Software Loans Are on Sale | Matthew Bloomfield of Palmer Square Capital Management

Watch on YouTube ↗  |  April 26, 2026 at 18:05  |  1:14:49  |  Monetary Matters
Speakers
Matthew Bloomfield — Editor, The Block

Summary

Matthew Bloomfield of Palmer Square Capital discusses the selloff in software loans, arguing it is overblown and presents a buying opportunity. He highlights that his public BDC (PSBD) trades at an unwarranted deep discount to NAV and is attractive for long-term investors. He also explains CLO structures, noting that volatility benefits CLO equity but that high yield bonds remain unattractive due to tight spreads. The conversation covers BDC bearishness, CLO liability dynamics, and the role of transparency in credit markets.

  • Software loan prices have fallen sharply on AI disruption fears, but Bloomfield believes the risk is overblown.
  • Palmer Square BDC (PSBD) trades at a deep discount to NAV despite strong credit quality and monthly transparency.
  • Bloomfield argues that public BDC discounts historically present attractive entry points.
  • High yield bonds are currently unattractive due to very tight spreads relative to risk.
  • CLO equity can benefit from loan discounts and spread widening during volatility.
  • Static CLO structures pioneered by Palmer Square have delivered average equity IRRs around 17%.
  • Defaults in CLO debt (AAA through BB) have been minimal due to structural protections.
  • Bloomfield recommends Aries Management (ARCC) as a well-run BDC peer.
Trade Ideas
Matthew Bloomfield Editor, The Block 4:56
PSBD discount is unwarranted and attractive.
Palmer Square BDC (PSBD) trades at a deep discount to net asset value despite high transparency from monthly NAV reporting, tradable underlying assets, and strong credit quality in large borrowers. Historically, such discounts have been excellent entry points for public BDCs. The firm is actively buying back shares, which is accretive at current levels, and the discount should converge over time.
PSBD HIGH
Matthew Bloomfield Editor, The Block 6:22
Software loan selloff is overblown opportunity.
The selloff in software loans within the broadly syndicated loan market due to AI disruption fears is overblown. The true risk of disintermediation is considerably lower because software systems are deeply embedded with high switching costs. Large borrowers in this space have better management and capital market access, making the risk-reward attractive at current discounted prices.
Software Loans (Broadly Syndicated) MED
Matthew Bloomfield Editor, The Block 33:33
High yield is unattractive due tight spreads.
The high yield bond market is currently unattractive because spreads are very tight relative to overall credit risk and have not widened meaningfully despite macro volatility. The market's credit quality has improved to mostly double-B, but yields are not compelling enough to warrant investment.
High Yield Bonds MED
Matthew Bloomfield Editor, The Block 74:01
Aries is a strong BDC.
Aries Management (ARCC) is a well-run BDC with a long track record and strong management team. It is a respected player in the space and would be a top pick among public BDCs if not for his own firm.
ARCC LOW
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This Monetary Matters video, published April 26, 2026, features Matthew Bloomfield discussing PSBD, Software Loans (Broadly Syndicated), High Yield Bonds, ARCC. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Matthew Bloomfield  · Tickers: PSBD, Software Loans (Broadly Syndicated), High Yield Bonds, ARCC