Eagle Point Credit Company Inc. 6.6875% NT 28 Q4 FY2024 earnings call

• 2024 Performance: Holders of common stock had a 14.7% total return, GAAP return on equity was 10.1%, and total distributions in 2024 were $1.92 per share. - Q4 Cash Flows: Recurring cash flows were $82 million ($0.74 per share), exceeding quarterly distributions and expenses. Higher cash flows driven by first-time equity payments from newly purchased CLOs and semi-annual interest payments. - Portfolio Activity: Deployed over $223 million in net capital into new investments in Q4. Completed 16 resets, lengthening the portfolio's weighted average remaining reinvestment period to 3.4 years. Rotated from CLO debt to CLO equity. - Note Offerings: Completed ECCU 7.75% notes offering with net proceeds $111 million. Series AA and AB perpetual preferred stock offerings generated $20 million. - NAV Accretion: Issued additional common shares through ATM program at a premium, resulting in $0.05 per share NAV accretion.

For the year 2024, holders of common stock had a total return of 14.7% assuming reinvestment of distributions. The company generated a GAAP return on equity of 10.1% and paid total distributions of $1.92 per common share in 2024. In the fourth quarter, recurring cash flows from the portfolio were $82 million ($0.74 per share), exceeding quarterly aggregate common distributions and total expenses. This was an increase from $68.2 million ($0.66 per share) in the third quarter. Net investment income less realized losses in the fourth quarter was $0.12 per share, consisting of $0.24 per share of net investment income and $0.12 per share of realized losses. Excluding accounting reclassifications and non-recurring expenses, NII and realized gains were $0.29 per share.

• Declared common monthly distributions for Q2 2025 of $0.14 per share. - Expect continued portfolio activity, including new issue investing and reset activity to enhance net investment income. - Proactive focus on long remaining reinvestment periods to drive performance and guard against market volatility.

• Cash flow fluctuations due to new investing activity and semi-annual paying assets in CLO portfolios. - Market volatility could impact CLO equity cash flows. - Potential overestimation of corporate default risk by some market desks affecting portfolio performance.

Q: Did you cover the commission expense line in the model?

A: Commission expense is a combination of commissions for the ATM program and the issuance of perpetual preferred Series AA and AB equity. Common issuance is below the line off the ATM paid in capital.

Q: How much of the recurring cash flow growth is related to market factors vs company actions?

A: Rotating from CLO debt to CLO equity, resets, refinancing, and new issue investing are key factors. A significant portion is due to the company's proactive rotation to CLO equity and resetting/refinancing CLOs to extend the reinvestment period.