Eagle Point Income Company Inc.

Greetings and welcome to Eagle Point Income Company's second 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Peter Sousa, at ICR. Thank you. You may begin.

Thank you, operator, and good morning. 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, and 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, www.egopointincome.com. Earlier today, we filed our form NCSR half-year 2022 financial statements in our second quarter investor presentation, 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, Chairman and Chief Executive Officer of Eagle Point Income Company.

Great. Thank you, Peter, and welcome everyone to Eagle Point Income Company's second quarter earnings call. We appreciate your interest in Eagle Point Income Company, or EIC. If you haven't done so already, we invite you to download our investor presentation from our website, which is www.eaglepointincome.com, and I'll refer to that during a portion of my remarks. EIC had a strong second quarter with NII and realized gains above our monthly distribution level. And with a rising rate environment, our portfolio, we believe, is very well positioned to generate significant additional income through our investments in floating rate CLO junior debt. For the quarter, our net investment income and realized gains were 41 cents per share. Our recurring cash flows were $5.7 million. which is a 12% increase from the first quarter and exceeded our regular common distributions and expenses by 21 cents per share. Recurring cash flows were aided in the quarter by newly purchased CLO investments and a reset payment from one of our existing CLO equity positions. Our NAV as of June 30th was $13.66 per share, with the reduction during the quarter principally due to mark-to-market drawdowns in the portfolio. Due to our confidence in the portfolio and EIC's outlook, we raised our monthly common distribution by 12% to 14 cents per common share beginning in October. Between April and July, three-month LIBOR increased from about 1% to nearly 3%. This will factor quite favorably into our October cash flows. Quite simply, the rapid increase in LIBOR has been materially positive for our junior CLO debt portfolio and should further increase the company's net investment income in the third quarter of 2022, as the LIBOR rates for all CLO debt tranches reset at meaningfully higher levels and 100% of the CLO debt investments in our portfolio are floating rate. Frankly, it is an exciting time for our portfolio, and the rising rate environment, increasing cash flows, and our confidence in our future outlook drove last week's announcement of a 12% increase in our monthly common distribution. Along with the rising rate environment, our proactive management of our portfolio mix to increase its allocation to CLO equity has further assisted the company to increase its cash flows and net investment income. While we continue to keep a close eye on the U.S. economy, we expect to continue to deploy capital at attractive levels and believe the company is positioned to do quite well over the coming quarters. In short, we see a number of paths to continuing to grow the company's net investment income. Looking at the market overall, there were a mere two syndicated loan defaults in the second quarter, and as a result, the 12-month trailing default rate remained near historic lows ending June at 28 basis points. We do expect defaults to gradually rise in the months and quarters ahead, but certainly not to the level that the loan market was pricing in towards the end of the quarter. Indeed, at quarter end, the loan index was around 92 cents on the dollar. As such, we believe there remain significant buying opportunities in the market, and we will continue to take advantage of this, adding to our portfolio where we see pockets of value. As long-term focused investors, we seek to construct our portfolio to manage through periods of dislocation And frankly, that's evidenced by our recent performance in the face of an unusual market environment. We're accomplishing exactly what we set out to. We're also continuing to seek to lengthen the weighted average reinvestment periods of our CLO debt and equity portfolios. We believe this will give our portfolio additional resilience should market conditions turn worse. We would remind you that CLO BB debt has historically withstood multiple economic downturns experiencing very low long-term default rates. While past performance is certainly not a guarantee of future results, we believe the performance of our portfolio over the last few years has further validated CLO BB as an attractive and resilient asset class. With that, I'll now turn the call over to Eagle Point's Chief Accounting Officer, Lina Umnova, who will walk us through the numbers in more detail.