EIC - Earnings call 3 2023 | Eagle Point Income Company Inc.

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Operator

Good morning, and welcome, everyone, to Eagle Point Income Company's Third Quarter Earnings Call. I will now turn the call over to Peter Sceusa at ICR.

Peter Sceusa

Thank you, and good morning.

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

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

projection on information as information date this and call during of statement of based is available call. forward-looking of made financial this the Each to us required update forward-looking to obligation any disclaim statements We unless by law. our

third Securities statements replay statements our XX Relations via investor for Income the presentation statements third section quarter today, Tom Majewski, filed of now quarter Company. the be can the found the XXXX and Point quarter be Chief link and the and Earlier days our reports www.eaglepointincome.com. investor Chairman the this by company's investor third also can and website, financial financial are A Financial would Officer website. Events the available of following to we Investor to of I Eagle accessed our be Exchange call Commission. company's statements Financial by like presentation following with in introduce and Executive presentation found and Presentations link. within

Thomas Majewski

Thank Eagle you, Call. interest Eagle your Point We or appreciate and Quarter in to Company's Third Income Income Earnings Company, EIC. welcome, Point Peter, everyone,

cash refer website If eaglepointincome.com, download our it another momentum from our done of year you which half invite the to flows. remarks. portfolio you presentation quarter-over-quarter portion as from generated I continued so haven't investor of a its strong already, we to increase will my company in at The the in first

doing generate is what it do environment, investors. more portfolio Our our rate designed a for to in we cash rising

which or January $X.XX share regular few monthly distribution common share, per month. in regular was excluding XX% operating per X pleased comfortably items. distributions share increase a million the of our flows of recurring monthly nonrecurring we our common confidence share We quarter, per monthly in distribution the week first continued were we history. $X.XX $X.XX share common share, quarter distributions are from and our excess common XXXX. and declared $X.X third the expenses, $X.XX I to distributions per is common to in And increase distributions paying the our and of $X.XX to increased share time, of just monthly for our per the in as net per share cash X income to in $X.XX monthly is per were by January. To our our distribution Given quarter. This per distribution during expenses, monthly last excluding paid beginning in the nonrecurring another investment we again portfolio, highlights share per This $X.XX fourth highest quarter in common beginning common noticed,

per NAV XX. as of and this from is was share, September Our X% of June XX increase an $XX.XX

due it June market in of from reflects October down decrease of XX. a ahead but Our widening the where significantly September NAV XX midpoint of our in and October XX our bit figure, approximately X% still the stood NAV came $XX.XX spread to range on as a

that offering this with net junior CLO We our into Series capital raised and million additional further B proceeds July. investment $XX.X further investments. deploying debt and our been offering We equity of capital capital increase new income. stock this preferred completed we strengthened X.XX% position have our in help will believe the term We from deployed

at NAV program, during generating the to at-the-market We also a common NAV, accretion X per opportunistically raised issuing capital shares quarter. of share about $X.XX premium nearly million through our

stock. B Series the XX,XXX term sales We about company. million also additional shares raised preferred of $XX generated to these of net Together, about proceeds

ample us. to revolver expand invest borrowing we million powder $XX available capacity portfolio. October XX, is This further as our of of which As over dry and to we with have cash

of CLOs, rate. XXX% nature portfolio our continues investments of our evident, are CLO debt the As is given benefit in floating floating that rate to the portfolio from

have CLO CLO some our to are digits, the double of an coupons of the and in All BB yield potential call in north early BBs scenario. XX%

to of performance investors, with to dislocation potential validation As We head manage our we consistently construct our income cash for strong periods XXXX. that executing our through on seek and portfolio respect and we excited flow into we're remain as that long-term playbook. focused is to portfolio's

Manager, the the Dan For our and Senior call like and turn additional Ko. commentary I'd market to overall Principal over activity, recent to portfolio on Portfolio

Daniel Ko

Thank you, Tom.

structure. to be the in the the portfolio. able rate of floating investment the opportunities excited and nature on CLO of elevated the junior about particular, environment EIC capital within to continue rate successfully our market, been capitalize We has to portions the underlying debt equity due

proceeds the quarter, debt offering $XX we attractive EICB ATM purchases. in nearly total our gross deployed capital from in and the preferred into junior million and equity and fully issuance During CLO CLO deployed

yield effective average a of the the weighted The during quarter XX%. robust CLO purchases was

the in market. see secondary to continue We return profiles attractive

par managers the their able relative value maturities the despite lower financing by in build issuers their have reinvesting loans. runway Our loan into seeking in on near-term to be in or push currently. through to to selection CLO order out continue to proactive prepayments spreads loan collateral discounted they locked credit remain extend

And nearly build thanks spreads, XX year. continued par as rallying OID, Index Loan as CLOs BB loan is GAAP of Credit well. the and year-to-date The CLO result, benefits This this the along increasing ROE year-to-date a the many up XX% issuers through of as XXXX. up September to Index of XX% of up September year XX, market first is spread. XX, as offering September As from JPM company's which year, loan with year-to-date momentum are and XX% and excess is half Leveraged the higher its Suisse lenders ultimately

saw eclipse on third pace billion we XXXX $XX new CLO market, remains CLO the mark. as the once in $XXX In of issuance the billion again the to market of quarter

reset funds, basically first short. up picked portion some far noncall slightly which otherwise the CLO and sensitive. was CLOs of half captive remains the activity XXXX vintage less volume half generally specific in has are a by for we X-year with significant return periods year, the As second believe CLO refinancing but of backed

syndicated loan There total down defaults in the a XX of prior were third quarter. the from quarter, in X

there macro the despite the again, fact, of In loans CLOs of secured concerns. various no month and evidence thus, of resilience September, were defaults in senior

a the result, historical trailing XX-month As below XX, default to declined of rate September as well X.X% averages.

portfolio We positioned distributions. paying believe CLO A well is XXX% and portfolio continue equity of these. to is environments current our of for CLO debt like our

we've CLO well average, above As by coupled a be with take impacted materially historical believe multiple loan debt economic withstood past, long-term it rates. amount EIC of loan in the limited volatility defaults for default default would wave. the has We noted, downturns low experiencing very price BB a consistently to significant

a strategy. not results, of portfolio future the While over guarantee past of of our we the the past few company's performance resilience performance the obviously believe demonstrated investment years is has

remain tail year, our we a position material the the end strong of via Entering with cash to revolver new powder and in dry very capacity. into investments deploy

be the Lena advisers' to will returns Umnova. for can and believe opportunistic turn continue that, to add Chief portfolio. will over we we where the now Accounting our achieve I With call Officer, will We company's compelling risk-adjusted

Lena Umnova

Dan. you, Thank

income NII of $X.XX and NII XXXX. investment excise share issuance the net of preferred of quarter third related to nonrecurring of stock, per company's Series the expenses of for quarter refund. $X.XX B of partially offset tax share is X.XX% share by $X.XX compared For recorded the per the the per for term $X.XX the net NII $X.X second share third of per share $X.XX quarter, XXXX NII for million or to company the of recorded or quarter per

level distribution Excluding above these nonrecurring the items, have been would NII our for per $X.XX quarter. share

appreciation comprised by income net $X.XX partially $X.X unrealized share. $X.X liabilities of operating at expenses of $XX.X net fair total investment million, unrealized and included, of value income million When The is was million. and company recorded third per on of costs the company's portfolio income quarter GAAP financing $X.X depreciation offset million certain of held or

Additionally, for other to fair the million, in quarter, recorded the the the company's credit third change of risk. $X.X liabilities income financial instrument-specific value representing attributed comprehensive of company

share XX% distribution additional $X.XX share we March distributions distributions year-end. last XXXX in the third $X.XX declared common monthly $X.XX beginning increase December share monthly of to through per per And declared per we XXXX. week, X January quarter, in another through monthly During of paid

higher to company lower which September current liabilities less had facility outstanding credit normal with company the operate preferred range revolving This at from we total have by our and the the end back XX%, the of XX% to end, seeking and to our moved of we ATM the upper assets borrowings XX% at of of ratio issuance month summer, stock EICB common equity, leverage program. As issuing to which ratio target this totaled in long-term expect market level been conditions. under the

at quarter with ratios above company and coverage XXX% requirements for in were debt the calculated and comfortably asset of company's The are stock at requirements the preferred respectively. XXX%. X,XXX%, end XXX% minimum accordance and These measures investment

September share, of $XXX company's net from of $XX.XX XXXX. X% asset the As per million an was or month value June X, end increase

are activity portfolio company's recurring make portfolio later on through in the quarter the to fourth its $X.X the investments in our cash some to month, the on that expected million. payments of received of Moving October investment company Note quarter.

per the XX of between capacity $XX October over investments. was company's Tom. of I as will investment Management's $XX.XX transactions, available $XX.XX of revolver over pending of net cash for the the share. October turn month to of had and estimate As end, call and million company unaudited now NAV

Thomas Majewski

floating and X and attributable banner a us continued view, elevated senior there EIC maintain asset resilient be you far, has had out income high Thank loans continue so level. structure. [ their and the a nature our risk XXXX loans the has grow rate rate secured at of In Great. classes to investment most ] Lena. CLOs to to of environment net help the and

rates. designed as our expense a rated through high Our intentionally The debt investment clearly default to credit BB-rated markets CLO were benefits today as the remain are well right of XX securities, the benefiting interest shareholders rates managing potential attributes balance corporate excited true the we low CLO like our with years, of ability a for past focused to And of cash in portfolio the CLO returns rate key to ever. increasing by offer both BB-rated as distributions. low compared be continue why bring BB-rated as for over reflected indeed, floating sheet our similarly debt high the as markets our X fund debt potential side for The these.

longer nature We Dan financing the and with than of is well risk-adjusted I for continue positioned thank Along Lena, questions. is shareholders. compelling and in Operator? confident returns your Eagle its to you Point generating will locked-in that remain the call for we now your time assets, CLO interest EIC Company. to that Income our open

Operator

a conducting Therefore, the session. [Operator be Thank closing Instructions] remarks. I you. now Majewski there question-and-answer will will At to this at Tom questions no over back time. And this time, we are for turn call

Thomas Majewski

for appreciate Great. the anyone Thank Lena joining Dan, have and time you thank should your attention. later call. and questions. much, today, I We're everyone, follow-up available you. any very

Operator

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

Eagle Point Income (EIC) 14 Nov 232023 Q3 Earnings call transcript