view the relative attractiveness between the liquid and the private side?

Kenneth Lee: Hey, good afternoon, and thanks for taking my question. Just given the prepared remarks around spreads tightening within the liquid side versus being a little bit more stable on the private side, how do you view the relative attractiveness between the liquid and the private side? You know, what's your preference for the marginal investment go forward, more on the private or more on the liquid side? Thanks.

Speaker #4: And what's your preference for the marginal investment going forward, more in the private or more in the liquid side? Thanks.

Speaker #5: Hey, Ken. It's Matt. Thanks for the question. I think it's more balanced than we've seen. I think there definitely was some of the volatility, and the broadly syndicated market—probably the opportunity set there, specifically on the secondary loan side—is more attractive than it has been in quite some time.

Matt Bloomfield: Hey, Ken, it's Matt. Thanks, thanks for the question. You know, I think it's more balanced than we've seen. I think there definitely with some of the volatility in the broadly syndicated market, probably the opportunity set there, specifically on the secondary loan side, is more attractive than it has been in quite some time. You know, our comments around spread tightening in that market, you know, were certainly true through the end of 2025 and to start 2026. I do think just in the past few weeks, with the broader volatility in software, that that's, you know, gonna negate any, you know, spread tightening on new issue loans coming to the market, at least for a little while.

Speaker #5: Our comments around spread tightening in that market, we're certainly true through the end of 2025 and to start 2026. I do think just in the past few weeks with the broader volatility in software that that's going to negate any spread tightening on new issue loans coming to the market, at least for a little while.

Matt Bloomfield: You know, we'll see if that's, you know, meaningful widening or not. I think there's definitely still a big appetite and capital to deploy in liquid credit. On the private credit side, you know, I think that activity is a little steadier. I think spreads to our comment earlier, you know, move a little bit slower there. As you've seen, you know, this quarter, you know, we deployed another, you know, 14.5+% into private credit transactions. I think, you know, it's been a good way for us to, you know, kind of defend spread in the portfolio in a spread tightening environment in general.

Speaker #5: We'll see if that's meaningful widening or not. But I think there's definitely still a big appetite in capital to deploy in liquid credit. And on the private credit side, I think that activity is a little steadier.

Speaker #5: I think, as it relates to our comment earlier, we'll move a little bit slower there. But as you've seen this quarter, we deployed another 14.5-plus percent into private credit transactions.

Speaker #5: And I think it's been a good way for us to kind of defend spread in the portfolio in a spread tightening environment in general.

Matt Bloomfield: I think the opportunity set's going to be good on both sides of the fence, but I definitely think there's more opportunity now in the secondary loan market than we've seen in quite some time.

Speaker #5: So I think the opportunity set's going to be good on both sides of the fence. But I definitely think there's more opportunity now in the secondary loan market than we've seen in quite some time.

Speaker #4: Gotcha. Very helpful there. And just one follow-up, if I may. In terms of distributions, any updated outlook around the distribution framework and how you think about dividends going forward?

Kenneth Lee: Gotcha. Very helpful there. Just one follow-up, if I may. In terms of distributions, any updated outlook around the distribution framework and how you think about dividends go forward? Thanks.

Speaker #4: Thanks.

Speaker #5: Yeah. Like we have in the past, the board kind of evaluates what we're seeing from income generation and other facets of the business. Certainly, we've absorbed 175 basis points of base rate reductions, so those have flowed through.

Matt Bloomfield: Yeah, you know, like we have in the past, the board, you know, continues to evaluate, you know, what we're seeing from income generation and other facets of the business. You know, certainly we've absorbed 175 basis points of base rate reductions. You know, those have flown through NII, you know, here as of late. You know, we'll see where the Fed goes from here. You know, obviously we can see what the forward curve is saying, but that tends to move around quite a bit, with just the economic data that comes out. As of now, you know, we've continued to put out the base dividend that we've had.

Speaker #5: NII here, as of late, we'll see where the Fed goes from here. Obviously, we can see what the forward curve is saying, but that tends to move around quite a bit with the economic data that comes out.

Speaker #5: So, as of now, we've continued to put out the base dividend that we've had, and we'll continue to reevaluate at the board level as we move through this quarter and beyond.

Matt Bloomfield: We'll continue to reevaluate at the board level as we move through this quarter and beyond. You know, again, hopeful on our conversations on spread that we've, you know, that tightening we've seen, you know, on the spreads versus base rates feels a little bit better than it has in some time.

Speaker #5: But again, hopeful on our conversations on spread that we've—that tightening we've seen on the spreads versus base rates feels a little bit better than it has in some time.

Speaker #4: Gotcha. Very helpful there. Thanks again.

Kenneth Lee: Gotcha. Very helpful there. Thanks again.

Speaker #3: At this time, I'd like to turn the call back to Chris Long for closing remarks.

Operator: At this time, I'd like to turn the call back to Chris Long for closing remarks.

Speaker #7: Thank you, operator. Thank you all for your time and thoughtful questions. We look forward to updating you on our first quarter 2026 financial results in May.

Chris Long: Thank you, operator. Thank you all for your time and thoughtful questions. We look forward to updating you on our Q1 2026 financial results in May. Have a good rest of your day.

Speaker #7: Have a good rest of your day.

Operator: This concludes today's call. Thank you all for joining. You may now disconnect.

Q4 2025 Palmer Square Capital BDC Inc Earnings Call

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