Ellington Credit Company【EARN】株式ニュース

Ellington Credit Company Announces Financial Results for the Fourth Fiscal Quarter Ended March 31, 2026May 19, 2026 4:15 PM
Business Wire Ellington Credit Company (NYSE: EARN) ("we") today reported financial results for the quarter ended March 31, 2026. Highlights Net asset value (NAV) per share was $4.09 as of March 31, 2026, which includes the effects of distributions of $0.24 per share for the quarter. GAAP net loss was $(32.3) million or $(0.86) per share. Net investment income ("NII") was $5.1 million, or $0.13 per share. Adjusted net investment income1 was $7.3 million, or $0.19 per share. CLO portfolio was $307.9 million as of March 31, 2026. CLO debt investments—$145.1 million CLO equity investments—$162.8 million Purchased $30.7 million of CLO investments and sold $34.2 million, across 44 trades. Weighted average GAAP yield2 for the quarter, based on amortized cost, was 12.5% on the total CLO portfolio. Received $17.4 million in recurring cash distributions3 from the investment portfolio, or $0.46 per share. Issued $54 million of senior unsecured notes on March 30, 2026. Management Commentary "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. "The first quarter selloff has reset and recharged the opportunity set: prepayments and repricings have slowed, investment yields have increased, and CLO managers are increasingly able to acquire performing discount loans that help support deal structures and interest spreads. In addition, as a meaningful portion of our CLO equity portfolio exits its non-call period, refinancing and reset opportunities should enhance underlying cash flows and support future growth in net investment income. EARN entered the second quarter well positioned to take advantage of this new environment, with ample dry powder and with the active trading and hedging capabilities to turn market dislocations into long-term value. These recent developments have already contributed to EARN’s strong performance so far in the second quarter." Distributions During and subsequent to the quarter ended March 31, 2026, our Board of Trustees declared the following distributions on our common shares. Declaration Date Record Date Payment Date Distribution Per Share January 8, 2026 January 30, 2026 February 27, 2026 $ 0.08 February 9, 2026 February 27, 2026 March 31, 2026 0.08 March 9, 2026 March 31, 2026 April 30, 2026 0.08 April 7, 2026 April 30, 2026 May 29, 2026 0.08 May 7, 2026 May 29, 2026 June 30, 2026 0.08 Investment Portfolio The following table summarizes the composition of the investment portfolio as of March 31, 2026. (In thousands) Amortized Cost Fair Value % of Total Investments U.S. CLO debt $ 129,681 $ 117,708 38.2 % European CLO debt 33,379 27,416 8.9 % Total CLO debt 163,060 145,124 47.1 % U.S. CLO equity 204,092 159,597 51.8 % European CLO equity 5,341 3,217 1.0 % Total CLO equity 209,433 162,814 52.8 % Total CLO debt and equity 372,493 307,938 99.9 % Other investments 446 425 0.1 % Total investments $ 372,939 $ 308,363 100.0 % Credit Hedges The following table summarizes our credit hedges, expressed in estimated notional equivalents(1) of the Markit CDX North American High Yield Index (the "Index"), as of March 31, 2026: (In thousands) Estimated Index Equivalents Credit Hedges(2) $ (187,462 ) (1) Notional equivalents are estimated based on historical price relationships between credit hedges (and/or their underlying components) and the Index, together with other factors. Our estimations of price relationships between instruments may change over time, and actual price relationships experienced may differ from those previously estimated. (2) Corporate credit hedges may include CDS, ETFs, equities, total return swaps, and similar instruments referencing both single issuers and indices, as well as options, tranches, and other derivatives on such instruments. Financing On March 30, 2026, we enhanced our capital structure through the issuance of $54.0 million of unsecured long-term notes (the "Senior Notes"), which bear a fixed interest rate of 8.50% payable quarterly in arrears, and mature on March 30, 2031 unless earlier redeemed or repurchased. The Senior Notes trade on the New York Stock Exchange under the symbol "ELLA" and have been rated ‘BBB’ by Egan-Jones Ratings Company, a nationally recognized statistical rating organization. We elected the fair value option under ASC 825 for the Senior Notes, and accordingly, the Senior Notes are included on the Consolidated Statement of Assets and Liabilities under the caption "Unsecured borrowings, at fair value"; as a result of this election we expensed $2.3 million of debt issuance costs at the time of issuance. The following table summarizes our outstanding borrowings as of March 31, 2026: ($ in thousands) Outstanding Borrowing(1) Reverse repurchase agreements $ 166,274 Unsecured borrowings 54,000 Total outstanding debt $ 220,274 (1) Represents outstanding principal amount of borrowing. Results of Operations The following table summarizes our operating results for the quarter ended March 31, 2026: Quarter Ended March 31, 2026 U.S. CLO Debt European CLO Debt U.S. CLO Equity European CLO Equity Other(1) Total Total Per Share(2) (In thousands, except share and per share amounts) Interest income $ 4,613 $ 1,015 $ 6,128 $ 26 $ 384 $ 12,166 $ 0.32 Other investment income — — 146 — — 146 — Total investment income 4,613 1,015 6,274 26 384 12,312 0.32 Interest expense (1,078 ) (193 ) (996 ) (17 ) (13 ) (2,297 ) (0.06 ) Debt issuance costs(3) — — — — (2,250 ) (2,250 ) (0.06 ) Other expenses — — — — (2,698 ) (2,698 ) (0.07 ) Net investment income 3,535 822 5,278 9 (4,577 ) 5,067 0.13 Net realized gain (loss) on investments 517 (71 ) (63 ) (386 ) 29 26 — Change in net unrealized gain (loss) on investments (8,890 ) (3,586 ) (24,730 ) 107 (26 ) (37,125 ) (0.99 ) Credit and foreign currency hedges, and other activities (238 ) (238 ) — Net income (loss) $ (4,838 ) $ (2,835 ) $ (19,515 ) $ (270 ) $ (4,812 ) $ (32,270 ) $ (0.86 ) Net income (loss) per share(2) $ (0.13 ) $ (0.07 ) $ (0.52 ) $ (0.01 ) $ (0.13 ) $ (0.86 ) (1) Includes interest income and net realized and change in unrealized gains (losses) associated with corporate debt and equity investments. Also includes management fees, performance fees, and various other operating expenses. (2) Based on weighted average shares outstanding of 37,572,206 shares for the quarter ended March 31, 2026. (3) Includes $1.7 million of underwriters' fees related the issuance of the Senior Notes, for which we have elected the fair value option, and $0.6 million of professional fees and other expenses incurred in connection with such issuance. The following table summarizes our operating results for the quarter ended December 31, 2025: Quarter Ended December 31, 2025 U.S. CLO Debt European CLO Debt U.S. CLO Equity European CLO Equity Other(1) Total Total Per Share(2) (In thousands, except share and per share amounts) Interest income $ 4,870 $ 1,311 $ 6,573 $ 439 $ 263 $ 13,456 $ 0.35 Other investment income — — 215 — — 215 0.01 Total investment income 4,870 1,311 6,788 439 263 13,671 0.36 Interest expense (1,299 ) (217 ) (791 ) (29 ) — (2,336 ) (0.06 ) Other expenses — — — — (3,584 ) (3,584 ) (0.09 ) Net investment income 3,571 1,094 5,997 410 (3,321 ) 7,751 0.21 Net realized gain (loss) on investments 121 240 75 222 12 670 0.02 Change in net unrealized gain (loss) on investments (4,707 ) (2,523 ) (18,633 ) (1,622 ) (41 ) (27,526 ) (0.74 ) Credit and foreign currency hedges, and other activities (1,962 ) (1,962 ) (0.05 ) Net income (loss) $ (1,015 ) $ (1,189 ) $ (12,561 ) $ (990 ) $ (5,312 ) $ (21,067 ) $ (0.56 ) Net income (loss) per share(2) $ (0.03 ) $ (0.03 ) $ (0.33 ) $ (0.03 ) $ (0.14 ) $ (0.56 ) (1) Includes interest income and net realized and change in unrealized gains (losses) associated with corporate debt and equity investments. Also includes management fees, performance fees, and various other operating expenses. (2) Based on weighted average shares outstanding of 37,570,694 shares for the quarter ended December 31, 2025. CLO Performance The quarter ended March 31, 2026 began on a constructive note, with credit spreads tightening and leveraged loan prices rising early in the year. However, market sentiment deteriorated as the quarter progressed, driven by growing concerns about the potential disruptive effects that artificial intelligence could have on corporate borrowers in the software sector. Broadly syndicated loans to the software sector, which represent roughly 11%4 of all CLO loan collateral, posted a negative total return of (5.5%)4 for the quarter, creating a significant drag on the performance of the wider CLO market. These pressures were compounded by broader macroeconomic volatility, including escalating geopolitical tensions. As a result, credit spreads widened materially, and prices on the Morningstar LSTA US Leveraged Loan Index fell 2.2% from their January peak through quarter end. The European leveraged loan market faced similar price declines. This weakness in leveraged loans drove broader spread widening across CLO debt tranche spreads during the quarter, with performance diverging sharply by credit quality. Senior tranches (AAA through A) were relatively resilient, outperforming both investment-grade and high-yield corporate bond indices. In contrast, lower-rated CLO debt experienced significant spread widening, particularly BB-rated tranches, where heavy selling pressure—driven by heightened credit concerns and sector-specific weaknesses—led to underperformance. Meanwhile, elevated default concerns weighed heavily on CLO equity valuations, particularly for CLOs with higher exposure to lower-rated loans. These pressures were further compounded by the continued compression of net interest margins within most CLOs, particularly earlier in the quarter, which reduced the excess interest available to CLO equity tranches. Overall, CLO equity generated significant losses for the quarter, as both excess interest and CLO liquidation values declined simultaneously. These effects were even more pronounced for European CLO equity tranches. Our investment portfolio generated negative results for the quarter, as unrealized losses concentrated in CLO equity exceeded net investment income, trading gains on mezzanine debt, and gains from the call of mezzanine debt positions held at discounts to par. At March 31, 2026, our CLO portfolio had a fair value of $307.9 million and a weighted average projected yield of 16.6% (based on fair value), and we held cash and cash equivalents of $57.7 million. Net Asset Value Summary The following table summarizes our assets and liabilities as of March 31, 2026: (In thousands, except share and per share amounts) March 31, 2026 Assets Investments, at fair value $ 308,363 Cash and cash equivalents 57,726 Other assets 20,838 Total assets 386,927 Liabilities Reverse repurchase agreements 166,274 Unsecured borrowings, at fair value 54,000 Other liabilities 12,831 Total liabilities 233,105 Net asset value $ 153,822 Common shares outstanding 37,579,569 Net asset value per common share $ 4.09 About Ellington Credit Company Ellington Credit Company (the "Fund") is a non-diversified closed-end fund that seeks to provide attractive current yields and risk-adjusted total returns by investing primarily in corporate collateralized loan obligations ("CLOs"), with a focus on mezzanine debt and equity tranches. The Fund is externally managed and advised by an affiliate of Ellington Management Group, L.L.C., a leading fixed-income investment manager founded in 1994. The Fund benefits from Ellington’s extensive experience and deep expertise in portfolio management, credit analysis, and risk management. Conference Call We will host a conference call at 11:00 a.m. Eastern Time on Wednesday, May 20, 2026 to discuss our financial results for the quarter ended March 31, 2026. To participate in the event by telephone, please dial (800) 343-4849 at least 10 minutes prior to the start time and reference the conference ID: EARNQ426. International callers should dial (203) 518-9848 and reference the same conference ID. The conference call will also be webcast live over the Internet and can be accessed via the "For Investors" section of our web site at www.ellingtoncredit.com. To listen to the live webcast, please visit www.ellingtoncredit.com at least 15 minutes prior to the start of the call to register, download, and install necessary audio software. In connection with the release of these financial results, we also posted an investor presentation, that will accompany the conference call, on our website at www.ellingtoncredit.com under "For Investors—Presentations." A dial-in replay of the conference call will be available on Wednesday, May 20, 2026, at approximately 2:00 p.m. Eastern Time through Wednesday, May 27, 2026 at approximately 11:59 p.m. Eastern Time. To access this replay, please dial (800) 934-2750. International callers should dial (402) 220-1142. A replay of the conference call will also be archived on our web site at www.ellingtoncredit.com. Cautionary Statement Regarding Forward-Looking Statements This release may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature and can be identified by words such as "anticipate," "estimate," "will," "should," "may," "expect," "project," "believe," "intend," "seek," "plan" and similar expressions or their negative forms, or by references to strategy, plans, or intentions. Forward-looking statements are based on our beliefs, assumptions and expectations of our future operations, business strategies, performance, financial condition, liquidity and prospects, taking into account information currently available to us. These beliefs, assumptions, and expectations are subject to numerous risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations and strategies may vary materially from those expressed or implied in our forward-looking statements. The following factors are examples of those that could cause actual results to vary from those stated or implied by our forward-looking statements: changes in interest rates and the market value of our investments, market volatility, changes in the default rates on corporate loans, our ability to borrow to finance our assets, changes in government regulations affecting our business, a deterioration in the market for collateralized loan obligations, our ability to adapt to the new regulatory regime associated with our conversion to a closed-end fund/RIC, potential business disruption related to our conversion to a closed-end fund/RIC, ability to achieve the anticipated benefits of our conversion to a closed-end fund/RIC, and other changes in market conditions and economic trends, such as changes to fiscal or monetary policy, heightened inflation, increased tariffs, slower growth or recession, and currency fluctuations. Furthermore, as stated above, forward-looking statements are subject to numerous risks and uncertainties, including, among other things, those described under the heading “Risk Factors” in our Registration Statement on Form N-2, which can be accessed through the link to our SEC filings under "For Investors" on our website (at www.ellingtoncredit.com) or at the SEC's website (www.sec.gov). Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected or implied may be described from time to time in reports we file with the SEC, and is not possible for us to predict or identify them all. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. This release and the information contained herein do not constitute an offer of any securities or solicitation of an offer to purchase securities. Reconciliation of Adjusted Net Investment Income to Net Investment Income We calculate Adjusted Net Investment Income as net investment income adjusted for: (i) non-recurring expenses; (ii) non-capitalized transaction costs, (iii) net realized and change in net appreciation (depreciation) associated with periodic settlements on interest rate swaps, and (iv) interest and dividend income (expense) net of transaction fees associated with the referenced assets on total return swaps. Adjusted Net Investment Income is a supplemental non-GAAP financial measure. We believe that the presentation of Adjusted Net Investment Income provides information useful to investors, because: (i) we believe that it is a useful indicator of both current and projected long-term financial performance, in that it excludes the impact of certain expenses and non-capitalized transaction costs that we believe are less useful in forecasting long-term performance and distribution-paying ability; and (ii) we believe that realized and accrued periodic settlements on interest rates swaps and interest and dividend income (expense) net of transaction fees on total return swaps are similar to net investment income and are more appropriately classified as recurring. Our calculation of Adjusted Net Investment Income may differ from the calculation of similarly titled non-GAAP financial measures by our peers, with the result that these non-GAAP financial measures might not be directly comparable. In addition, because Adjusted Net Investment Income is an incomplete measure of our financial results and differs from net investment income computed in accordance with U.S. GAAP, it should be considered supplementary to, and not as a substitute for, net investment income computed in accordance with U.S. GAAP. In setting our distributions, our Board of Trustees considers our earnings, liquidity, financial condition, distribution requirements, and financial covenants, along with other factors that our Board of Trustees may deem relevant from time to time. The following table reconciles, for the quarters ended March 31, 2026 and December 31, 2025, our Adjusted Net Investment Income to the line on our Consolidated Statement of Operations entitled Net Investment Income, which we believe is the most directly comparable U.S. GAAP measure: (In thousands except share amounts and per share amounts) Quarter Ended March 31, 2026 Quarter Ended December 31, 2025 Net Investment Income $ 5,067 $ 7,751 Adjustments: Less: Non-capitalized transaction costs and non-recurring expenses(1) (2,250 ) (49 ) Plus: Net realized and change in net appreciation (depreciation) on periodic settlements of interest rate swaps and net interest and dividend income (expense) on total return swaps $ (5 ) 2 Adjusted Net Investment Income $ 7,312 $ 7,802 Weighted Average Shares Outstanding 37,572,206 37,570,694 Adjusted Net Investment Income Per Share $ 0.19 $ 0.21 (1) For the quarter ended March 31, 2026, includes $1.7 million of underwriters' fees related to the issuance of the Senior Notes, for which we have elected the fair value option, and $0.6 million of professional fees and other expenses incurred in connection with such issuance. For the quarter ended December 31, 2025, includes $49 thousand of expenses incurred in connection with our strategic transformation. _________________________ 1 Adjusted net investment income is a non-GAAP financial measure. See "Reconciliation of Adjusted Net Investment Income to Net Investment Income" below for an explanation regarding the calculation of Adjusted net investment income. 2 Based on amortized cost; used in the calculation of interest income. 3 "Recurring cash distributions" primarily includes distributions received from our CLO investments but excludes cash received from CLO redemptions or sales during the quarter. 4 Source: Nomura CLO Special Topics View source version on businesswire.com: https://www.businesswire.com/news/home/20260519318335/en/ Investors:
Ellington Credit Company
Investor Relations
(203) 409-3773
info@ellingtoncredit.com or Media:
Amanda Shpiner/Grace Cartwright
Gasthalter & Co.
for Ellington Credit Company
(212) 257-4170
Ellington@gasthalter.com Original: Ellington Credit Company Announces Financial Results for the Fourth Fiscal Quarter Ended March 31, 2026

Ellington Credit Company Announces Financial Results for the Third Fiscal Quarter Ended December 31, 2025March 4, 2026 4:15 PM
Business Wire
Ellington Credit Company (NYSE: EARN) ("we") today reported financial results for the quarter ended December 31, 2025.

Highlights

Net asset value (NAV) per share was $5.19 as of December 31, 2025, which includes the effects of distributions of $0.24 per share for the quarter.

GAAP net income (loss) was $(21.1) million or $(0.56) per share.

Net investment income ("NII") was $7.8 million, or $0.21 per share.

Adjusted net investment income1 was $7.8 million, or $0.21 per share.

CLO portfolio was $369.5 million as of December 31, 2025.

CLO debt investments—$176.9 million.

CLO equity investments—$192.6 million.

Purchased $65.8 million of CLO investments and sold $17.4 million, across 47 trades.

Weighted average GAAP yield2 for the quarter was 13.7% on the total CLO portfolio.

Received $19.1 million in recurring cash distributions3 from the investment portfolio, or $0.51 per share.

Management Commentary

"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.

"Thanks to our portfolio management strategy, Ellington Credit delivered another quarter of outperformance relative to its peer set. Nevertheless—and as previously reported in our monthly NAV updates—the underperformance in the CLO equity market resulted in a significant drop in our NAV, and thereby a net loss for the quarter overall. We believe that a meaningful portion of the drop in NAV reflected credit spread widening rather than fundamental deterioration, so a substantial portion of these losses could reverse should market conditions normalize.

"Moving forward, we believe that the recent headwinds in CLO equity, spanning the fourth quarter and continuing into 2026, are repricing that market and expanding the opportunity set in a very meaningful way. As a result, while early in 2026 we had favored purchases of mezzanine debt, we now expect to selectively increase our CLO equity position as opportunities arise.

"I am confident that the current market environment plays precisely to our strengths in active investing and trading. Coupled with our substantial credit hedging portfolio coming into 2026, I believe that we are well positioned to capitalize on market dislocations and deliver attractive risk-adjusted returns for shareholders."

_________________

1

Adjusted net investment income is a non-GAAP financial measure. See "Reconciliation of Adjusted Net Investment Income to Net Investment Income" below for an explanation regarding the calculation of Adjusted net investment income.

2

Based on amortized cost; used in the calculation of interest income.

3

"Recurring cash distributions" primarily includes distributions received from our CLO investments but excludes cash received from CLO redemptions or sales during the quarter.

Distributions

During and subsequent to the quarter ended December 31, 2025, our Board of Trustees declared the following distributions on our common shares.

Declaration Date

Record Date

Payment Date

Distribution Per Share

October 7, 2025

October 31, 2025

November 28, 2025

$

0.08

November 10, 2025

November 28, 2025

December 31, 2025

0.08

December 4, 2025

December 31, 2025

January 30, 2026

0.08

January 8, 2026

January 30, 2026

February 27, 2026

0.08

February 9, 2026

February 27, 2026

March 31, 2026

0.08

Investment Portfolio

The following table summarizes the composition of the investment portfolio as of December 31, 2025.

(In thousands)

Amortized Cost

Fair Value

% of Total

Investments

U.S. CLO debt

$

139,295

$

136,212

36.8

%

European CLO debt

41,831

40,700

11.0

%

Total CLO debt

181,126

176,912

47.8

%

U.S. CLO equity

207,087

187,323

50.7

%

European CLO equity

7,111

5,231

1.4

%

Total CLO equity

214,198

192,554

52.1

%

Total CLO debt and equity

395,324

369,466

99.9

%

Other investments

418

419

0.1

%

Total investments

$

395,742

$

369,885

100.0

%

Credit Hedges

The following table summarizes our credit hedges, expressed in estimated notional equivalents(1) of the Markit CDX North American High Yield Index (the "Index"), as of December 31, 2025 and September 30, 2025:

Estimated Index Equivalents

(In thousands)

December 31, 2025

September 30, 2025

Credit Hedges(2)

$

(174,824

)

$

(90,568

)

(1)

Notional equivalents are estimated based on historical price relationships between credit hedges (and/or their underlying components) and the Index, together with other factors. Our estimations of price relationships between instruments may change over time, and actual price relationships experienced may differ from those previously estimated.

(2)

Includes CDS on corporate indices and options on corporate indices and ETFs.

Results of Operations

The following table summarizes our operating results for the quarter ended December 31, 2025:

Quarter Ended December 31, 2025

U.S. CLO

Debt

European

CLO Debt

U.S. CLO

Equity

European

CLO

Equity

Other(1)

Total

Total

Per

Share(2)

(In thousands, except share and per share amounts)

Interest income

$

4,870

$

1,311

$

6,573

$

439

$

263

$

13,456

$

0.35

Other investment income

—

—

215

—

—

215

0.01

Total investment income

4,870

1,311

6,788

439

263

13,671

0.36

Interest expense

(1,299

)

(217

)

(791

)

(29

)

—

(2,336

)

(0.06

)

Other expenses

—

—

—

—

(3,584

)

(3,584

)

(0.09

)

Net investment income

3,571

1,094

5,997

410

(3,321

)

7,751

0.21

Net realized gain (loss) on investments

121

240

75

222

12

670

0.02

Change in net unrealized gain (loss) on investments

(4,707

)

(2,523

)

(18,633

)

(1,622

)

(41

)

(27,526

)

(0.74

)

Credit and foreign currency hedges, and other activities

(1,962

)

(1,962

)

(0.05

)

Net income (loss)

$

(1,015

)

$

(1,189

)

$

(12,561

)

$

(990

)

$

(5,312

)

$

(21,067

)

$

(0.56

)

Net income (loss) per share(2)

$

(0.03

)

$

(0.03

)

$

(0.33

)

$

(0.03

)

$

(0.14

)

$

(0.56

)

(1)

Includes interest income and net realized and change in unrealized gains (losses) associated with corporate debt and equity investments. Also includes management fees, performance fees, and various other operating expenses.

(2)

Based on weighted average shares outstanding of 37,570,694 shares for the quarter ended December 31, 2025.

The following table summarizes our operating results for the quarter ended September 30, 2025:

Quarter Ended September 30, 2025

U.S. CLO

Debt

European

CLO Debt

U.S. CLO

Equity

European

CLO

Equity

Other(1)

Total

Total

Per

Share(2)

(In thousands, except share and per share amounts)

Interest income

$

5,161

$

1,256

$

6,728

$

420

$

281

$

13,846

$

0.37

Other investment income

—

—

305

—

—

305

0.01

Total investment income

5,161

1,256

7,033

420

281

14,151

0.38

Interest expense

(1,296

)

(208

)

(435

)

(25

)

—

(1,964

)

(0.05

)

Other expenses

—

—

—

—

(3,702

)

(3,702

)

(0.10

)

Net investment income

3,865

1,048

6,598

395

(3,421

)

8,485

0.23

Net realized gain (loss) on investments

907

223

235

(88

)

(16

)

1,261

0.03

Change in net unrealized gain (loss) on investments

(61

)

(39

)

(3,638

)

(413

)

54

(4,097

)

(0.11

)

Credit and foreign currency hedges, and other activities

(1,369

)

(1,369

)

(0.04

)

Net income (loss)

$

4,711

$

1,232

$

3,195

$

(106

)

$

(4,752

)

$

4,280

$

0.11

Net income (loss) per share(2)

$

0.13

$

0.03

$

0.08

$

—

$

(0.13

)

$

0.11

(1)

Includes interest income and net realized and change in unrealized gains (losses) associated with corporate debt and equity investments. Also includes management fees, performance fees, and various other operating expenses.

(2)

Based on weighted average shares outstanding of 37,563,048 shares for the quarter ended September 30, 2025.

CLO Performance

During the quarter ended December 31, 2025, prices in the U.S. leveraged loan market broadly declined, with performance diverging sharply by credit quality. Lower-quality CCC-rated loans saw significant price declines, driven in particular by elevated supply from CLOs being reset or liquidated. Reset CLOs typically must sell lower-rated loans to meet debt investor demands, while liquidated CLOs generally have exposure to seasoned portfolios (and hence carry greater exposure to lower-rated credits). Further compounding the weakness in CCC-rated loans was elevated default activity during the quarter. Higher-quality BB-rated loans, conversely, posted modestly positive total returns, as coupon interest more than offset price declines. Those price declines (-0.2% for the quarter) reflected ongoing repricing at lower rates, with price premiums giving way to new issuance at par with tighter spreads. These effects were more pronounced in the European leveraged loan market, where loan prices declined more than in the U.S. across credit ratings.

The weakness in leveraged loans, together with rising credit concerns, led to a widening of CLO debt spreads during the quarter. CLOs with greater exposure to lower-quality loans were most negatively impacted, while higher-quality, seasoned mezzanine debt tranches outperformed as loan prepayment and repricing activity remained elevated. Meanwhile, CLO equity was negatively impacted by loan coupon spread compression and continued weakness in CCC-rated credits. This combination of factors contributed to losses across most CLO equity profiles as both excess interest and underlying asset values in CLOs declined simultaneously.

Meanwhile, despite continued dispersion in credit performance within the high-yield corporate bond market, corporate credit spreads were modestly tighter overall; and equity indexes extended their strong performance, boosted by robust corporate earnings and interest rate cuts.

Our investment portfolio generated negative results for the quarter, as unrealized losses concentrated in CLO equity investments, along with credit hedge losses, exceeded net investment income, trading gains, and the positive impact of deal calls of mezzanine debt positions owned at discounts to par. As of December 31, 2025, our CLO portfolio had a fair value of $369.5 million and a weighted average projected yield of 14.6%, based on fair value, and we held cash and cash equivalents of $24.3 million.

Net Asset Value Summary

The following table summarizes our assets and liabilities as of December 31, 2025:

(In thousands, except share and per share amounts)

December 31, 2025

Assets

Investments, at fair value

$

369,885

Cash and cash equivalents

24,271

Other assets

20,807

Total assets

414,963

Liabilities

Reverse repurchase agreements

201,037

Other liabilities

18,892

Total liabilities

219,929

Net asset value

$

195,034

Common shares outstanding

37,568,800

Net asset value per common share

$

5.19

About Ellington Credit Company

Ellington Credit Company (the "Fund") is a non-diversified closed-end fund that seeks to provide attractive current yields and risk-adjusted total returns by investing primarily in corporate collateralized loan obligations ("CLOs"), with a focus on mezzanine debt and equity tranches. The Fund is externally managed and advised by an affiliate of Ellington Management Group, L.L.C., a leading fixed-income investment manager founded in 1994. The Fund benefits from Ellington’s extensive experience and deep expertise in portfolio management, credit analysis, and risk management.

Conference Call

We will host a conference call at 11:00 a.m. Eastern Time on Thursday, March 5, 2026 to discuss our financial results for the quarter ended December 31, 2025. To participate in the event by telephone, please dial (800) 343-4849 at least 10 minutes prior to the start time and reference the conference ID: EARNQ326. International callers should dial (203) 518-9848 and reference the same conference ID. The conference call will also be webcast live over the Internet and can be accessed via the "For Investors" section of our web site at www.ellingtoncredit.com. To listen to the live webcast, please visit www.ellingtoncredit.com at least 15 minutes prior to the start of the call to register, download, and install necessary audio software. In connection with the release of these financial results, we also posted an investor presentation, that will accompany the conference call, on our website at www.ellingtoncredit.com under "For Investors—Presentations."

A dial-in replay of the conference call will be available on Thursday, March 5, 2026, at approximately 2:00 p.m. Eastern Time through Thursday, March 12, 2026 at approximately 11:59 p.m. Eastern Time. To access this replay, please dial (800) 839-5635. International callers should dial (402) 220-2561. A replay of the conference call will also be archived on our web site at www.ellingtoncredit.com.

Cautionary Statement Regarding Forward-Looking Statements

This release may contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature and can be identified by words such as "anticipate," "estimate," "will," "should," "may," "expect," "project," "believe," "intend," "seek," "plan" and similar expressions or their negative forms, or by references to strategy, plans, or intentions. Forward-looking statements are based on our beliefs, assumptions and expectations of our future operations, business strategies, performance, financial condition, liquidity and prospects, taking into account information currently available to us. These beliefs, assumptions, and expectations are subject to numerous risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations and strategies may vary materially from those expressed or implied in our forward-looking statements. The following factors are examples of those that could cause actual results to vary from those stated or implied by our forward-looking statements: changes in interest rates and the market value of our investments, market volatility, changes in the default rates on corporate loans, our ability to borrow to finance our assets, changes in government regulations affecting our business, a deterioration in the market for collateralized loan obligations, our ability to adapt to the new regulatory regime associated with our conversion to a closed-end fund/RIC, potential business disruption related to our conversion to a closed-end fund/RIC, ability to achieve the anticipated benefits of our conversion to a closed-end fund/RIC, and other changes in market conditions and economic trends, such as changes to fiscal or monetary policy, heightened inflation, increased tariffs, slower growth or recession, and currency fluctuations. Furthermore, as stated above, forward-looking statements are subject to numerous risks and uncertainties, including, among other things, those described under the heading “Risk Factors” in our Registration Statement on Form N-2, which can be accessed through the link to our SEC filings under "For Investors" on our website (at www.ellingtoncredit.com) or at the SEC's website (www.sec.gov). Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected or implied may be described from time to time in reports we file with the SEC, and is not possible for us to predict or identify them all. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

This release and the information contained herein do not constitute an offer of any securities or solicitation of an offer to purchase securities.

Reconciliation of Adjusted Net Investment Income to Net Investment Income

We calculate Adjusted Net Investment Income as net investment income adjusted for: (i) non-recurring expenses; and (ii) net realized and change in net appreciation (depreciation) associated with periodic settlements on interest rate swaps. Adjusted Net Investment Income is a supplemental non-GAAP financial measure. We believe that the presentation of Adjusted Net Investment Income provides information useful to investors, because: (i) we believe that it is a useful indicator of both current and projected long-term financial performance, in that it excludes the impact of certain expenses that we believe are less useful in forecasting long-term performance and distribution-paying ability; and (ii) we believe that realized and accrued periodic settlements on interest rates swaps are similar to net interest income and are more appropriately classified as recurring.

Our calculation of Adjusted Net Investment Income may differ from the calculation of similarly titled non-GAAP financial measures by our peers, with the result that these non-GAAP financial measures might not be directly comparable. In addition, because Adjusted Net Investment Income is an incomplete measure of our financial results and differs from net investment income computed in accordance with U.S. GAAP, it should be considered supplementary to, and not as a substitute for, net investment income computed in accordance with U.S. GAAP.

In setting our distributions, our Board of Trustees considers our earnings, liquidity, financial condition, distribution requirements, and financial covenants, along with other factors that the Board of Trustees may deem relevant from time to time.

The following table reconciles, for the quarters ended December 31, 2025 and September 30, 2025, our Adjusted Net Investment Income to the line on our Consolidated Statement of Operations entitled Net Investment Income, which we believe is the most directly comparable U.S. GAAP measure:

Quarter Ended

(In thousands except share amounts and per share amounts)

December 31, 2025

September 30, 2025

Net Investment Income

$

7,751

$

8,485

Adjustments:

Less: Non-recurring expenses—Strategic transformation costs

(49

)

(35

)

Plus: Net realized and change in net appreciation (depreciation) on periodic settlements of interest rate swaps

2

—

Adjusted Net Investment Income

$

7,802

$

8,520

Weighted Average Shares Outstanding

37,570,694

37,563,048

Adjusted Net Investment Income Per Share

$

0.21

$

0.23

View source version on businesswire.com: https://www.businesswire.com/news/home/20260304793605/en/
Investors:

Ellington Credit Company

Investor Relations

(203) 409-3773

info@ellingtoncredit.com

or

Media:

Amanda Shpiner/Grace Cartwright

Gasthalter & Co.

for Ellington Credit Company

(212) 257-4170

Ellington@gasthalter.com

Original: Ellington Credit Company Announces Financial Results for the Third Fiscal Quarter Ended December 31, 2025