Management cited Nomura Research estimates that the median CLO equity return was negative 9% for the quarter and negative 14% for the full year. Portfolio Manager Greg Borenstein said Q4 was “one of the most difficult quarters for CLO equity in recent memory,” and noted that weakness in CLO equity was more pronounced in the new-issue market than in secondary trading. He said the company largely avoided new-issue equity during the quarter and has participated in only one new-issue equity transaction in the 1 ...

Financial Data and Key Metrics Changes - For the fourth calendar quarter, the company reported a GAAP net loss of $0.56 per share, with a net asset value (NAV) total return of negative 9.1% [12][16] - The NAV per share at year-end was $5.19, with cash and cash equivalents totaling $24.3 million [16][22] Business Line Data and Key Metrics Changes - Significant mark-to-market losses on CLO equity drove the net loss for the quarter, while CLO mezzanine debt performed better [12][14] - The weighted average GAAP yield for the CLO portfolio decreased to 13.7%, down from 15.5% in the prior quarter [13] - CLO equity represented 52% of total CLO holdings, remaining roughly unchanged from the prior quarter [14] Market Data and Key Metrics Changes - The CLO equity market faced challenges, with a median CLO equity return of negative 9% for the quarter and negative 14% for the full year [5][12] - In the U.S. leveraged loan market, lower-rated CCC loans faced significant pressure, while premium-priced loans continued to refinance at par [12][13] Company Strategy and Development Direction - The company has increased its allocation to CLO mezzanine debt tranches, which are believed to offer a compelling balance of yield and downside protection [7][19] - The company executed 218 CLO trades during the nine-month period following its conversion to a CLO closed-end fund, reflecting a disciplined and active approach to portfolio management [23][22] Management Comments on Operating Environment and Future Outlook - The management noted that the fourth quarter was challenging for CLOs, but disciplined portfolio management helped cushion the impact and position the company for future opportunities [11][21] - Looking ahead, the company aims to rebuild net investment income and NAV by deploying capital into what appears to be a distressed market, viewing it as fertile ground for trading opportunities [26][27] Other Important Information - The company increased its credit hedge portfolio to approximately $175 million, representing about 90% of its NAV, providing significant protection against market volatility [10][11] - The company is exploring the potential issuance of long-term unsecured debt to enhance its capital position [27] Q&A Session Summary Question: What is the company's stance on the software sector amid negative headlines? - The management emphasized the importance of diversification by sector and name, noting that while there are concerns in the software sector, there will be both winners and losers [30][34] Question: Can the company quantify the proportion of loans that are triple C rated or lower? - The management indicated that the typical CCC bucket in a CLO is around 7.5%, estimating that their exposure is not far off from the CLO market average of 4.4% [38][43] Question: What is the drag from credit hedges on the portfolio? - The management stated that the drag from credit hedges is estimated to be around 1%-2% of fund NAV per annum, which is considered reasonable for the protection provided [51][52] Question: How do redemptions affect the CLO market? - The management noted that redemptions can create opportunities for active trading, as flows move between different funds and portfolios [64][65] Question: What is the recovery timeline and structure for potential defaults in the CLO market? - The management explained that recoveries from leveraged loans historically have been above zero, with an average par burn rate of about 75 basis points annually [67][69]

Ellington Credit Company (NYSE:EARN) Q4 2025 Earnings call March 05, 2026 11:00 AM ET Company ParticipantsAlaael-Deen Shilleh - Associate General CounselBenjamin Graham - Equity Research AssociateChristopher Smernoff - CFOGregory Borenstein - Portfolio ManagerJason Weaver - Managing DirectorLaurence Penn - CEONone - Company RepresentativeConference Call ParticipantsEric Hagen - Managing Director and BTIG Mortgage and Specialty Finance AnalystOperatorPlease stand by. Your meeting is about to begin. Good morn ...

Financial Data and Key Metrics Changes - For Q4 2025, the company reported a GAAP net loss of $0.56 per share, with a net asset value (NAV) per share of $5.19, reflecting a net quarterly loss overall due to significant mark-to-market losses on CLO equity [12][17] - The net asset value based total return for the quarter was negative 9.1%, with the company limiting fund losses to approximately 9% of NAV, outperforming the overall peer set [5][17] Business Line Data and Key Metrics Changes - The company increased its allocation to CLO mezzanine debt tranches, which represented approximately 70% of CLO purchases during the nine-month period following its conversion to a CLO closed-end fund [7] - CLO equity represented 52% of total CLO holdings, remaining roughly unchanged from the prior quarter, while CLO debt accounted for nearly 50% of the portfolio by year-end [14][17] Market Data and Key Metrics Changes - The CLO equity market faced significant challenges, with the median CLO equity return for Q4 being negative 9% and negative 14% for the full year, driven by elevated credit dispersion and ongoing coupon spread compression [6][12] - In the U.S. leveraged loan market, lower-rated CCC loans experienced significant pressure, while premium-priced loans continued to refinance at par, leading to a divergence in performance [12] Company Strategy and Development Direction - The company emphasized a disciplined and active portfolio management strategy, focusing on CLO mezzanine debt for better yield and downside protection, while avoiding new issue CLO equity due to unattractive pricing dynamics [7][19] - The company plans to explore the potential issuance of long-term unsecured debt to provide additional capital, viewing the current market environment as an opportunity-rich investment landscape [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market conditions for CLOs in Q4 but expressed confidence in the company's active trading approach and risk management, positioning it well for future opportunities [11][22] - The company believes that a substantial portion of recent price declines are reversible, as they reflect yield spread widening rather than fundamental credit impairment [27] Other Important Information - The company executed 218 CLO trades during the nine-month period following its conversion, comprising $272 million of purchases and $63 million of sales, indicating a highly active trading strategy [24] - The company maintained a significant credit hedge portfolio, equal to roughly 90% of its NAV, to protect against market volatility [10][17] Q&A Session Summary Question: What is the company's stance on the software sector amid negative headlines? - Management noted that while there has been damage in the software sector, the diversified nature of the CLO portfolio helps mitigate risks, and there will be both winners and losers within the sector [31][34] Question: Can the company quantify the proportion of loans that are triple C rated or lower? - Management indicated that the typical CCC bucket in a CLO is around 7.5%, and they believe their exposure is not far off from the CLO market average of about 4.4% [39][45] Question: What is the drag from credit hedges on the portfolio? - Management estimated that the drag from credit hedges amounts to about 1%-2% of fund NAV per annum, which they consider reasonable for the protection provided against larger market shocks [48][54] Question: How does the company view the relationship between redemptions and spread widening in the CLO market? - Management highlighted that redemptions create opportunities for active trading, as flows move between different funds, allowing for better price discovery [66] Question: What is the recovery rate for potential defaults in the CLO market? - Management stated that historically, recoveries in leveraged loans have been well above zero, with an average par burn or loss rate of about 75 basis points annually, indicating that recoveries can vary significantly based on deal specifics [70]

Earnings Conference Call March 5, 2026 Quarter Ended December 31, 2025 Important Notice Forward-Looking Statements This presentation may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature and can be identified by words such as "anticipate," "estimate," "will," "should," "may," "expect," "project," "believe," "intend," "seek," "plan" and similar expressions or thei ...

Exhibit 99.1 Ellington Credit Company Announces Financial Results for the Third Fiscal Quarter Ended December 31, 2025 OLD GREENWICH, Connecticut—March 4, 2026—Ellington Credit Company (NYSE: EARN) ("we") today reported financial results for the quarter ended December 31, 2025. Highlights Management Commentary "I am confident that the current market environment plays precisely to our strengths in active investing and trading. Coupled with our substantial credit hedging portfolio coming into 2026, I believe ...

Core Viewpoint - Ellington Credit Company has provided information regarding the federal income tax treatment of distributions for its common shares, indicating a transition in its operational structure from a taxable C-Corp to a regulated investment company in 2025 [1]. Group 1: Company Overview - Ellington Credit Company is a non-diversified closed-end fund focused on providing attractive current yields and risk-adjusted total returns through investments primarily in corporate collateralized loan obligations (CLOs) [2]. - The Fund emphasizes mezzanine debt and equity tranches in its investment strategy [2]. - It is externally managed and advised by an affiliate of Ellington Management Group, L.L.C., which has been a prominent fixed-income investment manager since its founding in 1994 [2]. - The Fund leverages Ellington's extensive experience and expertise in portfolio management, credit analysis, and risk management [2].

Core Viewpoint - Ellington Credit (EARN) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements, making it a valuable tool for investors [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling pressure that affects stock prices [4]. Company Performance and Outlook - The upgrade for Ellington Credit reflects an improvement in the company's underlying business, which is expected to drive the stock price higher as investors respond positively to this trend [5]. - For the fiscal year ending December 2025, Ellington Credit is projected to earn $0.90 per share, with a 4.7% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of generating significant returns, particularly for Zacks Rank 1 stocks [7]. - The upgrade to Zacks Rank 2 places Ellington Credit in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10].

Financial Data and Key Metrics Changes - For calendar Q3, the company reported GAAP net income of $0.11 per share and net investment income of $0.23 per share, with a weighted average GAAP yield for the CLO portfolio at 15.5% [9][10] - The NAV as of September 30th was $5.99 per share, with cash and cash equivalents totaling $20.1 million, resulting in a NAV-based total return for the quarter of 9.6% annualized [13][21] Business Line Data and Key Metrics Changes - The CLO portfolio increased by 20% to $380 million, with new purchases totaling $116 million, of which 62% was in CLO debt and 38% in CLO equity [11][12] - CLO equity represented 51% of total CLO holdings, down from 53% at the beginning of the quarter, while European CLO investments accounted for 14%, roughly unchanged quarter-over-quarter [11][12] Market Data and Key Metrics Changes - The credit markets rallied during the third calendar quarter, supported by a dovish shift from the Federal Reserve, leading to tightened corporate credit and CLO spreads [4][5] - In the U.S. leveraged loan market, lower quality CCC-rated loans fell several points amid default concerns, while single B-rated loans advanced due to sustained CLO demand [10] Company Strategy and Development Direction - The company is focusing on increasing its portfolio allocation to mezzanine debt to gain more attractive yields while reducing exposure to new issue equity [6][7] - The strategy emphasizes active trading to capitalize on mispricings and manage risk effectively, with a preference for secondary market acquisitions over new issues [6][16] Management's Comments on Operating Environment and Future Outlook - Management noted that volatility and credit dispersion remain defining features of the corporate credit markets, with concerns about idiosyncratic volatility highlighted by recent bankruptcies [19][20] - The company expects elevated repricing activity and ongoing credit dispersion to create opportunities for outperformance through active portfolio management [23] Other Important Information - The company increased its credit hedge portfolio to approximately $90 million by the end of the quarter, equating to about 40% of its NAV, to provide downside protection [21] - Following the quarter end, the synthetic short position in credit hedges reached over $150 million in high-yield equivalents [21] Q&A Session Summary Question: What drove the increase in credit hedges from the end of September to the end of October? - The increase was primarily due to the growth in portfolio size and leverage, ensuring liquidity during market downturns [26][27] Question: Was the decrease in the CLO portfolio a more cautious view on credits? - The decrease was not necessarily a reflection of a cautious view but may have been due to distributions and markdowns in prices during the quarterly payment date [30][31] Question: Can you discuss the appetite for leverage and potential unsecured debt issuance? - The company is close to being fully invested and could potentially increase leverage to around $400 million, constrained by regulatory restrictions [40][41] Question: What are the predictions for CLO supply next year? - Predictions are uncertain, but there may be more reset and refinancing activities rather than new issues, depending on loan supply and market conditions [44][46] Question: How does AI impact the CLO market? - AI will affect the loan market, creating winners and losers, which raises concerns about credit dispersion and overall portfolio performance [48][50]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP net income of $0.11 per share and net investment income of $0.23 per share, with a weighted average GAAP yield of 15.5% on the CLO portfolio [9][11][12] - The NAV as of September 30 was $5.99 per share, with cash and cash equivalents totaling $20.1 million, and a NAV-based total return for the quarter of 9.6% annualized [12][21] Business Line Data and Key Metrics Changes - The CLO portfolio increased by 20% to $380 million, with new purchases totaling $116 million, of which 62% was in CLO debt and 38% in CLO equity [11][12] - CLO equity represented 51% of total CLO holdings, down from 53% at the beginning of the quarter [11] Market Data and Key Metrics Changes - The credit markets rallied in Q3, supported by a dovish shift from the Federal Reserve, leading to tightened corporate credit and CLO spreads [4][5] - In the US leveraged loan market, lower quality CCC-rated loans fell amid default concerns, while single B-rated loans advanced due to sustained CLO demand [10] Company Strategy and Development Direction - The company is focusing on increasing its allocation to mezzanine debt due to attractive yields and downside protection, while reducing exposure to new issue equity [6][7] - The strategy emphasizes active trading to capitalize on mispricings and manage risk effectively, with a preference for secondary market acquisitions [6][17] Management's Comments on Operating Environment and Future Outlook - Management noted that volatility and credit dispersion are defining features of the corporate credit markets, with concerns about idiosyncratic credit issues impacting performance [20][21] - The company expects elevated repricing activity and ongoing credit dispersion to create opportunities for outperformance through active portfolio management [25] Other Important Information - The company has increased its credit hedging portfolio to approximately $90 million, equating to about 40% of NAV, to provide downside protection [21][22] - Following the quarter end, the synthetic short position in credit hedges reached over $150 million as of October 31 [22] Q&A Session Summary Question: What drove the increase in credit hedges from the end of September to the end of October? - The increase was primarily due to the growth in portfolio size and leverage, ensuring liquidity during market downturns [28][29] Question: Is there a more cautious view on credits reflected in the decrease of the CLO portfolio? - The decrease was attributed to quarterly payment distributions and markdowns in CLO equity prices, not necessarily a more cautious view [35][36] Question: Can you discuss the appetite for leverage and potential unsecured debt issuance? - The company is close to being fully invested and could increase leverage to around $400 million, constrained by regulatory restrictions [39][40] Question: What are the predictions for CLO supply next year? - Predictions are uncertain, but there may be more reset and refinancing activities rather than new issues, depending on market conditions [42][43] Question: How does AI impact the CLO market and credit flow? - AI may create winners and losers in the loan market, affecting CLO equity returns and increasing concerns about credit dispersion [45][46]