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What were the key takeaways from Eagle Point Income's earnings call?

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- **Record Performance**: 2024 GAAP ROE of 21% and 24.8% total return, with $2.40 per share distributed (15.2% yield). Q4 NAV up 1% to $14.99 per share.
- **CLO Growth**: $91M invested in 11% yield CLOs, with 5 refinancings lowering debt costs by 28bps. CLO market issuance hit record $202B in 2024.
- **Stable Distributions**: $0.20/month distributions maintained through June 2025, supported by $3.30/year cash flows.
- **Strategic Shifts**: Potential increase in CLO equity allocation to 30%, with selective growth in high-yielding CFO investments.
- **Risk Management**: 0.4% portfolio default exposure, 30% leverage, and $30M+ liquidity for reinvestment opportunities.

**【CEO Opening Remarks】**
- **2024 Performance Highlights**: Achieved a GAAP return on equity of 21% and a total return of 24.8% on common stock (including reinvested distributions). Distributed $2.40 per share in cash, representing a 15.2% yield based on average stock price.
- **Q4 Cash Flows**: Received $16.1 million ($0.82 per share) in recurring cash flows, driven by new CLO debt investments. NAV increased to $14.99 per share, up 1% from Q3 and 4% year-over-year.
- **Distribution Stability**: Maintained monthly $0.20 per share distributions through June 2025, supported by consistent portfolio cash flows.

**【Portfolio Manager (Dan Ko) Investment Update】**
- **CLO Deployment**: Invested $91 million in new CLO debt and equity with a weighted average yield of 11%. Q4 S&P UBS Leveraged Loan Index returned 2.3%, and prepayments remained elevated at 7% of the market.
- **CLO Refinancings**: Completed 5 refinancings and 4 resets, lowering debt costs by 28bps and extending reinvestment periods to 3.0 years. Default risk remains low (0.9% trailing 12-month rate).
- **Market Trends**: Record $202 billion in new CLO issuance in 2024, with $509 billion in total issuance (including resets). CLO BB spreads remain attractive despite rate cuts, with limited impact on portfolio yields.

**【CFO (Lena Umnova) Financial Results】**
- **Q4 Earnings**: NII and realized gains of $0.54 per share, up from $0.57 in Q3. GAAP net income of $0.76 per share included $1.6 million in realized gains and $2.0 million in unrealized appreciation.
- **Leverage and Liquidity**: Maintained 30% leverage (within 25%-35% target) and $30 million+ cash/revolver capacity as of January 31. NAV estimate for January 31 was $14.96-$15.06 per share.

**【Q&A Key Takeaways】**
- **CLO Debt Outlook**: CLO BB spreads expected to trend tighter over time, but reinvestment risk exists as called bonds are replaced at lower spreads. CLO equity allocation could rise to 30% of portfolio.
- **CFO Investments**: Small ($13M) but high-yielding positions in CFO debt and equity, with subordination levels 2-3x higher than CLO debt. Selective growth in this segment.
- **Rate Sensitivity**: CLO BBs may see minor NII impact from Fed rate cuts, but CLO equity is less sensitive. Management prioritizing rate-agnostic investments.


Eagle Point Income Co Inc. (EIC) Q4 2024 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

EIC

EIC fundamentals

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