EIC - Earnings call transcript Q2 2024 | Eagle Point Income Company Inc.

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Operator

Greetings, and welcome to the Eagle Point Income Company's Second Quarter 2024 Financial Results Conference. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Peter Sceusa of ICR. Please go ahead.

Peter Sceusa

Thank you, and good morning.

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

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

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

presentation via our www.eaglepointincome.com. today, and financial our the A our replay of second Financial Exchange Statements N-CSR, this the Form financial second call with the found The Events can following the financial following are company's days the quarter we Earlier company's found Investor by be statements Reports the statements can Presentations filed be Securities quarter link, The can the Commission. of year XX half XXXX also link. investor accessed and and presentation website. investor by and in section be Relations investor website, statements for within presentation and available

Eagle I will of and Income Point now Officer turn the Executive Company. call over Chairman to Tom Chief Majewski,

Thomas Majewski

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

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

prior another cash quarter from the continued NAV strengthen had quarter. the from quarter grew our gross flows. portfolio end The and the to in sheet. our We increase continued into company's balance strong quarter-over-quarter second We first momentum yet

for designed continues elevated to rate robust cash portfolio flows. environments specifically Our generate

common or per the that per purchased during $X.XX per regular flows prior again we proceeds expenses. company the comfortably of quarter distributions during the compares of of $X.XX cash flows issuance third This received quarter The was many our didn't quarter. in flows share our the recurring excess share of the recurring were the the cash the or cash and of share. highlights, ATM A $X.XX securities quarter. in amount Among to operating million decline and payments preferred make $XX.X million driver proceeds until in using $XX.X

of The to in offering realized share income preferred expenses net company we C share. of distributions Similar paid nonrecurring to first the excluding term in plus $X.XX gains, April investment quarter. per generated monthly X% $X.XX per Series related our second common X the quarter,

that's Our of and NAV increase XX. of June $XX.XX as an March from XX X% about was

sheet. We our continue strengthen balance to

quarter. preferred we in common received quarter. our of Series earlier, or net per NAV issued share during million I April, at at-the-market X.X As of NAV, generating C the second $XX.X premium proceeds accretion about mentioned and ATM, Through term the to issued $X.XX a our approximately we million shares program, during

preferred of C the $XXX,XXX of additional about proceeds realized sales B and Series also stock We term from Series ATM. via

see nearly basis. Daily We're quarter, volume shareholders. for second average the our happy XX% the the higher trading our to stock volume trading with quarter first a year-over-year volumes increase for increased on volume continued common and than the in very quintupling to average

we the Dan distributions the I to market before his quickly some end end of add $X.XX for declared share Subsequent to of of to call quarter, the highlights turn per common monthly I'd over through like commentary. the Ko XXXX.

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

potential double more enhance our to digits, CLO called further equity All coupons if our to CLOs early. continues having Further, portfolio's the in the ability. CLO portfolio the yield the exposure BB some of even BBs earnings are of with are CLO

heard construct and reiterate performance. the positioned You've long-term portfolio us consistent any remain to the approach our strongly cycle believe economic weather portfolio to is focus We for in our as continued investors.

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

Daniel Ko

opportunities capitalized elevated of floating be lowered There rate environment Thank you, market, CLO year. the continues by rate believe equity investing still portions but this later begin debt positioned capital rates good Tom. successfully particular, to in succeed CLO structure. be to to and well on investment attractive the across junior the We in debt, are the EIC

for The perform Debt to of Credit with in XXXX. total for a quarter generating of Suisse of Leveraged the the index X.XX% first X.XX% and trajectory of continued July as its well, continued July Loan half loans return year-to-date XX. X.XX% Index

impact there been few line volatility, Over modest. the days, prices some softness with relatively on has been far has prices the loan market past so but in the broader loan in

profiles see We continue to in return primary and markets. secondary the attractive

In yield deployed equity CLO the debt into quarter, the quarter during XX.X%. purchases investments. of CLO CLO a we the second junior attractive weighted robust $XX The was capital million net in and approximately average effective

by loans. remain Our CLO collateral through reinvesting par on part relative managers discounted value building prepayments or focused trading into

on were XX% of profile maturity issuers approximately effort an prepayments the of their loans repaid driven During extend loan near-term the par. X% quarter, The market-wide annualized the leveraged maturities roughly debt. focused refinancing to by or in further at second

ever The issuance issuance, XX% period. new XXXX billion fastest first prior new we $XXX the the and higher the and second $XX CLO Regarding approximately of year billion for of of quarter than pace saw in half XXXX.

investors, our equity market tightened. primary to CLO call, spreads third-party debt As have us, the CLO as noted including have on QX returned

the CLO X see to our half lowering driven we reset spreads. continue and and by our reinvestment refinancings We cost period reset, X and weighted resets significant refinancings to period. uptick XX debt portfolio's reinvestment of of CLO of case a average equity the basis remaining increasing In XXXX, the extending in first the their completed X in points an refinancings years of the by debt positions, average in tighter

discounted to repaid convexity will at than certain of that sooner CLO anticipated. lead refinancings, in the previously being investments our We resets some of crystallizing par, our purchases calls and BB expect

believe June from only positioned is trailing and the default declined of average as XX X rise at EIC's XX-month default Even defaults leveraged were of for quarter portfolio There continue points. historical below second X.XX% the well end, if environments rate our should the like of well portfolio's levels, exposure loan XX basis stood these to as we to in these. quarter remaining X.XX%. defaults

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

additional risk-adjusted over Moving deploy well offer to new capital through company's into for forward, Lena Officer, to walk will Chief investments compelling that Accounting our results. I our positioned to portfolio. the the returns that, turn adviser's call Umnova With remain we now financial

Lena Umnova

you, Thank Dan.

of and company's recorded related gains stock, During $X.X preferred net the second for to of gains This for per XXXX When $X.XX the X% of nonrecurring quarter of realized the and to share. or quarter NII quarter, per of the gains million expenses were the and $X.XX investment realized of NII share. the income share or compares issuance first $X.XX C second excluding per Series realized $X.XX share and recorded XXXX. company term NII per NII

deploy When and net time share. by ATM liabilities expenses Tom quarter was to of preferred company's million. net million, fair appreciation of of in a at issuances. is unrealized million, partially quarter driven recorded financing investments decline earlier, part investments and investment $XX.X of million, realized net offset operating the $X.X were on portfolio As of total on $X.X comprised taking per bit of income depreciation second net The certain unrealized $X.X on costs mentioned all second the from included, in value which the appreciation and company gains of by unrealized $X.XX GAAP or held Series of the $X.X of C was NII $X proceeds income million income million stock

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

$X.XX per share $X.XX quarter, During year. monthly And paid second we of continued the the of X of share. last per end week, distributions the through distributions we monthly declared

leverage of to ratio company liabilities. As range expect quarter less had target XX% totaled preferred within to equity, conditions. which end, outstanding the the assets XX% of company which long-term normal This operate under our market we at XX% is total of current

Investment requirement the preferred Company asset quarter nothing is quarter, the drawn on comfortably stock of our in accordance requirements XXX% calculated the stock. of with ratio the for statutory At XXX%, revolver. coverage were had for preferred above end at this end Act The company's we

company's or was net value As XX. $XXX This decrease share. of June asset end, month million March $XX.XX approximately is from X% per the

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

over to available questions. for we the of now remarks net turn for it before I pending Tom company the investment. call provide up back transactions, July revolver of to $XX of As over cash had investment the XX, capacity and will closing million open

Thomas Majewski

investment proactive risk-adjusted are Throughout environment. continues to Thanks, nature classes economic our EIC BBs our perform protection generate compelling sheet most one to for to income. positioned strategy believe resilient their generate well investment structural and quarter, significant returns strongly view that our is or rate remain the our balance to focused rate asset floating in well and confident and positioned the is succeed that to Lena. EIC maintain CLO any of and We the shareholders. we risk net on strengthening continues quite portfolio attributable

questions. time in I now Company. We thank call the Operator? Lena, Dan Income and your for will your Eagle and you open to Point interest

Operator

to [Operator Instructions] questions for it this comments. I'd We're Majewski time. showing turn to queue over Mr. closing no at like in

Thomas Majewski

and Income and everyone, you your Company. Thank much, Eagle time in Lena, I Each of in dialing Great. Point interest very appreciate for today. Dan

available Thank are in the have questions. you. later any We anyone follow-up should office today

Operator

today's Ladies and gentlemen, this concludes event.

You rest lines your day. of time, the the webcast and may disconnect this enjoy logoff your at or

Eagle Point Income (EIC) 6 Aug 242024 Q2 Earnings call transcript