Eagle Point Credit Co Inc. Q3 FY2024 earnings call

• Recurring cash flows in Q3 were $68.2 million, in line with quarterly aggregate common distributions and total expenses; Q4 cash flows so far at $73 million. • Net investment income less realized losses was $0.23 per share, with realized losses including an $0.08 per share write-down of legacy CLO equity positions. • Deployed over $171 million in net capital into new investments in Q3, with new CLO equity purchases having a weighted average effective yield of about 18.5%. • Completed 14 reset transactions, lengthening the portfolio's weighted average remaining reinvestment period to about three years. • Series AA and Series AB non-traded 7% convertible perpetual preferred stock offering generated net proceeds of ~$10 million. • Issued ~7.5 million additional common shares through ATM program, generating NAV accretion of $0.08 per share. • Portfolio's CLO equities weighted average remaining reinvestment period at 3.0 years, 47% above market average. • Eagle Point Income Company (EIC) invests in CLO junior debt and continues to perform well.

Recurring cash flows from the portfolio for the third quarter were $68.2 million, or $0.66 per share. The company generated net investment income less realized losses of $0.23 per share, with net investment income per share at $0.29 and realized losses at about $0.06 per share. NAV as of September 30 was $8.44 per share, and rose to $8.60 per share at the midpoint of the range as of October 31. Cash flows received in the fourth quarter so far totaled $73 million, outpacing prior quarters. The company's asset coverage ratios on September 30 for preferred stock and debt were 326% and 735% respectively, comfortably above statutory requirements.

• Cash flows received in Q4 so far totaled $73 million, outpacing prior quarters. • Expect to continue portfolio rotation from BBs into CLO equity and other investments. • New issue investing and reset activity expected to enhance net investment income over time. • Existing regular $0.14 monthly common distribution declared through end of March 2025. • Balance sheet strengthened through preferred stock offerings and NAV accretive common stock issuances.

• Loan spread compression and off-cycle semi-annual interest payments impacted Q3 cash flows. • Approximately 10% of CLOs hadn't made first payment dates in Q3. • Potential impact of out-of-court restructurings on CLO market, though default rate remains very low. • Fluctuations in cash flows due to new investing activity and semi-annual payers in CLOs portfolios.

Q: A couple of questions about out-of-court restructurings and CLO spreads.

A: Tom Majewski discussed that out-of-court restructurings are a reality but a small percentage of companies, and CLO collateral managers with scale can influence lender groups; CLO spreads saw some trends with tightening abating post-quarter end.

Q: Matthew Howlett asked about NII trajectory.

A: Tom Majewski explained a multipronged strategy to get NII up, including keeping cash low, selling CLO debt, Series AA issuance, refis/resets; headwinds from loan spread compression abating post-quarter end.

Q: Paul Johnson asked about upcoming loan market activity.

A: Tom Majewski was optimistic about a pro-business environment leading to more M&A, which would benefit CLO equity; robust pipeline of resets and refis expected in the new year.

Q: Greg Kraut asked how to increase share price.

A: Tom Majewski said through continued cash flow to shareholders and increase in NAV, emphasizing consistent cash flows and educating investors about long-term stability.