Eagle Point Income Company (EIC) will be selling a new issue of Term Preferred Stock. This will be a monthly payor.
EIC is the sister (or maybe it is brother) company to Eagle Point Credit Company (ECC) who has issued term preferreds for years.
Like ECC, Eagle Point Income is a CLO (collateralized loan obligation) owner and they must maintain 200% asset coverage.
The registration statement can be read here.
Thanks to ken for catching this one.
What’s the deal with this one? Still waiting? Canceled?
https://www.sec.gov/Archives/edgar/data/1754836/000110465921108770/tm2125655d2_424b3.htm
This is the last Prospectus [Rule 424(b)(3)] supplement they filed with the SEC. Otherwise, we’ve seen no new developments/news. Maybe contact IR?
Phone: (203) 340-8510
E-Mail: ir@eaglepointincome.com
8/24 EIC- a bump & a bump-
Distributions
On July 30, 2021, we paid a monthly distribution of $0.09 per share on shares of our common stock to holders of record as of July 12, 2021. As previously announced, the Company declared distributions of $0.09 per share on shares of our common stock payable on each of August 31, 2021 and September 30, 2021 to holders of record as of August 11, 2021 and September 10, 2021, respectively; and distributions of $0.12 per share on shares of our common stock payable on October 29, 2021, November 30, 2021 and December 31, 2021 to holders of record as of October 12, 2021, November 10, 2021 and December 13, 2021, respectively.
Investment Strategy; Leverage
On August 10, 2021, our board of directors approved an increase in the percentage of our total assets which may be invested in collateralized loan obligation (“CLO”) equity securities. Effective immediately, we may invest up to 35% of total assets (at the time of investment) in unrated CLO equity securities. In addition, over the long term, management expects us to operate under normal market conditions generally with leverage within a range of 25% to 35% of total assets through borrowings under our credit facility or through the issuance of preferred stock or debt securities, although the actual amount of our leverage is uncertain from time to time.
FYI – Fitch offers a free weekly U.S. Leveraged Finance and CLO Weekly which provides an (almost) weekly update on CLO credit trends. You have to sign up for Fitch but it’s free. It’s a decent way to stay ahead of the trends which can’t be a bad thing for anyone playing in the space but feeling like they’re playing with fire. Below is the link to Aug 16 edition but you have to sign up to view it. https://www.fitchratings.com/research/structured-finance/us-leveraged-finance-clo-weekly-proposed-updates-to-clo-rating-criteria-released-lowest-ytd-hy-default-rate-in-14-years-16-08-2021… They’ve also announced they off for 2 weeks so next edition will be Sept 13 I believe.
Thansks 21wr–good source.
Proto,
I think the 10-Ks, and maybe 10-Qs, disclose a company’s portfolio.
Also, companies post a link to a “Presentations” page (via the IR webpage) and these presentations often include “supplements” for the presentation’s attendees to view while listening to the presentation. These supplements may show the company’s breakdown of its holdings, especially the supplements that accompany quarterly conference calls.
There may be other sources as well.
We need more term preferred from closed end funds with their leverage restrictions. EIC invests in the less volatile debt tiers of CLO’s than its sister/brother company ECC, which invests in CLO equity. Because the underlying is less volatile, perhaps this will better meet some people’s comfort zone for buying some riskier preferred.
If I may – I wanted to open up the discussion around CLO’s. I hold a number of issues (PRIF-H, NRZ-B, NLY-G) that I am trying to determine their respective CLO exposure. While I am interested in a new term preferred such as EIC, I am concerned I am overloading in this area. Is there any relatively easy way to assess CLO exposure in these instruments (or others) to determine an aggregate amount? Thanks in advance.
Off the top of my head, here are a few CEFs and stocks that have CEF exposure.
ECC – Closed End Fund (CEF) holding mostly CLO Equity.
EIC – CEF holding mostly CLO Debt, lower quality tranches.
(ECC and EIC are cousins – same managers.)
OXLC- CEF holding mostly CLO Equity
OXSQ- Business Development Company holding 2/3 Senior Loans and 1/3 CLO equity
(OXLC and OXSQ are also cousin company.)
PSEC – BDC with 15% exposure to CLOs – not sure if debt or equity tranches.
PRIF – CEF (with no public common stock) with CLO equity and junior debt tranches.
(PSEC and PRIF are managed by the same folks – more cousins here.)
XFLT – Term Trust that terminates in 2029. 36% CLO Equity, 8% CLO Debt, the rest in various other high yield debt instruments.
SAR – BDC that doesn’t invest in CLOs, but actually owns and manages one.
I’m sure there are more, but that’s all I can remember off the top of my head. Should give you a good list to research. I’m not aware of NRZ or NLY having any CLO exposure, but PRIF-H definitely does. Hopefully that helps a little.
I would add HFRO, Moodys A—1 and all
ACP.A I think is also in the same category.
Thanks RJZ – I appreciate the data you provided.
Here RJZ–here are the CEF preferreds
https://innovativeincomeinvestor.com/preferred-stocks-of-closed-end-funds/
Thanks Tim, I was trying to answer Proto123’s question about CLO exposure. Unfortunately I had a typo and typed CEF where I meant to type CLO. Your CEF preferred list is awesome; I use it all the time. Just need some better coupons – like everything else, they are all very low and getting lower with every issuance.
RJZ –
OFS Credit (ticker OCCI) could be added to the list, also. They have some term preferred’s, are into CLO’s and just raised their dividend:
https://ir.ofscreditcompany.com/news-releases/news-release-details/ofs-credit-company-increases-common-stock-distribution-0
Thanks forgot about them.
Yeah, glad to help. I’ve been holding OCCIO since it dipped below par. Definitely in the speculative camp for me and a limited position, as such – but still a good little earner. If it wasn’t for the 200% asset coverage ratio requirement, I doubt we’d own this one at all.
Interestingly, back in March OCCI offered a round of common and in April issued OCCIO. BOTH issues said Use of Proceeds would include funds to call in all or part of OCCIP 6 7/8% and/or what I think is a non-listed Ser B 6.60% preferred, but now 4 months later, I don’t think they’ve called any part of either yet, have they?
I’ve got a full position of OCCIP and its been a steady payer for quite a while. No redemption notices from them so far… knock on wood.
Here is the info on NRZ’s investment portfolio:
https://www.newresi.com/strategy-portfolio/investment-portfolio
Yes RJZ–EIC is mainly debt tranches while almost all the other funds are heaviest into equity tranches (most risk). By and large I think they are all ok now–subject to change are interest rates move higher (if they do) and/or we move into a recession.
Tim, I agree, I am very comfortable with the term preferreds and baby bonds of the CLO heavy issues – particularly the ECC term preferred that have strong covenants, in order to facilitate staying within the CEF leverage restrictions. I stay away from the common shares of these entities, except as speculative trades from time to time. Can’t wait to see how EIC’s preferred prices.