Lena Umnova: Thank you, Dan. For the third quarter, the company recorded net investment income or NII of $3.5 million or $0.38 per share, compared to NII of $0.49 per share recorded for the second quarter of 2023 and NII of $0.40 per share for the third quarter of 2022. NII for the quarter is net of $0.14 per share of non-recurring expenses related to the issuance of the company’s 7.75% Series B term preferred stock partially offset by $0.01 per share excise tax refund. Excluding these non-recurring items, NII would have been $0.51 per share above our distribution level for the quarter. When unrealized portfolio appreciation is included, the company recorded GAAP net income of $14.1 million or $1.51 per share. The company’s third quarter net income was comprised of total investment income of $7.0 million, net unrealized appreciation of investments of $9.8 million and unrealized depreciation on foreign liabilities held at fair value of $0.7 million, partially offset by financing costs and operating expenses of $3.4 million.
Additionally, for the third quarter, the company recorded other comprehensive income of $0.4 million, representing the change in fair value of the company’s financial liabilities attributed to instrument specific credit risk. During the third quarter, we paid three monthly distributions of $0.16 per share, declared additional monthly distributions of $0.18 per share through December year end, and last week, we declared another 11% increase in monthly common distribution to $0.20 per share beginning in January 2024 through March 2024. As of September month end, the company had outstanding borrowings from the revolving credit facility and preferred equity, which totaled 35% of total assets less current liabilities at the upper end of our long-term target leverage ratio range of 25% to 35%, at which we expect to operate the company under normal market conditions.
This ratio moved higher with the ICB issuance back in the summer, and we have been seeking to lower this level by issuing common stock through our ATM program. The company’s asset coverage ratios at the quarter end for preferred stock and debt calculated in accordance with investment company at requirements were 283% and 5,146%, respectively. These measures are comfortably above the minimum requirements of 200% and 300%. As of September month end, the company’s net asset value was $140 million or $14.08 per share, an 8% increase from June month end of 2023. Moving on to our portfolio activity in the fourth quarter through October month end, the company received recurring cash on its investment portfolio of $8.6 million. Note that some of the company’s investments are expected to make payments later in the quarter.
As of October month end, net of pending investment transactions, the company had over $17 million of cash and revolver capacity available for investments. Management’s unaudited estimate of the company’s NAV as of October 31 was between $13.60 and $13.70 per share. I will now turn the call back over to Tom.
Tom Majewski: Great. Thank you, Lena. EIC has had a banner 2023 so far, and the elevated rate environment has continued to help us grow and maintain net investment income at a high level. In our view, loans and CLOs continue to be two of the most resilient risk asset classes out there attributable to the senior secured nature of loans and their floating rate structure. Our investment portfolio as well as the right side of our balance sheet were intentionally designed for markets like these. And indeed, both are clearly benefiting our shareholders through our ability to continue increasing our cash distributions. The three key attributes why we remain excited to be managing a BB-rated CLO debt focused fund bring today as true as ever: the potential for low credit expense as reflected by the low default rates of BB-rated CLO debt over the past 20 years, the potential for high returns compared to similarly rated corporate securities, the benefits of floating rate BB-rated CLO debt offer in markets with high interest rates.
Along with the locked-in nature of CLO financing that is longer than its assets, we remain confident that EIC is well positioned to continue generating compelling risk-adjusted returns for our shareholders. We thank you for your time and interest in Eagle Point Income Company. Lena, Dan and I will now open the calls to your questions. Operator?
Operator:
Tom Majewski: Great. Thank you very much, everyone, for joining the call. Dan, Lena and I appreciate your time and attention. We’re available later today, should anyone have any follow-up questions. Thank you.
Operator: And this concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.
