Eagle Point Income Company · NYSE:EIC
Eagle Point Income — Q2 2022 Earnings Presentation
29 slides from Eagle Point Income's earnings presentation, Aug 16, 2022
Slide 1: Eagle Point Income Company Quarterly Update – 2Q 2022
EAGLE POINT INCOME COMPANY QUARTERLY UPDATE – 2Q 2022 AUGUST 16, 2022
Slide 2: Important Information
I M P O R TAN T I N F O R M AT I O N This presentation and the information and views included herein do not constitute investment advice, or a recommendation or an offer to enter into any transaction with Eagle Point Income Company Inc. (“EIC” or the “Company”) or any of its affiliates. This present
Slide 3: Table of Contents
TAB L E O F C O N T E N T S 1. Introduction to Eagle Point Income Company (EIC) 2. Senior Investment Team and Investment Process 3. CLO Market Overview 4. EIC Supplemental Information 5. Selected Market Data 2
Slide 4: Introduction to Eagle Point Income Company
INTRODUCTION TO EAGLE POINT INCOME COMPANY
Slide 5: Company and Adviser Overview
I N T R O D U C T I O N TO E I C Company and Adviser Overview The Company: Eagle Point Income Company Inc. (EIC) IPO Date July 23, 2019 Investment Objective Primary objective to generate high current income, with a secondary objective to generate capital appreciation Seek to achieve these obje
Slide 6: EIC Highlights
I N T R O D U C T I O N TO E I C EIC Highlights CLO Junior Debt is an BB-rated CLO debt has had a relatively low historical default rate of 7 bps per annum1 Attractive Asset Class Eagle Point believes BB-rated CLO debt offers the potential for higher returns as compared to senior secured loans a
Slide 7: Cumulative Distributions Per Share
I N T R O D U C T I O N TO E I C Cumulative Distributions Per Share EIC currently pays a monthly distribution of $0.14 per share1 EIC Cumulative Distributions Per Share2 $4.50 $4.24 $4.00 $3.51 $3.50 $3.00 $2.50 $2.18 $2.00 $1.50 $1.00 $0.69 $0.50 $0.00 2019 2020 2021 YTD 2022 Regular Distributions
Slide 8: Why Invest in BB-Rated CLO Debt?
I N T R O D U C T I O N TO E I C Why Invest in BB-Rated CLO Debt? Key Attributes Potential for lower credit expense Potential for higher returns Expected protection against rising interest rates1 98.5% (1,327 out of 1,347 tranches) Potential For Lower Credit Expense CLO BB versus BB HY Yield3
Slide 9: Senior Investment Team and Investment Process
SENIOR INVESTMENT TEAM AND INVESTMENT PROCESS
Slide 10: Senior Investment Team
INVESTMENT PROCESS Senior Investment Team Thomas Majewski Daniel Ko Daniel Spinner, CAIA Managing Partner Principal and Portfolio Principal and Portfolio Chairman and Manager Manager Chief Executive Officer 26 20 16 16 25 19 Years in Years in Years in Years in Years in Years in Financial Services CL
Slide 11: Investment Strategy and Process
INVESTMENT PROCESS Investment Strategy and Process With an emphasis on assessing the skill of CLO collateral managers and analyzing CLO structures, Eagle Point believes that its approach is more akin to a private equity-style investment approach than to the process used by many fixed income invest
Slide 12: CLO Market Overview
FLEAGLE POINT INCOME GOMPANY
Slide 13: The CLO Market is Large and Important to the Loan Market
C L O M AR K E T O V E RV I E W The CLO Market is Large and Important to the Loan Market The CLO market is the largest source of capital for the institutional senior secured loan market1 U.S. Leveraged Loans Outstanding1 U.S. CLO Outstanding2 CLOs Oustanding ($B) CLO Count (#) $1,500 $1,415 $1,000 $
Slide 14: Positive Loan Market Track Record
C L O M AR K E T O V E RV I E W Positive Loan Market Track Record From 1992 through 2021, the CSLLI generated positive total returns in 28 of the 30 calendar years Credit Suisse Leveraged Loan Index (“CSLLI”) Annual Total Return1 44.9% Annualized Return: 5.5%1 11.2% 11.0% 10.3% 10.0% 9.9% 9.4% 8.9%
Slide 15: Senior Secured Loans are the Raw Material of CLOs
C L O M AR K E T O V E RV I E W Senior Secured Loans are the Raw Material of CLOs Senior Secured Loans Represent “Pure” Credit Exposure Illustrative Borrowers3 Senior Senior position in a company’s capital structure Secured First lien security interest in a company’s assets Floating Rate Mitigates i
Slide 16: Loan Market Repayment Rate
C L O M AR K E T O V E RV I E W Loan Market Repayment Rate Loan repayments provide capital for reinvestment within CLOs Annual Repayment Rate Annual Repayment Rate Average 60% 56.4% Average: 48.9% 32.4% 48.2% 46.9% 44.7% 40.1% 40% 38.7% 38.1% 37.3% 29.6% 30.0% 26.9% 27.6% 23.6% Cumulative 24.1% Repa
Slide 17: CLOs are Securitizations of a Portfolio of Senior Secured Loans
C L O M AR K E T O V E RV I E W CLOs are Securitizations of a Portfolio of Senior Secured Loans EIC focuses primarily in junior debt tranches of CLOs, with a focus on BB-rated CLO debt CLO Assets CLO Liabilities and Equity AAA-Rated Debt Tranche 60-65% AA-Rated Debt Tranche 9-13% Primarily A-Rated D
Slide 18: Key Forms of Credit Enhancement for CLO Debt Investors
C L O M AR K E T O V E RV I E W Key Forms of Credit Enhancement for CLO Debt Investors CLO debt benefits from structural features and covenants that enhance its credit protection CLO debt benefits from structural features and covenants that enhance its credit protection 1) Overcollateralization ■ Ov
Slide 19: EIC Supplemental Information
EIC SUPPLEMENTAL INFORMATION
Slide 20: Income Statement and Balance Sheet Highlights
E I C S U P P L E M E N TAL I N F O R M AT I O N 1 Income Statement and Balance Sheet Highlights Q2 2022 Q1 2022 Q3 2021 Q2 2021 (Unaudited) (Unaudited) Q4 2021 (Unaudited) (Unaudited) 2 (Dollar amounts are per share of common stock) Weighted Average Effective Yield on the Portfolio3 16.76% 11.34% 1
Slide 21: Portfolio Detail – Q2 2022
E I C S U P P L E M E N TAL I N F O R M AT I O N 1 Portfolio Detail – Q2 2022 Coupon / Coupon / CLO Holdings Principal CLO Holdings Principal Mark Fair Value Effective Mark Fair Value Effective (as of June 30, 2022) Amount (as of June 30, 2022) Amount Yield Yield BB-Rated CLO Debt B-Rated CLO Debt A
Slide 22: Portfolio Summary
E I C S U P P L E M E N TAL I N F O R M AT I O N Portfolio Summary Summary Statistics1 Asset Type Summary2 WA Effective Yield on the Portfolio 12.08% WA Effective Yield on CLO Debt 9.92% B-Rated CLO Debt: WA Coupon on CLO Debt L + 6.16% $1.6mm (1.1%) WA Mark on CLO Debt 84.64% WA Effective Yield on
Slide 23: Obligor and Industry Exposures
E I C S U P P L E M E N TAL I N F O R M AT I O N Obligor and Industry Exposures As of June 30, 2022, EIC has exposure to 1,465 unique underlying borrowers across a range of industries Obligor and Industry Exposure Top 10 Underlying Obligors1 % Total Top 10 Industries of Underlying Obligors1,2 % Tota
Slide 24: Maturity Distribution of Underlying Obligors
E I C S U P P L E M E N TAL I N F O R M AT I O N Maturity Distribution of Underlying Obligors Maturity Distribution of Underlying Obligors1 33.2% 30% % of Fund Exposure 20% 16.4% 16.2% 16.8% Prior to 2025, only 8.6% of EIC’s underlying loan portfolio matures 10% 8.8% 7.4% 1.2% 0.0% 0% 2022 2023 2024
Slide 25: Selected Market Data
FLEAGLE POINT INCOME GOMPANY
Slide 26: Credit Fundamentals
S E L E C T E D M AR K E T D ATA Credit Fundamentals Average Leverage Multiples of Outstanding Loans Average Interest Coverage Multiples of Outstanding Loans (Debt/EBITDA)1 (EBITDA/Interest)1 5.9x 5.8x 5.9x 5.1x 5.6x 4.8x 4.8x 5.4x 4.8x 5.5x 5.3x 5.3x 5.3x 5.3x 5.2x 4.5x 4.6x 4.5x 5.1x 5.0x 5.0x 5.0
Slide 27: Credit Fundamentals
1. 1Q10 9.4% 1Q10 5.2% 2Q10 15.0% 2Q10 8.0% 3Q10 24.5% 3Q10 14.5% Source: S&P LCD. 4Q10 20.2% 4Q10 13.7% 1Q11 19.6% 1Q11 21.0% 2Q11 17.0% 2Q11 18.0% 3Q11 14.8% 3Q11 14.0% 4Q11 9.6% 4Q11 14.0% 1Q12 12.8% 1Q12 12.0% Credit Fundamentals 2Q12 12.2% 2Q12 9.1% 3Q12 9.3% 3Q12 9.9% 4Q12 8.3% 4Q12 8.9% 1Q13
Slide 28: Liquidity Considerations
S E L E C T E D M AR K E T D ATA Liquidity Considerations Secondary trading is conducted through BWICs (“Bids Wanted in Competition”) and privately negotiated sales CLO debt and equity tranches typically settle electronically via DTC and trade on a T+2 basis Annual CLO Trading Volume $200 $184.6
Slide 29: Company Information
COMPANY INFORMATION Eagle Point Income Company Inc. 600 Steamboat Road, Suite 202 Greenwich, CT 06830 www.EaglePointIncome.com ICR (Media and Investor Relations) IR@eaglepointincome.com (203) 340 8510
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