Eagle Point Credit Company Common Share of Beneficial Interest

Ladies and gentlemen, thank you for your patience. We will begin in about two minutes. Again, thank you for your patience. We will begin in about two minutes. Thank you. Thank you. Thank you. Thank you. Greetings. Welcome to the Eagle Point Credit Company's third quarter 2021 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Gary Edson of ICR. You may begin.

Thank you, Shamali, and good morning. By now, everyone should have access to our earnings announcement and investor presentation, which was released prior to this call, and which may also be found on our website at eaglepointcreditcompany.com. Before we begin our formal remarks, we need to remind everyone that the matters discussed on this call include forward-looking statements or projected financial information that involve risks and uncertainties that may cause the company's actual results to differ materially, from those projecting such forward-looking statements and projecting financial information. For further information on factors that could impact the company and statements and projections contained herein, please refer to the company's files with the Securities and Exchange Commission. Each forward-looking statement and projection of financial information made during this call is based on information available to us as of the date of this call. We disclaim any obligation to update our forward-looking statements unless required by law. A replay of this call can be accessed for 30 days via the company's website, EaglePointCreditCompany.com. Earlier today, we filed our third quarter 2021 financial statements and our third quarter investor presentation with the Securities and Exchange Commission. Financial statements and our third quarter investor presentation are also available within the investor relations section of the company's website. The financial statements can be found by following the financial statements and reports link, and the investor presentation can be found by following the presentations and events link. I would now like to introduce Tom Majewski, Chief Executive Officer of Eagle Point Credit Company.

Thank you, Garrett, and welcome everyone to Eagle Point Credit Company's third quarter earnings call. If you haven't done so already, we invite you to download our investor presentation from our website, which provides additional information about the company and our portfolio. Our banner 2021 has continued into the third quarter with excellent performance throughout our portfolio and operations. Our NAV continued to increase. Our portfolio generated very strong recurring cash flows. and our NII rose considerably compared to the second quarter. We were very active in managing the portfolio, both buying and selling securities, as well as resetting and refinancing CLOs in our portfolio. Net, we deployed $68.8 million into CLO equity and debt investments during the quarter, and importantly, we priced a total of 11 resets and refinancings during the quarter. our NAV increased 8% per share, ending the quarter at $13.98 per share. This upward trend continued in October, and we estimate our NAV at month end to be between $14.23 and $14.33 a share, reflecting an additional gain of 2% based on the midpoint of that range. To frame this, our NAV per share is now up 28% this year through October, and 35% since the end of 2019, before the onset of COVID. Recurring cash flows on our portfolio in the third quarter were 43.2 million, which was 61 cents per share above our total expenses and common distributions. This is our largest quarterly excess since we went public in 2014. October's cash collections have totaled 42.2 million, and we continue to maintain strong recurring cash flows on our portfolio. Notably, October's collections were 65% more than our collections in October of 2020. The company's recurring cash flows have fully recovered to pre-pandemic levels, as essentially all CLO equity positions are making quarterly distributions. Cash flows have further been enhanced by the accretive efforts of our proactive reset and refinancing activity during this year. Our net investment income and realized gains for the third quarter totaled 39 cents per share, exceeding our common stock distributions paid during the third quarter by 30%. Earlier today, given the strength of the company's performance, we declared a special distribution of 50 cents to our common stockholders. This is an initial special distribution based on our preliminary projections of taxable income. Upon finalization of the company's 2021 taxable income and based on current estimates, the company expects to declare one or more additional special distributions during 2022. We also continue to prudently raise capital through our At the Market program. We issued approximately 746,000 common shares at a premium to NAV and approximately 436,000 Series C preferred shares at a premium to their liquidation value, generating net proceeds to the company of about $21 million during the third quarter. This helps us build NAV and further increase diversity in our investment portfolio. As of September 30th, the weighted average effective yield of our overall portfolio was 16.35%, and that's up from 14.98% at the end of June. This increase was aided by strong cash flows on our portfolio, our proactive reset and refinancing program, our ability to put new investments in the ground at attractive levels, few borrowers defaulting, and muted levels of loan repricings. As I mentioned during the quarter, we deployed $68.8 million of net capital into CLO debt and equity investments. We continue to find attractive CLO opportunities, principally in the primary market, with a few opportunities also in the secondary market. Indeed, across the 12 CLO equity purchases that we made during the quarter, the weighted average effective yield was approximately 18%. On the monetization side, we opportunistically sold several CLO equity securities and other investments. Collectively, these sales allowed us to realize capital gains of $0.02 per common share. While we typically underwrite investments with a long-term hold mindset, we do sell investments where we see strong bids, or other attractive rotation opportunities. In addition to our deployment of capital, we remained very active with our reset and refinancing program during the quarter, taking advantage of strong demand for CLO debt. During the quarter, we priced nine resets and two refinancings, and now have completed 18 resets and 11 refinancings for the first three quarters of the year. We continue to have a robust pipeline of future refinancings and resets under evaluation, and we expect to be actively working this pipeline through the balance of 2021. As a refresher, a reset typically renews a CLO's reinvestment period and usually lowers its future cost of funding. It also allows us to reopen and refresh a transaction's governing documents. In a CLO refinancing, on the other hand, typically only the spread on a CLO's debt tranches are reduced, lowering the cost of funding, while most other CLO terms remain unchanged. For our two refinancings during the third quarter, we lowered the average cost of debt on the refinanced tranches by approximately 25 basis points. And for our nine resets, we saved an average of 29 basis points on the debt and lengthened the remaining reinvestment period of each of those CLOs out another five years. Borrowing from the private equity playbook, in several of the resets, we were also able to structure special cash distributions to the equity class at the time of the reset, lengthening the deals, lowering the cost of funding, and taking money out for the equity. This is a key part of our advisor's value proposition for our majority CLO equity strategy, proactive involvement with each investment, both at the time of purchase and throughout its life cycle. We are always seeking ways to create value for our shareholders. Thanks to our ability to capitalize on the attractive reset and refinancing environment, as of September 30th, our CLO equity portfolio's weighted average remaining reinvestment period stood at 2.9 years. This is an increase from 2.4 years at the beginning of 2021. So despite the passage of nine months of time through our proactive portfolio management, the weighted average remaining reinvestment period on our CLO equity positions actually increased meaningfully. These actions allow the company to increase prospective cash flows while also being better positioned to take advantage of future loan price volatility the next time it occurs. As we manage the company's portfolio, we keep to seek the weighted average remaining reinvestment period as long as possible. Along with the positive trends throughout our portfolio, we continue to maintain a solid balance sheet. We have no financing maturities prior to October 2026. All of our financing is unsecured, and we have no repo style financing or unfunded revolver commitments. Looking ahead, when combining our increased weighted average effective yield of our CLO equity portfolio, our favorable cash flow, and then the favorable default trends in the market, our reset and refinancing activity and the potential earnings to the portfolio, we believe the company remains very well positioned to continue increasing net investment income in the coming quarters. I would also like to take a moment to highlight our sister company, Eagle Point Income Company, which trades under symbol EIC. For the third quarter, EIC generated NII and gains above its quarterly distributions and raised over $44 million of common and preferred capital to deploy into its CLO junior debt and equity investment strategy. We believe this will help support EIC's strong financial performance as well. EIC also announced a special distribution to its shareholders today. We invite you to join our call at 11.30 a.m. to visit and visit the company's website, eaglepointincome.com, to learn more. Overall, we continue to be quite bullish on our portfolio and the broader economy. After Ken's remarks, I'll take you through the current state of the corporate loan and CLO markets and share our outlook for the remainder of 2021. I'll now turn the call over to Ken.