Financial Data and Key Metrics Changes - The company generated net investment income and realized capital gains of $0.33 per share for Q1 2025, consisting of $0.28 of net investment income and $0.05 of realized capital gains, compared to $0.12 per share in Q4 2024 [6][15] - The company's NAV as of March 31 was $7.23 per share, a 13.7% decrease from $8.38 per share at year-end [6][7] - The first quarter GAAP net loss was $97.5 million, with total investment income of $52.3 million and realized capital gains of $5.3 million [15] Business Line Data and Key Metrics Changes - The company priced three new CLO equity investments and reset nine positions in its portfolio, lengthening reinvestment periods to five years [4][5] - Sales and paydowns of CLO debt in the portfolio totaled $48.5 million during the first quarter, generating $0.05 per share of realized gains [9] - Approximately 18% of the CLO equity portfolio based on fair value are new investments or recently reset CLOs, scheduled to make their initial payments in subsequent quarters [11] Market Data and Key Metrics Changes - The S&P UBS Leveraged Loan Index generated a total return of 0.6% during Q1 2025, with a trailing twelve-month default rate of 82 basis points, well below the long-term average of 2.6% [18][19] - The weighted average spread of the CLO's underlying loan portfolios stood at 3.36% as of March 31, down from 3.49% at year-end [20] - The total issuance volume for CLOs reached $153 billion during Q1 2025, significantly above the $88 billion from Q1 2024 [23] Company Strategy and Development Direction - The company has completed its planned portfolio rotation from CLO debt into CLO equity and other investments prior to the recent market volatility [9] - The focus remains on enhancing net investment income and cash flow through proactive investment strategies, including resetting and refinancing CLOs [28] - The company maintains a 100% fixed-rate financing structure with no maturities prior to 2028, providing protection against future interest rate rises [25] Management's Comments on Operating Environment and Future Outlook - Management views the recent market price fluctuations as short-term and not indicative of fundamental issues within the portfolio [7][28] - The company believes that current discounted reinvestment opportunities will translate into good returns in the medium term, similar to past periods of volatility [9][28] - Management remains optimistic about the stability of cash flows from CLO equity, despite recent market challenges [32][41] Other Important Information - The company utilized its at-the-market program to issue $66 million of common stock at a premium to NAV, resulting in NAV accretion of $0.02 per share [12] - The company declared common regular monthly distributions for Q3 2025 of $0.14 per share [13] Q&A Session Summary Question: What will it take for the market to recognize the stability of CLO cash flows? - Management noted that cash flows from CLO equity have historically been stable, even during market downturns, and emphasized the importance of cash generation [31][32] Question: Will the pace of resets and refinancings continue? - Management indicated that while the pace may slow compared to Q1, they expect single to double-digit resets per quarter under current market conditions [45][46] Question: What accounts for the difference between gross and net capital deployed? - The difference is attributed to the significant rotation of CLO debt into CLO equity, which reduces the overall net capital figure [50][51] Question: Why was the pace of deployment slower in April? - Management explained that market volatility led to a slowdown in CLO equity trading, affecting deployment rates, but they expect activity to pick up as the market stabilizes [56][58] Question: How does the company handle loan loss reserves compared to banks? - Management clarified that while they do not create reserves like banks, their effective yields account for future losses, and they focus on cash generation for distributions [86][88]

Core Viewpoint - Eagle Point (ECC) reported quarterly earnings of $0.28 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, but down from $0.29 per share a year ago, indicating a 7.69% earnings surprise [1][2] Financial Performance - The company posted revenues of $52.34 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.15%, but up from $40.81 million year-over-year [2] - Over the last four quarters, Eagle Point has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Eagle Point shares have declined approximately 13.7% since the beginning of the year, contrasting with the S&P 500's gain of 0.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $52.95 million, and for the current fiscal year, it is $1.01 on revenues of $211.8 million [7] Industry Outlook - The Financial - Investment Management industry, to which Eagle Point belongs, is currently ranked in the bottom 11% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Eagle Point's stock performance [5][6]

Company Overview - Eagle Point Credit Company (ECC) aims to generate high current income by investing in CLO equity and junior debt tranches[14] - As of April 30, 2025, ECC's monthly distribution is $0.14 per share, resulting in a 21.6% distribution rate[14] - Since its IPO, ECC has distributed $22.33 cumulatively per common share[14] - Eagle Point Credit Management LLC manages over $12 billion in AUM across its platform[14] - The Adviser and Senior Investment Team have invested approximately $12.2 million in securities issued by the Company[15] CLO Market and Strategy - CLO equity has historically generated strong absolute returns with a low loss rate, with 96% of U S CLOs (2002-2011 vintages) generating positive equity returns[34, 35] - As of Q1 2025, 95.7% of ECC's portfolio is exposed to floating rate senior secured loans[30] - The S&P UBS Leveraged Loan Index has shown positive total returns in 30 out of the past 33 full calendar years[15, 45] - As of March 31, 2025, ECC's portfolio includes 215 CLO equity securities[30] Q1 2025 Performance and Portfolio Details - In Q1 2025, ECC received $72.19 million in distributions from CLO equity and $12.81 million from other investments, totaling $85 million in portfolio cash distributions[57] - ECC's portfolio, as of March 31, 2025, is comprised of 79% CLO equity, 4% CLO debt, 1% loan accumulation facilities, 4% regulatory capital relief, 6% consumer ABS, 5% other, and 1% cash[67] - As of March 31, 2025, ECC has exposure to 1,931 unique underlying loan obligors[30, 69]

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