Ellington Credit Company Earnings Call Transcripts
Fiscal Year 2026
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Q1 2026 saw technical-driven NAV declines and a GAAP net loss, but active trading, a focus on mezzanine debt, and a timely debt issuance positioned the fund for recovery. Improved market conditions in Q2 and portfolio rotations are expected to boost adjusted NII and support dividend coverage.
Fiscal Year 2025
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Q4 2025 saw a challenging CLO equity market, with a 9% NAV decline, but active trading and a shift to mezzanine debt limited losses and outperformed peers. The portfolio remains diversified, with increased credit hedges and a focus on seizing distressed market opportunities.
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Full dividend coverage was achieved as net investment income and the CLO portfolio grew, supported by active trading and increased credit hedges for downside protection. The company plans to issue unsecured notes to further enhance earnings and maintain a balanced, risk-managed portfolio.
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Achieved a 19.7% annualized NAV-based return and strong net income, driven by CLO equity and mezzanine performance, with the CLO portfolio growing 27% to $317 million. Outlook remains positive, with plans for further portfolio expansion and new debt issuance.
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Conversion to a closed-end fund was completed with minimal NAV impact, and the CLO portfolio grew 46% to $250 million. Despite a net loss from CLO mark-to-market declines, agency mortgages outperformed, and strong liquidity positions the fund for further CLO investments.
Fiscal Year 2024
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Shareholders approved a shift to a CLO-focused closed-end fund, with 72% capital in CLOs by year-end and agency RMBS holdings set for sale post-conversion. Q4 saw a net loss but strong distributable earnings, and the company expects to fully deploy new capital into CLOs by mid-year.
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Q3 saw strong CLO and agency MBS performance, with net income of $0.21 per share and ADE of $0.28 per share. Portfolio rotation to CLOs continued, leverage declined, and the dividend remains well-supported as the company advances its RIC conversion.
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Q2 saw a net loss of $0.04 per share but ADE rose to $0.36, driven by CLO portfolio growth and wider net interest margins. The strategic shift to a CLO-focused fund is on track, with reduced leverage and strong liquidity positioning.