Eagle Point Credit Company Inc. Q2 FY2025 earnings call

• Earnings: Net investment income less realized losses $0.16 per share, non-annualized GAAP total return on equity 6.3%, NAV up 1.1% from March 31. • Portfolio Activity: Deployed $86 million into new investments, took advantage of market dislocation to acquire CLO equity, completed 4 resets and 1 refinancing, strong pipeline of resets and refinancing. • Financing: Issued $41 million common stock at premium, $38 million 7% perpetual preferred stock, debt and preferred coverage ratios above requirements. • Portfolio Metrics: CCC-rated exposures lower than market average, fewer CLOs trading below 80, better junior OC cushion than market average.

The company generated net investment income less realized losses from investments of $0.16 per share, consisting of $0.23 of net investment income offset by $0.07 of realized losses from investments. NAV as of June 30 was $7.31 per share, up 1.1% from March 31. Recurring cash flows from the portfolio were $85 million or $0.69 per share in the second quarter. The CLO equity portfolio had CCC-rated exposures at 4.9% (lower than market average 6.5%), only 2.7% of CLOs trading below 80 (vs market average 5.1%), and weighted average junior OC cushion at around 4.6% (better than market average 3.5%).

• Positive outlook for portfolio with CLO equity expected to catch up to market recovery. • Extensive pipeline of resets and refinancing to enhance portfolio earnings power. • Long weighted average remaining reinvestment period provides optionality to capitalize on future market volatility.

• Market volatility and tariff concerns causing short-term mark-to-market challenges. • Spread compression impacting net investment income. • Economic uncertainty and regulatory changes affecting capital allocation and company performance.

Q: Mickey Schleien asks about CLO AAA spreads and risk-off mentality.

A: Thomas Majewski notes market dynamics, emphasizes cash flow focus, and highlights portfolio metrics showing quality.

Q: Randy Binner asks about European investments and all-in yield.

A: Thomas Majewski states European exposure between 5%-10% of portfolio and discusses all-in yield modeling with rates not primary cash flow driver.

Q: Erik Zwick asks about CLO collateral manager partnership and prepayments.

A: Thomas Majewski talks about partnerships providing top-line revenue share and prepayments driven by bullish/bearish loan sentiment not rates.

Q: Christopher Nolan asks about cash coverage and CLO equity yields.

A: Thomas Majewski explains cash coverage on loans not directly impacting CLO equity cash flows, with spread compression and reset/refinancing as key drivers.

Q: Unidentified Analyst asks about CLO equity sell-off and loan spread compression.

A: Thomas Majewski addresses sell-off as more sellers than buyers, and loan spread compression metrics showing slower compression in second quarter with leading indicators like loans trading above par.