Lena Umnova: Thank you, Dan. I will start by noting that for the fourth quarter, the company recorded net investment income or NII less realized losses of $5.5 million or $0.54 per share compared to NII of $0.38 per share recorded for the third quarter of 2023 and NII of $0.49 per share for the fourth quarter of 2022. NII for the quarter is net of $0.02 per share of nonrecurring expenses related to excise stocks associated with our estimated 2023 lower taxable income. Excluding the nonrecurring item, NII would have been $0.56 per share above our distribution level for the quarter. When unrealized portfolio appreciation is included, the company recorded GAAP net income of $7.5 million or $0.74 per share. The company’s fourth quarter net income was comprised of total investment income of $8.5 million, net unrealized appreciation on investments of $3.9 million, partially offset by financing costs and operating expenses of $3 million and unrealized appreciation on certain liabilities held a fair value of $1.9 million.
Additionally, for the fourth quarter, the company recorded other comprehensive income of $1.3 million, representing the change in fair value on the company’s financial liabilities attributed to instrument specific credit risk. During the fourth quarter, we paid three monthly distributions of $0.18 per share, declared an 11% increase in monthly distributions of $0.20 per share beginning in January 2024. And last week, we declared continued monthly distributions of $0.20 per share through June 2024. As of year-end, the company had outstanding borrowings from the revolving credit facility and preferred equity totaled 36% of total assets less current liabilities, which is slightly above our long-term target leverage ratio range of 25% to 35%, at which we expect to operate the company under the normal market conditions.
We have been seeking to lower this level by issuing common equity through our ATM program. Even with our 36% total financing, the company is comfortably above the statutory requirements of 200% and 300% for preferred stock and debt. Company’s asset coverage ratios at the quarter end for preferred stock and debt calculated in accordance with investment Company’s Act requirements were 279% and 1,668%, respectively. As of December 11, the company’s net asset value was $158 million or $14.39 per share, a 2% increase from September month of 2023 and an 11% increase from $12.91 at the beginning of the year. Moving on to our portfolio activity so far this year through February 15, the company received recurring cash flows on its investments of $10.3 million.
Note that some of the company’s investments are still expected to make payments later in the quarter. As of February 15, net authentic investment transactions, the company had over $26 million of cash and revolver capacity available for investment. Management unaudited estimate of the company’s NAV as of January month end was between $14.94 and $15.04 per share, a further increase of 4% from where it stood at the end of 2023. I will now turn the call back over to Tom.
Tom Majewski: Thanks, Lena. EIC had a great 2023 and the elevated rate environment has helped us to significantly grow our NII. Additional focus on a higher for longer interest rate scenario, we believe will further benefit the company and our financial outlook. We’ve been able to increase our distributions to shareholders multiple times over the past two years. In our view, CLO BBs continue to be one of the most resilient risk asset classes out there attributable to their structural protections and floating rate nature. Our investment portfolio as well as the right side of the company’s balance sheet with all fixed rate financing were both intentionally designed for markets like these and are clearly benefiting our shareholders through increased cash distribution.
The three attributes why we remain excited to be managing a CLO BB focused fund back in 2019 at our IPO ring as true as ever today. The potential for low credit expense as reflected by the low default rates for CLO BBs over the last 20-plus years, the potential for higher returns compared to similarly rated corporate securities and the benefit that floating rate CLOs offer in markets with increasing interest rates. We remain very 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 call to your questions. Operator?
Operator:
Tom Majewski: Great. Thank you, everyone, for joining Dan, Lena and I appreciate your time and interest in Eagle Point Income Company. Should anyone have questions, they would like to pose, feel free to reach out to us later in the day, we will be in the office. Thank you very much.
Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.
