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Core Viewpoint - Ellington Credit Company has announced the pricing of an underwritten public offering of $50 million aggregate principal amount of 8.50% notes due 2031, which will mature on March 30, 2031, and can be redeemed partially or fully starting March 30, 2028 [1][2]. Group 1: Offering Details - The 2031 Notes have been rated 'BBB' by Egan-Jones Ratings Company, an independent rating agency [2]. - The Fund has granted underwriters a 30-day option to purchase up to an additional $7.5 million aggregate principal amount of 2031 Notes to cover over allotments [2]. - The offering is expected to close on March 30, 2026, subject to customary closing conditions, and the Fund intends to list the 2031 Notes on the New York Stock Exchange under the symbol "ELLA" [3]. Group 2: Use of Proceeds - The net proceeds from the offering are expected to be used for general corporate purposes, including funding purchases of additional assets in line with the Fund's investment objectives and strategies, and repaying short-term borrowings under reverse repurchase agreements [2]. Group 3: Company Background - Ellington Credit Company is a non-diversified closed-end fund that aims to provide attractive current yields and risk-adjusted total returns by primarily investing in corporate collateralized loan obligations (CLOs), focusing on mezzanine debt and equity tranches [7]. - The Fund is externally managed and advised by an affiliate of Ellington Management Group, L.L.C., a leading fixed-income investment manager founded in 1994 [7][8].

Core Viewpoint - Ellington Credit Company has declared a monthly common dividend of $0.08 per share, payable on April 30, 2026, to shareholders of record as of March 31, 2026 [1] Group 1: Dividend Announcement - The Board of Trustees of Ellington Credit Company announced a monthly common dividend of $0.08 per share [1] - The dividend is scheduled to be paid on April 30, 2026, to shareholders who are on record as of March 31, 2026 [1] Group 2: Financial Performance - As of December 31, 2025, the net asset value (NAV) per share was reported at $5.19, which includes distributions of $0.24 per share for the quarter [1] - The GAAP net income (loss) for the same period was $(21.1) million, equating to $(0.56) per share [1] - Net investment income (NII) was reported at $7.8 million, or $0.21 per share [1] Group 3: Tax Information - Information regarding the federal income tax treatment of distributions deemed paid in 2025 has been posted on the Fund's website [2] - The Fund operated as a taxable C-Corp from January 1, 2025, to March 31, 2025, and has been operating as a regulated investment company since April 1, 2025 [2]

Core Insights - The company faced significant challenges in the CLO equity market during Q4 2025, with a median CLO equity return of negative 9% for the quarter and negative 14% for the full year, marking it as one of the most difficult quarters in recent memory [1][4][7] - Active portfolio management and a strategic shift towards CLO mezzanine debt tranches helped the company limit losses to approximately 9% of net asset value (NAV) and outperform peers [3][7] Financial Performance - The company reported a GAAP net loss of $0.56 per share for Q4, with an NAV of $5.19 and a total return of negative 9.1% for the quarter [6][10] - The weighted average CLO portfolio yield decreased to 13.7% from 15.5% in the previous quarter, reflecting lower asset yields and portfolio turnover [6][9] Portfolio Positioning - The company increased its allocation to CLO mezzanine debt tranches to approximately 70% of post-conversion purchases, viewing them as offering a favorable balance of yield and downside protection [11] - During Q4, the company executed 47 unique CLO trades and made $66 million in new purchases, with CLO equity representing 52% of total CLO holdings at quarter-end [12][13] Risk Management - The company significantly increased credit hedges to roughly $175 million, or about 90% of NAV, to protect against market volatility [15] - Despite the drag on results from hedges, the company utilized various hedging tools to manage risk effectively [16] Market Outlook - Looking ahead to 2026, the company anticipates continued pressure on CLO equity but plans to increase mezzanine buying and explore potential long-term unsecured debt issuance for liquidity [19] - The company noted that more than three-quarters of its purchases in early 2026 have been mezzanine debt, particularly focusing on deleveraging double-B tranches [19]

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]

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) per share of $5.19, reflecting a total return of negative 9.1% for the quarter [12][16]. - The weighted average GAAP yield for the quarter on the CLO portfolio was 13.7%, down from 15.5% in the prior quarter [13]. Business Line Data and Key Metrics Changes - The company limited fund losses to approximately 9% of NAV, outperforming the overall peer set, despite the challenging market environment for CLO equity [4][5]. - CLO equity represented 52% of total CLO holdings, roughly unchanged from the prior quarter, while CLO mezzanine debt tranches proved more resilient [14]. Market Data and Key Metrics Changes - The CLO equity market faced significant challenges, with the median CLO equity return for the quarter at negative 9% and negative 14% for the full year [5]. - In the U.S. leveraged loan market, lower-rated CCC loans experienced significant pressure, while premium-priced loans continued to refinance at par [12]. 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, with approximately 70% of CLO purchases during the nine-month period being mezzanine debt tranches [7]. - The company is focused on rebuilding net investment income and NAV as it deploys capital into what is perceived as a distressed market, viewing it as fertile ground for active trading and disciplined risk management [26][27]. Management's Comments on Operating Environment and Future Outlook - Management noted that while the fourth quarter was challenging for CLOs, disciplined and active portfolio management cushioned the impact and positioned the company for future opportunities [11]. - The company believes that a substantial portion of recent price declines are reversible, as they reflect yield spread widening rather than fundamental credit impairment [26]. Other Important Information - The company executed 218 CLO trades during the nine-month period following its conversion to a CLO closed-end fund, comprising $272 million of purchases and $63 million of sales [23]. - The company maintained a credit hedge portfolio equal to roughly 90% of its NAV as of December 31st [10][15]. Q&A Session Summary Question: What is the company's stance on the software sector and other sectors of interest? - Management indicated that while there has been damage in the software sector, they believe there will be winners and losers, and they maintain a diversified portfolio to manage risk effectively [30][34]. Question: Can you quantify the proportion of loans underlying the portfolio that are triple C rated or lower? - Management estimated 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][43]. Question: What is the drag from credit hedges on a go-forward basis? - Management noted that the drag from credit hedges amounts to approximately 1%-2% of fund NAV per annum, which they consider reasonable for the protection provided [51][52]. Question: How do redemptions affect conditions in the CLO market? - Management stated that redemptions can create opportunities for active trading, as flows move between different funds and portfolios [64][65]. Question: What is the timeline and structure for working through potential defaults in the CLO market? - Management explained that recoveries from leveraged loans historically have been well above zero, with an average par burn or loss rate of about 75 basis points annually [68].

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 ...

Financial Performance - Net asset value (NAV) per share was $5.19 as of December 31, 2025, reflecting distributions of $0.24 per share for the quarter [8]. - GAAP net loss was $(21.1) million, or $(0.56) per share, indicating a significant drop in NAV due to challenges in the CLO equity market [8]. - Net investment income (NII) was $7.8 million, or $0.21 per share, with adjusted net investment income also reported at $7.8 million [8]. - For the quarter ended December 31, 2025, net investment income is $7,751,000, down from $8,485,000 in the previous quarter [30]. - Adjusted net investment income for the same quarter is $7,802,000, with an adjusted net investment income per share of $0.21 [30]. - The company incurred non-recurring expenses of $49,000 related to strategic transformation costs in the quarter ended December 31, 2025 [30]. Investment Portfolio - The CLO portfolio had a fair value of $369.5 million, with CLO debt investments totaling $176.9 million and CLO equity investments at $192.6 million [8]. - The company received $19.1 million in recurring cash distributions from the investment portfolio, equating to $0.51 per share [8]. - The investment portfolio generated negative results due to unrealized losses in CLO equity investments, with cash and cash equivalents of $24.3 million as of December 31, 2025 [20]. - The company executed 47 trades, purchasing $65.8 million of CLO investments and selling $17.4 million during the quarter [8]. - Total assets as of December 31, 2025, amount to $414,963,000, with investments at fair value of $369,885,000 [21]. Market Conditions and Strategy - The company plans to selectively increase its CLO equity position as market opportunities arise, following recent headwinds in the CLO equity market [5]. - Credit hedges amounted to $(174.8) million as of December 31, 2025, compared to $(90.6) million as of September 30, 2025 [11]. - The weighted average GAAP yield for the CLO portfolio was 13.7% for the quarter [8]. - The fund primarily invests in corporate collateralized loan obligations (CLOs), focusing on mezzanine debt and equity tranches [22]. - Forward-looking statements are subject to risks such as changes in interest rates and market volatility, which could impact future performance [24]. Shareholder Information - The weighted average shares outstanding for the quarter ended December 31, 2025, is 37,570,694 [30]. - Net asset value is reported at $195,034,000, resulting in a net asset value per common share of $5.19 [21]. - The company will host a conference call on March 5, 2026, to discuss financial results for the quarter ended December 31, 2025 [23]. - The company emphasizes the importance of adjusted net investment income as a useful indicator of long-term financial performance [27].

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].