Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to Eagle Point Credit Company's Second Quarter 2023 Financial Results Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Peter Sceusa with ICR. Thank you.

begin. may You

Peter Sceusa

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

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

further impact with statements refer the For Securities factors on herein, the to information Commission. that the the company please contained projections could and and filings company's Exchange and

of made information and of to and based I and Point quarter link, the during this link. statement forward-looking of any We statements Chief Reports by available following Exchange Each via financial call presentation with Presentations Eagle unless Officer quarter our website. Majewski, can half the available the law. investor introduce of date and Credit us the The The second financial company's Statements accessed by information on the Financial Securities the now Form Events as this of Executive presentation the like Tom N-CSR, and call. found be following our Company. forward-looking obligation would to Investor be in year be disclaim A can website, replay we investor and by our found this statements projection also today, update are section second our presentation financial Commission. to within company's Earlier the is statements of call can filed required days investor XXXX XX for eaglepointcreditcompany.com. Relations financial statements

Thomas Majewski

welcome, everyone, Credit Earnings Quarter Call. and Company's Great. Point Eagle Second to you, Thank

portfolio. to our information The website the company invite investor which so our haven't download we and about solid quarter. a you you second If additional provides done our company already, had presentation from

recurring Our in quarter first flow second quarter. our flows cash in than larger recurring the cash the was XX%

continue to during opportunities. of purchased a CLO average portfolio CLO period second quarter equity quarter pardon effective weighted end, portfolio me, taking quarter CLO of attractive equity also investments We our average weighted during had XX.X%. reinvestment And advantage proactively the secondary -- of the manage X.X of had a third market equity remaining years. by as our yield

As against we one as our have as stated remaining volatility. long weighted is in reinvestment future keeping possible market believe defenses best our past, period the we average of

portfolio our and $X.XX Along X-month quarter SOFR common in to expenses flows prior X-month mismatch of common with the we exceeding quarter our per $X.XX $X.XX new investment the quarter, net manage quarter distribution improved by variable reclassification of during share. per we the our share aggregate monthly $XX.X per continue LIBOR for the $X.XX our per share, investments -- or into monthly and actively second portfolio, the distributions capital share, totaled distributions compress. supplemental our and second distribution $X.XX common flows income regular per some We million aggregate we recurring of to before the second between deployed as during $XX.X Cash received cash portfolio on the $X.XX and realized declared net and through in the We additional share end quarter. year. For $X.XX impact of continue a of the losses. of from continuous million increase

share a end of quarter, $X.XX July NAV $X.XX. now to distributions IPO. we've end. per delivered of distributions, per end at Since increase our was June per we to common between the XX cash July X.X% of the our from the be $XX.XX NAV share XXXX stockholders as month since of Inclusive our and share quarter estimate $X.XX XX

continue premium issued and accretion at a approximately also million X.X of prudently NAV capital common a We shares program share. raise generating at-the-market our about through to $X.XX per

These weeks. continued powder thanks no common strong our our access financing prior sales balance fixed issuing of program cash million shares of July, our ample $X.X providing maturities million. that environment. approximately XXXX. have comfort of in deploy $XX.X dry July, Investors unsecured, premium over cash should the rising the to in part additional end new $XX us generating on million giving generated At to to with proceeds and April approximately remains nearly have we financing ATM million. at flows, rate proceeds rate and in take coming We've we us net a of of investments of And our into protection net a $XX.X July all sheet, to

As the our XX.XX% reduction slight from weighted which of of yield end effective was June equity March. of portfolio XX, average a is CLO XX.XX%, the at

should had which weighted a portfolio's bolster However, of average effective new yield we quarter purchased XX.X%, second weighted yield average during CLO prospectively. help effective the equity the

the Additionally, to average market equity -- XX.X% based increased our of on portfolio of yield as CLO yield effective weighted value expected June XX.

many market. value during investment mentioned, efforts equity in we capital available continue moment, the not do quarter, of the we the $XX.X deployed into million focus secondary at market accumulation primary debt, and CLO and secondary attractive CLO investments. an We CLO the net other today previously I facilities of on the to loan IRRs represent believe equity, As our

powder the seen pickup an in versus XXX principally opportunistically yields a basis Recently, we've as opportunities point market. opportunities. And comparable from into our to secondary primary least secondary continued result, we've at deploy dry

on average that's proactive Despite As through and years end the finding months. enable weighted to equity portfolio longer CLO to relative our opportunities reduction focused modest reinvestment at was of reinvestment continues years remain occurs. a drive X.X the to equity of volatility warp at from on to equity portfolio's period June X of the to CLO XXXX. whenever X this generally portfolio stood months our by remaining navigate the portfolio's management, our invest market. reduced remaining passage X XX, CLO our portfolio equity in just CLO period We We through the it broader believe with outperformance

like to take Eagle EIC debt. EIC. Company, also principally symbol Point trades junior Income highlight invests the under would CLO a to in moment I which

investment monthly per $X.XX the generated second For once regular additionally, per EIC the in by we for distribution income again, share And share, October. net distribution EIC's quarter. of quarter, to exceeding XX% recently its raised common beginning $X.XX common

for throughout XX:XX join a environment the EIC call call. has to for strong that you we'll be well to performed very investment call and well continue invite net rate and remains today's positioned rising income. ECC, hosting After at a.m. EIC generating very

broader call at CLO in more After I'll now eaglepointincome.com. the You managing information website, portfolio a markets. eye remain through can and we find company's you take Overall, the on remarks, loan turn the state Ken. I'll the very close our current and over of corporate Ken's economy. active to the keep

Kenneth Onorio

Thanks, Tom.

second gains June $X.XX company losses NII share. in share For realized and $X.XX of XXXX of quarter realized for million per recorded NII $X.XX share This of and of per net $X quarter compares per of the the quarter the income, ending to or XXXX, approximately net XX, XXXX. realized first investment of and the losses

of to of since a CLO a The equity and of the investments result fair losses fair second for reflected NAV as Please reclass been an to realized value note, effect the company's for share per live the late of of value and included There previously investments. $X.XX amortized the impact of result these and accounting NAV meaningful between write-down had quarter XXXX a realized certain as is the cost already no loss. of in purposes a unrealized was write-down.

less the our Excluding have losses second write-down, per realized been quarter share. would NII $X.XX

included, value GAAP quarter, For of share. recorded million net in approximately first and Series the This by total or company's total $X.XX the of quarter appreciation million. $X.X loss net second of a $XX.X comprised $XX certain second GAAP to share of net net D of per portfolio income the GAAP $X.XX of liabilities $X.X appreciation income of on the million the was when share fair stock quarter offset million, investment XXXX. $X.X and second expenses unrealized on preferred of appreciation of losses total of realized million income of quarter held compares GAAP $XX.X XXXX on $X.XX of net company million distributions in and The per $X.X unrealized at income investments net is unrealized per million,

attributable loss risk. to fair Additionally, instrument comprehensive change for liabilities credit the an the second quarter, the of company recorded the specific $X.X representing financial company's value on other million in

XXX% The company's measures to respectively. statutory pursuant Investment requirements and June are preferred XXX%, and Act XXX% at stock asset coverage were These the debt of XX and Company calculated XXX%. requirements above for comfortably ratios

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

Moving Note expected million. the of make received our in third that through investments in some on of the $XX.X cash activity on later to to company quarter recurring portfolio XX, investment July its the quarter. portfolio our are flows payments

As of July XX, cash of for million investment. available $XX we had

range of X.X% a XX. company's from share per was increase July NAV $X.XX the as of the reflecting Management's to estimate $X.XX, of June XX

share. share monthly distributions $X.XX of monthly and second common share aggregate the distributions per X of common paid X monthly During we common per of supplemental distributions per $X.XX quarter, variable $X.XX for

declared back hand we distributions call have for I common remainder the the to now aggregate monthly Tom. share over Additionally, XXXX. per $X.XX of will of

Thomas Majewski

to total now X.XX% quarter performed continues markets. half, ability July Suisse to generate financial Great. macroeconomic during full multiple for an index the the asset market crisis. loans volatility show environments. best first on The Thank to since strong entire a and to X.XX% loan as and you, well. returns the the generated momentum have Credit and is positive The of continued The in quite Ken. its I'll class update pace has return its on second CLO year Leveraged its return and Index Loan provide through resilience

X% XX XX-month the quarter, end, defaults rate by research XX% XXXX. X.XX%, of as or prior with about which result, have X% expectation between end for Despite the second at about the During historic annualized up a well their comparable X% quarter, leveraged second end but roughly and par, quarter still Most default stood is modestly averages. default long-term to repaid the rate trailing loans first the about in up below actually which the desks leveraged raised default. quarter, the increase at during loans And at bank from saw quarter. is of we the

underlying dollars and trade managers loan discounted at portfolios our valuable prices share to in improve reinvest partially provides selection secondary discounted of in collateral CLO a loan with value losses continuing their With par relative for market. from offset today's to the well to credit through significant CLOs defaults. loan issuers This market positioned high-quality remain to loans,

market Given par ongoing And trading leveraged conditions, be at index as loan the the XX.X% continues loans to XX. of price of June around Credit over percentage Suisse with minimal.

As quite a result, loan subdued. market in remains activity repricing the

as in an maturities We continue to their XXXX effort to maturity out sizable observe tackle their XXXX activity wall. loan refinancing push and issuers further

of spread this, offer and part our newly OID on lenders higher to continuing a they're As loans. CLOs, like refinance issued

provides equity to with our increase portfolio. receive result, our the weighted CLO excess build turn par this our a As in which and spread average opportunities numerous we increases spread, portfolio on

X CLO's On increased X.XX%. X%. within basis trading about a of and X.X% our This was unchanged the concentrations of our stood in spread end average last CLOs as the measure the weighted of XX our at the from at below portfolios XX loan quarter percentage quarter points CLOs of look-through loans portfolio our is prior within months. basis, CCC has underlying

cushion eclipse this the saw and market, on of average first us once market is of to design. end, new billion CLO In X.XX% about quarter half. $XX OC the we the average CLO This our weighted cushion and $XX again. $XXX about the remains pace of in gives is losses. withstand above was to at portfolio's room Our And junior -- issuance which XXXX And second mark well billion OC in X.X%. billion the downgrades by quarter for

in Point. of significant by CLO which however, Reset volume, a our gives are in generally majority some embedded the nature this activity doesn't CLOs market picked backed believe up in-the-money of return value And market CLO refinancing our the Eagle financing full has while credit. less this sensitive and the equity it we We market captive give frankly, And slightly. believe portfolio. like than credit, hidden funds, represents was investors the

basis of that equity believe in XXX points basis in about We of AAA spread our have points the is average in XX portfolio the today. the weighted CLOs we money

structure loans we up believe CLO environment debt with to financing we in loans and have as well a term par have very an and particular, markets consistently set it's done equity the other they using discounts in the stable times over CLO paydowns multiple price outperform to structures buy from As are loan where and noted, medium of the volatility, par at broader corporate past.

up, active secondary sum significant investments weighted investment attractive net deploying in common in robust sourcing generated second of we of increase the a the average cash in To we terms $X.XX saw in market. quarter in quarters. future We per the income to in flows expect cash yields, capital flows with quarter We remained be the share. quarter and in principally and

per end the position sheet program to and attractive through $X.XX of our of new year. We variable of common further NAV during ATM regular distribution our the have cash liquidity the We through on and balance into generating continued July monthly existing deploy investments. share ample our accretion quarter our strengthened distributions as supplemental

continue maintain We to rate XXX% fixed financing.

maturities have to We no April XXXX. of prior

We recurring investment given portfolio OC or reinvestment any from protection further cash financing whatsoever. We our as strong open for a special Company. supplemental increase to thank call Eagle Ken believe consistent average form be And our extra return shape mindset. and your We debt financing variable interest company's or Credit us portfolio very have remain rates. we'll and pleased investors manage stable flows. remaining you interest continues secured This We in to questions. and now cash the to period, the time in with repo cushion in opportunistic to gives of in and strong its your I long-term weighted investment and will remain proactive Point no we distributions. the

Operator

Instructions]. [Operator

KBW. Our Paul with Johnson first question comes from

Paul Johnson

hear okay. Good Yes. you can hope morning. me I

in marks just is far the positions equity Or kind realized as of As drove just that of the there were goes guys this any you that on paid the for CLO items, losses that guess, this onetime quarter portfolio, have? I result a quarter? off,

Thomas Majewski

take Do to you want Ken? that,

Kenneth Onorio

Sure.

you are the or $X.XX overall referring So, to portfolio? the

Paul Johnson

quarter. the mean this so, looking realized Yes. million loss the or Correct. I'm I just $XX.X at

Kenneth Onorio

Yes. Sure.

where -- of we that down a So $X.XX is the for CLOs. cost reclassification walking an handful are value fair late-in-life accounting to amortized

value realize to was in quarters, So already reflected it's our a being since reclassification and loss in from it's it unrealized previous reclassed fair loss.

out to loss above earnings, So line from we line. the moving are basically it pushing the through below

accounting. an It's CLOs we that meaningful to cash chance investments. into of any classification in no So of is with without do sort accounting late impact to that temporary meaningful flowing have NAV. that have we profitable impairment just recovery or a are for When life reclassification

Thomas Majewski

This marked takeaway. geography. already had as balance We is simply the these a sheet down

Paul Johnson

Got you.

Thomas Majewski

[indiscernible] Or sheet geography. balance

Paul Johnson

know kind just quarter? prices It loan sounds in the can it things. pretty understand complicated, what the like I mean, I driver especially you. I these turning is life up. mean, late marks well. was mean, Got I then be of this the portfolio I of general, in of the were

kind of kind that see here. conserving the you were explained guys decline other from top-down the that just could of But the the quarter. in drove reclassification now items any kind You there of

Thomas Majewski

No significant anything, widened if the portfolio items, during second specific yields quarter.

while in the widened during market quarter. or demand So demanded CLO the the for market the increased, second cash the yield, market equity unambiguously flows yield

reflect of sale reducing of the value has that so portfolio. our And the secondary

very proactive accurately and So we've been very, always portfolio. our marking

markets simply we regardless second has a you'll look market-wide, or down, yield saw, up, continued if unabated. XXXX, it's during the though, the going our portfolio. of Sometimes quarters nothing cash back up on widening specific flow a you down quarter historically What to basis, marked it's sometimes back what was going the to see

has the and was net month. itself the CLO NAV certainly all that's the quite during month That into July, to done up in our shareholders in estimates, during capital and the distribution, quarter has of trend all and and X% the regular the between deployed and the reversed X% supplemental the third frankly, distributions on of July -- based equity quarter paid and second well in

Paul Johnson

secondary a you And of in today? you such call, why guess, in what in build you then that. difference and seeing differential the mentioned seeing issue on the I sort I'm pipeline? those Or a are versus just big big there is, I Appreciate pickup between you enough secondary recovery opportunities And you're of, -- curious guess, would guys yield see, to markets the primary do rather the primary a market?

Thomas Majewski

Yes.

sync big holding so now a reasons, debt. market is the buy right you out the the loans why with for CLO out the of equity AAA AAA we to number proverbially on right degree. same arbitrage whack right the of with loan some a a And CLO primary opportunity now bit back good So now as out that market CLO is And market is balance. have issue or day same to driver secondary for little or of the of not

the placed retention in States small say captive majority While half, in have CLOs the issued or new the, repealed in to in CLOs collateral I'll first taken to United into We're these access that. were be capital. belief, We number back still XXXX, our trying and , half sensitive. overturned XXXX, rules less of the a the funds. captive risk managers admit used return on vast based And issue of when the we first polite. were all

sometimes they're time. there's gap for market do usually unambiguously access usually is secondary. capital. and -- a not -- a is primary cheaper, These have that past pronounced a there's and cheaper. can't that time they've But The -- I that things time such have persistent. period occurred imagine primary amongst any of to to between historically, experts usually this handful of math the don't continue is issuers from been They not They secondary they in sometimes don't controversy

that think be paper for still primary reducing, issued right now There's the world the will going new not probably wide. there to AAA are we're in differential it's In ticket for there not stay and but corner new enough I And large turning is many little for buyers versus take of while. cases, is certainly And CLO market AAA the spreads to sizes. extent trade a CLO who AAA bite $XXX dominated might AAAs $X trade is CLO of the million, to another million, and million CLO can example market why primary AAAs. is that $XX million by $XXX AAA CLO secondary the issue between chunks type $XXX new investors purchases. million often secondary

just together dynamics get bid the And smaller many not of market. enough a a across in the There's syndicated AAA to cases, deep investors.

markets number buying. those stuck large them a few smaller kind of of now not right are but So of buyers, dealing actively a with ticket

periods, time it's my to So there's so occurred have persisted These -- But more they time. stay A plus supply form U.S. there's is extended periods for of That again, of time. the $XXX just This wide. frankly. equity. one outstanding. AAA of amongst CLOs big CLO billion somewhere in is that haven't the from longer demand, chunk of said, than the situations in between experience,

in market of in no remain as no but opportunities investment very We secondary selective We things the go we shortage of the after, have the in shortage well. opportunities market. secondary there's

Paul Johnson

about guess, potentially I'm not. not sense. say, of relatively that lending in recently. a CLOs very if you've out lending, or of but same we've of that issuance, last be just obviously, are sort trend I makes sort or of the interesting. That direct I'd these Any can sure something heard kind you've I'm question, leveraged lower noticed? at sort here? That's things that are invest along there. you you That's direct segue, curious point interesting have volume And if trend loan any the that's all if would just of a there's terms that CLO commentary any, in there, would with observed of kind

Thomas Majewski

Sure.

time then Point and they're day to deals in private and CLOs private feel these now to were is still are typically typical direct middle-market deals. Credit that sizable. many Over a quite getting But arranged the $XXX that the $XXX CLOs they're a million now quite These cases, little private arranged credit bit little money look are So from like $X except time, phrase done of by a In of Company banks. private many small in credit CLOs lending And in, called these world $XX the the loans. and in long called that lot invest million, the I has credit billion to CLOs non-bank-led non-spot, the bigger we'll think led market, ago, even They're private many managers well fault Eagle loan. CLOs. are being and perspective. And they're cases, recovery credit bigger. investment and do really million cases, credit versus

nearly back you look rate can have outperformed broadly credit default we private syndicated any shows at have manager data that some look credit. when we'll you how and will credit some private see, certainly certainly, So has historically, the or if data

the And our mindset is, the private an not there's or ability when I that's go in up. think market, missing reinvest defaults managers opinion collateral to accurate. of thing cheap that's credit directionally one The in

higher financial but measures, reinvest fewer recoveries Syndicated So had they and on many the to example the now middle than is private defaults at dollar. managers to CLOs according as through then because CLOs, had collateral not loans. outperformed crisis, credit able the syndicated better was $X.XX, it credit, classic were $X.XX and market where, because credit, called the middle-market $X.XX

instead discount points -- XXX L+XXX. XX XX L+XXX is of of at discount better. lending were obviously much managers market basis nice, Middle of is points basis points

of the with arbitrage than distress less to of in we've outperform actually certain. today times of long-term is in their equity really grappled one So potential IRR market on actually while syndicated looks the CLOs the private ability credit CLOs many terms better is things

middle what number small the private portfolio. We have CLOs or credit in would of market called be a

pivot ability that has category. two fall market called or market the into prices significantly. And should one There's collateral that the particular would there, to syndicated believe Shore in into fall a Lake syndicated in manager which the we portfolio,

that the So dialogues a something and of on ability We have it's Many invest keep wherewithal in partner not times DNA perform we certainly many to. distress managers that issuers. eye in CLOs deep convinced of open versus to space. really with. have in and to the of of something syndicated many in. issuers we them with We're XXX% close the we're make the It's keep cycle close the

one down or in if we the at memory QX it let's point XX, NAV from XXXX, two, of XXXX, of increasing year say, obviously, obviously, check between forward XX% if out, our And NAV quarters you while a although measured please materially examples serves, ECC's look numbers roll from ended somewhere December it the December up the in and starting XX% went XXXX.

that's both because So pre-COVID within portfolio our And our through. and fund. going management reinvesting our within proactive of

similarly, CLO distress deeply par syndicated managers market. at navigating discounted collateral and through of in And prices the the many the then building

private look thing the do So by some although with the really to important CLOs. data again, that's us usually itself selling. and the the sure we market the really not se. an that's market per time is option for DNA is credit in really, investing credit more cheap we're have when the out an else when has in private becoming everyone the to proven wherewithal intrigued but We know are to how managers And and any in be buying it's loans best at for secondary and CLO time kind collateral involved it's make of time market, to pounce

Operator

question B Howlett Securities. with Matt Riley comes Our from next

Matthew Howlett

when months in it give share. much know between good longer -- kind is difference and a I just there -- At the the by NII much obviously, up, It's you obviously, you equate improvement go can you excess off from is mean, I just number walk above that of compressed, don't I flow you can GAAP flow, far the and X that through in And to point, to intrigued go per the a just simple -- tax helped one of all the so that's excess much can July. some them, do have and give run to or be cash I'm dividend start. how the cash does this way month a but how mentioned how $X.XX is continue.

Thomas Majewski

Sure.

any profit encourage profit, equity and seem experience, click CLO caused So and tax the I back downloaded nondeductible CLO if there. in odd including will will most nearly however, GAAP Maybe given it, of things life minus the time, but we update equity. which you you investment, for posted numbers website tries lay In over to PowerPoint in some cycle cash but in year, to, cash any profit, downloaded ever cash equate from you our a history they haven't never unchanged. to in years thing, as between. our which the special investment. popular August perspective our on tax have our And if to is thing been a maybe from the had have we'd tax of out everywhere distribution. think where in not XXXX GAAP to of we've many format, way and been someday and large return are GAAP a up of website, it's the of representative and treated mismatches taxed those distributions There's pay there's been a tax years equate capital

it's for the is recently, This And assume the the the So liabilities. theory. back there's really, many normalization same to CLO, over sadly they experience in the scenario struggle given XX in back year, where see -- my they're alignment reality just I people would handsome until when SOFR assets to return in before the been line And in in and increase X-month is years. much side that's modeled and LIBOR a XXX is let increase obviously, an how although, But their set -- flow, to SOFR, I a more reality less to your what minute. question, a is year, year. would the say in at and it's that of a where days at me the get this their any flip of they're rate of of days X And cash CLOs ever SOFR persists. how the now in the loans

the So the given it's the side always rate credit be a market. loans rate sometimes X liability they overlay the and prime off the just SOFR a in CLO. not months, on and between going asset probably a on mismatch months other pay complexities can Then the side base a given, rates. there's of that to there's even base of X can enough pay month, That's off X

So there's side. asset of the rate kinds on all stuff

again, to X a payment early to to changing, make a happened mucked Our around in reality, tax rate. This month my has LIBOR and the set end of many short between In That once for XXXX a maybe corporate X-month single rate. rules maybe loan X gap and offshore when note do money in SOFR, that. has in rapidly curve liabilities got rate months. a moving up markets and times have the months rates The lot memory, month, if of then X once you of the United while. are And quarter. as And month every cases, into single that corporate -- was and to quarter, States then X-month pain while. last to some you XX significant kind steep the SOFR the really saw all XXXX, X-month from over for rising X the back a environment, CFOs of move a bringing money we as were got

if all a or your worth if this say time. not you're to you're going points, But send it's worth to to other it's save XX time. points, basis probably which have You X company's the work, going certificate X basis and

far. or got seeing of short going electing month is undoing -- the curve That's it many what curve much X now end more so saw were So we're differential if short we're seeing the are LIBOR we end when companies and the even the at X flattens, the paying is and steeper, on of lower. more month they

same that decaying a a mindful my that you from the $XXX that invest equity the and it's B, that So to a if at it's you've whatever return then A beginning, more short-term terminal invest and spike. also CLO it investment. CLO will very our And beginning at $XXX be is is invested. your expectation you or we're normal is unlikely payment expectation, that

on talked distributed term. strong about on some we portfolio, the worse our on equity cash so CLO value generating kind years approximately some over been cash of better, XX% has very long And cash years

of flow of portion return cash a a capital. is Now that

principal So when $X.XX-odd payment at be or should return as look a and your as a above about flow equity sense just of being or really of that if of excess expenses, thought an cash loan. system amortizing be into distributions CLO makes our like $X.XX of capital forgetting and I generically that XX-odd actually for on tax loan would that CLO the like our GAAP sense

reinvest use You and portion CLOs. pay out portion pay new out, then income distribution into expenses to ideally repayment seeking the and to

be So flow short curve. comfortably short cash hopefully, more quite in state we're -- and levered basis that the excess Which term, on and flow end a back then of of to think normal see an distributions of a will cash our nicely of on itself in expenses basis. excess I itself CLOs. long-term to ongoing the is kind within the hope of manifests I proving out

Matthew Howlett

Right.

to you the of that of cash some that tremendously the summary understated look return $X.XX, sort like at what of said relative $X.XX. So sounds to it, you're mean or in the that way just that's I it in of capital NII on given kind saying, assumptions to not of with conservative that's

Thomas Majewski

$X.XX. Not total of of the NII, the

Matthew Howlett

Right, of the $X.XX. Yes.

Thomas Majewski

I'd X that quarters look you history cash off difference answer. of be we neck, one shares. the see comfortable -- large, But if quarter-to-quarter. is that we as -- difference. there just like as and get neck Yes, the the which expenses. if as There out And what cash by provide of sense to X in the exactly. we flows, and distributions where were is the expenses, to other is distribution lot of and general see you preferred and of things they can I'd cash a kind possible. but Yes, in and to the debt like always as go a to back high common high always portfolio pay a of possible, yes. like but is coupons you be and Obviously, then the That's it historic to what kind versus or were our

effectively a been general, between it's of healthy return received income. and capital that's in CLO on can recorded a You quite And cash actual see, spread expenses payments. our and

Matthew Howlett

Got you. The you And that guys -- in that here got as you leverage right is obviously July. range then the last question. bump in NAV But obviously, target. a big up

of they're baby preferred leverage the a to issue To priced around series maybe or appetite You've new the preferred recently. in range or the seeing I yield. some to X% the X.X% more with even the in What's appetite July or think the in raised call to issue. bond improvement maturity to debt What's some bonds? trading a X-year do yield the We're ATM. to money get in one reopening to

Thomas Majewski

Yes. equity. company and debt long We're right including Well, band to time, in a that leverage, for we've, between total running obviously targeted now. the and XX% so preferred common XX% unsecured

-- or to is the XX% we distributions very, of to We twice. an COVID. art And issue. of company. the band we've judgmental had did to of where time science XX%, interrupt ACR the XX% a to never XX% obviously, long and the very call, manage is well more a served have the make measure which never That it's very going company very a reached ACR, as an offside once -- how obviously very to and we outside us a done ago, got a than we we never due that's important band why to -- on well you much were into served or

on and on I like actually. last to I I our -- maturity to in sadly don't a on too I like was probably look time debt X, yields than disagree ran the -- our we much will it think don't based Unfortunately, mid-Xs the preferred last calls. off, the First lighter say, little

too and exercised. the we So was in the off X.XX long paper that EIC, full shoe of And was that's issued not ago. well, really deal of piece did --

market. markets with familiar also within kind or XX balance year, us X we'd a we're the So have they've asked our band. about I to on X that back the of mid- We to yet. maturities. -- of I'm What that like right and or we whatever X called high X-year focused open, now, Xs targeted don't with possible keep leverage kind And while bankers. think

things, were maturity. the XXXX if another of that one gives to we us So add another X-year --

So we that. think about

are OID there around Sadly, rules the rules for ATM issuance. some

So is I D, perpetual have the and sadly eligible, but the that a material issue ATM. bit really deep. just too baby while of market is we not even be that amount the may we a ATM done which can think the up bonds I actually that, preferreds a it's think And tiny not

we So it. open for our keep eyes

or to in reopen. touch X- the with XX-year see We a are love market I'd bankers,

I think That there move more be tenor. issue maturity a might aggressively mindful with X-year at but see bit you more point, well some attractive if our as us a said, we managing I'm were rates of wall. may

Matthew Howlett

could putting certainly around purchase accretive XX%. yields CLO and it it be Well, on if equity you're

Thomas Majewski

is a not shortest XXXX? if -- BBs another had And like the we thing obviously remember thing XXXX that in it Yes. we The went our and very COVID, don't -- math accretive. it's The only CLO at -- when maturity late I early or by that that's XXXX. to me if was what was, what guess but what no-brainer I into is easy, ECC gnaws COVID prediction, a honestly, the be want

went when definitive. worked what into mid-'XX, was. we [indiscernible] market secured be years. check no -- the please If no But out, even but obviously, would didn't with we maturity 'XX in XXXX a it I I now see -- no tapes all let's late or the debt know we to and multiple unsecured -- maturities have for had we We the to had notes be had

companies maturity think And are deadline. We've knowing sit, obviously, I I XXXX with as the stuff where want far sitting to But wall perpetuals is out keeping like and I'm at their are I maturity of ECCs the So mindful I mindful nearest as don't ECCs deal as of wall, possible. as great. XXXX. then [indiscernible] to to got just the very

Operator

would for over Thomas to no are like I [Operator questions. to would comments. turn this Majewski time, now Instructions]. back At closing the call further there I like --

Thomas Majewski

Ken much much. very for today you look you later and I and Thank next be to questions speaking time Thank quarter. interest in Great. will available any to you'd like Point your forward folks again And very ask. have with Credit we Eagle if Company. you

Operator

conference. today's This concludes

disconnect may your for time, lines we at this and you You thank participation. your

Eagle Point Credit (ECC) 15 Aug 232023 Q2 Earnings call transcript