ECC - Earnings call transcript Q3 2022 | Eagle Point Credit Company Inc.

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Operator

Greetings. Welcome to the Eagle Point Credit Company’s Third Quarter 2021 Financial results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the to turn Edson host now ICR. of would conference your over Garrett I

begin. may You

Garrett Edson

was Shamali(ph. at you, should earnings presentation, found call, to everyone good also may have our to be which and investor which and our Thank announcement and access ), website morning. on prior this eaglepointcreditcompany.com. released By now,

and forward-looking those everyone uncertainties differ that discussed on matters Before our remarks, formal the the information, cause we may materially financial such financial we call, that that statements statements, include Company's begin involve to information. projected and projected risks need projected to remind results forward-looking or this actual in from

presentation link. of with now to obligation Company's Company. the Company's unless of XXXX on also contained filed information law. Chief be investor presentation call Exchange can of Commission. the and and following factors section presentation the Earlier us investor Point statements information We Majewski, projection and the financial with our this impact by available financial our Executive call Exchange the could XX and Each and the statements I forward-looking date of accessed statements further like Eagle Relations statements found financial the herein, and the within The financial Investor today, be forward-looking the this can Commission. statements third to eaglepointcreditcompany.com. would we be are our Credit projections Tom refer third quarter call. our during Officer quarter by third events and can Securities reports introduce and following found link, presentations the information statements quarter made for investor any available Company filings days website. Financial Securities statements For please as required of replay is and that update Company's of via this disclaim on website, A based the to by to

Thomas Majewski

Eagle Quarter and Credit you Garrett, Company’s to welcome Third everyone Thank Point Earnings Call.

we download which provides additional invite our you portfolio. done If you already, Investor presentation from and our so to the our information Company about haven't website,

banner third and quarter, throughout the portfolio performance our operations. Our continued has with XXXX into excellent

portfolio cash our NAV CLO XX considerably quarter. strong We continued and generated selling well to - refinancing investments and flows, very very into both managing as and our importantly, the NII in our Net, compared the recurring buying financings increase, $XX.X to re were resetting during rose quarter. active portfolio. as in we s securities, Our resets portfolio, the equity and we during quarter. debt of total CLO a deployed the And and million priced second

by to have quarterly between trend totaled increased in be refinancing reset in Notably ending efforts %based the than month through been this onset on during share, public the this, was flows NAV estimate and distributions. range. above portfolio. Company's end Cash X further midpoint were our per recurring To cash quarter on per have Recurring in our before of we XXXX. of to share. which expenses This XXXX. third proactive in fully $XXXX, share year are enhanced NAV million, of we quarterly continue October, total largest end our quarter since and our collections collections making were cash $XX.X the COVID. went and recurring the additional our levels cash frame per -pandemic of portfolio million, common pre a strong, recovered $X.XX XXXX share, we at The distributions. CLL and of now XX cash continued and Our equity reflecting positions October, %this year. an %per flows XX up the to as This of at all $XX.XX activity NAV flows accretive is %since October flows $XX.X our essentially the our upward our have gain XX and $XXXX excess October's that is X October's collections %more on share making

of finalization stockholders. the Company's investment income third totaled net income by and Our $X.XX an paid the distributions This distributions Earlier additional $X.XX initial common distribution during %. declared Company's the exceeding more is of XXXX expects our XX on realized taxable our and we to a distribution strength projections given declare our based gains current share, common Upon during third of on for quarter stock the special of based or the one to special XXXX. Company special per quarter preliminary today, taxable income. the performance, estimates,

We premium also program. Series issued capital to through at to a NAV shares approximately This XXX,XXX We helps a us value, during common Company XXX,XXX diversity investment continue portfolio. NAV late increase in further liquidation to approximately raise C their shares third prudently $XX the quarter. at generating premium at-the-market build us to preferred proceeds of and million net and the our about

effective overall borrowers ability put XXth, new end levels few and investments of from As portfolio June. our proactive levels, muted refinancing ground increase This strong of repricing’s. and weighted XX.XX%. in cash to the and our the the average attractive yield program, XX.XX%at aided was loan flows at of portfolio, reset of our up was defaulting, on our September by that's

deployed quarter, and into debt I As investments. we mentioned capital CLO $XX.X equity during of million net the

during that yield with attractive principally the CLO the opportunities we quarter, approximately XX XX was to a the market. continue secondary opportunities We market in %. few made average equity Indeed, across in also effective primary the the find weighted CLO purchases

opportunistically side, realize Collectively, us investments. capital common CLO sales sold of monetization share. and we these other equity allowed to per the several securities On $X.XX gains

with While investments we where bids typically attractive hold other long-term or rotation underwrite sell see mindset, do investments we we strong a opportunities.

taking our with demand advantage capital, quarter, debt. refinancing of the to for and deployment strong addition of very during remained active CLO we reset In are our program

XX refinancing’s. completed refinancing’s have the resets During year. three XX for the and resets now of And priced quarters first and the X quarter, we X

working and expect we to resets continue of be pipeline through We refinancing’s evaluation a balance to actively this have the future robust XXXX. of pipeline under and

As typically refresh CLO's of transactions unchanged. a typically, hand, its lowering the the on most while a reset us other and CLO a remain allows debt usually CLO spread of and CLO's to lowers terms renews are reopen the It cost documents. tranches cost In funding. future funding other reinvestment governing refresher, our on period, reduced, also refinancing a only a

create playbook, resets, third average points of on XX our remaining approximately period those the debt the reinvestment of on on For life able lengthening two in investment advisor’s out Borrowing and of saved to key years. majority the XX the we debt years reinvestment weighted class quarter, CLO equity. cycle. each strategy, money equity taking our lengthened period we refinanced of time from XXXX. to during cost were purchase shareholders. throughout an seeking basis and its we XXth also tranches our proposition and with reset; our deals, our private the an for and involvement time the the proactive several CLO average to at equity basis the X.X of the the our by Xyears. This at reset value And We're cost for X attractive remaining another of structure of equity the refinancing’s of capitalize average as always lowering lowered funding, increase value the to beginning September the ability ways to equity both special the stood each at This refinancing part cash Thanks from of resets, portfolios CLOs at for is the our the of environment, X.X for out points. is of the distributions

actions months increase actually management, passage allow also flows, cash the time of X price of the our average it of despite better future equity advantage weighted to through reinvestment meaningfully. portfolio CLO period the the Company to increased volatility positioned take while positions loan on occurs. next time prospective being So remaining our proactive These

long Balance Company's a possible. reinvestment we portfolio, we As positive continue as keep weighted solid Sheet. to portfolio, throughout with remaining Along trends average a manage the the period our seek to maintain as we

unsecured, of commitments. is no no or revolver XXXX, have financing to have unfunded We re-post financing prior style all financing October maturities we and our

of coming default the trends well-positioned favorable when potential Eagle increased earnings and Company average equity ahead, believe our quarters. I net income combining continue the very highlight flow, reset refinancing the Company, the our moment take like symbol sister Company, EIC. the weighted yield to CLO portfolio, our in market, also our a under would trades effective which Looking Point in to then favorable increasing to we portfolio and Income our investment and activity to the remains cash

equity and generated CLO today, raised also you gains at EIC we $XX call XXXX distributions for strategy. I Company's economy. as join our over deploy quite capital, preferred quarter, help into the this EIC we announced bullish continue EIC 's to corporate be NII of our eaglepointincome.com, of portfolio CLO million through third For now over Ken. to the its outlook a.m. learn on the believe the debt in strong invite will take state share special to and shareholders performance quarterly We the investment you markets to website, call its current well. XXXX. common to to financial above remainder After distribution visit the the and support turn and and will will remarks, broader our and I and loan Ken's visit of to Overall, more. junior the

Kenneth Onorio

Thanks, Tom.

asset income XXXX, share %, at net of $XX.X The $XX.X stock preferred third income comfortably coverage The income a are $XX.X of net quarter statutory respectively. of $X.XX of total debt, Company investment When Investment of of ratios third share of are of million $X.XX investment recorded net or Company income quarter $X.XX for realized per Company third to gains quarter in compares This gains net share. quarter and a XXXX. net $XX.X XXXX, share per share, offset of XXXX gains expenses XXXX. of gains of or requirements XXX Company's the XXX million, recorded %and in September These Company million in per %and share included, per of to and to the approximately realized the quarter. requirements, GAAP income million and net were third for the the compares $XX.X $X.X unrealized in losses of was of capital XXth $X.XX GAAP $X.XX calculated gains unrealized approximately income per and income income, second and third second $X.XX above the quarter the of of investment net For Act XXX of realized Company's the million. pursuant and measures the realized %. partially million per investment of net net This quarter by comprised XXX

debt assets preferred is assets, Our Company's XX quarter-end %of a total approximately leverage generally of the the with outstanding XX less at under and %to XX %of range liabilities. total securities current total between Company operating conditions. our market normal This within

Moving of $XX.X $X.XX received XXXX. portfolio per quarter on It's flows or through activity quarter our October to portfolio highlight important the to $XX.X later we million compares payments or share. in the investments fourth of third recurring share, million This on to XXst, see the of cash the make per during investment quarter. full are some in accompany expected that its to $X.XX

As of net $XX.X settlements. cash had pending million on-hand, of October we XXst, of

XXXX, month. by per the now XX share. first hand the special per as $X.XX Beginning October, we Tom. earlier, Tom monthly and per quarter $X.XX week, $X.XX to %to of X month call I we paid a share. we back quarter, distributions mentioned of per distribution our distributions declared increased During in for we $X.XX will today the declared of of distribution common over Last third

Thomas Majewski

Thank Ken. Great. you.

The take the call the and and this a a return the solid call Index third Suisse also then market some positive sell-off year had of positive a through the for Let thoughts now XXth it's questions. measured. Leveraged in we'll total through first the months of Loan total year, was generating and to Credit loan the is -- the me about CLO X.X%. quarter, open on participants mark to October year-end, the for index index’s that the will up month, been X.X%. the returns of XX prior years the Bar XX index

trailing like are aware returns ourselves. course, material consistent S&P CLOs class research. at third which the quite very corporate XX-month Corporate returns to are for asset investors. historic right that end, default investors only is to loans generated remain low, loans no defaulted well the for lows. indeed, At basis now. other such of has that among one We month risk that defaults remains rate These market raw and drives the believe positive positioned loan stood according October the during quarter of Company We XX CLO points, the for

a of over unchanged percentage On average activity loans in spread substantially of loan been par a has the weighted following was basis trading bit, remains end the While generally June. point our look-through X quarter basis, market creeping re-pricing in muted. up the the for from the portfolio

Our XXXX. the $XX the billion end record bringing billion cushion X.XX%as through a was besting of the we the of June. increase issuance the end of set of portfolio's quarter, weighted the average saw $XXX from OC $XXX third quarter full prior-year September in year, and new X.XX%at that's CLO billion of in for junior CLO and the the meaningful In market, already

what flow shift loan products. to of ultimately strong strong refinancing’s XXXX. and Demand they remains assets, as previous - a which and Creditflux, closed-end within was CLO leading the Eagle by economy, levels re CLO named record rate for the a to recognized team's remain believe defaults pace price publication fixed set our honored the is further generate very floating We own billion fund. in have billion at to on of as has award dedication pandemic also saw testament while during cash a appreciation that continues loan work also well With XXXX that's $XX our and ECC, in backdrop, it Point we for and This our room market. and Company very eclipse us. resets a muted we pricings, investors few to We're $XX rate strong effort. portfolio Credit for is best

Point Credit Investor, was U.S. advisor, In of CLO experts. a industry verified credit flux CLO Management Equity Best addition, Eagle XXX voted our survey in

those our so NII awards. We of exceeded realized sum gains this common up, and each receive distribution both are year. honored to have quarter far To

of Our up our of on portfolio the %since onset XX XX rise quite portfolio's before beginning the Net and XXXX. October asset to the flows through measured value has %since continued remained year, COVID, strong. Cash

Our a for excellent income distribution next with taxable year performance finalized. additional be $X.XX special distributions declare allowed announced has us likelihood common to XXXX once in special is

the New CLO third equity portfolio XX average weighted investments in had during yield the effective that went of quarter %. a

CLO looking paths -- time. our market, have, over more deploying and additional drive which plans and believe reset We significant are capital the with actively our past an X really for us markets of remained managing returns, CLOs them. continue we the potential We strengthen like are structure our to these, much our believe you interest NII. now pull your multiple and to levers I we your that, to pull, can With this both Company's capital Point have shareholders I to out our debt, And risk program, our has this adjust we the been and pressed advantage Sheet In offense within and CLO on It's and as truly questions. increase year attractive you and adjusted Balance exceptional into the portfolio for to equity in we we assure Company. to time within refinancing us thank increasing Company. our strong NII help NII. Credit for months as continue the risk and providing over and in in our Eagle Ken cash open will to call distributing will all possible.

Operator

be with of with a comes ] pool the you. question. please, our Thank at Ladenburg. first this And questions. will [ from we time, Operators Please conducting And Mickey your we moment, while One Schleien Instructions for line proceed session. question-and-answer question

Mickey Schleien

Tom, seen loan a for are in during the loans that consider investments and rates inflation time, Thanks important think it's grown floating-rate I Tom risk. CLO have that morning, also Good but that questions. haven't I taking CLOs funded, and are we're markets very generation we experiencing very, match generally Yes. credit and to my Ken. significantly. and realize

expectations persistent helpful given perform CLOs be these hoping. more seems think So was times, Fed the for understand than rate your to what to that inflationary inflation it would loans and how during I could be

Thomas Majewski

exact address of parts debt companies earnings things question, on coverage which strong we our else face ratios, average Many really -- have portfolio, charts, To sustain good that between is X service interest market-wide coverage our companies could portfolio though hundreds of representative profits. sustain before there's difficulty holding Sure. could debt. probably quarterly ratios. companies short-term with debt But X-times and of just points very our that they'd rate start A X- not servicing across debt basis in and to very the and for have deck. borrowers of investor increases our any side many to their both, substantially service service certainly sustain all portfolio, could constant, all sort companies hundreds have of of hundreds

of service and example XXXX good the did is about concerned handle folks really to and many think something unto rate defaulted, rate interest movements but amount the increases a we're So ability loan Certainly were increases to of go lot don't A bunch. give And whole time in not to can't happened rates. Company's on. spending you a think did rates leverage was interest of I I ability it. a the itself. what if you it can handful that that think XXXX about I between of interest defaulted movements due when up any focused

which for So that we the think predicting, raised lend major we given analyst bid-ask anticipate to. money don't issue companies assuming don't that market is in I Fed the X times, the rates any a being

companies I'm confidence can't reflecting trouble pretty would that and some every pricing for not the been what Michigan saying that a My levels, we've in are I certainly costs that, by of John you looking ask X right that's say, we are do I'm those ability robust sample, been can't that There's think case entirely news news a more increases. multiple at good pretty attracting more amount like to the persist, you in when expect certainly has to to Company quarter-over-quarter on is wrong S&P the higher bit of of and through folks this other companies an not meaningful Do power so. low, and Deere general, system? margins does here don't but products, that that see CEOs, limited labor. consistently, inflation pass earliest. or question. very even how and we gone against goes away are some companies, that -- struggling to passing in though present, at period a a way, talk darn the of I seeing Now -- when on at the but strike. indices that's facing some and Against we're these is profits I their of now, customers. And companies Company, costs, those yes. the have And quarters we're hear I large pretty little pricing I up is that it facing labor higher pretty on And that don't At securing of anecdote the bad consistently frankly seen sense these to customers? of the point a percolate are companies difficulty hire seeing portfolio. U.S.? hyperinflation profit The some nearly we've consumer consumer over XXX high the is part a a of think unrest, your sentiment supply see through basis. CFOs answer strong trickle difficulty that day

But But normalized need are light even %to think XX debt it them would other trouble. to being last months. But to rate the be I and me, likely level. bit back of in least surprise some current to a markets extended to think %something the repaid. over realm they lifeline as of at in we its the Do roll of strong be for covenant medium-term. think at to potential to more giving seeing default the relatively that of can quarters the degree of extent more to trends I three an X distress our get continue X with possibility. period We in is that? borrowers if runway, negative. some companies inflation All does it even near borrow even if continues one has for that with Although of eventually a get forward like hopefully a wouldn't to it to positive of persists probably find Companies you're clock borrow, side. time, the

Mickey Schleien

tighten. and growth the default mentioned, start go get so are you historic The answer evidenced into economic for economic you leads began there's CLO low lot default for -- long Thanks up. over mentioned lows, difficult, down my -- mentioned, starting last stimulus, loan of This road, environment. you can markets, the really the it But the after looking Fed with just at more question. and climbing. by and could they ahead, that default's to things tailwinds really and year, loan actually comprehensive at the rates some the growth next run both will year as That point, been -- Fed, the that's all only leveraged could a could pandemic And as decline.

how your versus equity of cash their your high. yields gauging flows today you thinking estimated So in are are about on CLO terms which risks very investments those

Thomas Majewski

and that we over ramps quarterly do we defaults that, coming the use assume like up and things that back default we'd Our of financials, one the be we do assume out But to two a assumptions, prepayments normal. in out is quarter-over-quarter laid tweaks one default months levels. change Page rate the and the Obviously, a back we been fairly not rate normalized default assumptions for return might we XX to see. basis them modest to financials. lay like the of big quarterly points, On back There's quarters, at and quickly, XX that's or rates the it. things to

see go. we of market, conservative the market to that, feel on On maybe defaults the or of expect how the give a My sense probably sign So that's is it XX but better below runway kind us certainly trading things. thinks around right some -- loans %in do warning will got percentage challenge the take. be we've were now that, first anything, X of of if you

had we'll to strong mercenary I in to creep sense In had capital that look loan general, more even a be technical a long borrow up additional early time. XXX think see And being start covenant than be quite market, they of the over. over, to is an with an at is number runway. they've would from some to at of that degree light liquidity against additional low. if wanted profiles someone on with available risk default loans the sign up warning maybe give companies have that XXX companies lender better My

GAAP additional that of equal, is cash the rates quarter purposes increase cost, yields else is So for excess to holding it all as get project the does our when then lowering default to holding the amortized the which reinvestment on assumptions prospectively, return and flows amortized remain treated would flow we the even go we to down And cost what interim, continues that amount next an yield, effective our effective in cash buy relatively consistent above capital constant. assumptions. default prepayment if investment our as

So it's something a our on. we've concern. got near-term not eye It's

looking be at would distressed prices. loans opinion my trading in sign warning at first The

Mickey Schleien

interest make you face you And own or adjustments make take when curves Tom your follow-up. value interest quick these forward at a rate forward to do rates? just you Do estimates

Thomas Majewski

can't We forward-curve tell just ever you the curve, the use been forward I right. has

Mickey Schleien

Yeah.

Thomas Majewski

-- But thing, pretty market curve sell or could the if that it's it's and liquid a buy relatively you easily.

our baseline use we that as So assumption.

at that, forward to for stress assumptions degree but pull our a used we up some me Let Bloomberg. do the down Investments cribbage and can off look just we market-based

Mickey Schleien

rate using away still forward an capture interest use, to curve the transition you're starting LIBOR? to you or curve are LIBOR from a alternate And

Thomas Majewski

Yes.

loans set portfolio SOFR. number A off over the CLOs CLO's they're LIBOR. basis, if once And four that up debt of way long pays CLO's year very SOFR. real So, the of There's most that right theory large, of all loan that to set now, July the CLO our denominated of by of LIBOR small the payments. -- is, issued a swaps loan are hurt randomly that's X off have and every indexed SOFR, Basis been half in our the to risk. is are that year. of rates LIBOR, even throughout CLO's something in us months risk existed introduces times they're in and paid Loans XXXX LIBOR off

is market CLOs might next can in the swapped will of pretty LIBOR so year, have new ways all of after said modest. the our this interesting quite regulators of no pretty issued starting when issued debt off will refinance pay. that the then a quarters LIBOR in other in off much know and It recall The be many a turn year. LIBOR were loans X-month important SOFR word start help hurt. such In being time been are no new can a most question pay general us low. different that It's There's or more be one LIBOR much to prime. Company modest helped there's to It's loans that or don't motivation they as I You for those Until debt. the SOFR. is which, based also have against reissue but still want switch new in to up can rates X-month favor. -- loans or or

%threshold. that pace get and take to to will time the debating we're it So XX

as Even is assumptions thankfully, of assumptions although be be not LIBOR measured at. some set. there to into there SOFR But in forward forward at liquid degree curve looking Our next quarters, market the our not that is point beginning sense in year introduce is SOFR it's months. beginning as some the to we'll curve, to begin

Mickey Schleien

That's it Thank me explanation, this that for you. Tom. I appreciate morning.

Thomas Majewski

Mickey. Great. Thanks

Operator

question from comes next with Howlett Matthew B. the our with Riley. line proceed And of Please question. your

Matthew Howlett

Thanks for to you've these line. great results, put you're going Tom, question. out taking top my

and Fed through, debt, X.X%. the %and matures? %, S at the could you could and issuing debt go stability high of over, it's high the have going take about What You you to with notes? cost a potentially determinant talk me B coming And plan so? CLO it's the do then Would at prior on -- in of calling or class walk X callable. in I You unsecured Look terms at BDC look walk me the Anything in out? the what's see are like the the class talked equity some next that asset as about seen and have you lifting year? Series your of cost of costs X to and your fund now down doing %, over rates an Sheet Class. up Just lower Balance longer X year might through that looks issue how you would asset you there cost you next break just of data your through, late

Thomas Majewski

Sure.

issued. B's, the we C's, or And the the soon of where Y's, structure, callable. issued and believe compared which X's and paper, a earlier high EIC lowest achieved do oriented at last rated issued funds serves be a is our Within the share piece have So of seem investment-grade which a X X's, X-year to capital points, %preferred a by W's. investment ever fund. the EIC, callable have and what couple of memory coupons EICA, the CLO security for If the those quite month preferred to to sister ECC's we B's, Company Y's, I was guess are cost

about, in shorter right year, at we and that and XXXX. value we've that XXXX $XX significantly, we've was -- got admittedly is absolutely we was back to prepared lots in with to that side to all I were lower our we're CLO's value at maturity we're said, issue is we the structure, tenor within NII them. levers our all now ECC and it stability. Company's proven to accretive that Ken One have continue ECC out the an last April But Zs paper of tenor, costs, the sheet things, of and And a had putting that obviously, XXXX, point beneficial come that remarks and and of to cost, pull has when and so see to the extent worried one the market shareholders. it with And X-year and We to although we with out we've paper of old our is the things EIC, really balance when point, structure something we've looking the than we're Company's our done in That we we're not mentioned would lower the our materially in stuff actively that we of of In be would ECC extent the evaluate XXXX, both the balancing. ugly to take we March tenor. tremendously something pieces together to opportunities certainly since at of shortest capital mindful at. collage the

Matthew Howlett

It would get below talked %rate. can clearly And about be interesting Things those levels. we X significant. really at

opportunity. that you on certainly what look So on hearing more do forward to I

your what us terms issuance, active you're in and you'd and crystal issuance, primary a is of given I'm keep tell silver does terms attractive, market. XX healthy, anyway the towards with in tell expectations out assuming Moving What primary robust like? going kind of 'XX to you can look XXXX looking are? what like anything of ball say calendar to the investment opportunities months,

Thomas Majewski

can things, here of I know page we me getting one take warehouses, new to you -- to can our our financials, in in are accumulated peek -- Loan on slowly right. Those can see issue couple Accumulation I getting of trend, Facilities. have A the you called got commonly CLOs. quick portfolios our X see sometimes X get with just so Bear financials. count the Yeah. I

we've could least the sight at conclude as reasonably new into you end quarter of line X got So investments.

the XX As look our XXXX, at we're year. XX in our involved -- I of general back kind issue we advisors -- of about about history to issuance history as a going CLOs in

it's think a ever it's little In I I lower. and that Sometimes been it's don't been time ever XX little higher, a X. don't it's sometimes think frame,

-- a the and CLO or So of on buying to expect kind start in depending where not and what adjustment find between the And while balance denominated back added CLO LIBOR be that's beginning going a around as maybe XXX credit AAAs on into got have and is e-calibrates What next will CSA to SOFR debt. that. Can of we the in We're in year of brief spread people we over slow not or forth period not today. one-a-month issuance paper? SOFR the go a in little at a bit part I the maybe December what's the as in basis, market August, world. going

so we little slowdown been So but got case much the rate we But issuance, a the as a than far of very Steady not be wins has race in and more surprised of September here, Eddie fewer we'll run I a lot. bit pace next are XX our the think if -- ground issued or that six see lot if in we've I'd that's year. XXth,

to new known how secondary the we're the years, were still we've the to across ground our frankly, buying it we quarter principally and our for in of buys different third probably a and the secondary. secondary year, primary. invested equity. number look over opportunities, the primary We across issue of also XXXX money we primarily attractive was majority half equity while look When market, made I the almost put is XXXX a was back XXXX firm firm, in very

the buys. cheap quarter good new value secondary got this things market, came don't attractive a when we'll secondary is. we we pretty market. positions in general, But than that at at in see we've So creating the couple wherever in go the best were levels edge of the In hesitate things pounds a primary

Matthew Howlett

special Got dividends, the those out. Thanks you, pointing question great. congrats. both on for points Last to

how you I how more the the earned can You we On the well could -- always before be? what terms about dividends? met know core should year, you NII the think out special how do those earned, sort tell think dividends, the or special just X part maybe we at want special at look to dividend. these model said What or should earn earned next tier being general for We -- you that is monthly being there? the might the how X about year-end I above been always dividends? us of in the be as -- you look times And then, recurring do at business to Company? of special this exceptional dividends dividends core we not their of look in or investors how dividends is know

Thomas Majewski

Yeah.

flow, in opinion the and most income, is everyone to EPS important. my likes income. So cash there's it's GAAP there's X tax about NII, which that in And things There's then one. talk tricky good the and a all which There's taxable CLOs, and man, stuff.

Matthew Howlett

Right.

Thomas Majewski

year. all every equaled of life will -- those given than have the over in my equal. never investment, And they experience, They any

year, it So to when a XXXX, the %of would've a in back of in last you we was the of were beginning shareholder year balance The and look you income. Ken taxable gotten KX if return was XX capital. from

Matthew Howlett

Right.

Thomas Majewski

against or within which in you both Last a greener P-fix, drove losses that was year's as your a were get It income. it. with And is a tax capital take what little dividends lower CLO an some defaulted did in structure, CLOs, obviously. bill can didn't associated that ordinary offset you and a typical companies basis,

$X.XX -- loans a at flashed else paid us fortunately, off lot perhaps, that's were income equal, of loans a So last no those ton cash income $X.XX, when ordinary good, pay PAR and all. now all later. loans the of year were tax on to this some CLOs of flip lot at year. -- generated cash The Obviously, have a no at dollar, discounts have unfortunately, bought that or $X.XX, side,

Matthew Howlett

Great.

Thomas Majewski

flashed is a gains, of income then ton with through And to with us. done that that created

tax most of is versus So what is the probably the inconsistency indicative of cash.

our obviously, roughly nicely who up we we estimate. We had owned that's team morning the based we year, Great, person a this with our on line a taxable more NII, and a things the stock on lasted tax the other for the still or call into I do over, So special and to August seek everything Ken out declared, that's earnings basically. We expect look take what excess not wanted tax as some last a visibility what an we'll spillover year, spillover the yet here's into the today. Once will lay get have long-term pay. as we're general, PM, XXXX, so next the X:XX a cost we give that of some at reward as have do shareholders. news. little shareholders, %that shareholders, X certainly where There's to good which to we we change. balance. extended tax -- of ultimately good stock or to said happy a long-term with we out wanted something period and to bit excise then And our And money you strategy paid we And also that's news greater when our In additional the income of we income to rather preliminary go this an reward here, to financing we in some view do what estimates want rewarding out anyone we'd reward call, want is we long-term We that in kind will news. out time. get special of year or one more $X.XX while we'll have over the once be preliminary the get shareholders, we specials as to can is night for last income, X who so people certainly be stock then on returns bought final, now. has before times next and

are worked income ride will bit what year. after be defer a requirement but last rules as bit Life getting distribution wish the we of a lot little the income that. a will little to free those possible, with as pipe the dilemma. time best didn't for and we pay taxes long we to our to We have a try it's simpler taxable taxable without close but So

Matthew Howlett

certainly like internally but Great, the shareholders seeing -- GAAP. it we're benefit,

we one they're all it above can't vice well to and going to point Some forever. converge just. point all some can the versa be At only other equals

Thomas Majewski

our in on which website thing on presentation be a I XXXX, the might think clicked website. have most We from our

look we a section, representative way back tax. GAAP, in out you lay If presentation where cash, the and investment

no given see same, the so. You'll all year are totals is but the same, the

Matthew Howlett

look take on. will a Thank and that I at you. Great. congrats

Thomas Majewski

you. Thank

Operator

Johnson of Please the Instructions line proceed comes And [ KBW. ] Operators question. next with your Paul question from our with

Paul Johnson

morning. Good my Thanks taking questions. for

see ahead do to you been this you I'm guys so about, anything looks favorable active those change you this X for year, that? for CLOs the it if quarter? resets, have Refis. X what continued made or could quarter quarters And like continuing opportunities in refi there during you talk significantly are fairly and opportunity as actively if been So wondering the reset just has to

Thomas Majewski

So year probably certainly can XX XXXX. And and had to class rise Boom, significant them of that quarter done a every complex. a are XXX out to the the we X-year things, been reset, take hit period. we that between the The of in money the that equity deal board on with table. back AAA the we'd had take Point on the X deal even the we the the could hit CLO have to refi market of non-called with resets largest world, then were as of of able somewhere majority part in Back of Eagle something special the XX across family, summer In all some thrilled. to we we quarter good equity were cost resets, second do some those condition, non-call, Lengthen of it -- believe savings reset. there's the cash we and the of deals of across the positions them. X the news distributions during the holder types our X-year of this the is got and so the number deal, transactions part that's of some probably lower broader things off portfolio XXX, date case. over. be on our variety and reinvestment the that in Boy that one far issued What the AAA. those got when we we cost last of CLOs being were second lowering If gave advantages a things cases,

keeping in periods not risk of or most than said CLOs out dozens back many nice balance. refiles. they market little X-year my tighten XXXX think of A or -- capturing they're captive one year. had something. back widen also market. maybe might say the the XXXX and even, we tightening a and XX about here, issuance generally a XXXX while AAAs the basis from done we non-call that about resets going couple pushing XX I off resets. then running we notes of done issuance. the today It's let did -- in of the are AAA basis the we've and in we've funds it much bit most but retention were level, -- things not tighter seen CLOs of refis keeping That because or -- XX And throughout during some non-call of points, today find third-party XX of issued to how a let And we've switch good of able lot active last were summer. what points deal balance of into the me equity is hands, most been let's me check there's -- talked about, We've the the was and

AAA believe for the bit I and thing wherever so and continued potential others we're there. a that that going quarter ECC have, let we'll a to Investment arm slow just investments our just makes year, as One the we are on spread end of which a to an probably CLO me reset Partners get credit into resets little CLOs And that it schedule than look the wrestling end. down in that we'll has this continue quarter-end. the with over sense. sure adjustment doing Our lot after after say with transition to And had focus make One a I'll is I complete with of position we've portfolio, even properly. more XX, Octagon buyers. continue indeed, going LIBOR

activity -- and in bit year, little So a maybe much earnest combination for whatever we of the the resets, our the But won't resume too to expect more of we portfolio. in see probably sense. with may refis balance most then makes

years. the distributions, think the the we -- know bouts reinvestment but We as reinvestment the kicking volatility d reinvestment our the love of we though, great. While the basis we most love next period. period CLO's to we I know day. period -- save what save want to don't that do say as X But of is We resets. We XX loved money, will of we all part said it, best possible out love we come. we on what lengthening is the is reset that reinvent on points when special much have another That's

CLOs if passage reversed course And this which year our that's were as we for and not within tomorrow, the ever in going when that. period it's but and the one opinion. and up wider have market. talk might we'd a nicely hits even has doing us it prediction, our Armageddon Indeed, -- defense, Will ago, want year had average reinvestment many two calls asked a of go in while reinvestment who this been number gone about So Ryan runway despite back gets as X the peer maybe as we weren't If weighted is remaining resets the up much certainly because possible it been down months. last

Paul Johnson

next question good Great. year a believe performance bit and were %for into little quarter. I'm was the fourth helpful wondering to XX your obviously just, NAV and %so Thanks we're if up Tom, far commentary. I speak than like, X could that's very you very My up more the

%basically COVID or I speak most thoughts think any if additional I began. of guess, since the could, see from from upside you I'm you we've of if COVID market, mentioned you to the what appreciation how to downturn. that and I the and here the strength XX loan guess you think NAV wondering realized recovery to, around

Thomas Majewski

had distributions we venture reinvestment it's a at today's above. period, the way. of XX the That's Yes. around along value to little plus obviously started more XX roughly other can't income new many mean is we're in our obviously aware stream certainly value like drive of %. coming thanks typically funds, the bit. a If fair -- on value, touch typically bit security. of maybe may Right up to of We're it. below something liquidation BDC little kind would touch is than shiny IO that about Things is above a securities end the the near CLO the NAV its lending or securities. way anywhere one liquidation %obviously We CLO our to value around value market up a think its From fixed that value The on fair hold right -- That's we the maybe our basis. answer. But right CLOs. -- give a value the do the things NAV, NAV appreciation be below is NAV take based of I the a it's juicy or we worth pre-COVID the pre-COVID, the underlying NAV is not or than is a or market -- increase that the of the where because our the simply our of of fair the Think does liquidation other -- a be nice, marked BDC, I that. extent of going be got resets, as a

points. quarter. think saved Just reset our representative about We this basis XX

longer cash just shares collateral shares underlying They else many the the got constant, the those in revenue all flows or rebates So extent participates longer. Company got to in holding future just manager also and cases got fees, and better. the

to some holding our we many can't underlying so of I up, a amount value where just out, to performance CLO's. our a we owned, it's of more the been did day reset that So NAV cases day quite proactive -- has positions And them portion not due break a have it. cash them much but security don't did the of refi that's exact we're NAV of the and out year went But the up, after take worth this straight take management. of out we increase our bit of management increase the to did. before able due activity, our versus versus It's non-trivial this I

to increase even move So continue that and loan to to the market has if of able our doesn't we're -- resets from the that extent the should refis, value potential portfolio here. up further

Paul Johnson

is seen market. thanks And that of the commentary. that you very will funds My in been curious that's it's in and I'm got would fund-raising the if question it. this invest set capital those if anyway? helpful you've And been Company? we've Point Credit of on participate last Got any advisor, Eagle the new potentially funds active alongside again, raised, any to together be but if

Thomas Majewski

transactions if SEC, get relief other in of serves, which Sure. advisor. negotiated invest ECC Yes. from the XXXX, Back did of memory allows the private to we one in jointly with and exemptive clients

that ECC of took the out of vehicle of that ancient slice manage we private back in every history, back rata way and pro a to we XXXX. Going actually portfolio in summer investment spun a was

time. that circumstance, it when absent do cash and on an to other vehicle been the not have we new allocated advisor But extraordinary investment, clients general of the vehicles some There's in several those So or other in capital in Point formed makes investing exceptional well in a portfolio. our strategy. and participate been majority flow There specifically of all Eagle majority experience the or -- be as, would inflows, strategy vehicles. for as

have cash when we raise each a a in principal anytime if try every price exception out in client is But money not up there's measured -- beyond transaction negotiating portfolio In we to one gets a there. rata. The term possible. CLO so just sitting the of allocation coming it little size something the as we're ratably across was approves sure as have you investment cash. focused time-to-time. on negotiated firm, always allocated in not of investment, of on on new it's and of would -- it's we're keep But ours, So when we're pro where cash board ECC any from bit as the independent be the variably but investments going be very making investments of we typically our at it's that general, the

Paul Johnson

it. and Appreciate my taking today Got questions all that's me. for

Thomas Majewski

Thanks so much, Paul.

Operator

I'll Majewski back to looks And closing session Thomas the call have the it end for of over turn like remarks. question-and-answer now the reached we and

Thomas Majewski

the joining it's everyone here, trending EIC. very regarding ago join but and for for market great forward Great. much, call. Hopefully, few year Thank the those Thank our continues Company, of for appreciate the be everyone's to us great We you been you. Indeed, interest you in and for weeks the direction. ECC. got can at a in look quarter year XX:XX we've to the more a call

Operator

this for concludes and may Thank And your this conference today's at lines you disconnect time. you your participation.

Eagle Point Credit (ECC) 16 Nov 212022 Q3 Earnings call transcript