Eagle Point Credit Company Inc. Q4 2025 Earnings Call Summary

Core Viewpoint - The company faces performance challenges in 2025 due to 'return-insensitive' captive CLO equity funds, leading to faster loan spread compression than CLO liabilities can adjust [1] Group 1: Portfolio Management - The company increased its allocation to non-CLO credit assets to 26% of the portfolio, aiming for higher risk-adjusted returns in regulatory capital relief and private credit [1] - Active portfolio management through 34 resets and 27 refinancings in 2025 resulted in an average CLO debt cost saving of 42 basis points, helping to mitigate some loan spread compression [1] Group 2: Market Conditions - The current loan market is characterized by a 'super majority' of new CLOs being purchased by captive funds, similar to the risk retention period of 2017-2018 [1] Group 3: Strategic Partnerships - Strategic partnerships with Muzinich in the U.S. and Europe are aimed at increasing top-line revenue shares, providing a diversified income stream beyond direct CLO equity holdings [1] Group 4: Credit Profile - The company maintains a higher quality credit profile compared to the broader market, with lower CCC-rated exposure at 4.1% versus 4.3% and a superior junior OC cushion at 4.5% compared to 3.9% [1]