Material Agreement (Form 8-K)

Item 1.01. Entry into a Material Definitive Agreement.

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 CLO Reset Transaction functions as a source of long-term balance sheet financing for a portion of the Company's portfolio investments and, as a result, the Notes (as defined below) issued in connection with the CLO Reset Transaction are subject to the Company's regulatory asset coverage requirement.

The Secured Notes offered in the CLO Reset Transaction were issued by the Issuer pursuant to an indenture (the "Indenture"), dated as of May 23, 2024 (the "Original Closing Date"), among the Issuer, Palmer Square BDC CLO 1, LLC (the "Co-Issuer") and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the "Trustee"), as amended by a supplemental indenture (the "Supplemental Indenture"), dated as of the Refinancing Date, among the Issuer, the Co-Issuer and the Trustee, and consented to by the Company, as collateral manager and subordinated noteholder, and 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 Company continues to retain 100% of the subordinated notes issued by the Issuer on the Original Closing Date (the "Subordinated Notes"), which do not bear interest but are entitled to all of the principal and interest payments made on the loan portfolio held by the Issuer, net of interest and principal payments distributed to the holders of the Secured Notes, and will continue to retain the Subordinated Notes in accordance with the U.S. Risk Retention Rules and the EU/UK Securitization Regulations at and after the closing of the CLO Reset Transaction. The Secured Notes together with the Subordinated Notes are collectively referred to herein as the "Notes."

On the Refinancing Date and in connection with the CLO Reset Transaction, the Issuer and the Co-Issuer entered into a refinancing note purchase agreement (the "Purchase Agreement") with BofA Securities, Inc., as the refinancing initial purchaser (the "Initial Purchaser"), pursuant to which the Initial Purchaser purchased the Secured Notes issued pursuant to the Indenture, as amended by the Supplemental Indenture, as part of the CLO Reset Transaction.

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, which is managed by the Company as collateral manager pursuant to a collateral management agreement entered into with the Issuer on the Original Closing Date (the "Collateral Management Agreement"). 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 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 Secured Notes are the secured obligations of the Issuer, the Subordinated Notes are the unsecured obligations of the Issuer, and the indenture governing the Notes includes customary covenants and events of default. The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or "blue sky" laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from registration.

The descriptions of the documentation related to the CLO Reset Transaction contained in this Current Report on Form 8-K do not purport to be complete and are qualified in their entirety by reference to the underlying agreements, attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4, incorporated into this Current Report on Form 8-K by reference.