Eagle Point Income Co current report, 26 July 2023

Eagle Point Income Company Inc. — Form 8-K Summary

Business context and reporting period

The filing, dated July 26, 2023, reports Eagle Point Income Company Inc.’s issuance of Series B Term Preferred Stock. The filing does not provide quarterly or annual operating results; revenue, profit, cash flow, margins, assets, and liabilities are not reported.

Transaction and key financial terms

ItemDetails
Security issued7.75% Series B Term Preferred Stock due 2028
Offering closedJuly 26, 2023
Shares sold1,130,500 shares
Liquidation preference$25 per share
Gross liquidation preference of shares sold$28.3 million, calculated as 1,130,500 shares multiplied by $25
Authorized Series B shares2,400,000 shares
Dividend rateFixed annual rate of 7.75%, or $1.9375 per share per year, payable monthly when declared and legally available
Mandatory redemptionJuly 31, 2028, at liquidation preference plus accumulated and unpaid dividends
Optional redemptionPermitted on or after July 31, 2025, at liquidation preference plus accumulated and unpaid dividends
Underwriters’ optionUp to 169,575 additional shares within 30 days of July 20, 2023
Expected listingNew York Stock Exchange under the symbol EICB

Material changes versus the prior comparable period

  • The company entered into an underwriting agreement on July 20, 2023 and completed the Series B preferred stock offering on July 26, 2023.
  • A Certificate of Designation was filed on July 25, 2023, creating the Series B Term Preferred Stock.
  • The new preferred stock ranks senior to common stock, equally with the company’s existing and future preferred stock, and subordinate to existing and future indebtedness, including the BNP Paribas credit facility.
  • No prior-period financial results or quantified comparison are included in this filing.

Guidance, risks, contingencies, and unusual items

  • Dividends are cumulative but payable only when declared or authorized by the board and from legally available funds. The board may decline or be unable to pay dividends if it determines payment is not in stockholders’ best interests or if required Investment Company Act asset coverage is not maintained.
  • If the company fails to redeem the shares when required or fails to pay a dividend on its payment date, the dividend rate increases by 2 percentage points per year until the applicable failure is cured.
  • The first dividend is scheduled for August 31, 2023, for holders of record on August 11, 2023.
  • The preferred stock is senior to common stock but subordinate to debt, creating a fixed preferred dividend and redemption obligation ahead of common stockholders.
  • Preferred stockholders may elect two directors voting separately as a class. If dividends on preferred stock are unpaid for two full years, preferred holders may elect a majority of the board until the default is cured.
  • The underwriters may purchase additional shares, but the filing does not state whether that option was exercised.
  • The filing does not state net offering proceeds, underwriting discounts, issuance costs, use of proceeds, or the expected effect on leverage and asset coverage.

Facts investors should verify

  • Whether the underwriters exercised all or part of the 169,575-share option.
  • The net proceeds and use of proceeds from the offering.
  • The listing status and trading price of EICB.
  • Compliance with 1940 Act asset-coverage requirements and the company’s ability to fund monthly dividends and the 2028 mandatory redemption.
  • The company’s debt levels, liquidity, credit-facility terms, and ranking of obligations relative to the Series B preferred stock.
  • The complete Underwriting Agreement and Certificate of Designation filed as Exhibits 1.1 and 3.1.