Eagle Point Credit Company Common Share of Beneficial Interest

Greetings and welcome to Eagle Point Credit Company's second quarter 2023 financial results conference call. At this time, all participants are on 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Peter Scusa, with ICR. Thank you. You may begin.

Thank you and good morning. By now, everyone should have access to our earnings announcement and investor presentation, which was released prior to this call, which may also be found on our website at egopointcreditcompany.com. Before we begin our formal remarks, we need to remind everyone that the matters discussed in 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 projected in such forward-looking statements and projected financial information. For further information on factors that can 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 form NCSR half-year 2023 financial statements in our second quarter investor presentation with the Securities and Exchange Commission. The financial statements in our second 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'd now like to introduce Tom Majewski, Chief Executive Officer of Eagle Point Credit Company.

Great. Thank you and welcome everyone to Eagle Point Credit Company's second 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. The company had a solid second quarter. Our recurring cash flow in the second quarter was 27% larger than our recurring cash flows in the first quarter. We also continue to proactively manage our CLO equity portfolio by taking advantage of attractive secondary market opportunities. CLO equity investments purchased during the third quarter, pardon me, during the second quarter had a weighted average effective yield of 20.8%. And as of quarter end, our CLO equity portfolio had a weighted average remaining reinvestment period of 2.7 years. As we have stated in the past, we believe keeping our weighted average remaining reinvestment period as long as possible is one of our best defenses against future market volatility. For the second quarter, our net investment income totaled 32 cents per share before the impact of some reclassification realized losses. We continue to actively manage our portfolio, and we deployed $29.7 million in in net capital into new portfolio investments during the quarter. We received recurring cash flows on our portfolio during the second quarter of 53.7 million or 90 cents per common share, a 27 cent increase from the prior quarter and exceeding our aggregate common distribution and expenses by 21 cents per share. Cash flows in the second quarter improved as the mismatch between one month and three month LIBOR and SOFR continued to compress. Along with our regular monthly common distribution of 14 cents per share, we declared additional variable supplemental distributions of 2 cents per share, or aggregate monthly distributions of 16 cents through the end of the year. Inclusive of the July 31st distributions, we've now delivered cash distributions of $19.19 per share to our common stockholders since our 2014 IPO. NAV per share as of June 30 was $8.72. Since the end of the quarter, we estimate our NAV at July month end to be between $9.08 and $9.18 per share, a 4.7% increase from quarter end. We also continue to prudently raise capital through our at-the-market program and issued approximately 4.3 million common shares at a premium, generating a NAV accretion of about 12 cents per share. These sales generated net proceeds of nearly $44 million. We've continued to access our ATM program in July, issuing approximately 3.8 million of additional common shares at a premium and generating net proceeds of approximately 38.5 million. At the end of July, we have 83.6 million of cash on our balance sheet, thanks in part to our strong July cash flows, providing us with ample dry powder to deploy into new investments over the coming weeks. And all of our financing remains fixed rate and unsecured, giving us protection in a rising rate environment. Investors should take comfort that we have no financing maturities prior to April 2028. As of June 30, the weighted average effective yield of our CLO equity portfolio was 15.23%, which is a slight reduction from 15.83% at the end of March. However, new CLO equity we purchased during the second quarter had a weighted average effective yield of 20.8%, which should help bolster the portfolio's weighted average effective yield prospectively. Additionally, the weighted average effective yield expected yield of our CLO equity portfolio based on market value increased to 27.5% as of June 30th. As I previously mentioned, During the quarter, we deployed $29.7 million of net capital into secondary CLO equity, CLO debt, loan accumulation facilities, and other investments. We believe many of the primary CLO equity IRRs available in the market today do not represent an attractive value at the moment, and we continue to focus our investment efforts on the secondary market. Recently, we've seen at least an 800 basis point pickup in yields from comparable secondary opportunities versus primary opportunities. And as a result, we've continued to opportunistically deploy our dry powder principally into the secondary market. As of June 30th, our CLO equity portfolio's weighted average remaining reinvestment period stood at 2.7 years, and that's a modest reduction from three years at the end of 2020. Despite the passage of six months through our proactive portfolio management, the warp on our CLO equity portfolio was just reduced by four months. We believe this continues to drive the portfolio's outperformance relative to the broader CLO equity market. We remain focused on finding opportunities to invest in CLO equity with generally longer remaining reinvestment periods to enable our portfolio to navigate through volatility whenever it occurs. I would also like to take a moment to highlight Eagle Point Income Company, which trades under the symbol EIC, EIC invests principally in junior CLO debt. For the second quarter, EIC generated net investment income of 49 cents per share, once again exceeding its regular common distribution for the quarter. And additionally, we recently raised EIC's monthly common distribution by 13% to 18 cents per share beginning in October. EIC has performed very well throughout the rising rate environment and remains very well positioned to continue generating strong net investment income. After today's call for ECC, we'll be hosting a call for EIC at 1130 a.m. and invite you to join that call. You can find more information at the company's website, eaglepointincome.com. Overall, we remain very active in managing our portfolio and keep a close eye on the broader economy. After Ken's remarks, I'll take you through the current state of the corporate loan and CLO market. I'll now turn the call over to Ken.