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Get filing alertsPalmer Square Capital BDC refinances $300M CLO at SOFR+1.28%/1.75%, maturing 2039
Filed July 15, 2026 · Period ending July 15, 2026 · ~1 min read
Key Changes
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Refinanced $300M CLO with $228M AAA tranche at SOFR+1.28% and $72M AA tranche at SOFR+1.75%, both maturing July 2039, backed by diversified senior secured loan portfolio
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Notes callable at any time after closing, providing flexibility to refinance if market conditions improve or unwind the structure if needed
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Company irrevocably waived all collateral management fees, keeping more cash flow within the CLO structure rather than extracting fees
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR →
Summary
Palmer Square Capital BDC completed a reset transaction on its $300 million CLO, refinancing the secured debt at SOFR+1.28% for the $228 million AAA tranche and SOFR+1.75% for the $72 million AA tranche. Both tranches mature in July 2039.
The CLO is backed by a diversified portfolio of senior secured loans with flexibility to invest in second lien loans, corporate bonds, and certain bankruptcy-related debtor-in-possession loans. The company retains 100% of the subordinated notes, which absorb residual cash flows after the secured notes are paid.
The refinancing includes flexible redemption provisions allowing the company to call the notes at any time, providing optionality to refinance again if rates improve or to unwind the structure if needed. The company has permanently waived all collateral management fees it would otherwise earn, keeping more cash flow within the CLO structure. For retail holders, this is a routine liability management transaction that resets the terms on existing secured financing. The new rates reflect current market conditions for CLO debt, and the 13-year maturity with call optionality gives the company flexibility to manage its cost of capital over time.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Item 1.01 — Entry into a Material Definitive Agreement filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
On July 15, 2026 (the “Refinancing Date”), Palmer Square Capital BDC Inc. (the “Company”) completed the refinancing of a $300.00 million term debt securitization (the “CLO Reset Transaction”) of Palmer Square BDC CLO 1, Ltd. (the “Issuer”), an exempted company incorporated with limited liability under the laws of the Cayman Islands and a wholly-owned indirect subsidiary of the Company, in connection with which the Issuer issued the Secured Notes (as defined below).
The company refinanced its existing $300 million collateralized loan obligation (CLO) structure through a reset transaction. This refinancing maintains the same principal amount but resets the terms, including interest rates and maturity date, for the secured debt tranches backed by the company's loan portfolio.
Added in current filing · verify on EDGAR →
consist of (i) $228.00 million of AAA Class A-R Notes due 2039, which bear interest at the forward-looking term rate based on the secured overnight financing rate (“Term SOFR”) plus 1.28% (the “Class A-R Notes”); and (ii) $72.00 million of AA Class B-R Notes due 2039, which bear interest at Term SOFR plus 1.75% (the “Class B-R Notes” and, together with the Class A-R Notes, the “Secured Notes”).
The refinanced CLO consists of two tranches of secured notes totaling $300 million: $228 million of AAA-rated Class A-R Notes at SOFR+1.28% and $72 million of AA-rated Class B-R Notes at SOFR+1.75%. Both tranches mature in July 2039. The company retains 100% of the subordinated notes, which absorb residual cash flows after the secured notes are paid.
Added in current filing · verify on EDGAR →
The Notes are scheduled to mature on July 15, 2039; however, the Notes may be redeemed by the Issuer, at the written direction of (i) a majority of the Subordinated Notes (with the consent of the Company, in the case of the Secured Notes) or (ii) the Company, in each case, on any business day on or after the Refinancing Date.
The refinanced notes have a 13-year maturity (July 2039) but include flexible redemption provisions allowing the company to call the notes at any time after the refinancing date. This optionality provides the company with the ability to refinance again if market conditions improve or to unwind the structure if needed.
Added in current filing · verify on EDGAR →
The Company has agreed to irrevocably waive all collateral management fees payable to it so long as it is the collateral manager under the Collateral Management Agreement.
The company has permanently waived all fees it would otherwise earn as collateral manager of the CLO. Since the company owns the CLO structure and retains the subordinated notes, waiving these fees keeps more cash flow within the structure rather than extracting it as a management fee, which could benefit the overall economics of the financing arrangement.
Added in current filing · verify on EDGAR →
The CLO Reset Transaction is backed by a diversified portfolio of senior secured loans or participation interests therein with the potential for investment in second lien loans or participation interests therein, corporate bonds or loans made to a debtor-in-possession pursuant to Section 364 of the Bankruptcy Code having the priority allowed by either Section 364(c) or 364(d) of the Bankruptcy Code and fully secured by senior liens or participation interests therein
The CLO is collateralized by a diversified portfolio primarily consisting of senior secured loans, with flexibility to invest in second lien loans, corporate bonds, and certain bankruptcy-related debtor-in-possession loans. This describes the asset base supporting the $300 million in secured notes and provides insight into the risk profile of the underlying collateral.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 16, 2026 · How we verify