SecProbe.io

December 26, 2019      Harry S. Pangas, Esq. Dechert LLP 1900 K Street, NW Washington, DC 20006
Re: Palmer Square Capital BDC Inc.   File Nos. 000-56126; 814-01334
 Dear Mr. Pangas:   On November 27, 2019, you filed a registra tion statement on Form 10 on behalf of
Palmer Square Capital BDC Inc. (the “Company” ), in connection with the registration of the
Company’s common stock under Section 12(g) of  the Securities Exchange Act of 1934 (the
“Exchange Act”).  We have reviewed the re gistration statement, and have provided our
comments below.  For convenience, we genera lly organized our comm ents using headings,
defined terms, and page numbers from the registration statement.  Where a comment is made in
one location, it is applicable to all similar di sclosure appearing elsewh ere in the registration
statement.   Please respond to this letter within ten ( 10) business days by either amending the filing,
providing the requested information, or advi sing us when you will provide the requested
information.  We may have additional comments after reviewing your resp onses to the following
comments, or any amendment to the filing.   We note that the Company is voluntarily registering shares of its common stock under
Section 12(g) of the Exchange Act.  Please no te that a filing on Form 10 goes effective
automatically by lapse of time 60 days after the or iginal filing date, pursuant to Section 12(g)(1)
of the Exchange Act.  If our comments are not satisfactorily addressed within this 60-day time
period, you should consider withdrawing the Compa ny’s Form 10 prior to its effectiveness, and
re-filing a revised Form 10 that includes change s responsive to our comments.  If the Company
chooses not to withdraw its Form 10 registrati on statement, it will be subject to the reporting
requirements of Section 13(a) of the Exchange Act.   Additionally, we will continue to review the
filing until all of our comments have  been satisfactorily addressed.

Harry S. Pangas, Esq.
December 26, 2019 Page 2
REGISTRATION STATEMENT

Explanatory Note (Page ii)

1. With respect to the lack of liquidity of , manner of distributio n of and funding of
distributions made by non-traded BD Cs, please add the bulleted disclosure below, if accurate, in
bold and larger font.  We suggest the bullets also appear prominently immediately above the
signature line on the Subscription Agreement.
 The Company’s Shares may not be sold wit hout the written consen t of the Adviser.

 If the Company makes additional offerings of its Shares in the future, an investor may be
required to make additional purchases of the Company’s Shares on one or more dates to
be determined by the Company.

 The Company’s Shares are not currently listed on an exchange, and it is uncertain
whether they will be listed or whethe r a secondary market will develop.

 Repurchases of Shares by the Company, if any, are expected to be limited.

 An investment in the Company may not be suitable for investors who may need the
money they invest in a specified time frame.

 Our distributions may be funded from unlimited amounts of offering proceeds or
borrowings, which may constitute a return of  capital and reduce the amount of capital
available to us for investment. Any capital returned to you through distributions will be
distributed after payment of fees and expenses.

Item 1.  Business — The Company (Page 1)

2. The second sentence of this section states  that the Company intends to elect to be
regulated as a BDC.  Please disclose when th e Company intends to file an election to be
regulated as a BDC.

3. Please disclose in this section the expected maturity of the corporate debt and CLOs in
which the Company will invest.  In addition, please  disclose here (as indicated on page 3) that
the Company can invest in equity and j unior debt tranches of CLOs.
 4. The fifth sentence of the second paragraph of th is section states that investments that are
rated below investment grade are sometimes re ferred to as, among other things, “leveraged
loans”.  Please describe leveraged loans.  5. The seventh sentence of the second paragra ph of this section states that the Company
may, for hedging purposes, utilize in struments such as forward contracts, currency options and
interest rate swaps, caps, collars  and floors.  On page 3, the last  two sentences indicate that the

Harry S. Pangas, Esq.
December 26, 2019 Page 3  Company uses derivatives both for specula tive and hedging purposes, including, without
limitations, futures, forwards contracts and optio ns, swaps and short posit ions.  Please reconcile
the disclosure regarding the types and purpose(s)  for which derivatives will be used in these
sections.  6. The third paragraph of this section desc ribes Capital Commitments to be made by
investors in the Company.  Please disclose what  happens to investors who fail to honor their
obligations under a Capital Commitment.    7. Please explain to us whether the Company will make Capital Commitments that may be
unfunded for some period of time.  If so, please e xplain to us whether th e Company will treat its
unfunded commitments as senior securities under Section 18(g) of the Investment Company Act
of 1940 (“1940 Act”).  If the Company will have unfunded commitments that it will not treat as
senior securities, please provide  us with a representation that  the Company reasonably believes
that its assets will provide adequate cover to a llow it to satisfy its future unfunded investment
commitments, and include an explanation as to why the Company believes it will be able to
cover its future unfunded investment commitments.
Item 1.  Business — The Investment Advisor (pages 1 – 2)

8. This section describes the Investment Team  and Investment Committee.  Please identify
the person or persons who are primarily responsible for the day to day management of the
portfolio.  If the portfolio ma nagers are jointly and primarily  responsible for day to day
management, please make that clear and provide a brief description of each person’s role on the
Team or Committee.
Item 1.  Business — Market Opportunity (page 2)

9. The third sentence under “Size of Corporate Debt Market” refers to “dry powder”.
Please clarify the meaning of this term.  10. The first sentence under “Regulatory Envi ronment and Opportunity for Alternative
Lenders” refers to “middle market companies”.  If investing in middle market companies is part
of the principal strategies of the Company, please  identify and define thes e types of companies in
the description of the Comp any’s principal strategies.

Item 1.  Business — Investment Objective (pages 2 – 3)

11. The last paragraph on page 2 states that th e Company will primarily invest in first and
second lien secured loans.   If the Company inte nds to invest in covenant-lite loans, please
describe such loans and the extent to which the Co mpany may invest in such loans; also, disclose
in the Risk Factors section the heightened ri sks associated with covenant-lite loans.

Harry S. Pangas, Esq.
December 26, 2019 Page 4  12. The last sentence of the first paragraph on page 3 indicates that senior secured loans
within a CLO will be subject to “limitations on non-U.S. borrowers.”  Please disclose with
greater specificity the limitations on non-U.S. borrowers.  13. Please disclose whether the Company may make investments in foreign markets,
including emerging markets, and if so, disclose  the corresponding risks of such investments.
 14. Please clearly and consistently describe th e types of investments the Company will make
as part of its principal strate gies and please distinguish inve stments that are part of the
Company’s principal strategies from investments that are part  of the Company’s non-principal
strategies.  For example, please reconcile and revise, as necessary, the following inconsistent
disclosure:
 “We are a financial services company that prim arily lends to and inve sts in debt securities
of privately held companies.”  (first sent ence under Item 1.  Business – The Company)
 “The Company’s current investment focus is gui ded by two strategies . . . (1) investing in
corporate debt securities and, to a lesser extent, (2) inves ting in collateralized loan
obligations . . . structured cred it that typically owns corpor ate debt securities.” (second
paragraph under Item 1.  Business – The Company)
 “. . . primarily investing in first and second lien secured loans, and to a lesser extent
unsecured debt which in some cases includes an equity component.”  (last paragraph on
page 2)
 “. . . portfolio investments may also include , but are not limited to, corporate structured
credit, cash and synthetic CLOs, CLO warehouses , collateralized debt obligations . . .,
swaps, asset backed securities, preferred shares, corporate bonds, corporate bank loans, preferred stock, municipal bonds or loans and convertible securities .”  (second paragraph
on page 3)
 Also, please review the risks set forth in the Ri sk Factors section to confirm that there is
corresponding risk disclosure for each type of investment identified as part of the Company’s
principal strategies.  For example, the second paragraph on page 3 refe rs to municipal bonds.
However, the Risk Factors section does not di sclose any corresponding ri sks of municipal bonds.
 15. The second paragraph on page 3 refers to c onvertible securities.  If the Company will
invest in contingent conv ertible securities as part  of its principal strategies, please identify such
securities as part of the Comp any’s principal strategies and di sclose the corresponding risks of
such securities in the Risk Factors section.  16. On page 3, the second sentence of the last pa ragraph states that the Investment Advisor
may employ leverage and use derivatives, both for speculative and hedging purposes.  Please
describe with specificity how the Investment A dvisor will “employ leverage”.  Also, please
describe with specificity how the Investment Advisor will use derivatives for speculative
purposes and what types of derivatives will be used.  See Letter from Barry Miller, Associate

Harry S. Pangas, Esq.
December 26, 2019 Page 5  Director, Division of Investment Management, to  Karrie McMillan, General Counsel, Investment
Company Institute, dated July 30, 2010.
Item 1.  Business — Investment Approach (page 4)

17. The second sentence of this section desc ribes three components of the Investment
Advisor’s top-down approach.  Please revise the descripti on of the second component, i.e., cross-
asset relative value analysis, in plain English.  18. The last sentence of this s ection describes the loans and CL O debt and equity that the
Company will buy as those that the Investment Advisor believes are “high  quality”.  Please
disclose what “high quality” means in this context.   Please also explain to us how this disclosure
that the Investment Advisor s eeks to mitigate risk by seeking to buy loans and CLO debt and
equity that the Investment Advi sor believes are high quality is consistent with earlier disclosure
that the Company will invest in high-yield inve stments, which, as stated on page 1, “may result
in an above average amount of risk and volatility or loss of principal”.

Item 1.  Business — Advisory Agreement (pages 7 – 9)

19. Please consider disclosing a fee table that conforms to the requirements of Item 3.1 of
Form N-2 adjacent to this section.  Please also  consider disclosing an expense example that
conform to the requirements of Instruction 11 to Item 3.1 of Form N-2.  We believe that such
disclosure would be helpful to investors.
Item 1.  Business — Advisory Agreement — Base Management Fee (page 7)

20. The first sentence of this section refers to “tot al net assets”.  Please de fine total net assets.
 21. Please confirm that the Company will accrue for the management fee at the contractual
rate of 2.00% and not the ne t amount after waiver of 1.75% prior to a Listing.

Item 1.  Business — Advisory Agreement — Incentive Fee (pages 8 – 9)

22. This section describes the Income Incen tive Fee.  Please disclose a graphical
representation and examples showing the calculation of the Income Incentive Fee.

Item 1.  Business — The Private Offering (page 10)

23. The first sentence of the second paragraph of th is section states that an investor’s failure
to purchase additional common stock when requested  by the Company will resu lt in that investor
being subject to certain default provisions set forth in the Su bscription Agreement, which may
include causing such investor to “forfeit” a significant portion of its shares or to transfer its
shares to a third party for a price that is less than the net asset value of such shares.  Please
disclose to whom the investor will forfeit shares.  Please also identify the third party to whom an

Harry S. Pangas, Esq.
December 26, 2019 Page 6  investor will be required to sell  its shares.  We may have more  comments after reviewing your
response.
Item 1.  Business — Regulation (pages 11 – 16)

24. The last sentence of the third paragraph of th is section states that the Company may issue
new shares of common st ock at a price below net asset valu e in certain circumstances.  Please
disclose that the Company will comply with the conditions set forth in Section 63(2) of the 1940
Act when selling common stock at a pr ice below net asset value.

Item 2. Financial Information  — Discussion of Management’s Expected Operating Plans
— Revenues (page 55)
25. The second sentence of this section states that the Company’s debt investments will bear
interest at a floating rate usually determined on the basis of a benchmark such as LIBOR.  As
LIBOR is expected to be discont inued after 2021, please either disclo se the risks associated with
the expected discontinuation of LI BOR as a principal risk for the Company or explain to us why
this would not be a principal risk for the Company.  See Staff Statement on LIBOR Transition,
July 12, 2019.
Item 7.  Certain Relationships and Relate d Transactions, and Director Independence —
Conflicts Relating to Purchase and Sale of Investments — Allocation of Investment
Opportunities  (page 65)

26. The first sentence of this section states that none of the PSCM Affiliates is under any
obligation to offer investment opportunities of which it becomes aware to the Company or to
account to the Company or share with the Compa ny or inform the Company of any investments
before offering investments to other funds or accounts that PSCM Affiliates manage or advise.
Earlier disclosure states that the Investment Advisor and Palmer Square have entered into a
Resource Sharing Agreement pursuant to which Pa lmer Square provides the Investment Advisor
with access to Palmer Square’s resources, incl uding the Investment Team, to enable the
Investment Advisor to fulfill its obligations under the Advisory Agreement.  Please explain to us
why Palmer Square (which is included in the definition of PSCM Affiliate) is not under any of the obligations described in the first sentence of this section in light of  the existence of the
Resource Sharing Agreement.  We may have more  comments after review ing your response.

Item 9.  Directors and Execu tive Officers — Market Pri ce of and Dividends on the
Registrant’s Common Equity and Related Stoc kholder Matters — Dividend Reinvestment
Plan (pages 68 – 69)

27. The first sentence of the third paragraph of this section states th at, after a Listing, the
Board will use newly-issued shares of the Comp any’s common stock to implement the dividend
reinvestment plan, whether or not  the shares are trading at a pr ice per share at, below or above
net asset value.  Please explain to us the basis of the Board’ s determination to use newly issued
shares to implement the dividend reinvestment pl an, regardless of the price at which the shares

Harry S. Pangas, Esq.
December 26, 2019 Page 7  are trading.  In particular, pleas e address how the