Eagle Point Credit Company Inc. (ECC) Earnings

Management highlights

- **Quarterly Financial Headlines** * Net asset value (NAV) per share ended Q2 2026 at $4.51, an 8% increase from $4.17 at March 31, 2026 * GAAP return on common equity reached 12.7% for the quarter, with GAAP net income of $70 million ($0.53 per share), compared to a GAAP net loss of $1.12 per share in Q1 2026 and GAAP net income of $0.47 per share in Q2 2025 * Net investment income (NII) was $0.17 per share; NII less realized losses was negative $0.62 per share, compared to $0.14 per share in Q1 2026 and $0.16 per share in Q2 2025 * Total recurring cash flows from investments hit $62 million ($0.47 per share), exceeding total distributions and expenses by $0.14 per share - **Portfolio Management Activity** * Completed 8 CLO resets and 7 CLO equity refinancings, delivering a weighted average 22 basis point reduction in CLO debt costs and extending all affected reinvestment periods to 5 years * Rotated capital away from underperforming CLO collateral managers, realizing losses that were already reflected as prior-period unrealized losses, with minimal incremental impact on Q2 2026 NAV * Redeployed freed capital to top-tier collateral managers and attractive non-core credit opportunities * Deployed $111 million in total new investments at a weighted average effective yield of 24.6% during the quarter * Reached a key milestone in the European strategic partnership with Musenich with the successful pricing of its inaugural European CLO; ECC benefits from both direct equity investment and a perpetual revenue sharing arrangement for future issuances - **Credit and Portfolio Quality** * The trailing 12-month leveraged loan default rate ended the quarter at 1%, down from 1.4% in Q1 and well below the long-term average of 2.5% * ECC's look-through default exposure is just 14 basis points, far below the broader market average * Triple C rated exposures in the CLO portfolio total 3.8%, better than the market average of 4.6%; weighted average junior overcollateralization cushion is 4.4%, also above the market average of 3.8% * The weighted average spread of CLO loan portfolios was flat quarter-over-quarter, ending a 18-month period of spread compression that pressured CLO equity returns - **Capital Structure Update** * Completed full redemption of the ECCW and ECCX notes, reducing outstanding leverage and extending the capital structure duration; no financing matures before January 2029 * All existing debt and preferred stock is fixed-rate, with a large portion of preferred equity being perpetual, which management views as a unique competitive advantage for a publicly traded CLO equity-focused firm * As of quarter-end, debt and preferred equities equal 47% of total assets less current liabilities, above the firm's 27.5%-37.5% target leverage range for normal market conditions

Guidance

- Management has declared monthly common share distributions of 6 cents per share for the remainder of 2026, and views the current distribution level as appropriately aligned with earnings to support long-term sustainability - The firm intends to return leverage to its 27.5%-37.5% target range over time, with no fixed internal deadline for completion - Management's unaudited estimate for NAV per share as of end of July 2026 is between $4.33 and $4.43, a 3% midpoint decline from the end of Q2 2026 - Management remains constructive on the long-term outlook for both CLO equity and the broader alternative credit opportunity set available to the firm

Segment performance

Eagle Point Credit Company operates two core investment segments: CLO equity and non-CLO alternative credit. As of June 30, 2026: 1) CLO equity: represented 62% of the total portfolio by value, consisting of actively managed CLO equity positions with a 3.4-year weighted average remaining reinvestment period (15% longer than the market average). 2) Non-CLO alternative credit: represented 38% of the total portfolio by value, up from 32% as of March 31, 2026. This segment includes infrastructure credit, specialty finance, regulatory capital relief transactions, asset-backed securities, and other opportunistic private credit investments. New non-CLO investments deployed during the quarter included the $111 million total new deployment, with ~$27 million allocated to this segment; one realized non-CLO investment (a specialty finance transaction secured by World Cup tickets for Sports Illustrated Tickets) delivered a 1.2x multiple on invested capital over a seven-month holding period.

Risks & headwinds

- Continued uncertainty around the impact of AI on software sector leveraged borrowers created significant market volatility in CLO equity and loan valuations in the first half of 2026, and could drive future price volatility - Geopolitical uncertainty and interest rate volatility continue to impact leveraged loan supply and demand dynamics, which can affect spread levels and CLO equity valuations - Persistent spread compression driven by excess loan demand relative to supply remains a key structural headwind for CLO equity returns, even though it abated in Q2 2026 - CLO collateral manager underperformance (from excessive par burn and bad credit selection) can lead to disproportionate portfolio value declines relative to the broader market - Current leverage is above the firm's target range, requiring active management to return to target levels

Analyst Q&A

• Q: What is driving the end of loan spread compression, and is this change sustainable? /

  A: Spread compression is driven by supply and demand dynamics: strong loan demand from new CLO issuance outpaces limited loan supply, pushing prices up and spreads down. Q2 2026 new CLO issuance fell ~20-25% quarter-over-quarter, reducing overall loan demand. Combined with ongoing rate and geopolitical uncertainty that has tempered bullish demand, this has muted spread pressure. The firm is already seeing wider spreads on some software sector loans as part of amendment and extension deals, and conditions look favorable for continued muted compression or modest spread widening.

• Q: What is the expected yield of non-CLO investments versus CLO equity, and what is the target allocation for the non-CLO segment? /

  A: Both new non-CLO and new CLO equity investments carry expected yields in the low 20s, so there is no meaningful yield difference between the two segments. The firm does not have a fixed target for non-CLO allocation; it will move up or down based on the availability of attractive risk-adjusted returns. The shift to increase non-CLO exposure is a response to the challenging 18-month period for CLO equity, and leverages the broader Eagle Point platform's access to high-quality originated investment opportunities that are already run across the firm's wider fund complex.

• Q: Why has infrastructure credit allocation grown meaningfully over recent quarters, and what types of investments does the firm make in this space? /

  A: Infrastructure credit is currently delivering some of the best risk-adjusted returns across all opportunities available to Eagle Point. These are not low-yield traditional project finance; they are specialized, transformative investments that often include equity kickers, sourced by a dedicated, experienced in-house origination team. The portfolio is sector-agnostic, including digital infrastructure, EV battery component manufacturing, recycling facilities, hydroelectric power, and energy storage, with no concentrated exposure to any single infrastructure subsector.

• Q: What drives the rotation away from underperforming CLO collateral managers, and how will the firm get leverage back to its target range? /

  A: Managers are typically exited for persistent underperformance driven by excessive par destruction (selling assets at a loss without replacing them at discounted prices) and bad credit selection that leads to outsize value declines relative to the market. The firm recently added a full-time quantitative analyst to identify early warning signs of underperformance. To reduce leverage to target, the firm will rely on a combination of potential future NAV growth, early realizations of non-CLO investments that generate excess returns, and opportunistic buybacks of outstanding preferred debt trading at a discount, with no set deadline to hit the target range.