Eagle Point Income Company Inc.

Greetings. Welcome to the Eagle Point Income Company's 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 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, Garrett Edson of ICR. You may begin.

Thank you, Shamali, 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 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. Further information on factors that could impact the company in 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, www.eaglepointincome.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 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 first quarter earnings call. We appreciate your interest in Eagle Point Income Company, or EIC as we call it. If you haven't done so already, we invite you to download our investor presentation from our website at eaglepointincome.com, and I'll refer to it during a portion of my remarks. The first quarter was a great start to the year for EIC, but importantly, we want to note that the rising rate environment is setting the stage for our portfolio to generate significant additional income through our investments in floating rates, CLO junior debt. For the quarter, net investment income and realized gains were about 33 cents per share. Our recurring cash flows were about $5.1 million, which is a 38% increase from the fourth quarter of 2021, driven primarily by newly purchased CLO investments and a reset payment from one of our CLO equity positions. In April, we raised our monthly common distribution by 4% to 12.5 cents per share per month. Due to our strong performance in 2021, we were able to pay a special distribution of 20 cents per common share back in January. We seek to raise capital from time to time through our at-the-market offering program. We issued approximately 112,000 common shares at a premium to NAV during the quarter. We also tapped the ATM to issue approximately 122,000 of our Series A preferred shares during the quarter. Together, these sales generated additional net proceeds of a little less than $5 million during the quarter. Our NAV as of March 31st was $16.52 per share, a modest reduction from where it stood at the end of the year. Between January and April, three-month LIBOR increased from about 20 basis points to a little over 100 basis points. Today, that rate stands at roughly 150 basis points. and we believe this increase in LIBOR is a significant positive event for our CLO junior debt and should continue to increase the company's net investment income beginning in the second quarter of 2022 as 100% of the CLO debt investments that we hold are floating rate. The coupon rates on our CLO debt recently reset in April at today's new higher rates. This should add to our NII on an ongoing basis and able to cover our monthly common distributions on a sustainable basis. Along with this rising rate environment, our proactive management of our portfolio allowed us to increase our allocation to CLO equity, which has further assisted the company in increasing its cash flows and net investment income. While we continue to keep a close eye on the U.S. economy given persistent inflation and supply chain concerns, we expect to continue to deploy capital at attractive levels and believe the company is positioned to do quite well over the coming months. In short, we see multiple paths to continue to grow the company's net investment income. There were no syndicated loan defaults during the first quarter, and as a result, the trailing 12-month default rate remained at or near historic lows, finishing March at 19 basis points. We continue to expect relatively few corporate defaults in the coming quarters. As of recent data, less than 3% of the loan market is trading at prices below 80 cents on the dollar. We consider that an indicator of potential default, and that number is quite low. As long-term focused investors, we seek to construct our portfolio to manage through periods of dislocation. In strong markets, we focus on positioning our portfolio for the next downturn, and in choppier markets, we seek to reinvest and build PAR and build NAV for all shareholders. We continue to try lengthening our weighted average reinvestment period of our CLO debt and equity portfolios whenever possible. We'd like to remind you that CLO double B debt has historically withstood multiple economic downturns, experiencing low default rates over the long period of time. While past performance is never a guarantee of future results, we believe the performance of our portfolio over the last few years has clearly validated CLO double B debt as an attractive and resilient asset class. I want us to take a moment to introduce someone new to our calls. Today, I'm joined by Lina Umnova. Lina joined Eagle Point back in 2015, and she is our Chief Accounting Officer. I'll now turn the call over to Lina, who will walk us through the financials in a little more detail.