8-K: Eagle Point Income Company Prices Public Offering of 8.00% Series C Term Preferred Stock

Eagle Point Income Company has priced a public offering of 1,220,000 shares of its 8.00% Series C Term Preferred Stock due 2029, expected to generate approximately $29.3 million in net proceeds.

Summary

• Eagle Point Income Company has announced the pricing of a public offering for 1,220,000 shares of its 8.00% Series C Term Preferred Stock due 2029.
• The offering price is set at $25 per share.
• The company anticipates net proceeds of approximately $29.3 million after accounting for underwriting discounts, commissions, and estimated offering expenses.
• The preferred stock is rated BBB by Egan-Jones Ratings Company.
• Underwriters have a 30-day option to purchase up to an additional 183,000 shares.
• The offering is expected to close on April 3, 2024, subject to customary closing conditions.
• The company intends to list the preferred stock on the New York Stock Exchange under the symbol EICC within 30 days of the original issue date.
• Ladenburg Thalmann & Co. Inc., B. Riley Securities, Inc., and Piper Sandler & Co. are acting as joint bookrunners for the offering.
• InspereX LLC and Wedbush Securities Inc. are acting as lead managers for the offering.

Sentiment

Score: 7

Explanation: The announcement is positive as it secures funding for the company. The BBB rating is solid and the offering is well structured. There are no significant negative aspects.

Positives

• The offering is expected to generate approximately $29.3 million in net proceeds for the company.
• The preferred stock has received a BBB rating from Egan-Jones Ratings Company, indicating a moderate level of credit risk.
• The listing on the New York Stock Exchange will provide increased liquidity for the preferred stock.
• The involvement of multiple reputable financial institutions as bookrunners and lead managers suggests a well-structured offering.

Risks

• The offering is subject to customary closing conditions, which could potentially delay or prevent the closing.
• The company's actual net proceeds may vary from the estimated $29.3 million due to unforeseen expenses.
• The preferred stock rating could be subject to revision or withdrawal by the rating agency.
• The company's future performance may be impacted by various factors, as outlined in their prospectus and SEC filings.

Future Outlook

The company intends to list the Preferred Stock on the New York Stock Exchange within 30 days of the original issue date under the symbol EICC. The company's future performance may be impacted by various factors, as outlined in their prospectus and SEC filings.

Industry Context

This offering is part of Eagle Point Income Company's strategy to raise capital and invest in junior debt tranches of collateralized loan obligations (CLOs). The issuance of preferred stock is a common method for closed-end investment companies to raise funds.

Comparison to Industry Standards

• The 8.00% coupon rate on the Series C Term Preferred Stock is within the typical range for preferred stock offerings by similar closed-end investment companies.
• The BBB rating from Egan-Jones is a common rating for preferred stock issued by companies with a moderate risk profile.
• The use of multiple underwriters and lead managers is standard practice for offerings of this size and complexity.
• Other companies in the CLO space such as Oxford Lane Capital Corp. and XAI Octagon Floating Rate & Alternative Income Term Trust also issue preferred stock to raise capital.

Stakeholder Impact

• Shareholders will see an increase in the company's capital base.
• Potential investors have the opportunity to purchase the new preferred stock.
• The company will have additional funds to invest in its primary investment objective.

Next Steps

• The offering is expected to close on April 3, 2024.
• The company intends to list the preferred stock on the New York Stock Exchange under the symbol EICC within 30 days of the original issue date.

Key Dates

Keywords

Preferred Stock, Public Offering, Eagle Point Income Company, Series C, EICC, Underwriting, Net Proceeds, BBB Rating, NYSE, CLO