EARN News & Events

"The first calendar quarter of 2026 was marked by continued headwinds and volatility in the CLO market," said Laurence Penn, Chief Executive Officer and President. "For Ellington Credit, while as previously communicated our NAV declined during the quarter, our up-in-credit bias and active trading again drove outperformance versus peers. We believe that a significant portion of the market weakness was technical-driven by overall sentiment and elevated yield spreads in the corporate credit markets, rather than by fundamental credit deterioration. We selectively leaned into the resulting opportunities, prioritizing CLO mezzanine debt over equity while staying disciplined by adding incremental hedges along the way. We also enhanced our capital structure, taking advantage of a narrow market window at the end of March to issue unsecured debt. Following quarter end, we used most of the debt offering proceeds to make new CLO investments, with deployment substantially complete by the end of April, thus positioning us for future earnings growth. The offering has also meaningfully strengthened our balance sheet, as we used a portion of the proceeds to refinance repo financings, replacing short-term secured debt with long-term unsecured debt."

Ellington Credit Company announced the commencement of an underwritten public offering of unsecured notes due 2031. The public offering price, interest rate, and other terms will be determined through negotiations between the Fund and the underwriters. The 2031 Notes have been rated 'BBB' by Egan-Jones Ratings Company, an independent rating agency unaffiliated with the Fund. The Fund intends to grant the underwriters a 30-day option to purchase additional 2031 Notes at the same price and on the same terms and conditions to cover overallotments, if any. The Fund expects to use the net proceeds from the offering for general corporate purposes, including funding purchases of additional assets in accordance with the Fund's investment objectives and strategies and repaying short-term borrowings under reverse repurchase agreements, which the Fund uses to finance many of its investments. The 2031 Notes are expected to be listed on the New York Stock Exchange and to trade thereon within 30 days of the original issue date under the ticker symbol "ELLA". Piper Sandler & Co. is acting as the lead book-running manager for the offering. Lucid Capital Markets and A.G.P./Alliance Global Partners are acting as joint book-running managers; B. Riley Securities, Clear Street and Muriel Siebert & Co. are acting as lead managers; and Wedbush Securities is acting as co-manager for this offering.

Net asset value per share was $5.19 as of December 31, 2025, which includes the effects of distributions of $0.24 per share for the quarter. "The fourth calendar quarter was challenging for the CLO equity market. For Ellington Credit, our relative up-in-credit bias and active trading strategy helped partially offset the challenges, as CLO mezzanine debt tranches, which have been a focus of our investment activity in recent months, proved more resilient, and with opportunistic trading contributing positively to results," said Laurence Penn, Chief Executive Officer and President.