Eagle Point Income Company (EIC) Q2 FY26 earnings call: guidance and Q&A

Erik asked about the drivers behind the decrease in recurring cash distributions, distinguishing between market factors and portfolio performance, and what would lead to an inflection point for growth.

Dan Ko explained that the CLO debt portion is expected to increase income as base rates rise. The decrease was mainly driven by CLO equity due to spread compression and the semi-annual payment nature of some underlying bonds, which causes fluctuations. He expects recovery over time.

“The decrease in cash flows was probably mainly driven by the CLO equity portion of the portfolio, which has, kind of, faced spread compression over the past, kind of -- at least during 2025 and the effects of that is really being felt more now as all those, kind of, loan, kind of, coupons were reset.”

asked by Erik Zwick · answered by Daniel Ko

Erik inquired about the company's updated thoughts on allocating capital towards share repurchases, considering the recovered NAV and persistent stock price discount, especially since prior buybacks were less aggressive due to liquidity concerns.

Tom Majewski acknowledged the discount and the balance between share price and stock liquidity/daily volume. He noted that buying back equity could help align leverage with the target range, and the company has an undrawn revolver. They evaluate all capital allocation levers daily.

“We're mindful of the discount on the share price balanced against the liquidity in the stock and the daily volume. And one of the things, I think I said on the last call was, we backed off somewhat just due to the impact we saw on the volume of the stock as we were buying it back.”

asked by Erik Zwick · answered by Thomas Majewski

Erik asked about the dynamics driving the record CLO trading volume in 2026, whether increased liquidity is an advantage, and if it attracts more competitors.

Dan Ko stated that the increased liquidity is a benefit for the fund, allowing for portfolio repositioning. He noted that the CLO market has grown significantly since 2012, with more participants and attention, which is positive.

“And -- without actually it was, kind of, better than we anticipated in terms of, kind of, the levels that we were able to get, and that's really due to just the liquidity that has grown within the CLO market and just there being more eyes and people that actually look at CLOs versus 2012 when we initially started.”

asked by Erik Zwick · answered by Daniel Ko

Timothy asked why leverage is currently at 12% (below the 25-35% target) and the path to getting back in line with the target.

Dan Ko explained that the company retired more expensive preferreds earlier in the year. They are now issuing 6% convertible perpetual preferreds (EIC AA and AB) and expect this issuance to continue, increasing leverage. The undrawn revolver also provides a tool to increase leverage.

“So we, earlier this year, kind of retired, I guess, our most expensive preferreds, which were, I think, at 8% EICC and that there was just relative to, kind of, the opportunities we were seeing in CLO, that didn't make a ton of sense to keep outstanding.”

asked by Timothy D'Agostino · answered by Daniel Ko

Timothy asked how the "other investments" sleeve for EIC is similar or different to that of Eagle Point Credit Company (ECC).

Dan Ko confirmed that there is a good amount of overlap between the "other investments" in EIC and ECC. He noted that EIC, being a smaller fund, might have less concentration in some of these, but they expect a lot of overlapping positions over time.

“No, it is similar in that many of the -- there's a good amount of overlap between the ECC and EIC kind of other investments. I guess EIC is somewhat -- given that it's a smaller fund, maybe has a little bit less concentration in some of these whereas ECC has, kind of, bigger positions.”

asked by Timothy D'Agostino · answered by Daniel Ko