Aug 13, 2026 earnings call — CLO portfolio repositioning to grow net investment income
EARN reported an economic return of 8.1% for the quarter and NAV rose to $4.18 per share.
Revenue $0.0B (est $0.0B) · EPS $0.15 (est $0.20)
Key quotes
"The market sell-off earlier in the year widened credit spreads and significantly expanded the CLO opportunity set, and we moved quickly, issuing unsecured debt in late March, rapidly deploying the proceeds in April and actively repositioning the portfolio throughout."
"We believe that we are well positioned to grow net investment income in the months ahead as our NII for the full quarter did not yet fully reflect the earnings power of our expanded and repositioned portfolio as of the end of the quarter."
"Lower borrowings and a higher net asset value brought our leverage ratios down. Our debt-to-equity declined to 1.29x at June 30 from 1.43x at March 31, leaving us with a stronger, more flexible balance sheet and additional borrowing capacity entering the third quarter."
Analyst Q&A 1
dividend safety and borrowing plans
Q (Crispin Love · Piper Sandler): The analyst asked if adjusted net investment income would rise after the $0.06 July run rate, whether the company might add more borrowing or tap the ATM, and how comfortable they are with the current dividend. He also asked why the CLO, debt, and equity mix changed and how fully invested the firm is today.
A: Management said they are comfortable with the current dividend and expect adjusted net investment income to reach the low 20s. They explained the portfolio moves came from buying oversold CLO equity, rotating positions that have tightened into longer-dated, higher cash-flow names, and some month-to-month effects from distributions or PO timing. On leverage, they said debt/equity was 1.43x at March 31 and 1.29x at June 30, could move back toward the March level, and they could grow the portfolio another 5%, 10% from the June 30 numbers using distributions, deal calls, sales and excess liquidity.
"So leverage is also a function of what kind of credit hedges we have in place as they all kind of go together." — J. Herlihy