Eagle Point Credit Company Common Share of Beneficial Interest

Greetings and welcome to Eagle Point Credit Company first quarter 2022 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 a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Garrett Edson of ICR. Thank you. You may begin.

Thank you, Doug, 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 and projected financial information that involve risks and uncertainties that may cause the company's actual results to differ materially from those projected in such forward-looking statements and projected financial information. For further information on factors that could impact the company and the statements and projections contained herein, please refer to the company's filings 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 first quarter 2022 financial statements and our first quarter investor presentation with the Securities and Exchange Commission. Financial statements and our first 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 presentation 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 first 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. It was a very productive start to 2022 for Eagle Point. We actively managed our portfolio, deploying $66 million of net capital into CLO equity and debt investments during the quarter, and also priced three reset transactions. Our portfolio continued to generate strong recurring cash flows. And early in the quarter, we completed a very successful refinancing of much of our debt and preferred stock. This will generate significant savings and contribute to an improved bottom line moving forward. As a result, we once again generated NII and realized gains before non-recurring items above our regular common distributions. While markets are certainly choppy today, we expect our NII momentum from the first quarter will continue into the second quarter and continue to our current distribution level into the third quarter. For the first quarter, our net investment income and realized gains before non-recurring items totaled 40 cents per share, exceeding our regular common distributions for the quarter. Recurring cash flows received in our portfolio in the first quarter were 41.1 million, or $1.03 per share, which was 32 cents above our total expenses and regular common distributions paid. April's cash collections have totaled $43.5 million ahead of the total for the first quarter. NAV per share ended the first quarter at $12.64. Since the end of the quarter, we estimate our April NAV to be between $12.44 and $12.54 per share, reflecting a roughly 1% decline based on the midpoint of that range. Still, our NAV has increased from before the onset of COVID and is up roughly 18% since the end of 2019. We believe there are a few other income-oriented funds that are listed that have had NAV increase so materially over this timeframe. We completed a timely, a very timely offering of our new 5.375% ECCV notes right before the spike in rates earlier this quarter, and locked in new long-term fixed-rate financing. This was both our largest $25 denominated issuance ever and also our lowest cost of capital to date by a healthy margin. We used the proceeds from this offering to retire our remaining 7.75% ECCB preferred stock, our 6.75% ECCY notes, and half of our 6.11% ECCX notes. These actions provided us with several meaningful benefits. We achieved significant savings on interest expense going forward. All of our financing remains fixed rate and unsecured, protecting us in what seems to be a very pronounced rising rate environment. And we extended our weighted average debt maturity and now have no maturities prior to April of 2028. Those of you who have been on our calls before know we've never had any repo-style financing or any unfunded revolver commitments. We continue to raise capital prudently through our At the Market program, initiative at 3.5 million common shares at a premium to NAV, generating an accretion of $0.04 per share for shareholders. We also tapped the ATM to issue about 280,000 of our Series C preferred shares, the ECCCs, and 89,000 of our Series D perpetual preferred shares. Together, these sales generated additional net proceeds of approximately $57 million during the first quarter. Given the continued strength of the company's performance and our confidence in the outlook for our portfolio, we raised our common distribution by 17% to 14 cents per share in April. We've continued with that increased distribution rate now into the third quarter. As of March 31st, the weighted average effective yield on our overall portfolio was 16.78%, down slightly from 17.04% at the end of December. Our portfolio's weighted average effective yield was aided by strong cash flows, 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 earlier, During the quarter, we deployed $66.3 million of net capital into CLO equity and debt investments. We completed three resets and converted three of our loan accumulation facilities into new CLOs. Across the nine CLO equity purchases that we made during the first quarter, the weighted average effective yield was approximately 18%. We continue to find attractive CLO opportunities in the primary and secondary markets, and have deployed an additional $50 million of net capital into CLO equity and debt securities during the month of April. On the monetization side, we opportunistically sold a few CLO securities and other investments. Collectively, these sales allowed us to realize gains of about a penny per common share. And while we typically underwrite investments with a long-term hold mindset, we do sell investments where we see good rotation opportunities. In addition to our deployment of capital, we remain active in the quarter with our reset and refinancing program, taking advantage of the strong demand for CLO debt in the first quarter to lower our cost of funding and enhance future cash flows for several of our CLOs. For our three resets that we did in the first quarter, we saved an average of 17 basis points on the debt and lengthened the remaining reinvestment periods of each back out to five years. With CLO debt spreads wider due to the recent volatility in the markets, we expect refinancing and reset volumes to be muted in the near term, but we'll continue our pipeline in the months ahead when market opportunities present themselves. As we've consistently noted, resets and refinancings are a key part of our advisors' value proposition for our majority CLO equity strategy, proactive involvement with each investment both at the time of acquisition and throughout its life cycle. we are always seeking to create value for our shareholders. Thanks to our ability over the past year to capitalize on this attractive reset and refinance environment, as of the end of the first quarter of 2022, our CLO equities weighted average remaining reinvestment period stood at 3.1 years. This is an increase from 3.0 years at the beginning of the year and from 2.4 years at the beginning of 2021. So despite the passage of 15 months, Through our proactive portfolio management, the reinvestment period on our CLO positions actually increased meaningfully. These actions allow the company to increase prospective cash flow while also being better positioned to take advantage of future loan price volatility. As we manage the company's portfolio, we seek to keep the weighted average remaining reinvestment period as long as possible. Looking ahead, we are keenly aware of the impact of rising rates, the Fed curtailing purchases of securities, and geopolitical challenges that are facing the world. We'd remind you that while loan prices have been declining recently, rising rates are typically a positive for CLO equity. While we remain mindful of the challenging market environment, we've been through a number of economic cycles and are well-positioned to take advantage of market dislocations, adding to the company's investment portfolio where we see opportunities. With our portfolio's strong CLO equity weighted average effective yield, favorable cash flows, low defaults, and lack of loan repricings, we are confident in the continued earning potential of our portfolio, and we believe the company is well positioned to continue increasing NII as 2022 moves along. I'd like to also take a moment to highlight Eagle Point Income Company, which trades under ticker symbol EIC. For the first quarter, EIC generated NII and gains of $0.33 per common share. and with this rising rate environment, remains very well positioned to increase NII over time, given its junior debt focus, particularly CLO BBs, which is heavily correlated with rising rates. We invite you to join our call at 11.30 a.m. today and to visit the company's website, eaglepointincome.com, to learn more. Overall, we'll keep a watchful eye 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 2022. I'll now turn the call over to Ken.