Eagle Point Credit Company Common Share of Beneficial Interest

Greetings, and welcome to the Eagle Point Credit Company first quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Garrett Edson of ICR. Thank you, sir. 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, and which may also be found on our website at eaglepointcreditcompany.com. As a reminder, before we begin our formal remarks, 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 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 2024 financial statements in our first quarter investor presentation with the Securities and Exchange Commission. The financial statements in 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 presentations and events link. I will now turn it over to Tom Juske, 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, I 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 start to 2024. Our investment portfolio is performing well, and we improved our balance sheet during the first quarter. We believe the company remains well positioned for continued upside moving forward. Let me take you through some highlights from the first quarter. The company generated net investment income and realized capital gains of $0.31 per share, excluding non-recurring expenses related to a preferred stock offering. We received recurring cash flows in our portfolio in the first quarter of $56.2 million, or $0.70 per share. We previously noted that recurring cash flows in the first quarter were impacted by higher loan prepayments in the fourth quarter of 2023, which led to a bit of cash drag within many CLOs. This has since normalized. Indeed, during the month of April, we received recurring cash flows of $65.7 million, well in excess of the recurring cash flows received in each of the two prior quarters. With roughly 2.6% of our CLO's underlying portfolios now invested in bonds, and remember that bonds typically pay interest on a semi-annual basis, we do expect some ups and downs in cash flows from quarter to quarter. NAV per share as of March 31st was $9.16, a modest decrease from year end. During the quarter, we paid $0.48 per share of cash distributions to our common shareholders. We are very active in managing our portfolio during the quarter, deploying over $131 million in net new capital into investments that we believe will increase the earnings power of our portfolio. As the prices for CLO BBs increased during the quarter, We began selling some of the positions we held in our portfolio that we had purchased opportunistically over the last year or two. This helped generate some of our realized gains. We plan to continue rotating some of our CLO BBs back into CLO equity over the coming months. Along with our overall portfolio performance, we continue to raise capital through our at-the-market program and issue approximately 7.9 million common shares at a premium, generating NAV accretion of $0.06 per share. We also issued a modest amount of preferred stock through the ATM. We were also pleased to raise an additional $47 million of net proceeds in the quarter through the issuance of a new Series F term preferred stock, which will be due in 2029. As of March 31st, 2024, the weighted average effective yield on our CLO equity portfolio was 16.43%, and this compares to 16.7% at the end of the year. The new CLO equity we purchased during the first quarter had a weighted average effective yield of 19.4%, which should help bolster the portfolio's weighted average effective yield prospectively. Additionally, the weighted average expected yield of our CLO equity portfolio at quarter end based on market value stood at approximately 24%. Additionally, the company had a number of meaningful subsequent events so far after quarter end that I'd like to highlight. We estimate that our NAV as of April month end to be between 894 and 904 per share. Along with our regular monthly common distribution of 14 cents per share, we declared an additional variable supplemental distribution of two cents per share, or an aggregate monthly distribution of 16 cents per share, now going all the way through September of 2024. Earlier this month, we successfully launched our new series AA and series AB non-traded 7% convertible perpetual preferred stock offering. This has started to generate net proceeds for the company, and we believe this will be significantly accretive to ECC over time. Consistent with our long-time strategy for operating the company, all of our financing remains fixed rate, and we have no financing maturities prior to April 2028. In fact, some of our preferred stock financing is even perpetual now. with no set maturity dates. While we continue to focus the majority of our investment efforts on the secondary market during the quarter, we did deploy capital into a few attractive primary investments as well as debt spreads tightened during the first quarter. We also continue to focus on improving our weighted average remaining reinvestment period, or WARP, via investing in CLO equity with longer reinvestment periods in the secondary market. Further, with CLO debt spreads tightening, refinancing and reset volumes picked up during the first quarter. And indeed, we took advantage of this environment and completed two resets and one refinancing during the quarter. These had the effect of extending the reinvestment periods of the reset CLOs to a new five-year reinvestment period and for the refinancing, lowering the cost of debt by about 13 basis points. As a result of our consistently proactive portfolio management, as of March 31st, Our CLO equity portfolio's weighted average remaining reinvestment period, or WARP, stood at 2.5 years. This is ahead of where it stood at year-end 2023, despite the passage of three months. Our portfolio's WARP is 56% above the market average of 1.6 years. We expect to remain active in completing resets and refinancings where attractive and have a full pipeline of CLOs to tackle. We believe keeping our warp as long as possible is one of our best defenses against future market volatility. EIC invests primarily in CLO junior debt, and I'm pleased to share that it won the Credit Flux Industry Award for Best Public Closed-End CLO Fund last week. For the first quarter, EIC generated net investment income and realized gains, excluding non-recurring expenses, of 57 cents per share. EIC raised its monthly common distribution at the beginning of the year by 11% to 20 cents per share, which is the highest rate in that company's history. And EIC has performed very well over the last couple of years and we believe remains well positioned to continue generating strong net investment income. We invite you to join EIC's investor call at 1130 a.m. today after this call and to visit the company's website, eaglepointincome.com, to learn more. 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.