Palmer Square Capital BDC Inc.

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Palmer Square Capital BDC's first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Jeremy Goff, Managing Director. Please go ahead.

Welcome to Palmer Square Capital BDC's first quarter 2026 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 first quarter 2026 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. 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. With that, I will now turn the call over to Chris Long.

Good afternoon, everyone. Thank you for joining us today for Palmer Square Capital BDC's first quarter 2026 conference call. On today's call, I will provide an overview of our first quarter results, touch on our market outlook and competitive positioning, and then turn the call to the team to discuss the current industry dynamics at play, our portfolio activity, and financial results. During the first quarter, our team deployed $109.4 million of capital and generated total and net investment income of $26.2 million and $11 million respectively. We delivered net investment income of 35 cents per share and paid a 37 cent per share total dividend, which includes a one cent supplemental distribution above our base dividend and included approximately two cents of spillover income. Consistent with the sector, our earnings profile is reflective of monetary policy tightening over the last several quarters, in addition to experiencing a slowdown in new deal and refinancing activity given the macro backdrop. With this in mind, our dividend payout still represents an 11.1% yield on NAV and 13.5% yield on the stock price as of April 30th, which we believe is a compelling value proposition for investors. We also believe we are beginning to experience a pickup in activity in April, which we are hopeful continues in the remainder of the second quarter. As such, our board has confirmed our second quarter base dividend of 36 cents with the supplemental to follow in normal course. We will continue to prioritize to the extent possible a distribution strategy that maximizes cash returns to investors. Our March NAD per share was $13.30. This mark is based on real, actionable prices in the market and underscores our intentional commitment to transparency and accountability regardless of the day's market conditions. This level of transparency is especially relevant in today's environment. With heightened scrutiny around BDC portfolio company valuations, we believe our monthly NAV disclosure delivers an added layer of confidence in the underlying value of PSBD's portfolio while highlighting the uniqueness of our portfolio's positioning in liquid, senior secured debt. We are pleased with the increased amount of positive feedback we have been receiving in this regard. The first quarter of 2026 presented another episode of volatility induced by the software sell-off and credit cycle concerns in general, factors we discussed on our fourth quarter earnings call in February. These issues have continued to drive headlines in the months since, in addition to concerns and economic impacts resulting from the Iran war. As I did last quarter, I'd like to spend a moment reiterating our philosophy around software and technology investments as it remains very topical. We continue to prefer deeply embedded, mission-critical software in areas such as cybersecurity, IT infrastructure, and ERP systems, which we believe will ultimately be net beneficiaries of AI advancements. Within these subsectors, we lend to large, highly scaled providers that have meaningful profitability and cash flow. We found that these large enterprise platforms tend to be backed by sophisticated private equity sponsors and believe their capital structures provide meaningful equity cushions below our senior secured loans. In our experience, these providers also frequently benefit from significant incumbency advantages. We believe another advantage is the breadth and depth of their data collected across industries. This data positions incumbents to develop more effective AI infrastructure than their more nascent peers, as data quality remains a foundational element of model performance and inference. To that end, we believe our portfolio companies are already realizing the benefits of AI advancements. Examples include one data analytics business that has over 60% of its top 50 customers using at least one AI native product, while one of our large ERP software companies AI application has seen adoption by 40% of its over 7,000 customers. In the latter example, management expects that adoption to be over 75% by year end 2026. Beginning in April, we started to observe a stabilization and in some cases a reversal. of the mark-to-market prices on software and other AI-impacted loans, which we believe reflects the market's growing realization of the advantages incumbent providers hold amid the AI-driven disruption. To echo recent commentary from a large private equity sponsor, these incumbents are well positioned to win, but that position is not guaranteed. We believe that advantage is predicated on their long-term customer relationships their ownership of critical data that underpins the day-to-day functions of their clients, and their ability to incorporate AI into existing software systems to improve services. With that, I will hand the call over to Angie.