Eagle Point Income Company Inc.

Greetings. Welcome to Eagle Point Income Company's fourth quarter and year-end 2020 financial results call. At this time, all participants are in listen-only mode. The 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 that this call is being recorded. At this time, I'll turn the conference over to Garrett Edson of ICR. Garrett, you may begin.

Thank you, and good morning. 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 companies' 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 in the statements and projections contained herein, please refer to the company's filings, 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 four linked statements unless required by law. A replay of this call can be accessed for 30 days via the company's website, www.eaglepointincome.com. Earlier today, we filed our form NCSR, a full year 2020 audited financial statements in our fourth quarter investor presentation with the Securities and Exchange Commission. Financial statements and our fourth quarter investor presentation are also available within the investor relations section of the company's website. 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, Chairman and Chief Executive Officer of Eagle Point Income Company.

Thank you, Garrett, and welcome everyone to Eagle Point Income Company's fourth quarter earnings call. We appreciate your interest in Eagle Point Income Company, or EIC. If you haven't already done so, we invite you to download our investor presentation from our website at eaglepointincome.com, which I will refer to during a portion of my remarks. On the call, we'll provide a little bit of high-level commentary on the fourth quarter and recent activity. Ken will walk us through the financials, and then we'll, of course, open the call to any questions you might have. When we first brought Eagle Point Income Company to the public markets in July of 2019, we We highlighted three key attributes as to why we were excited to be managing a BB-rated CLO debt-focused fund. The potential for lower credit expense due to minimal default rates historically of BB-rated CLO debt over the past 20 years, the potential for higher returns compared to similarly rated corporate securities, and the protection that BB-rated CLO debt offered against rising interest rates. We were truly put to the test in 2020 in terms of the first attribute, credit risks, and certainly given the fears of corporate defaults perhaps exceeding 10%, an outlook held by some in the depths of the market last year. I'm very pleased to say that while we're not 100% out of the woods, we believe the CLO asset class broadly and CLO junior debt in particular passed the test with flying colors. The net asset value of our portfolio at the end of 2020 increased 88% from its low at the end of March of 2020. All of the investments in our portfolio paid as scheduled in full during the fourth quarter, and we recorded net investment income and realized gains of $0.29 per share. Once again, comfortably in excess of our distribution rate. Due to our financial performance since the lows of the pandemic and the confidence management has in the company's future prospects, we were pleased to increase our monthly distribution to $0.085 per share of common stock effective April 2021. We're mindful even at this increased distribution rate, it's still below our initial distribution rate. Back at the time of our IPO in July of 2019, three-month LIBOR was about 2.3%. Today, it's around 0.2%. As all of our CLO debt securities are floating rate off of three-month LIBOR, its rapid move downward in the first half of 2020 did hurt our near-term earnings. That said, with rates so low, we believe there's far much more room on the upside for rates versus downside on our CLO debt. As we look into 2021, most research desks are now projecting defaults of between 3% and 3.5%. which is much more optimistic than where they stood even just six months ago. With less than 2% of the loan market trading below 80 today, frankly, there could be further upside in these projections. Three or 3.5% default rate assumes all of those default, and then a bunch of others do. Perhaps that's a little too conservative of a view. The economy is growing, and the Fed continues to be accommodative. As long-term investors, we've constructed our portfolio to be able to manage through periods of dislocation and believe we're well positioned to grow the portfolio and generate attractive returns for our investors. Our positive momentum from the fourth quarter continued in January with 100% of our portfolio positions that were scheduled to make payments having done so. For a while in 2020, we had one position that was deferring interest. That security paid all the back interest plus interest on the interest and is now current on its payments as well. Our management estimate of January NAB points to another roughly 2% increase in NAV from the end of December. We remain optimistic about our outlook and continued cash flow generation. If the market continues to tighten, we believe we have room for further portfolio appreciation. And indeed, we still have $2.2 million of unrealized markdowns on our CLO debt portfolio. This represents about $0.36 per share. To the extent these securities ultimately pay off at par, which is what we expect, that would further accrue to NAV. As we've noted previously, we're long-term focused, and we'd like to remind you that CLO BBs have managed on multiple occasions to withstand very severe economic cycles, yet still experiencing very low long-term default rates. While past performance is, of course, not a guarantee of future results, we believe 2020 has again validated CLO BBs and attracted as an attractive and resilient asset class. I'll now turn the call over to Ken maybe to walk us through the fourth quarter financials.