Q1 2026 Eagle Point Income Co Inc Earnings Call

May 19, 2026

Speaker #1: Ladies and gentlemen, thank you for your patience. The conference will begin momentarily. Again, thank you for your patience. Greetings and welcome to the Eagle Point Income Co first quarter 2026 financial results conference call.

Operator 2: Greetings, welcome to the Eagle Point Income Company Q1 2026 Financial Results Conference Call. At this time, I will turn the conference over to Mr. Darren Daugherty from Prosek Partners. You may now begin.

Operator: Greetings, welcome to the Eagle Point Income Company Q1 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief Q&A session will followed after the presentation. If anyone should require for further assistance please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, I will turn the conference over to Mr. Darren Daugherty from Prosek Partners. You may now begin.

Speaker #1: At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad.

Speaker #1: As a reminder, this conference is being recorded. At this time, I will turn the conference over to Mr. Darren Daugherty from ProSec Partners. You may now begin.

Speaker #2: Thank you, operator, and good morning. Welcome to Eagle Point Income Co's earnings conference call for the first quarter of 2026. Speaking on the call today are Thomas Majewski, chairman and chief executive officer of the company; Dan Ko, senior principal and portfolio manager for the company's advisor; and Lena Umnova, chief accounting officer for the advisor.

Darren Daugherty: Thank you, operator, and good morning. Welcome to Eagle Point Income Company's Earnings Conference Call for Q1 2026. Speaking on the call today are Thomas Majewski, Chairman and Chief Executive Officer of the company, Daniel Ko, Senior Principal and Portfolio Manager for the company's advisor, and Lena Umnova, Chief Accounting Officer for the advisor. Before we begin, I would like to remind everyone that the matters discussed on this call include forward-looking statements or projected financial information that involve risks and uncertainties that may cause the company's actual results to differ materially from such projections. For further information on factors that could impact the company and the statements and projections contained herein, please refer to the company's filings with the SEC.

Speaker #2: Before we begin, I would like to remind everyone that the matters discussed on this call include forward-looking statements or projected financial information that involve risks and uncertainties that may cause the company's actual results to differ materially from such projections.

Speaker #2: For further information on factors that could impact the company and the statements and projections contained herein, please refer to the company's filings with the SEC.

Speaker #2: Each forward-looking statement or projection of financial information made during this call is based on the information available to us as of the date of this call.

Darren Daugherty: Each forward-looking statement or projection of financial information made during this call is based on the information available to us as of the date of this call. We disclaim any obligation to update our forward-looking statements unless required by law. Earlier today, we filed our Q1 2026 financial statements and investor presentation with the Securities and Exchange Commission. These are also available in the investor relations section of the company's website, eaglepointincome.com. A replay of this call will also be made available later today. I will now turn the call over to Thomas Majewski, Chairman and Chief Executive Officer of Eagle Point Income Co Inc. Tom?

Speaker #2: We disclaim any obligation to update our forward-looking statements unless required by law. Earlier today, we filed our first quarter 2026 financial statements and investor presentation with the Securities and Exchange Commission.

Speaker #2: These are also available in the Investor Relations section of the company's website eaglepointincome.com. A replay of this call will also be made available later today.

Speaker #2: I will now turn the call over to Thomas Majewski, chairman and chief executive officer of Eagle Point Income Co Tom?

Speaker #3: Thank you, Darren, and good morning, everyone. We're glad you're joining us today for Eagle Point Income Co.'s quarterly earnings call. Despite facing some broader market challenges, EIC had a strong first quarter.

Thomas Majewski: Thank you, Darren. Good morning, everyone. We're glad you're joining us today for Eagle Point Income Co Inc.'s quarterly earnings call. Despite facing some broader market challenges, EIC had a strong Q1. During the quarter, we had an increase in our net investment income from the prior quarter, and our recurring cash flows covered our distributions and our total company expenses. The CLO market faced challenging conditions in much of Q1 2026. The company was not immune to these broader dynamics. While CLO fundamentals remained relatively stable, a decline in loan prices, especially in the software sector, and a cautious tone across credit markets due to the ongoing war in Iran weighed on our NAV during the quarter.

Speaker #3: During the quarter, we had an increase in our net investment income, from the prior quarter, and our recurring cash flows covered our distributions and our total company expenses.

Speaker #3: The CLO market faced challenging conditions in much of the first quarter of 2026, and the company was not immune to these broader dynamics. While CLO fundamentals remained relatively stable, a decline in loan prices especially in the software sector and a cautious tone across credit markets due to the ongoing war in Iran weighed on our NAV during the quarter.

Speaker #3: The software sector was a particular area of focus during the quarter, and investors continued to assess the potential impact of artificial intelligence on certain business models and revenue streams.

Thomas Majewski: The software sector was a particular area of focus during the quarter, and investors continued to assess the potential impact of artificial intelligence on certain business models and revenue streams. Importantly, however, our exposure is principally through broadly syndicated loans, not middle-market loans that are commonly found in BDCs. The loans in our CLOs are typically larger, more liquid, institutionally syndicated credits with observable market pricing. While this observable pricing can result in more immediate mark-to-market volatility during periods of volatility, it provides clarity to investors as to the valuation of the underlying investments. While that volatility impacted quarterly valuations of many CLOs, we believe it also created opportunities for CLO collateral managers to reinvest proceeds from sales and pay downs into discounted loans with attractive forward return potential.

Speaker #3: Importantly, however, our exposure is principally through broadly syndicated loans, not middle-market loans that are commonly found in BDCs. The loans in our CLOs are typically larger, more liquid, institutionally syndicated credits with observable market pricing.

Speaker #3: While this observable pricing can result in more immediate mark-to-market volatility during periods of volatility, it provides clarity to investors as to the valuation of the underlying investments.

Speaker #3: While that volatility impacted quarterly valuations of many CLOs, we believe it also created opportunities for CLO collateral managers to reinvest proceeds from sales and paydowns into discounted loans with attractive forward return potential.

Speaker #3: While these factors led to a decline in CLO valuations during the quarter for many securities, we believe the market typically undervalues the reinvestment option embedded in CLOs, during times of volatility.

Thomas Majewski: While these factors led to a decline in CLO valuations during the quarter for many securities, we believe the market typically undervalues the reinvestment option embedded in CLOs during times of volatility. The ability to buy loans at material discounts to par has allowed CLO equity to deliver attractive intermediate and long-term returns many times in the past. In addition, we believe our floating rates CLO junior debt portfolio will benefit from higher income should we see an upward movement in short-term rates. With an increase in inflation more and more the outlook by many market participants, it seems the potential for a rise in short-term rates may be more on the table than we thought even just three months ago.

Speaker #3: The ability to buy loans at material discounts to par has allowed CLO equity to deliver attractive intermediate and long-term returns, many times in the past.

Speaker #3: In addition, we believe our floating rates CLO junior debt portfolio will benefit from higher income should we see an upward movement in short-term rates.

Speaker #3: With an increase in inflation, more and more of the outlook by many market participants it seems the potential for a rise in short-term rates may be more on the table than we thought even just three months ago.

Speaker #3: During the quarter, we deployed 56 million dollars into new investments across multiple credit asset classes, with a weighted average effective yield of 16%, as we took advantage of compelling relative value opportunities created by our particularly uncertain macro environment.

Thomas Majewski: During the quarter, we deployed $56 million into new investments across multiple credit asset classes with a weighted average effective yield of 16% as we took advantage of compelling relative value opportunities created by a particularly uncertain macro environment. Throughout the quarter, we continued to actively manage our CLO portfolio by completing 4 resets and 2 refinancings of our CLO equity positions. This resulted in weighted average CLO debt cost savings of 48 basis points for those CLOs. In addition to lowering debt costs, the reset positions extended their reinvestment periods to 5 years. While CLO junior debt remains central to EIC's strategy, we opportunistically increase our exposure to other credit classes, including infrastructure credit, regulatory capital relief transactions, portfolio debt securities, and other structured and private credit investments.

Speaker #3: Throughout the quarter, we continued to actively manage our CLO portfolio by completing four resets and two refinancings of our CLO equity positions. This resulted in weighted average CLO debt cost savings of 48 basis points for those CLOs.

Speaker #3: In addition to lowering debt costs, the reset positions extended their reinvestment periods to five years. While CLO junior debt remained central to EIC's strategy, we opportunistically increased our exposure to other credit classes, including infrastructure credit, regulatory capital relief transactions, portfolio debt securities, and other structured and private credit investments.

Speaker #3: Eagle Point's platform has a dedicated team with deep specialized expertise across all of these asset classes, and this is a meaningful platform advantage enabling EIC to access originated investment opportunities increase portfolio diversification, and generate excess returns above traditional CLO securities.

Thomas Majewski: Eagle Point's platform has a dedicated team with deep, specialized expertise across all of these asset classes, and this is a meaningful platform advantage, enabling EIC to access originated investment opportunities, increase portfolio diversification, and generate excess returns above traditional CLO securities. NAV decreased to $11.99 per share as of 31 March from $13.31 per share at year-end. The decrease primarily reflects negative mark-to-market adjustments on the company's CLO debt portfolio, driven by wider spreads and weaker risk appetite for CLO junior debt during the quarter. Our GAAP return on first equity was -7.2%. That said, we saw a meaningful rebound in April, and indeed, EIC's NAV increased to between $12.48 and $12.58 per share. This is a 4.5% increase at the midpoint of the range.

Speaker #3: NAV decreased to $11.99 per share as of March 31st from $13.31 per share at year-end. The decrease primarily reflects negative mark-to-market adjustments on the company's CLO debt portfolio, driven by wider spreads and weaker risk appetite for CLO junior debt during the quarter.

Speaker #3: Our gap return on first equity was negative 7.2%. That said, we saw a meaningful rebound in April, and indeed EIC's NAV increased to between 12.48 and 12.58 per share.

Speaker #3: This is a 4.5% increase at the midpoint of the range. Despite the decline in NAV during the first quarter, our net investment income increased quarter over quarter to 36 cents per share and that's up from 35 cents per share in the fourth quarter of 2025.

Thomas Majewski: Despite the decline in NAV during Q1, our net investment income increased quarter over quarter to $0.36 per share, and that's up from $0.35 per share in Q4 2025. Both of these measures are in excess of the $0.33 per common share in distributions that we paid. Turning to our capital structure, during Q1, we launched our 6% Series AA and Series AB convertible perpetual preferred stock offering. This provides the company with a source of low-cost, long-duration capital and increases our financial flexibility. We are unaware of any other publicly traded entity that invests primarily in CLO debt with perpetual financing and consider this to be a material competitive advantage for our company.

Speaker #3: Both of these measures are in excess of the $0.33 per common share in distributions that we paid. Turning to our capital structure, during the first quarter we launched our 6% Series AA and Series AB convertible perpetual preferred stock offering.

Speaker #3: This provides the company with a source of low-cost, long-duration capital and increases our financial flexibility. We are unaware of any other publicly traded entity that invests primarily in CLO debt, with perpetual financing and consider this to be a material competitive advantage for our company.

Speaker #3: Subsequent to quarter-end, we completed the full redemption of our 8% series C term preferred stock, which had been our highest cost debt financing. These actions reflect our continued focus on lowering our cost of capital, lengthening our maturity profile, all with a goal to enhancing our long-term's earning power.

Thomas Majewski: Subsequent to quarter end, we completed the full redemption of our 8.00% Series C Term Preferred Stock, which had been our highest cost debt financing. These actions reflect our continued focus on lowering our cost of capital, lengthening our maturity profile, all with the goal to enhancing our long-term earning power. During the quarter, we repurchased almost 390,000 shares of our common stock at an average discount to NAV of 19.3%. This resulted in NAV accretion of $0.04 per share. Since June 2025, when the board initially announced the share repurchase authorization, through 31 March of this year, we've repurchased a total of $50 million of common stock at an average discount of 13% of NAV, resulting in NAV accretion of $0.26 per share.

Speaker #3: During the quarter, we repurchased almost 390,000 shares of our common stock at an average discount to NAV of 19.3%. This resulted in NAV accretion of 4 cents per share.

Speaker #3: And since June of 2025, when the board initially announced the share repurchase authorization, through March 31st of this year, we've repurchased a total of 50 million dollars of common stock at an average discount of 13% of NAV, resulting in NAV accretion of 26 cents per share.

Speaker #3: We plan to selectively continue our common share buybacks as market opportunities present themselves. We believe the actions we've taken during the quarter, together with our current portfolio positioning, leave us well situated for the quarters ahead.

Thomas Majewski: We plan to selectively continue our common share buybacks as market opportunities present themselves. We believe the actions we’ve taken during the quarter, together with our current portfolio positioning, leave us well-situated for the quarters ahead. I’ll now turn the call over to Senior Principal and Portfolio Manager Dan Ko for an update on the market.

Speaker #3: I'll now turn the call over to Senior Principal and Portfolio Manager Dan Ko for an update on the market.

Speaker #2: Thanks, Tom. I'll provide a brief update on the loan and CLO markets. In the first quarter, the S&P/UBS Leveraged Loan Index fell by 0.5%.

Daniel Ko: Thanks, Tom. I'll provide a brief update on the loan and CLO markets. In Q1, the S&P/LSTA Leveraged Loan Index fell by 0.5% but rebounded by 1.2% during the month of April. Despite this mixed performance in loan returns, underlying loan borrow fundamentals have remained stable as corporate revenue and EBITDA growth remain positive, supporting overall credit performance across the broadly syndicated loan market. The trailing 12-month default rate ended the period at 1.4%, modestly higher than year-end levels, but well below the long-term average of 2.5%. While lower loan prices have pressured CLO valuations in the near term, they are also creating a more attractive reinvestment environment.

Speaker #2: But rebounded by 1.2% during the month of April. Despite this mixed performance in loan returns, underlying loan borrower fundamentals have remained stable, as corporate revenue and EBITDA growth remain positive.

Speaker #2: Supporting overall credit performance across the broadly syndicated loan market. The trailing 12-month default rate ended the period at 1.4%, modestly higher than year-end levels, but well below the long-term average of 2.5%.

Speaker #2: While lower loan prices have pressured CLO valuations in the near term, they are also creating a more attractive reinvestment environment. With many loans trading below par and repricing activity slowing in the first quarter, we saw greater potential for par build, wider spreads on new investments, and improved forward returns.

Daniel Ko: With many loans trading below par and repricing activity slowing in Q1, we saw a greater potential for par build, wider spreads on new investments, and improved forward returns. For junior CLO debt securities, we believe this rate environment is constructive. With intermediate and long-term rates increasing, we expect short-term rates, including SOFR, which CLO debt floats off of, to follow. Indeed, the market is pricing in potential Fed rate hikes in the next year. With the potential for higher short-term rates, junior CLO debt investments continue to offer attractive floating rate income potential, which we would expect to support higher income on the portfolio in the future. In addition, periods of market volatility can create opportunities to purchase CLO debt at discounts, providing the potential for pull to par as markets normalize.

Speaker #2: For junior CLO debt securities, we believe this rate environment is constructive. With intermediate and long-term rates increasing, we expect short-term rates, including SOFR—which CLO debt floats off of—to follow.

Speaker #2: Indeed, the market is pricing in potential Fed rate hikes in the next year. With the potential for higher short-term rates, junior CLO debt investments continue to offer attractive floating rate income potential, which we would expect to support higher income on the portfolio in the future.

Speaker #2: In addition, periods of market volatility can create opportunities to purchase CLO debt at discounts. Providing the potential for pull-to-par as markets normalize. We believe that the combination of income generation, structural protection, and potential convexity makes junior CLO debt particularly compelling in the current environment.

Daniel Ko: We believe that the combination of income generation, structural protection, and potential convexity makes junior CLO debt particularly compelling in the current environment. In terms of CLO new issuance, we saw 47 billion of volume during the quarter, down slightly from 55 billion in Q4 2025. Reset activity for Q1 was 32 billion, down from 54 billion last quarter, while refinancing activity was 24 billion, up from 20 billion last quarter. With the broader markets normalizing into Q2, we expect CLO volumes to remain robust going forward. With that, I'll hand it over to our advisor's Chief Accounting Officer, Lena Umnova, to walk through our financial results.

Speaker #2: In terms of CLO new issuance, we saw $47 billion of volume during the quarter, down slightly from $55 billion in the fourth quarter of 2025.

Speaker #2: Reset activity for the first quarter was 32 billion, down from 54 billion last quarter. While refinancing activity was 24 billion, up from 20 billion last quarter.

Speaker #2: With the broader markets normalizing into the second quarter, we expect CLO volumes to remain robust going forward. With that, I'll hand it over to our advisor's Chief Accounting Officer, Lena Umnova, to walk through our financial results.

Speaker #3: Thank you, Dan. During the first quarter, the company generated net investment income, or NII, of 36 cents per share and NII less realized losses of 34 cents per share.

Lena Umnova: Thank you, Dan. During the Q1, the company generated net investment income or NII of $0.36 per share and NII less realized losses of $0.34 per share. This compares to NII less realized losses of $0.03 per share last quarter and NII and realized gains of $0.44 per share for the Q1 2025. Including unrealized portfolio losses, GAAP net loss was $22 million or $0.95 per share for the Q1 2026. This compares to GAAP net loss of $0.60 per share last quarter and a GAAP net loss of $0.46 per share for the Q1 2025. Recurring cash flows from the company's investment portfolio totaled $40 million or $0.62 per share during the quarter and exceeded the company's common stock distributions and expenses.

Speaker #3: This compares to NII less realized losses of 3 cents per share last quarter and NII and realized gains of 44 cents per share for the first quarter of 2025.

Speaker #3: Including unrealized portfolio losses, gap net loss was 22 million or 95 cents per share for the first quarter of 2026. This compares to gap net loss of 60 cents per share last quarter and a gap net loss of 46 cents per share for the first quarter of 2025.

Speaker #3: Recurring cash flows from the company's investment portfolio total 14 million, or 62 cents per share during the quarter, and exceeded the company's common stock distributions and expenses.

Speaker #3: During the quarter, we paid 3 monthly common stock distributions of 11 cents per share and last week we declared 3 monthly common stock distributions of 11 cents per share for the third quarter of 2026.

Lena Umnova: During the quarter, we paid 3 monthly common stock distributions of $0.11 per share, and last week we declared 3 monthly common stock distributions of $0.11 per share for Q3 2026. As of 31 March, the company had outstanding preferred equity securities equal to 34% of total assets less current liabilities, which is within our target range of 25% to 35%, where we expect to rate the company under normal market conditions. Looking at our portfolio activity during April, the company received recurring cash flows on its investment portfolio of $11 million. Note that some of the company's investments are still expected to make payments later in the quarter. As of 30 April, net of pending investment transactions and settlements, the company had $15 million of cash and revolver capacity available for investment and other purposes.

Speaker #3: As of March month-end, the company had outstanding preferred equity securities equal to 34% of total assets less current liabilities. This is within our target range of 25% to 35%, where we expect the company to be during periods under normal market conditions.

Speaker #3: Looking at our portfolio activity during the month of April, the company received recurring cash flows on its investment portfolio of $11 million. Note that some of the company's investments are still expected to make payments later in the quarter.

Speaker #3: As of April month-end, net of pending investment transactions and settlements, the company had $15 million of cash and revolver capacity available for investment and other purposes.

Speaker #3: Managements on audited estimate of the company's NAV as of April month end was between $12.48 and $12.58 per share, at the midpoint this was an increase of 4.5% from March month end.

Lena Umnova: Management's unaudited estimate of the company's NAV as of April month-end was between $12.48 and $12.58 per share. At the midpoint, this was an increase of 4.5% from March month-end. I will now turn the call back over to Tom to provide closing remarks before we take your questions.

Speaker #3: I will now turn the call back over to Tom to provide closing remarks before we take your questions.

Speaker #4: Thanks, Lena. In our view, the combination of lower loan prices, reduced loan repricing activity, and the potential for higher short-term rates is improving the outlook for our earnings power.

Thomas Majewski: Thanks, Lena. In our view, the combination of lower loan prices, reduced loan repricing activity, and the potential for higher short-term rates is improving the outlook for our earnings power. Combined with our disciplined capital allocation and access to the full Eagle Point origination platform, we believe we are well positioned to translate this environment into stronger results for shareholders over time. We appreciate your continued support, and thank you for your time and interest in Eagle Point Income Co Inc. Lena, Daniel, and I will now open the call to your questions. Operator?

Speaker #4: Combined with our disciplined capital allocation and access to the full Eagle Point Origination platform, we believe we are well positioned to translate this environment into stronger results for shareholders over time.

Speaker #4: We appreciate your continued support and thank you for your time and interest in Eagle Point Income Co Inc. Lena, Dan, and I will now open the call to your questions.

Speaker #4: Operator?

Speaker #2: Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad and a confirmation tone will indicate your line is in the question queue.

Operator 2: Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. Our first question comes from the line of Erik Zwick with Lucid Capital Markets. Please proceed.

Operator: Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. Our first question comes from the line of Erik Zwick with Lucid Capital Markets. Please proceed.

Speaker #2: You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #2: One moment, please, while we pull for questions. And our first question comes from the line of Eric Zwick with Lucid Capital Markets. Please proceed.

Speaker #5: Thank you. Good morning again. Wanted to start with a question on software you mentioned in your comments, and it's obviously been very topical of late in the leveraged loan market.

Erik Zwick: Thank you. Good morning again. Wanted to start with a question on software. You mentioned it in your comments, and it's obviously been very topical of late in the leveraged loan market. Looking at your, I think it's slide 22 maybe, where you know, kind of show the concentration of different industries in the portfolio, technology and software is, you know, I guess kind of double at least the next largest one. It's at 12%, 12.5%. Curious, you know, what the lasting kind of, and I guess maybe, Tom, this is a bigger picture question, just think of the impact could be.

Speaker #5: And looking at your, I think it's slide 22 maybe, where you kind of show the concentration of different industries in the portfolio of technology and software, I guess kind of double at least the next largest one at 12%, 12.5%.

Speaker #5: So curious, what the lasting kind of, I guess, maybe Tom, this is a bigger picture question, just thinking the impact could be is it likely to result in changes to volume in the leveraged loan issuance as potentially fewer IPOs in software, or do you think it leads to increased defaults and credit quality issues?

Erik Zwick: You know, is it likely to result in, you know, changes to volume in the leveraged loan issuance as potentially, you know, fewer IPOs in software? Or do you think it, you know, leads to increased defaults and credit quality issues? Maybe more importantly, how are you thinking about this and, you know, your desired kind of a target for exposure to software in the portfolio?

Speaker #5: And maybe more in part, how are you thinking about this and your desired kind of target for exposure to software in the portfolio?

Speaker #6: So a lot of questions packed into one there. But overall, indeed, you can see it is software and services is the largest category by a factor of more than two compared to second place.

Thomas Majewski: A lot of questions packed into one there.

Erik Zwick: Yeah, sorry for that.

Thomas Majewski: Overall, indeed, you know, you can see it is software and services is the largest, you know, category by a factor of more than 2 compared to the second place. I guess one of the first things we think about broadly is not all software companies are created equally. You know, at a high level, there's statistics that 70% of Fortune 500 companies still use mainframes. Forget about, you know, blades or SaaS or things like that. The risks are more pronounced in some sectors of software than others. A good example, like an airline reservation system, would be something so critical not to be SaaS-ed away anytime soon. At Eagle Point, our internal books and records, like the official custodian records, I think it's a long time away before we see that.

Speaker #6: I guess one of the first things we think about broadly is not all software companies are created equally. At a high level, there are statistics that 70% of Fortune 500 companies still use mainframes.

Speaker #6: Forget about Blades or SaaS or things like that. The risks are more pronounced in some sectors of software than others. That example, like an airline reservation system, would be something so critical—not to be SaaS-ed away anytime soon—that Eagle Point, our internal books and records, like the official custodian records, I think it's a long time away before we see that.

Speaker #6: At the same time, how we track vacation time and things like that, I'm sure we subscribe for some silly thing that we could probably just make and do it less expensive.

Thomas Majewski: At the same time, how we track vacation time and things like that, you know, I'm sure we subscribe for some silly thing that we could probably just make and do it less expensive. Broadly, the criticality of a tool is an important factor in its SaaS vulnerability, first off. Then two, you know, I'll make an analogy back to e-commerce and Amazon.com's IPO, which I think was back in 1997, give or take. One of the things, you know, we talked about then, you could probably find Bloomberg articles and other mass media articles, you know, the end of retail as we know it. Indeed, Amazon has significantly changed retail. We're going on 29 years ago that that IPO happened, and there's still plenty of stores.

Speaker #6: So broadly, the criticality of a tool is an important factor in its SaaS vulnerability. First off, and then two, I'll make an analogy back to e-commerce.

Speaker #6: And Amazon.com's IPO, which I think was back in 1997, give or take, one of the things we talked about then, you could probably find Bloomberg articles and other mass media articles, the end of retail as we know it.

Speaker #6: And indeed, Amazon has significantly changed retail we're going on 29 years ago that that IPO happened. And there's still plenty of stores and once that I saw recently actually said retail was the had the highest occupancy rate of any category in CMBS in the CMBS market, so lowest vacancy.

Thomas Majewski: One stat I saw recently actually said retail was the had the highest occupancy rate of any category in CMBS, in the CMBS markets, so the lowest vacancy. While the predictions of doom are always great in the credit market, in my opinion and experience, they are often overstated. That said, there are snakes lurking in the grass and risks are out there. There are, you know, software loans in the syndicated market that are, you know, trading in the 50s, perhaps some even lower at this point. That's the exception. That's not the majority. It is certainly greater than zero. When we look at our portfolios, we're not buying or selling specific loans in any CLOs. The collateral managers are the ones doing that.

Speaker #6: So while the predictions of doom are always great in the credit market, in my opinion, and experience, they are often overstated. That said, there are snakes lurking in the grass, and risks are out there.

Speaker #6: And there are software loans in the syndicated market that are trading in the 50s, perhaps some even lower at this point. That's the exception.

Speaker #6: That's not the majority. But it is certainly greater than zero. When we look at our portfolio's the we're not buying or selling specific loans in any CLOs, the collateral managers are the ones doing that.

Speaker #6: That said, the software industry is an area of significant focus for us, both in our monitoring and ongoing diligence of existing investments in the ground, including the decisions potentially to sell investments, as well as an important part of our decision when we're selecting a new security to invest in.

Thomas Majewski: That said, the software industry is an area of significant focus for us, both in our monitoring and ongoing diligence of existing investments in the ground, including the decisions potentially to sell investments, as well as an important part of our decision when we're selecting a new security to invest in. We don't sit here and say we have a target software exposure. All else equal, I would seek to lower it. That said, due to activity in the underlying portfolios, it's possible it goes the other way as well. Overall, I suspect that trend is going to be in the downward direction. But I do highlight and I really underscore the pace of transition. While it's probably faster this time than it was with e-commerce 29 years ago, we're not in an immediate situation.

Speaker #6: So we don't sit here and say we have a target software exposure. All else equal, I would seek to lower it. That said, due to activity in the underlying portfolios, it's possible it goes the other way as well.

Speaker #6: Overall, I suspect that trend is going to be in the downward direction. But I do highlight—and I really underscore—the pace of transition.

Speaker #6: While it's probably faster this time than it was with e-commerce 29 years ago, we're not in an immediate situation. There are a small number of watch names, that said, I think many companies have a fair bit of runway to go.

Thomas Majewski: There are a small number of watch names. That said, I think many companies have a fair bit of runway to go. It's something we're actively watching. We're in active dialogue with our collateral managers, and it is impacting our investment decisions, but it's by no means the only factor we consider when we decide to buy, sell, or make the decision to hold a security.

Speaker #6: So it's something we're actively watching. We're in active dialogue with our collateral managers, and it is impacting our investment decisions, but it's by no means the only factor we consider when we decide to buy, sell, or make the decision to hold a security.

Speaker #5: Thanks, Tom. I appreciate the insight on that topic. And last question for me, and then I'll step aside. Just given—especially looking at the update for the April NAV—the stock continues to trade at a discount to NAV.

Erik Zwick: Thanks, Tom. I appreciate the insight on that topic. Last question from me, and then I'll step aside. Just given, especially looking at the, you know, update for the April NAV that the stock continues to trade at a discount to NAV, so is it, you know, fair to say that the share repurchases still remain, you know, attractive from your viewpoint and likely to, you know, continue for the repurchasing for the near term?

Speaker #5: So, is it fair to say that share repurchases still remain attractive from your viewpoint, and are likely to continue for the near term?

Thomas Majewski: We have continued to use the program, although I'll say it's not been as aggressive as we've used it in the past. If you listen to prior calls, I definitively use that word or a similar word. One of the things we balance is the potency of the buybacks in terms of NAV accretion, and I think we've built up about $0.24 of NAV through discounted buybacks. The flip side, we also balance liquidity in the stock and the actual potency of our buying to the stock price. It's something we continue to monitor and tweak. The program remains open and active, and we do have open capacity on it.

Speaker #6: We have continued to use the program, although I'll say it's not been as aggressive as we've used it in the past. If you listen to prior calls, I definitively used that word or a similar word.

Speaker #6: One of the things we balance is the potency of the buybacks in terms of NAV accretion. And I think we've built up about 24 cents of NAV through discounted buybacks.

Speaker #6: On the flip side, we also balance liquidity in the stock and the actual potency of our buying to the stock price. So it's something we continue to monitor and tweak. The program remains open and active, and we do have open capacity on it.

Thomas Majewski: I will say I balance We love buying our stock cheap, we love volume in our stock, and we like to use our powder when we can really move the stock price. It's a collage of all of those three that may inform our decision every day. I would no longer say right now we're aggressively buying back stock, but the program is open and active.

Speaker #6: I will say I balance we love buying our stock cheap. We love volume. In our stock, and we like to use our powder when we can really move the stock price.

Speaker #6: So it's a collage of all of those three. That inform our decision every day. I would no longer say right now we're aggressively buying back stock, but the program is open and active.

Speaker #5: Thank you for the update.

Erik Zwick: Thank you for the update.

Speaker #1: The next question comes from the line of Christopher Nolan with Leidenberg Fellman. Please proceed.

Operator 2: The next question comes from the line of Christopher Nolan with Ladenburg Thalmann. Please proceed.

Operator: The next question comes from the line of Christopher Nolan with Ladenburg Thalmann. Please proceed.

Speaker #7: Hi, Dan. Actually, for anyone. The 12-month default rate was 1.40 in according to my notes is 1.20 last quarter. With software, the reason for that change?

Christopher Nolan: Hi, Dan. Actually, for anyone. The 12-month default rate was 1.40, and according to my notes, it was 1.20 last quarter. Was software the reason for that change?

Speaker #5: Yeah. Some of it was I mean, we haven't seen really the software names default significantly. It's more so it was not necessarily in a specific sector yet.

Daniel Ko: Yeah. Some of it, I mean, we haven't seen really the software names, you know, default significantly. It's more so, it was not necessarily in a specific sector yet. I mean, a lot of the software names we're kind of seeing kind of them play out in terms of kind of whether they'll survive or not. You know, we think that there's been a lot of baby thrown out with the bathwater for software names in that about 75% of them still trade above 90. There's actually pretty decent kind of power building opportunities there. I mean, a lot of the CLO collateral managers were selling software last year in 2025 because they were kind of getting ahead of this AI disruption risk. This is not anything that's new to the CLO market.

Speaker #5: I mean, a lot of the software names, we're kind of seeing them play out in terms of whether they'll survive or not.

Speaker #5: We think that there's been a lot of 'baby thrown out with the bathwater' for software names, in that about 75% of them still trade above 90.

Speaker #5: And so there's actually pretty decent kind of par-building opportunities there. I mean, a lot of the CLO collateral managers were selling software last year, in 2025, because they were kind of getting ahead of this AI disruption risk.

Speaker #5: So this is not anything that's new to the CLO market. And with kind of the lower concentrations than kind of private credit, and the ability to trade loans, there is an ability to kind of make those relative value swaps.

Daniel Ko: With kind of the lower concentrations than kind of private credit and the ability to trade loans, there is an ability to kind of make those relative value swaps. You know, maybe, there certainly will be defaults kind of in some of the software names that could lead to kind of higher defaults in the future. Kind of getting ahead of it, trading it around, allows us to, or at least the BSL market seems to keep the default rates still relatively low.

Speaker #5: And so, maybe there certainly will be defaults, kind of in some of the software names, that could lead to higher defaults in the future.

Speaker #5: But kind of getting ahead of it, trading it around, allows us to at least the BSL market seems to keep the default rates still relatively low.

Speaker #7: So you're not really seeing higher non-accruals or anything like that per se, just necessarily the bank not a performer. Okay. On a follow-up, some of the BDCs I cover, believe it or not, I started seeing increased credit stress in healthcare.

Christopher Nolan: You're not really seeing, you know, higher non-accruals or anything like that per se.

Daniel Ko: Correct.

Christopher Nolan: This is sort of a bank non-performer. Okay.

Daniel Ko: Correct.

Christopher Nolan: On a follow-up, some of the BDCs I cover, believe it or not, have started seeing increased credit stress in healthcare. Have you guys seen anything like that?

Speaker #7: Have you guys seen anything like that?

Daniel Ko: Not significantly unless it's, I guess, somehow related to AI. You know, if it's like some sort of software company that's really categorized within healthcare and has a risk of being disrupted by AI. Otherwise, no, we haven't seen that.

Speaker #5: Not significantly, unless it's, I guess, somehow related to AI. If it's some sort of software company that's really categorized within healthcare and has a risk of being disrupted by AI or otherwise, no, we haven't seen that.

Speaker #7: Okay. That's it for me. Thank you.

Christopher Nolan: Okay. That's it for me. Thank you.

Speaker #1: Thank you. There are no further questions at this time. And I'd like to turn the call back over to Thomas Majewski for closing remarks.

Operator 2: Thank you. There are no further questions at this time, and I'd like to turn the call back over to Thomas Majewski for closing remarks.

Operator: Thank you. There are no further questions at this time, and I'd like to turn the call back over to Thomas Majewski for closing remarks.

Speaker #6: Great. Thank you very much, everyone, for joining today. Lena, Dan, and I appreciate your interest in Eagle Point Income Company. If you have any further questions, we'll be in the office later today and be happy to speak.

Thomas Majewski: Great. Thank you very much everyone for joining today. Lena, Dan, and I appreciate your interest in Eagle Point Income Co Inc. If you have any further questions, we'll be in the office later today and be happy to speak. Thank you very much.

Speaker #6: Thank you very much.

Operator 2: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.