Eagle Point Income Company Inc. Q3 FY2025 earnings call

• Portfolio performance: NAV increased, net investment income covered common distribution, recurring cash flows exceeded expenses, and NAV rose to $14.21 per share. - Investment activities: Deployed $60 million into new investments, new CLO equity had a high yield, and completed resets and refinancings of CLO equity positions. - Capital structure: Issued $35 million of preferred stock, announced redemption of Series B term preferred stock, repurchased common stock, and increased repurchase authorization. - Market update: CLO market activity, loan market performance with default rates and trading volume trends discussed.

For the third quarter, Eagle Point Income Company generated net investment income less realized losses of 26¢ per share, consisting of $0.39 per share of net investment income offset by 13¢ of realized capital losses. Recurring cash flows totaled $17 million or 67¢ per share, consistent with the prior quarter. NAV rose to $14.21 per share as of September 30, up from $14.08 per share in June. GAAP return on equity was 3%. The company deployed $60 million into new investments, with new CLO equity purchased having a weighted average effective yield of 16.6%. It issued $35 million of preferred stock, repurchased $21 million of common stock at an average discount to NAV of 8.3%, and the board increased the common share repurchase authorization to $60 million from $50 million.

• Declared three monthly distributions of 11¢ per share for Q1 2026, a reduction from previous. - Board increased common share repurchase authorization to $60 million from $50 million. - Plan to continue aggressive share buybacks when common stock trades at a discount to NAV.

• Matters discussed include forward-looking statements and projected financial information involving risks and uncertainties that may cause actual results to differ materially from projections. Factors impacting this are detailed in the company's SEC filings.

Q: How does the recent data on revenue and EBITDA change for below-grade companies impact credit quality expectations?

A: Thomas Majewski and Dan Ko discussed that positive revenue and EBITDA trends for below-grade companies are credit positive, with growth moving in the right direction and lower rates likely to lower interest costs for these companies.

Q: What has driven the increase in annual trading volume in the CLO market?

A: Dan Ko mentioned more eyes on CLOs due to premium yields and low credit expense relative to other fixed income assets, along with the advent of ETFs.

Q: How will cash be used, paying down fees or buying back common shares?

A: Thomas Majewski stated cash will be used for both paying down the bees (likely referring to certain obligations) and aggressively buying back common shares.