And so, just by the nature of that size, there’s just a lot of interesting things to continue to do from a secondary standpoint. So, with our deployment in the first quarter, the vast majority of that was secondary. And we still think there’s some good things to do there, as well.
Kenneth Lee: Great. Very helpful there. Thanks again.
Operator: [Operator Instructions] Our next question comes from the line of Vilas Abraham with UBS. Please go ahead.
Vilas Abraham: Hey everybody. Thanks for the question. Just on spread, you touched on spreads getting a little bit tighter as we’ve been seeing and hearing. Can you talk a little bit specifically though about kind of what the levels are now? And just put that into a little bit of context in terms of what you’ve seen over the years? And just kind of how you think that plays out throughout this year?
Matt Bloomfield: Yeah, certainly. This is Matt again. I’d say, in the broadly syndicated market, frankly speaking, we’ve seen less spread compression than we’ve seen in the upper end of the private credit space. In that private credit arena, year, year–and–a–half ago, you were looking at SOFR 600 to 650 type spreads for kind of a down the fairway unit tranche. You’ve seen some pretty meaningful spread tightening going on there, where some deals have now gotten down below 500. So, pretty, pretty dramatic from a spread compression perspective there. On the syndicated loan side of things, spreads are still a bit wider their 10 year average. And so when you look across all other credit arenas, whether it’s IG, high yield, with spreads, in some cases, testing through their ten year types, loans still screen pretty attractive to us especially with the floating base rate perspective.
Now, that being said, even in April, we have started to see some repricing activity hit our market akin to what some of the larger private credit structures have seen, as well. So, certainly not immune to that, but still I think on a relative basis, still pretty attractive in our view relative to its long–term history.
Vilas Abraham: Okay. And then, going forward this year, would you say that just the volume of deal activity is probably the biggest driver here on which direction spreads go?
Matt Bloomfield: Yeah, I think that’s right. Supply/demand is always going to be a big part of what kind of drives the market. And certainly credit quality and how companies are performing. And so I think, we continue to be pleased with the overall trajectory of credit performance. And in some cases that will warrant some tightening. But I’d say, more so to your point on capital markets activity, as new issue does pick up, which again, we do expect to happen, that will put a natural cap on how tight – spreads can tighten just from a volume of issuance standpoint, which it’s pretty typical from what we’ve seen historically speaking.
Angie Long: This is Angie. I do think also spreads tightening for our existing portfolio, which is still several assets trading at a discount that does represent a price appreciation, which will – those price appreciations will improve the NAV. So, I think spread tightening while on anything we may buy that’s new is not favorable, spread tightening for anything that we already own, it’s great.
Vilas Abraham: Got it. Makes sense. And then just one more, just on leverage. Any latest thoughts there? It looks like you guys are comfortable in your range. But anything new to do that? How you’re thinking about that?
Matt Bloomfield: No, I think, as Angie has mentioned last call, in the current environment, it’s kind of this range is where we feel comfortable. But we can certainly with the type of portfolio that we have and some of the liquidity that we can utilize, we can talk all that up and down pretty quickly. So, I’d say nothing’s really changed from last quarter in our view on that other than, we did announced the CLO issuance from a capital structure diversification standpoint. That’ll be leverage neutral to the BDC. But did take advantage of a lot of the spread tightening that that we’re talking about on the liability side of things to put some really nice term–based financing into the capital structure for the BDC.
Angie Long: And it’s Angie again, just to add, we feel comfortable with where the leverage is now. We are obviously nimble and able to move, but the most important thing we’ve been focusing on is the structure of that borrowing and extending terms on existing facilities and then obviously doing a very significant term out with the CLO issuance.
Vilas Abraham: Got it. Very helpful. Thank you.
Operator: [Operator Instructions] There are no more questions at this time. And that concludes our Q&A session. I will now turn the conference back over to Chris Long for closing remarks.
Chris Long: On behalf of the management team, we greatly appreciate your support of Palmer Square Capital BDC. As we look to the remainder of the year, PSBD has a clear differentiated investment strategy, which we believe will deliver strong risk–adjusted returns and shareholder value, amid any market environment. We look forward to providing an update on our second quarter 2024 earnings call in August. Thank you so much.
Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
