EIC - Earnings call transcript Q1 2024 | Eagle Point Income Company Inc.

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Operator

Greetings. Welcome to the Eagle Point Income Company First Quarter 2024 Financial Results Call. [Operator Instructions] I will now turn the conference over to your host, Peter Sceusa, you may begin.

Peter Sceusa

Thank you, and good morning.

As a reminder, before we begin our formal remarks, 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.

and factors projections impact to contained filings the on the company the information with and statements herein, Securities further that the could and company's For Commission. Exchange please refer is of and statement us information this available of Each based the forward-looking information date projection on of call. made financial during call this as to disclaim law. any required unless by obligation We to statements update our forward-looking

the our days first this Securities website. call statements XXXX presentation today, can via XX the within investor quarter company's of for Earlier investor company's our are replay and and A we and statements also the accessed filed quarter financial quarter of Financial our available www.eaglepointincome.com. website, Relations be Investor first presentation Exchange first Commission. the with section

the now by Presentations following to it investor in by can link, Reports found Company. Income will the the Tom found of Chairman Financial Chief statements I presentation turn be be link. Executive financial statements Officer can and Eagle over Point Majewski, Events following and and

Thomas Majewski

you, call. Great. earnings Point Company's Eagle Income welcome, or Eagle to Income everyone, quarter EIC. and interest Company, appreciate first Point your We Peter, in Thank

to haven't information and website already, so you invite our portfolio. contains we investment our our If presentation investor about from at you presentation done The company eaglepointincome.com. download detailed the

NAV solid in We the first quarter-over-quarter quarter increase The of of year-end increase flows, XXXX our where significant XXXX had strengthening another company. a sheet. portfolio picked off for and right left balance up in a cash from

common $XX.X per per quarter, generate capital highlights do environment, flows distributions gains and received or doing expenses. net was regular to excess of share an $X.XX in elevated for the more income million what investment generated Among simply We it of cash cash. is portfolio share. our in company our and exactly operating the realized $X.XX first Our recurring comfortably rate designed of

our the year during first confidence we Indeed, the XX% distributions of paid monthly quarter. in increased common beginning X share by given portfolio. our common per distribution monthly the at We our $X.XX of

Our NAV company At the preferred of the million. of which share, due pricing additional is C the in X% proceeds for and X% be was of received XX per Series quarter, $XX.X March offering stock, which as of an we capital from by of increase raised year-end. and end $XX.XX XXXX will subsequently term

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

B during term via the ATM also issued stock preferred some the Series quarter. We

program volume our we usage additional the of the indeed, XX% Importantly, higher our And of of common in average ATM believe, liquidity fourth XXXX of trading was XXXX. approximately quarter is our than the first helping quarter drive shares.

midpoint events and share, like from the meaningful per estimate through share modestly after number between We and the be month subsequent company highlight. $XX.XX NAV to distributions declared XX up at at the common monthly had NAV. to now end our is September April XXXX. end a I'd March $XX.XX that Additionally, We of quarter this of per $X.XX of

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

won to Best it. the This efforts of behalf relentless true to week, Award honored award to Fund Public have testament is the Closed-End I'm a Credit and our we're Industry XXXX. won for very team's Lastly, entire share Flux that CLO last proud EIC company, for on

a floating of the definitely our benefit CLOs rate, of to Our rate that is the benefit higher The BBs. floating portfolio environment CLO when considering continues from for company. rate are to nature longer all

if having the they're in point, called with even All more some early. are at digits to double of coupons BBs the our CLO CLO this yield BB potential

that long-term construct investors, generation we exactly that cash to a and flows and focused validation cycles, multiple income executing our are strong portfolio As weather to we're our economic seek on playbook.

We moving for remain our forward. excited portfolio's potential

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

Daniel Ko

the Thank which rate excited continued compared opportunities to We to rate elevated EIC by other debt reward remain continues Tom. investing investment equity our the about asset CLO portions has in junior on and capitalize the particular, successfully in to CLO floating you, debt, the market, within the structure. shareholders classes. fixed-income environment of capital

a trajectory its in quarter. generating as investments equity total The capital Credit return net loans April Loan CLO Index in million The and strong for continued attractive CLO index We first from deployed of X.XX% into quarter. end. up junior over with related month momentum debt, in of XXXX, the the $XX Suisse Leveraged its continued other X.XX%

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

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

build managers par collateral relative by reinvesting CLO discounted payments through or build seek to trading to continue part Our loans. into value

at maturities annualized first to issuers quarter, an the par. roughly in loans leveraged of During continue effort approximately further the extend to debt. loan repaid of Most tackle or their maturity X% XX% their near-term

the lenders Some borrowers continue to lengthen newly in out refinanced to loan. offer their order on OID maturities

$XX market, ever the first prior than fastest approximately of In quarter we issuance period. terms primary and the pace billion higher new XX% of the of the year XXXX, CLO in saw

tightened. new investors spreads While sensitive, which CLO market far new funds, XX% return CLO issue generally last was market less by returned captive to equity XXXX to XX% CLO are of the backed in third-party have debt year issue have the as

the in period an of their lowering years the refinancings period. positions X in This of and spreads. also average basis reset, completed we April, quarter, in portfolio's of CLO a case and equity our debt average tighter by through year, activity extending weighted the the remaining points X reinvestment reinvestment X We refinancing increasing cost to pickup the debt material our by of refinancings the driven reset during CLO the end reset saw and XX

first and convexity sooner of investments previously lead of achieving also will X than rate the defaults some to our X the average historical redeemed, quarter, anticipated. X.X%. resets rise the in default to syndicated that There XX, slight CLO our calls to We of up quarter. trailing discounted a loan in XX-month purchases below were from prior total in as defaults, BB of Despite the in refinancings, X.X% number fell well the par being pull the the expect and remaining March of

to XX these. well X.X%, March of positioned as for should our portfolio market Even exposure the from continue default if rise at well below we rate. stood these believe is levels, like environments defaults EIC's

listed amount economic default take downtrends a BBs historical coupled rate. of above past the have with floating loan helps As rates. in interest defaults will rate materially The average investments low also We impacted well long-term experiencing loan the very rate price we've CLO limited by multiple be insulate consistently volatility. from default noted, the to believe we EIC a volatility significant for nature

to As we look new portfolio. compelling we offer the remain capital that deploy positioned company's for risk-adjusted fresh ahead, well returns investments into

Accounting With will that, I to Lena call Chief over now our Officer, turn Umnova. the adviser's

Lena Umnova

Thank you, Dan.

realized of income share. per investment recorded share. of the and GAAP and Compared per of NII losses per quarter, the less included, is XXXX income per of gains the for of realized $XX appreciation company NII first net million recorded million $X.XX $X.XX the NII share for quarter $X.X portfolio or net of quarter or the to company first or share XXXX. recorded unrealized $X.XX $X.XX fourth When During

liabilities gain million. of net net The income realized at which all investments held appreciation expenses unrealized of quarter $X.X unrealized $X.X company's million, of certain $X.X of first was of and investment value offset of $X.X by costs income and of $X.X were total on partially on comprised million net financing on fair million, depreciation operating million, investments

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

X monthly continued per per During the quarter, an common in increase of quarter. monthly month distributions share, end. September prior of XX% also And from we week, we first declared share monthly $X.XX distributions last the $X.XX distributions to paid

attended the As credit from asset borrowings company totaled liabilities. total end, facility of revolving and of quarter XX% less current equity, preferred the had which the

long-term period coverage we at market This stock which assets This is target preferred ratios leverage range ratio respectively. and accordance in at XX% that stock above company's XX% is calculated comfortably company and The debt end conditions. quarter and investment for normal with to our statutory of the under X,XXX%, were XXX% company XXX% debt. requirements requirements expect for the at the preferred within XXX% and of

company's a increase X% As the net per $XX.XX month end XXXX. $XXX the share, of end, of or assets million was March from value

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

transactions, net investment. of new for $XX of of the April company had from investment available That net X% April in the of of capacity preferred million proceeds As received C includes issuance Series end, month and stock. our over term million $XX.X revolver pending cash

income, the using it recent per month offering where call we not second on month per the $XX.XX of NAV quarter's and we the some will but the end. NII midpoint, that, April share. from modest earn share estimate drag $XX.XX quarter. the expect company's between full the capital as expect during At unaudited back by third over was will proceeds We at quarter from to the now and up I of normalize Management's March a turn as deployed will ATM end EICC it's activity Tom. stood

Thomas Majewski

quarter well, from generating environment the Lena. work was to excellent Thanks, investment our another rate for elevated for continue strong strategy and very our It portfolio. NII EIC and --

our the favorable to our the attributable of and term protection to nature. In through and most BBs the stock floating sheet rate issuance strengthen in market preferred to continue our their CLO at be C Series one continue the of structural a balance resilient assets program available We risk view, recent coupon. at-the-market

sheet as increases from over our portfolio both like distributions were right the these balance benefiting designed well are shareholders years. our side monthly our markets intentionally for investment X-plus past as cash multiple and in the Our of

of why floating the The BBs elevated with X rated for interest key a as same focused CLO XXXX. we years, IPO and the rate in be returns BBs for to markets low the BB that the by excited offer back securities high over managing benefits our remain for low The the to attributes these reflected fund as default XX like compared CLO remain from credit CLO similarly rates. rates in to corporate expense, potential potential past

is Company. Point questions. your to We We'll for interest confident now Lena, Eagle continue in and your Operator? compelling and EIC I time that remain well shareholders. our risk-adjusted call Income Dan the generating returns for to thank open positioned you

Operator

to Tom are And Since for Tom? I'll session. the turn no call closing Instructions] over remarks. question-and-answer Majewski concludes [Operator there questions, back now the this

Thomas Majewski

Great. be of for Thank I and day the questions you, appreciate your you the Point regarding everyone, have Lena, the call. joining Income the available much. interest investors be and balance attention would Company. Dan We'll very Thank and office for take if them. to any further Eagle in

Operator

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

Eagle Point Income (EIC) 21 May 242024 Q1 Earnings call transcript