Eagle Point Income Company Inc. (NYSE:EIC) Q2 2025 Earnings Call Transcript

Eagle Point Income Company Inc. (NYSE:EIC) Q2 2025 Earnings Call Transcript August 12, 2025

Operator: Greetings. Welcome to Eagle Point Income Company’s Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I’ll now turn the conference over to Darren Daugherty with Prosek Partners. Thank you. You may begin.

Darren Daugherty: Thank you, operator, and good morning. Welcome to Eagle Point Income Company’s Earnings Conference Call for the Second Quarter of 2025. 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 Adviser; and Lena Umnova, Chief Accounting Officer for the Adviser. 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 Securities and Exchange Commission.

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 Second Quarter 2025 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 Company. Tom?

Thomas Philip Majewski: Thank you, Darren. Good morning, everyone, and thank you for joining us on the call today. Our portfolio delivered solid performance in the second quarter of 2025, generating strong cash flow from investments and investment income amid the rapidly shifting market landscape. The quarter started with heightened concerns related to global trade and its impact on economic growth. However, as market concerns subsided, the stock market led a broad rebound across asset classes. The CLO market, which tends to lag other asset classes, showed a gradual recovery as well, reflecting in increased reset and refinancing activity. During the second quarter, EIC generated net investment income and realized gains of $0.39 per share.

This was comprised of $0.37 of net investment income and $0.02 of realized capital gains. The company received recurring cash flows of $18 million or $0.67 per share during the quarter. This compares to cash flows of $16 million or $0.71 per share in the first quarter. Recurring cash flows were less than our regular common distributions and total expenses as a result of the lower SOFR rates on our CLO debt portfolio, combined with some lower recurring CLO equity cash flows as a result of spread compression. That said, we expect third quarter cash flows to be roughly in line with that quarter’s distributions and expenses. Our NAV as of June 30 was $14.08 a share, and this is slightly below March 31 NAV of $14.16 per share. While market volatility in April impacted CLO prices broadly, our portfolio has seen a recovery in our NAV from the April lows.

And for the second quarter, the company generated a non-annualized GAAP return of 3.5%. The volatility we experienced in the latter part of the first quarter continued into April creating attractive buying opportunities for discounted CLO debt and equity securities. During the quarter, we were able to opportunistically deploy $40 million into attractive investments, taking advantage of market-wide price dislocation. Notably, for BB-rated CLO debt, we were able to buy some securities at prices we hadn’t seen since the first half of 2024. When we can purchase CLO debt at a discount, this provides the potential for convexity or pull to par as markets recover and normalize. Our strong liquidity position allowed us to remain on the offensive during the period of volatility in the second quarter.

We expect these purchases to help us create realized gains in the future, similar to how our previously discounted purchases from 2023 and 2024 contributed to realized gains that we’ve generated in more recent quarters. Earlier in the quarter, we strengthened our balance sheet through our at-the-market program, raising about $20 million of common stock at a premium to NAV. This generated NAV accretion of about $0.01 per share. We also raised about $11 million of preferred capital during the quarter via our ATM program. In late May, however, our stock price dropped, and we quickly announced a $50 million share repurchase program. Our stock was trading at a high single-digit discount to NAV, and we aggressively began buying back our stock. The stock closed on June 6 at an 8.4% discount to the May 31 NAV.

And in part, due to our buyback program, it ended the quarter at only a 2.9% discount. In total, we repurchased $6.5 million of common stock at an average discount to NAV of 6.4%. This helped generate $0.02 of NAV accretion during the quarter. Due to regulations, we’re limited to the volume we can buy on any given day, and we would have bought more if we could. Today, we declared 3 monthly distributions of $0.13 per share for the fourth quarter, maintaining the distribution level we established in the previous quarter. We completed 2 resets of our CLO equity positions in the quarter. These actions lower debt costs within the CLOs and extended the CLO’s reinvestment period, which continued to enhance our portfolio’s weighted average remaining reinvestment period and our long-term earning power.

I’d now like to turn the call over to Senior Principal and Portfolio Manager, Dan Ko for a broader market update.

Daniel W Ko: Thank you, Tom. We continue to find attractive investment opportunities across the CLO market in both junior CLO debt and CLO equity. The market volatility that began in the latter part of the first quarter and continued into April created significant buying opportunities for EIC. We capitalized on the market disruption by buying BB-rated CLO debt and equity at discounted levels. The S&P UBS Leveraged Loan Index experienced volatility during the second quarter, with the April decline being offset by recovery through May and June. During the second quarter, the loan index had a total return of 2.3% and is up almost 3% year-to-date as of June 30. The index continued to perform well through July and is up 3.8% as of July 31.

The recovery in loan prices from the April lows has been encouraging, although CLO debt and equity have not yet fully participated in this recovery, presenting continued upside potential for EIC. The trailing 12-month default rate increased to 1.1% as of June 30, remaining well below the historical average of 2.6%. The quarter included a notable default by Altice, representing approximately 38 basis points of the CLO market, though the event was largely anticipated by market participants. EIC’s portfolio default exposure as of June 30 stood at 41 basis points. Our portfolio is well positioned, even if defaults were to rise in the future. During the second quarter, approximately 3.3% of leveraged loans or roughly 13% annualized were prepaid at par.

Many loan issuers continue to be proactive in tackling their near-term maturities and the maturity wall of the market continues to get pushed out further. In terms of CLO new issuance, we saw a $51 billion issued during the second quarter with most of the activity concentrated in the second half of the quarter as markets stabilized. Reset and refinancing activity for the second quarter was $44 billion and $9 billion, respectively. Our CLO debt portfolio benefits from its floating rate nature, although the impact of lower benchmark rates since last year has lowered our earnings. I’d like to note that the CLO equity exposure in the company’s portfolio provides some insulation from rate movements and benefits from the reinvestment optionality during periods of market stress.

As of June 30, we had over $20 million of cash and undrawn revolver capacity available for investment and common stock repurchases, providing ample liquidity to capitalize on opportunities. We believe the recent market volatility has created attractive entry points, and we remain well positioned to deploy capital into investments that offer compelling risk-adjusted returns for our shareholders in the long run. With that, I will now turn the call over to our Adviser’s Chief Accounting Officer, Lena Umnova, to walk through our financial results.

Lena Umnova: Thank you, Dan. During the second quarter of 2025, the company recorded net investment income and realized gains of $10 million or $0.39 per share. This compares to NII and realized gains of $0.44 per share recorded for both the first quarter of 2025 and the second quarter of 2024. When unrealized portfolio gains are included, the company recorded GAAP net income of $13 million or $0.49 per share. The company’s second quarter net income was comprised of investment income of $15 million, realized gains of $0.5 million and unrealized gains on investments of $4 million, partially offset by unrealized losses on certain liabilities recorded at fair value of $1 million and financing and operating expenses of $6 million.

Additionally, other comprehensive income was less than $0.5 million for the second quarter. During the second quarter, we paid 3 monthly distributions of $0.20 per share. Earlier today, we declared 3 monthly distributions of $0.13 per share for the fourth quarter of 2025, in line with the level of distributions previously declared for the third quarter. As of June month end, the company had outstanding preferred equity securities and borrowings from our credit facility, which totaled 31% of total assets less current liabilities. This is within our long-term target leverage ratio range of 25% to 35%, at which we expect to operate the company under normal market conditions. The company’s asset coverage ratios at the quarter end for preferred stock and debt calculated in accordance with Investment Company Act requirements were 325% and over 6,300%, respectively.

These measures are well above the statutory requirements of 200% and 300% for preferred stock and debt. As of June month end, the company’s NAV was $373 million or $14.08 per share, a slight decrease compared to $14.16 per share as of March month end. During the second quarter, we repurchased over 488,000 shares of our common stock on the share repurchase program for total proceeds of $6.5 million. The shares were repurchased at the average discount to NAV of 6.4% per share, resulting in a NAV accretion of $0.02 per share. We would like to highlight that all repurchased shares were retired. Moving on to portfolio activity during the month of July, the company received recurring cash flows on its investment portfolio of $17 million. Note that some of the company’s investments are still expected to make payments later in the quarter.

As of July month end, net of pending investment transactions and settlements, the company had $51 million of cash and revolver capacity available for investment and other purposes. Management’s unaudited estimate of the company’s NAV as of July month end was between $14.34 per share and $14.44 per share. This is an increase from June’s month end and above where we stood on March 31 NAV. I will now turn the call back over to Tom to provide closing remarks before we open the call up for questions.

Thomas Philip Majewski: Thank you, Lena. The second quarter demonstrated our proactive approach to investing and managing the company. While the market volatility in April created short-term pressure on NAV it largely recovered by the end of the quarter and as of July is above where we stood at the end of March. Volatility provides us with attractive investment opportunities allowing us to buy securities at discounted prices that we hadn’t seen in some time. While we are disappointed with our share price move in May, it also presented the opportunity for us to buy back stock cheap. We are generally limited to a percentage of the daily volume, so we can’t buy as much as I’d like, but I know this is one of the best investments we can make.

We plan to continue buying back our stock as market opportunities present themselves. The recent market volatility reinforced our views that periods of dislocation can create opportunities for patient well-capitalized investors like EIC. We believe our strong liquidity position and experience team allows us to capitalize on these opportunities while maintaining focus on generating attractive long-term risk-adjusted returns for our shareholders. We remain confident that EIC is well positioned to continue generating strong returns, and we appreciate your continued support. We’d like to thank you for your time and interest in Eagle Point Income Company. Lena, Dan and I will now open the call to your questions. Operator?

Q&A Session

Operator: [Operator Instructions] The first question comes from the line of Randy Binner with B. Riley.

Randy Binner: Yes, I think that was well covered. The result was stable, I think, maybe more so than some of the more equity-focused names and on the NII and the all-in NII and yield. Could you just spend — I mean it was discussed by Dan and Tom on the call, but could you spend a little more time just how we should think about that kind of that all-in yield coming through on the debt portion of your CLO portfolio? I guess I’m just kind of focused on the Fed and like if rates dropped, if spreads can widen and just how we should think about that kind of all-in yield back half this year into next?

Thomas Philip Majewski: Sure. Let me jump in and maybe Dan will come in with a few other points. So whereas CLO equity is far less rate sensitive than the average fixed income investment, CLO debt, which is a P&I kind of bond to get your interest and principal back at the end with rates typically based off of SOFR does move around with short-term rates. CLOs typically reset their rates on or about the 10th day of a quarter, give or take a few days. So let’s say the Fed did take action in September, probably you’d see lower SOFR rates in October when the bonds were reset. So if you were to see a Fed rate movement in September, it could translate through to a little bit lower income at EIC into the fall. That said, the CLO equity component of that portfolio probably doesn’t move around meaningfully based on any sort of rate movement.

The way we’ve looked at the company broadly — so I guess your question, first off was, would you see some spread widening in CLO BBs if rates were cut? Potentially. It’s not a hard and fast rule. You do start getting to a — at some point, there becomes floors and all-in returns that people are interested in buying CLO BBs. So tightening rates, all else equal, probably doesn’t bring about tightening in spreads, maybe widening. I don’t know, Dan, do some of the things as we’ve seen rates go from 0 to 5 to 0 to 5 to whatever.

Daniel W Ko: Yes. Historically, we’ve seen kind of CLO BBs in kind of normal course markets hovering in the kind of high single-digit yields. So if spreads were to come in, it’s possible that spreads kind of widen and we haven’t historically seen CLO BBs least kind of in the 2.0 era inside of, let’s say, a 7% yield for very long and probably closer to kind of 8%, maybe 9-ish percent sort of yields. So while obviously, these are floating rate instruments, I guess there is a kind of a relative value versus kind of high-yield bonds where a lot of people look at high-yield corporates or CLO BB’s kind of yielding a higher amount than high-yield corporates. So you probably continue to see a higher yield for CLO BB’s despite kind of rates going down, at least that’s what we’ve experienced historically, but I guess who knows what happens in the future.

Randy Binner: Okay. Great. That was helpful. I appreciate it.

Thomas Philip Majewski: To cut it maybe even more to the point, 0.25 point move is not that big of a move if we see rates move down 100 basis points. That starts becoming interesting in terms of impact on earnings, rates could also go up, too. I mean it’s — it kind of — it obviously goes both ways on this one, but you should think of this as a — principally floating rate portfolio.

Operator: Our next question is from the line of Christopher Nolan with Ladenburg Thalmann.

Christopher Whitbread Patrick Nolan: Dan had his market comments earlier indicated recovery in leveraged loan pricing from the UBS index. And then immediately afterwards, talked about pushing out of loan maturities. Wouldn’t the push out of loan maturities sort of indicate some credit distress at the bank level?

Daniel W Ko: No, not necessarily. I mean just these issuers are refinancing their debt since the market is strong, they’re able to kind of restrike, I guess, the — or lengthen out the maturities by refinancing the old debt and giving themselves more runway. So we’ve seen a healthy amount of refinancing activity. These are all being paid off at par. It’s not like it’s a restructuring and the maturities are being struck out — pushed out. The holders have the option to take par and kind of invest somewhere else or they could kind of roll in the refinancing of the loan.

Christopher Whitbread Patrick Nolan: Okay. And I guess as a follow-up on that note. I mean we’re pretty — where do you guys — I mean, are you sort of in the holding pattern in terms of the risk on or risk off for EIC? Or where are you thinking about that? Because there seems to be a lot of cross currents with the macro news.

Daniel W Ko: Yes. No. I mean we think that CLO BBs as well as CLO equity behave is a resilient asset class and kind of performs through the cycles. So we’re constantly kind of evaluating relative value between the 2 within our portfolio and are staying active in kind of trading the portfolio around. We have had, as noted kind of during the call that we’ve had several positions kind of being paid down at par because the CLOs are being refinanced and reset as well, which leads to kind of debt being paid off at par and so kind of looking to redeploy those proceeds to earn income.

Christopher Whitbread Patrick Nolan: Okay. So the read into that is really just opportunistically trying to add on to your positions.

Daniel W Ko: Yes.

Operator: The next question is from the line of Erik Zwick with Lucid Capital Markets.

Erik Edward Zwick: I jumped on a little bit late, so apologies if you address something that I asked here. But wondering if you could just kind of characterize your pipeline for new investments today? How that’s shaping up at this point?

Daniel W Ko: Yes. I mean we look at both on the CLO BB side, we’re looking at both new issue and secondary, all things equal, we prefer seeing discount, and there are opportunities to kind of buy CLO BBs at a discount in the secondary market. And even in primary, we were able to kind of source that just given the size of our orders, we’re able to kind of drive some OID and primary transactions as well. So looking across various different opportunities. There’s again, it’s relative value between secondary, between primary new issue, primary refis, primary resets and there’s been a lot of activity in the first half of the year, it was about $100 billion of new issuance, a little more of refis and resets. And we’ve seen that kind of pace continue through July and into August.

So plenty of opportunities and lots of things to look at. So the pipeline kind of remains strong. On CLO equity side, we’ve erred towards secondary, although primary can present some opportunities with some of our structuring and our ways that we can kind of originate transactions. But both the debt and equity side, we see as reasonably attractive in adding to our portfolio today.

Erik Edward Zwick: And then just following up on Tom, your comments about the share buyback that you did in the quarter and kind of given the discount where the stock is trading relative to NAV now, potentially wanting to buyback more. Just curious, do you find it more beneficial from your seat to manage that program manually or with a program kind of put in place? And then kind of maybe a bit of a follow- up to that when I would assume then if the price action were to become more constructive and you’re trading at a premium, again, you kind of flip the switch and potentially go back to issuing shares by the ATM.

Thomas Philip Majewski: Yes. Good question. And we’re 1 month into figuring out how to work in — 2 months in, I guess, into working a buyback program. When we launched the buyback, I think the stock was around an 8.5% discount, give or take. We — through our buying and buying of others, it got to around a 2% discount, 2% or 3%. So that’s the program we’re supposed to be doing. When I look at this, if I can buy our stock at a 7% discount, Dan Ko can’t buy a quality BB at 93 right now. We can buy quality BBs at 99 probably, but that’s about it. Just because not that Dan can do it, just the market doesn’t exist. So when I look at it, like that’s, in general, the cheapest thing we can do. So we’re going to do it. As you start getting up to low single digits NAV, you do back off a little bit.

Just generically, you don’t want to accidentally go above NAV or anything like that and just a little margin is fine there. So when we look at this, if our stock was at 93% of NAV and CLO BBs were 80, I’d probably buy CLO BBs at 80, quality BBs if that was the price opportunity. But relative to other opportunities, that’s what I think is the cheapest. That said, we’re capped at something like 20% of volume or trailing volume. There’s a whole series of rules around it that we can’t overhear. And you don’t want to deploy all your capital in one day and then the next day someone comes back and sell. So while I’d like to buy more, it’s probably not an unreasonable governor of the volume limit that we’re able to be. But we do try and on soft days, try and get as close to that limit as we comfortably can.

As to turning back on the ATM, we’re really fortunate we’ve got a ton of room on our revolver which we do use as a tool very comfortably. The size and scale of the company makes the revolver. I mean, the asset coverage ratio now is, what, 6,000% or something like. The revolver is relatively small relative to the overall size of the company. So we can move that up and down freely without materially changing leverage. So I would expect what I know today, we wouldn’t necessarily be issuing stock even if we got back to or when we get back to a premium, I suspect we’d simply be using the revolver to make investments when we saw attractive pieces of the puzzle. When the stock was at a premium, kind of the day-to-day functionality, this didn’t work all the time, but a lot of the time, keep the revolver partway drawn when we were issuing stock on the ATM, just go pay down the revolver with those proceeds, not sit on cash, but use the revolver to make investments.

And then when the ATM made sense, issue to pay down revolver and then redraw. If we magically got to a premium tomorrow, I think we just continue making investments off the revolver for the foreseeable future.

Operator: The next question is from the line of Shalabh Mehrish with VinsonCap Advisors.

Shalabh Mehrish: Just a couple of quick questions. The first one was on recurring cash flow. So I noticed that recurring cash flow is below distribution and operating costs in the quarter, but those were the old distributions of $0.20 and they’re now $0.13. So is it fair to say that there’s quite a bit of excess once you’ve taken operating costs and distributions into account. So there’s some chance of a special distribution perhaps at the end of the year?

Thomas Philip Majewski: I love the way you’re thinking. Let’s see, so the specials are a tricky a tricky one. I guess the first thing, a couple of parts of your question there. In the second quarter, recurring cash flow came in below distributions and expenses. We did make an adjustment to the distribution rate beginning in the third quarter. And if you use last quarter’s recurring cash flows and apply it to this quarter’s anticipated recurring expenses and distributions, it’s about equal. We like it when it exceeds but all else equal, it start with equal. So — and we flashed the — we said the amount of cash received so far to date this quarter, correct. It’s a touch less than where it was last quarter, but all in a close band.

So the vast majority of the cash is already in the bank for this quarter, which is good. So first step, we were below — recurring cash was below distributions and expenses. So that’s not so good. It looks like we’re going to be roughly in line this quarter based on the cash numbers we’ve shared, so that’s good. As to getting to a special, what prompts special dividends or special distributions is when taxable income exceeds the distributions we paid. Now there is some concept of using spillover income in the first few distributions and the new tax year can be applied to the old tax year and some things like that. We look at — and one other variable while CLO debt taxable income is very easy to calculate, CLO equity taxable income is all over the place.

And if you look at our sister vehicle ECC there’s been periods where years where a significant portion of the distributions were treated as a return of capital because the CLOs didn’t flash up much income to the equity, even though they paid lots of cash. There’s been other years where the CLOs have had more taxable income than cash. And an example of that, if you bought a lot of loans cheap in 2020 during COVID, and they all paid off at par in ’21, that realized gain counts as taxable income, but you don’t actually get the cash. So it’s — an ECC had a special program for a while that ended last year. So it whips around all over the place on equity. It’s easier on debt, and here, we’ve got roughly 70-30 debt and equity. So 70 is easy, 30 is difficult to predict.

And even if we had a perfect model today, if a CLO collateral manager realizes a big gain or takes a big loss the last day of the tax year, it could muck up all our projections. So you can’t really flow things through. So the short answer is, right now, based on where we look, it looks like the company’s recurring cash flows are in line with operation expenses and distribution. So that’s good. To the extent taxable income materially exceeds our distributions, which is not a prediction at this point, and we really won’t know towards the end of the year. We obviously do have to maintain paying out substantially all of our taxable income. If that were to happen, we’d certainly consider the appropriate plans. I wouldn’t — where we sit, it doesn’t seem super likely, but it’s 5 more months of the year and a lot of things can happen.

Shalabh Mehrish: Okay. That’s very helpful. Second question was on the coupon on the BB CLO debt as you report in your monthly reports. I noticed that the — going from June to July or even going from May to June, the coupon didn’t change dramatically. In fact, it increased from May to June and kind of was unchanged from March. Is that because — despite the fact that spreads have been tightening and deals are being refi, is that because you’re picking up more attractive opportunities in the secondary market, as you alluded to?

Thomas Philip Majewski: So the question relates to — and maybe Dan will drive on this. The question kind of pondering is how does our CLO debt coupon hasn’t changed much. The market is certainly tightening in general, but over the last few months, spreads haven’t moved. The overall yield or a coupon on CLO BBs hasn’t moved that much.

Daniel W Ko: Yes, SOFR has actually been slightly gone up. So as kind of rates have reset that we’ve seen kind of coupons slightly go up, spreads maybe modestly tighter since kind of the end of — sorry, modestly wider since the end of Q2. I guess there are a variety of different opportunities in that the new issue kind of pricing in the, let’s say, the high 400s, low 500s spread, Tier 1 resets, and I’m talking about Tier 1 collateral managers here. You got some clean resets pricing kind of in the low 500s to mid-500s, and you’ve got even some of the more banged-up resets kind of pricing at 600 plus for Tier 1 collateral managers. So there’s just a wide variety, and so really finding kind of the right mix of various different profiles within the portfolio is our goal in that. There’s still opportunities at some of the wider levels for kind of a little dirtier Tier 1 sale of BBs.

Shalabh Mehrish: Got it. That’s very helpful. And finally, my last question was on the OC cushion. So I noticed the OC cushion, actually, this is really going from June to July. So it’s not as relevant to the quarter end numbers. But going from June to July, the OC cushion declined by about 28 basis points. Is that because the rating agencies, especially Moody’s has been very aggressive with the CCC downgrades?

Daniel W Ko: Not really. It’s not — we haven’t seen the CCCs pick up. Actually, in the month of July, we saw more upgrades than downgrades during that particular month. So if anything, I think it’s due to, I guess, there was a credit called Altice that was in a lot of CLO portfolios, roughly about, I think we mentioned 38 basis points of exposure across the market. And so that went into default. Most people expected that default. It was priced as a loan that was going through default and restructure. So that’s probably the biggest driver of it. That being said, I mean, there’s plenty of cushion within the OC test. I guess we have 460 basis points as the OC cushion listed. So that’s — to put that into perspective, I guess, basically how much CCCs would you need for that cushion to be eroded.

It’s basically 16.5% CCCs roughly because you’ve got 7.5% of CCCs that you’re allowed and then kind of assuming a $50 price on the CCCs, that’s kind of 9.2% more CCCs you can have before the OC cushion is eroded. Similarly, another way to look at it is, I guess, what default rate kind of causes this to go away, assuming kind of a, I guess, a 50% carrying value for the default, that’s still, I guess, 9.2% of the portfolio.

Shalabh Mehrish: Right. Okay. Appreciate it. And I guess, finally, I mean, you’ve already talked about this that the stock is trading at substantial discount to the latest reported NAV. I think it’s like double digits now, maybe like 11% or 12% discount. So I guess it’s still pretty attractive from a repurchase standpoint, right?

Thomas Philip Majewski: That’s our opinion. I think I used the word cheap in the prepared remarks. So I mean, I just look at the share price and the midpoint of our NAV, looks like it’s about a little more than 10% discount right now, even close to 12%. This is equivalent — I mean the CLO BB market for quality BBs is around par. This, it’s like buying quality CLO BBs at 88. So we’re not 0.25 point smart, but we’re probably 12 points smart.

Operator: At this time, I’d like to turn the floor back to Mr. Majewski for closing remarks.

Thomas Philip Majewski: Great. Lena, Dan and I appreciate your interest in Eagle Point Income Company. We are going to be around today. If anyone else has follow-up questions, please feel to reach out directly. Thank you for your time and interest.

Operator: Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today’s conference. Please disconnect your lines at this time, and have a wonderful day.