UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-23758
EAGLE POINT INSTITUTIONAL
INCOME FUND
(Exact name of registrant as specified in charter)
600 Steamboat Road, Suite 202
Greenwich, CT 06830
(Address of principal executive offices) (Zip code)
Thomas P. Majewski
c/o EAGLE POINT INSTITUTIONAL
INCOME FUND
600 Steamboat Road, Suite 202
Greenwich, CT 06830
(Name and address of agent
for service)
Copies to
Thomas J. Friedmann
Philip Hinkle
Dechert LLP
One International Place, 40th Floor
100 Oliver Street
Boston, MA 02110
(617) 728-7120
Registrant’s telephone number, including
area code: (203) 340-8500
Date of fiscal year end: December 31
Date of reporting period: December 31, 2024
Form N-CSR is to be used by management investment
companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required
to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use
the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information
specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection
of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”)
control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing
the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection
of information under the clearance requirements of 44 U.S.C. § 3507.
| Item 1. |
Report to Stockholders |
The Annual Report to shareholders of Eagle Point Institutional Income
Fund (the “Company”) for the year ended December 31, 2024 is filed herewith.
Eagle Point Institutional Income Fund
Annual Report – December 31, 2024
Table of Contents
Letter
to Shareholders and Management Discussion of Fund Performance
February 26,
2025
Dear Shareholders:
We are pleased
to provide you with the enclosed report of Eagle Point Institutional Income Fund (“we,” “us,” “our”
or the “Fund”) for the year ended December 31, 2024.
The Fund is
a closed-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”)
and is advised by Eagle Point Credit Management LLC (the “Adviser”). The Fund is organized as a Delaware statutory
trust and offers its common shares of beneficial interest (“Shares”) to investors on a continuous basis at the Fund’s
net asset value (“NAV”) per share plus any applicable sales load. The Fund’s primary investment objective is
to generate high current income, with a secondary objective to generate capital appreciation. We seek to achieve these objectives
by investing primarily in equity and junior debt tranches of collateralized loan obligations (“CLOs”). We may also
invest in other securities or instruments that are related investments or that are consistent with our investment objectives.
The Adviser
has significant expertise in CLO investing, including 78 years of combined CLO industry experience among the senior investment
team, and over $12 billion of assets under management as of December 31, 2024.1 The Fund was formed in order to provide
investors with access to institutional credit investment strategies in a continuously offered, SEC-registered and non-traded format.
In 2024, we:
| ■ | Increased our distribution rate and paid monthly distributions to shareholders totaling $0.981 per share for the year. The annualized distribution
rate as of year-end was 10.4% and it represents a 13% increase from annualized distribution rate as of the prior year-end.2 |
| ■ | Actively deployed $125.1
million into new CLO equity investments, CLO debt investments and loan accumulation facilities. Newly purchased CLO equity investments
had a weighted average effective yield of 18.0% as measured at the time of investment. |
| ■ | Raised $66.1 million through
sales of the Fund’s shares and reinvestment of distributions. The Fund expects to continue expanding its equity base by raising
capital under our continuous offering program. |
Past performance is not indicative of, or a guarantee of, future performance.
Please see page 8 for endnotes.
| ■ | Completed 11 resets and
3 refinancings of CLOs in our portfolio. The resets each created new 5-year reinvestment periods for those CLOs and typically reduced
those CLOs’ debt costs. On average, the refinancings lowered the AAA debt spreads by 21 basis points. |
| ■ | Through our investing
activity and proactive reset program, increased the weighted average remaining reinvestment period, or “WARRP,” of
the Fund’s CLO equity portfolio to 3.9 years as of December 31, 2024 (compared to 3.4 years as of December 31, 2023) despite
the passage of one year. |
| ■ | Completed an underwritten
public offering and issued 1.4 million Series A Term Preferred Shares due 2029 (the “Series A Term Preferred Shares”),
resulting in net proceeds to the Fund of $33.2 million. The Series A Term Preferred Shares provide attractive, long-term financing
for the Fund. |
| ■ | Established a $25 million
revolving credit facility, providing additional capital for investment. As a result, the Fund’s total assets exceeded $168
million as of year-end, inclusive of available borrowings under our revolving credit facility, representing 219% growth year-over-year.
|
The strong performance
of our investment portfolio during 2024 enabled the Fund to distribute $7.9 million to its shareholders. The Fund’s consistent
distributions during the year reflected its practice of providing shareholders with a stable distribution rate each month.2
This practice had no material impact on the Fund’s investment strategies during the fiscal year. If the Fund’s distributions had
been higher or lower, the Fund’s NAV would have declined or increased (respectively), as a result. The Fund had net investment
income (“NII”) distribution coverage since inception of 105.5%.
We continue
to prudently and actively manage the Fund’s investment portfolio while raising capital to take advantage of attractive investment
opportunities in the CLO market. During 2024, we deployed $125.1 million into new CLO equity investments, CLO debt investments
and loan accumulation facilities and sold three CLO debt investments for the total proceeds of $1.2 million realizing capital gains
with a weighted average appreciation in price of 9.70%.
During 2024,
we received strong and consistent cash flows from our investment portfolio; our cash-on-cash return was 23.7%.3 This
was comfortably in excess of our expenses and distributions which provided the Fund with additional dry powder to deploy into new
investments at attractive prices.
We believe our
portfolio continues to have the potential for further meaningful upside. In our view, CLOs generally are not particularly sensitive
to interest rate movements, as CLO equity is
Past performance is not indicative of, or a guarantee of, future performance.
Please see page 8 for endnotes.
predominantly a spread arbitrage product. Both the asset side of a CLO’s balance
sheet, principally in broadly syndicated loans, and the liability side of a CLO’s balance sheet, CLO debt tranches which
are also are principally floating rate, and substantially offset any fluctuations in short-term rates.
As of December
31, 2024, the Fund’s investment portfolio consisted of 86 unique CLO investments. Importantly, nearly all the Fund’s
investments were also investments made by other institutional funds and accounts managed by the Adviser. To the extent that the
Fund (along with other funds and accounts managed by the Adviser) owns a majority position in the equity tranche, our Adviser has
the ability to exercise certain protective rights over the vehicle (such as the ability to call the CLO after the non-call period,
to refinance/reset CLO debt tranches after the non-call period and to influence potential amendments to the governing documents
of the CLO) that may reduce our risk in these investments and/or enhance the value of our investments.
On June 28,
2024, the Fund entered into an agreement that established a senior secured revolving credit facility, of which the Fund can borrow
up to an aggregate $25 million. In October 2024, the Fund raised $33.2 million in net proceeds for investment through the issuance
of its Series A Term Preferred Shares. We expect to operate the Fund between a 25% and 35% debt to assets ratio under normal market
conditions. The Fund’s use of leverage through the credit facility and Series A Term Preferred Shares is expected to be accretive
to shareholders.
We also want
to highlight the Fund’s distribution reinvestment plan for shareholders. This plan allows shareholders to elect to have their
distributions reinvested into new shares at a 5% discount to NAV per share. We encourage all shareholders to carefully review the
terms of the plan. See “Distribution Reinvestment Plan” in the enclosed report.
Past performance is not indicative of, or a guarantee of, future performance.
Please see page 8 for endnotes.
Market
Overview4
Loan Market
The S&P
UBS Leveraged Loan Index5 recorded a total return of 9.05% in 2024, the third-best performance over the past ten years.
Average broadly
syndicated loan (“BSL”) prices finished 2024 at 96.37. This is an increase from 95.32 at the beginning of the year.
The trailing
12-month average default rate finished the year at 0.91%, comparing favorably to 1.53% at year-end 2023 and remained comfortably
below the long-term average of 2.61%.6 The Fund’s underlying loan portfolios have default exposure of only 0.23%.
Business development
companies (“BDCs”) and private credit funds continued to step in and fill the void left by banks. Since 2020, we saw
approximately $140 billion of syndicated loan borrowers refinanced by the private credit market. We maintain that this trend will
continue for the long term and will improve the overall risk profile of BSL CLOs as the private credit market refinances some of
the syndicated market’s higher risk loans.
Importantly,
with $390 billion of BSLs repaying at par in 2024, the 12-month trailing loan repayment rate increased to 27.9% as of year-end,
well above the 17.6% rate as of the end of 2023. Strong demand from CLOs and retail investors helped drive a loan repricing wave
that compressed spreads, bringing the 2024 repricing total to a record $760 billion. With 4% of the loan market set to mature prior
to 2027, the “maturity wall” continues to be pushed out, and we do not view loan maturities as a meaningful risk. Only
3.1% of the loan portfolios underlying our CLO equity positions mature prior to 2027.
There was over
$1.3 trillion of total loan issuance in 2024, but importantly, only $170 billion of net new loan issuance.
CLO Market
The CLO market
recorded a record $202 billion of new gross CLO issuance in 2024, but due to repayments at par of many CLO securities, net issuance
remained a relatively modest $70 billion. The first half and the second half of the year saw two different trends: in the first,
the market observed net negative new issuance for the first time since 2008-2009; in the second half, strong CLO debt demand tightened
spreads and made new issue equity appear cheap in comparison to secondary equity, a dynamic which drove the creation of new CLOs
and positive net issuance.
Past performance is not indicative of, or a guarantee of, future performance.
Please see page 8 for endnotes.
CLO refinancing
and reset volumes were robust in 2024. For the year, there were $84 billion of refinancings – the second-highest year on
record – and $223 billion of resets.
Looking ahead,
we anticipate that 2025 net issuance volumes will be in line with those of 2024. We expect resets will continue to be prevalent
as CLO debt spreads tighten. The outlook is driven by strong investor demand for floating-rate products and an expected increase
in leveraged loan activity tied to lower interest rates and a healthier M&A environment.
The underlying
fundamentals of CLO portfolios remain strong. The median market wide CCC-rated loan exposure for US CLOs was 5.9%, with average
overcollateralization cushions of 3.5% through December 2024. These both compare favorably to 7.4% and 3.3%, respectively, at the
end of 2023. For reference, based on fair market value, all of the Fund’s portfolio of CLO equity with a payment date in
the fourth quarter received a distribution.
We remain excited
about the investment opportunities within the CLO market and believe there is significant value within the equity and junior debt
portions of the capital structure. Our portfolio is well positioned to benefit from additional upside through 2025 with market
trends like strong investor demand for floating rate products and anticipated increases in leveraged loan activity. While there
remains potential for the portfolio to still be impacted by loan spread compression, we are seeking to offset that by continuing
our program of resets and refinancings.
Additional
Information
In
addition to the Fund’s regulatory requirement to file certain quarterly and annual portfolio information as described further
in the enclosed report, the Fund makes certain additional financial information available to investors via our website (www.EPIIF.com).
About
Our Adviser
Eagle Point
Credit Management LLC is a specialist asset manager focused on investing in CLO securities and other income-oriented credit investments.
As of December 31, 2024, our Adviser and its affiliates had over $12 billion of assets under management.1
Subsequent
Developments
Pursuant to
the Fund’s continuous offering, during the period from January 1, 2025 through January 31, 2025, the Fund issued common shares
for total net proceeds to the Fund of $3.7 million.
For the month
of January 2025, the Fund declared and paid a distribution in the amount of $0.083 per share, representing a 10.4% annualized distribution
rate.2
Past performance is not indicative of, or a guarantee of, future performance.
Please see page 8 for endnotes.
*
* * *
Management remains
keenly focused on continuing to create value for our shareholders. We appreciate the trust and confidence our shareholders have
placed in the Fund.
Thomas Majewski
Chairman and
Chief Executive Officer
This letter
is intended to assist shareholders in understanding the Fund’s performance for the year ended December 31, 2024. The views
and opinions in this letter were current as of February 21, 2025. Statements other than those of historical facts included herein
may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks
and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of
factors. The Fund undertakes no duty to update any forward-looking statement made herein. Information contained on our website
is not incorporated by reference into this shareholder letter and you should not consider information contained on our website
to be part of this shareholder letter or any other report we file with the SEC.
Past performance is not indicative of, or a guarantee of, future performance.
Please see page 8 for endnotes.
Notes
| 1 | Represents
gross assets under management, inclusive of committed but undrawn capital, managed by
Eagle Point Credit Management LLC and certain of its affiliates. |
| 2 | Annualized distribution rate reflects distributions paid as of the end
of the most recent period, annualized, and divided by the period end NAV. The annualized distribution rate is not a guarantee of
future returns and future performance may vary. The timing and frequency of distribution payments is not guaranteed. Such variance
may be material and adverse, including the potential for full loss of principal and no distributions. In considering returns,
investors should bear in mind that historical performance is not a guarantee, projection or prediction and is not indicative of
future results. Actual net returns in any given year may be lower than the historical returns. Investment return and principal value
of any investment will fluctuate and may be worth more or less than the amount initially invested. Distribution payments are not
guaranteed. Distributions may be comprised of any combination of 1) net investment income and/or 2) net capital gain, and, if the
Fund distributes an amount in excess of net investment income and net capital gains, a portion of such distribution will constitute
a return of capital. A distribution comprised in whole or in part by a return of capital does not necessarily reflect the
Fund’s investment performance and should not be confused with “yield” or “income.” A return of capital
distribution may reduce the amount of investable funds. The actual components of the Fund’s distributions for US tax reporting
purposes can only be finally determined as of the end of each fiscal year of the Fund and are thereafter reported to shareholders on
Form 1099-DIV. |
| 3 | Cash-on-cash
return represents the total amount of recurring distributions received from investments
for the period over the Fund’s average beginning NAV for the period, annualized. |
| 4 | Market
data and statistics summarized herein are sourced from JPMorgan Chase & Co., S&P
Capital IQ, Pitchbook LCD, S&P UBS and Bank of America. |
| 5 | The
S&P UBS Leveraged Loan Index tracks the investable universe of the US dollar-denominated
leveraged loan market. The performance of an index is not an exact representation of
any particular investment, as you cannot invest directly in an index. |
| 6 | Default rate represents
the rate of obligors who fail to remain current on their loans based on the par amount. |
Page Intentionally Left
Blank
Important Information about this Report and
Eagle Point Institutional Income Fund
This report is transmitted
to the shareholders of Eagle Point Institutional Income Fund (“we,” “us,” “our” or the “Fund”)
and is furnished pursuant to certain regulatory requirements. This report and the information and views herein do not constitute
investment advice, or a recommendation or an offer to enter into any transaction with the Fund or any of its affiliates. This report
is provided for informational purposes only, does not constitute an offer to sell securities of the Fund and is not a prospectus.
From time to time, the Fund may have a registration statement relating to one or more of its securities on file with the U.S. Securities
and Exchange Commission (“SEC”). Any registration statement that has not yet been declared effective by the SEC, and
any prospectus relating thereto, is not complete and may be changed. Any securities that are the subject of such a registration
statement may not be sold until the registration statement filed with the SEC is effective.
The information and its
contents are the property of Eagle Point Credit Management LLC (the “Adviser”) and/or the Fund. Any unauthorized dissemination,
copying or use of this presentation is strictly prohibited and may be in violation of law. This presentation is being provided
for informational purposes only.
Investors
should read the Fund’s prospectus and SEC filings (which are publicly available on the EDGAR Database on the SEC website
at www.sec.gov)
carefully and consider their investment goals, time horizons and risk tolerance before investing in the Fund. Investors should
consider the Fund’s investment objectives, risks, charges and expenses carefully before investing in securities of the Fund.
There is no guarantee that any of the goals, targets or objectives described in this report will be achieved.
An investment in the Fund
is not appropriate for all investors. The investment program of the Fund is speculative, entails substantial risk and includes
investment techniques not employed by traditional mutual funds. An investment in the Fund is not intended to be a complete investment
program. Past performance is not indicative of, or a guarantee of, future performance. The performance and certain other portfolio
information quoted herein represents information as of December 31, 2024. Nothing herein should be relied upon as a representation
as to the future performance or portfolio holdings of the Fund. Investment return and principal value of an investment will fluctuate,
and shares, when sold, may be worth more or less than their original cost. The Fund’s performance is subject to change since
the end of the period noted in this report and may be lower or higher than the performance data shown herein.
Liquidity will be provided
by the Fund only through limited repurchase offers described below (if at all). An investment in the Fund is suitable only for
investors who can bear the risks associated with the limited liquidity of the shares and should be viewed as a long-term investment.
The Fund’s shares will not be publicly traded and an investor should not expect to be able to sell shares regardless of how
the Fund performs.
Neither the Adviser nor
the Fund provide legal, accounting or tax advice. Any statement regarding such matters is explanatory and may not be relied upon
as definitive advice. Investors should consult with their legal, accounting and tax advisors regarding any potential investment.
The information presented herein is as of the dates noted herein and is derived from financial and other information of the Fund,
and, in certain cases, from third party sources and reports (including reports of third party custodians, CLO managers and trustees)
that have not been independently verified by the Fund. As noted herein, certain of this information is estimated and unaudited,
and therefore subject to change. We do not represent that such information is accurate or complete, and it should not be relied
upon as such.
Forward-Looking Statements
This report may contain “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements
of historical facts included in this report may constitute forward-looking statements and are not guarantees of future performance
or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking
statements as a result of a number of factors, including those described in the Fund’s filings with the SEC. The Fund undertakes
no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this report.
Performance Data1
The following graph shows
the performance of a $10,000 investment in the Fund’s shares and the S&P BDC Index for the period from June 1, 2022 (commencement
of the Fund’s operations) through December 31, 2024. The performance calculation assumes the purchase of the Fund’s
shares at the offering price at the beginning of the period (i.e., at the initial net asset value per share and assuming the maximum
sales charge of 6.75%) and the repurchase of those shares at net asset value at the end of the periods shown. Distributions are
assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s distribution reinvestment
plan. Performance reflects applicable fee waivers and/or expense limitations in effect during the periods shown and in their absence,
performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions
or the repurchase of Fund shares. For comparative purposes, the performance of a relevant third-party securities market index,
the S&P BDC Index, is shown.
Past performance is not indicative of, or a guarantee of, future performance. Future results may vary
and may be higher or lower than the data shown.
| |
Annualized
Total Return |
Cumulative
Total Return |
| |
1
Year |
Since
Inception |
Since
Inception |
| Eagle
Point Institutional Income Fund (without sales load)2 |
4.02% |
7.95% |
21.89% |
| Eagle
Point Institutional Income Fund (with sales load) |
-3.00% |
5.08% |
13.66% |
| S&P
BDC Index |
16.61% |
14.24% |
41.12% |
Please see footnote disclosure on Page 13.
Summary of Certain Unaudited Portfolio Characteristics
The summary of portfolio
characteristics reflected below is as of December 31, 2024. The information presented below is on a look–through basis to
the collateralized loan obligation, or “CLO”, equity held by the Fund as of December 31, 2024 (except as otherwise
noted) and reflects the aggregate underlying exposure of the Fund based on the portfolios of those investments. The data is estimated
and unaudited and is derived from CLO trustee reports received by the Fund relating to December 2024 and from custody statements
and/or other information received from CLO collateral managers, or other third party sources.
| Summary of Portfolio Investments3 |
| Number
of CLO Securities |
86 |
| Number
of CLO Collateral Managers |
26 |
| Fair
Value of CLO Equity Securities |
$135,300,162 |
| Fair
Value of CLO Debt Securities |
$9,462,870 |
| Fair
Value of Loan Accumulation Facility Securities |
$8,587,237 |
| Summary of Underlying Portfolio Characteristics4 |
| Number
of Unique Underlying Loan Obligors |
1,364 |
| Largest
Exposure to an Individual Obligor |
0.58% |
| Average
Individual Loan Obligor Exposure |
0.07% |
| Top 10
Loan Obligors Exposure |
4.85% |
| Aggregate
Indirect Exposure to Senior Secured Loans5 |
97.09% |
| Weighted
Average Market Value of Loan Collateral |
97.97% |
| Weighted
Average Stated Loan Spread |
3.45% |
| Weighted
Average Loan Maturity |
4.8
years |
| Weighted
Average Remaining CLO Reinvestment Period |
3.9
years |
Please see footnote disclosure on Page 13.
Notes
| 1 | The
performance of an index is not an exact representation of any particular investment,
as you cannot invest directly in an index. The indices shown herein have not been selected
to represent a benchmark for a strategy’s performance, but are instead disclosed
to allow for comparison of the Fund’s returns to that of known, recognized and/or
similar indices. The S&P BDC Index is intended to measure the performance of all
Business Development Companies (BDCs) that are listed on the NYSE or NASDAQ and satisfy
market capitalization and other eligibility requirements. Although the Fund is not a
BDC, BDCs generally invest in high yielding credit investments, as does the Fund. In
addition, similar to the Fund, BDCs generally elect to be classified as a regulated investment
company under the US Internal Revenue Code of 1986, as amended, which generally requires
an investment company to distribute its taxable income to shareholders. |
| 2 | Calculated
based on the Fund’s net asset value, which is net of the sales load. |
| 3 | The
summary of portfolio investments shown is based on the fair value of the underlying positions
as of December 31, 2024. |
| 4 | The
information presented herein is on a look-through basis to the collateralized loan obligation,
or “CLO”, equity held by the Fund as of December 31, 2024 (except as otherwise
noted) and reflects the aggregate underlying exposure of the Fund based on the portfolios
of those investments. The data is estimated and unaudited and is derived from CLO trustee
reports received by the Fund relating to December 2024 and from custody statements and/or
other information received from CLO collateral managers and other third party sources.
Information relating to the market price of underlying collateral is as of month end;
however, with respect to other information shown, depending on when such information
was received, the data may reflect a lag in the information reported. As such, while
this information was obtained from third party data sources, December 2024 trustee reports
and similar reports, other than market price, it does not reflect actual underlying portfolio
characteristics as of December 31, 2024 and this data may not be representative of current
or future holdings. The weighted average remaining reinvestment period information is
based on the fair value of CLO equity investments held by the Fund as of December 31,
2024. |
| 5 | We
obtain exposure in underlying senior secured loans indirectly through CLOs and related
investments. |
Consolidated Financial Statements for the Year
Ended
December 31, 2024
Eagle Point Institutional
Income Fund & Subsidiaries
Consolidated Statement
of Assets and Liabilities
As of December 31, 2024
(expressed in U.S. dollars)
| ASSETS | |
|
| Investments, at fair value (cost $158,412,168) | |
$ | 153,350,269 | |
| Cash and cash equivalents | |
| 1,343,105 | |
| Interest receivable | |
| 5,011,359 | |
| Due from Adviser | |
| 1,665,553 | |
| Subscriptions receivable for common shares sold | |
| 929,095 | |
| Deferred offering costs attributed to common shares | |
| 547,409 | |
| Prepaid expenses | |
| 66,867 | |
| Total Assets | |
| 162,913,657 | |
| | |
| | |
| LIABILITIES | |
| | |
| 8.125% Series A Term Preferred Shares due 2029, less unamortized deferred financing costs of $1,694,981 (1,400,000 shares outstanding (Note 9)) | |
| 33,305,019 | |
| Borrowings under credit facility, less unamortized deferred financing costs of $87,073 (Note 8) | |
| 19,412,927 | |
| Incentive fee payable | |
| 1,744,688 | |
| Management fee payable | |
| 1,240,217 | |
| Interest payable | |
| 338,864 | |
| Professional fees payable | |
| 328,266 | |
| Administration fees payable | |
| 98,855 | |
| Trustees’ fees payable | |
| 53,250 | |
| Transfer agent fees payable | |
| 20,000 | |
| Other expenses payable | |
| 135,255 | |
| Total Liabilities | |
| 56,677,341 | |
| | |
| | |
| COMMITMENTS AND CONTINGENCIES (Note 7) | |
| | |
| | |
| | |
| NET ASSETS applicable to common shares, unlimited shares authorized, 11,045,767 shares issued and outstanding | |
$ | 106,236,316 | |
| | |
| | |
| NET ASSETS consist of: | |
| | |
| Paid-in capital | |
$ | 108,543,260 | |
| Aggregate distributable earnings (losses) | |
| (2,306,944 | ) |
| Total Net Assets | |
$ | 106,236,316 | |
| | |
| | |
| Common shares issued and outstanding | |
| 11,045,767 | |
| | |
| | |
| Net asset value per common share | |
$ | 9.62 | |
| | See accompanying notes to the consolidated financial statements | 15 |
Eagle Point Institutional Income Fund & Subsidiaries
Consolidated Schedule of Investments
As of December 31, 2024
(expressed in U.S. dollars)
| Issuer
(1) | |
Investment
(2) | |
Acquisition
Date (3) | |
Principal
Amount | |
Cost | |
Fair
Value (4) | |
%
of Net Assets |
| Investments
at Fair Value (5) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Collateralized
Loan Obligation Debt (6) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Structured Finance | |
| |
| |
| | | |
| | | |
| | | |
| | |
| United States | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Bain Capital Credit
CLO 2021-5, Limited | |
Secured Note -
Class E, 11.39% (3M SOFR + 6.76%, due 10/23/2034) | |
10/28/24 | |
$ | 3,000,000 | | |
$ | 2,911,755 | | |
$ | 2,947,200 | | |
| 2.77 | % |
| Dryden 92 CLO, Ltd. | |
Secured Note - Class E, 11.28%
(3M SOFR + 6.76%, due 11/20/2034) | |
10/29/24 | |
| 3,000,000 | | |
| 2,946,489 | | |
| 2,954,700 | | |
| 2.78 | % |
| KKR CLO 17 Ltd. | |
Secured Note - Class E-R, 12.31%
(3M SOFR + 7.65%, due 04/15/2034) | |
10/25/24 | |
| 3,000,000 | | |
| 2,990,348 | | |
| 3,013,500 | | |
| 2.84 | % |
| Tralee
CLO VII, Ltd. | |
Secured
Note - Class E, 12.28% (3M SOFR + 7.65%, due 04/25/2034) | |
06/02/22 | |
| 550,000 | | |
| 495,252 | | |
| 547,470 | | |
| 0.52 | % |
| Total
Collateralized Loan Obligation Debt | |
| |
| |
| | | |
| 9,343,844 | | |
| 9,462,870 | | |
| 8.91 | % |
| | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Collateralized
Loan Obligation Equity (7) (8) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Structured Finance | |
| |
| |
| | | |
| | | |
| | | |
| | |
| United States | |
| |
| |
| | | |
| | | |
| | | |
| | |
| AMMC CLO 30, Limited | |
Subordinated Note (effective
yield 16.47%, maturity 01/15/2037) | |
11/01/24 | |
| 3,750,000 | | |
| 2,985,375 | | |
| 2,927,018 | | |
| 2.76 | % |
| Ares LXII CLO Ltd. | |
Subordinated Note (effective
yield 16.88%, maturity 01/25/2034) | |
01/18/24 | |
| 4,750,000 | | |
| 3,111,090 | | |
| 2,806,028 | | |
| 2.64 | % |
| Ares LXIV CLO Ltd. | |
Subordinated Note (effective
yield 16.59%, maturity 04/15/2035) | |
01/26/23 | |
| 837,500 | | |
| 541,735 | | |
| 526,525 | | |
| 0.50 | % |
| Ares LXV CLO Ltd. | |
Subordinated Note (effective
yield 18.20%, maturity 07/25/2034) | |
04/16/24 | |
| 1,050,000 | | |
| 711,775 | | |
| 691,556 | | |
| 0.65 | % |
| Ares LXIX CLO Ltd. | |
Income Note (effective yield
24.14%, maturity 04/15/2037) ⁽⁹⁾ | |
01/31/24 | |
| 4,850,000 | | |
| 3,128,095 | | |
| 3,688,255 | | |
| 3.47 | % |
| Ares LXXII CLO Ltd. | |
Income Note (effective yield
21.06%, maturity 07/15/2036) ⁽⁹⁾ | |
06/21/24 | |
| 4,050,000 | | |
| 2,808,054 | | |
| 3,160,901 | | |
| 2.98 | % |
| Ares Loan Funding IV, Ltd. | |
Subordinated Note (effective
yield 14.51%, maturity 10/15/2036) | |
04/23/24 | |
| 4,925,000 | | |
| 3,477,325 | | |
| 3,148,618 | | |
| 2.96 | % |
| Bain Capital Credit CLO 2021-2,
Limited | |
Subordinated Note (effective
yield 29.58%, maturity 07/16/2034) | |
08/09/23 | |
| 4,250,000 | | |
| 2,066,249 | | |
| 2,009,555 | | |
| 1.89 | % |
| Bain Capital Credit CLO 2021-7,
Limited | |
Subordinated Note (effective
yield 13.47%, maturity 01/22/2035) | |
09/05/23 | |
| 3,450,000 | | |
| 1,953,849 | | |
| 1,538,507 | | |
| 1.45 | % |
| Bardot CLO, Ltd. | |
Subordinated Note (effective
yield 35.81%, maturity 10/22/2032) ⁽⁹⁾ | |
11/22/22 | |
| 275,000 | | |
| 143,822 | | |
| 121,235 | | |
| 0.11 | % |
| Barings CLO Ltd. 2021-II | |
Subordinated Note (effective
yield 12.80%, maturity 07/15/2034) | |
09/07/22 | |
| 600,000 | | |
| 393,059 | | |
| 331,782 | | |
| 0.31 | % |
| Barings CLO Ltd. 2022-II | |
Income Note (effective yield
35.65%, maturity 07/15/2039) ⁽⁹⁾ | |
06/21/22 | |
| 1,000,000 | | |
| 351,947 | | |
| 554,483 | | |
| 0.52 | % |
| Barings CLO Ltd. 2022-IV | |
Subordinated Note (effective
yield 15.39%, maturity 10/20/2037) | |
10/29/24 | |
| 3,500,000 | | |
| 3,010,175 | | |
| 2,934,942 | | |
| 2.76 | % |
| Barings CLO Ltd. 2024-II | |
Income Note (effective yield
19.59%, maturity 07/15/2039) ⁽⁹⁾ | |
05/31/24 | |
| 4,300,000 | | |
| 2,971,900 | | |
| 3,407,631 | | |
| 3.21 | % |
| Battalion CLO XXIII Ltd. | |
Income Note (effective yield
14.50%, maturity 07/15/2036) ⁽⁹⁾ | |
05/19/22 | |
| 1,225,000 | | |
| 589,152 | | |
| 519,758 | | |
| 0.49 | % |
| Bear Mountain Park CLO, Ltd. | |
Income Note (effective yield
28.66%, maturity 07/15/2035) ⁽⁹⁾ | |
07/13/22 | |
| 550,000 | | |
| 446,582 | | |
| 609,526 | | |
| 0.57 | % |
| Belmont Park CLO, Ltd. | |
Income Note (effective yield
17.15%, maturity 04/15/2037) ⁽⁹⁾ | |
02/21/24 | |
| 3,450,000 | | |
| 2,300,061 | | |
| 2,291,938 | | |
| 2.16 | % |
| BlueMountain CLO XXIV Ltd. | |
Subordinated Note (effective
yield 16.86%, maturity 04/20/2034) | |
05/31/22 | |
| 750,000 | | |
| 435,934 | | |
| 323,743 | | |
| 0.30 | % |
| Carlyle US CLO 2017-2, Ltd. | |
Subordinated Note (effective
yield 19.54%, maturity 07/20/2037) | |
10/09/24 | |
| 13,300,000 | | |
| 2,711,913 | | |
| 2,561,743 | | |
| 2.41 | % |
| Carlyle US CLO 2021-6 Ltd. | |
Subordinated Note (effective
yield 20.76%, maturity 07/15/2034) | |
09/06/24 | |
| 5,000,000 | | |
| 2,257,375 | | |
| 2,207,435 | | |
| 2.08 | % |
| Carlyle US CLO 2021-10, Ltd. | |
Subordinated Note (effective
yield 14.69%, maturity 10/20/2034) | |
08/16/23 | |
| 2,057,000 | | |
| 1,129,152 | | |
| 1,026,143 | | |
| 0.97 | % |
| Carlyle US CLO 2022-2, Ltd. | |
Subordinated Note (effective
yield 17.28%, maturity 04/20/2035) | |
08/15/23 | |
| 3,482,000 | | |
| 2,287,381 | | |
| 2,151,993 | | |
| 2.03 | % |
| Carlyle US CLO 2022-4, Ltd. | |
Subordinated Note (effective
yield 15.96%, maturity 07/25/2036) | |
10/29/24 | |
| 3,000,000 | | |
| 2,973,750 | | |
| 2,893,229 | | |
| 2.72 | % |
| Carlyle US CLO 2023-3, Ltd. | |
Income Note (effective yield
07.88%, maturity 10/15/2036) ⁽⁹⁾ | |
07/06/23 | |
| 1,000,000 | | |
| 713,781 | | |
| 619,722 | | |
| 0.58 | % |
| CBAM 2019-9, Ltd. | |
Subordinated Note (effective
yield 16.53%, maturity 07/15/2037) | |
11/01/24 | |
| 8,550,000 | | |
| 3,003,188 | | |
| 2,918,805 | | |
| 2.75 | % |
| CIFC Funding 2017-I, Ltd. | |
Subordinated Note (effective
yield 16.02%, maturity 04/21/2037) | |
10/09/24 | |
| 5,000,000 | | |
| 2,159,609 | | |
| 2,085,939 | | |
| 1.96 | % |
| CIFC Funding 2017-III, Ltd. | |
Subordinated Note (effective
yield 15.93%, maturity 07/20/2030) | |
10/09/24 | |
| 5,800,000 | | |
| 2,126,512 | | |
| 2,031,644 | | |
| 1.91 | % |
| CIFC Funding 2017-V, Ltd. | |
Subordinated Note (effective
yield 16.33%, maturity 07/17/2037) | |
10/30/24 | |
| 1,000,000 | | |
| 474,750 | | |
| 457,677 | | |
| 0.43 | % |
| CIFC Funding 2019-II Ltd. | |
Subordinated Note (effective
yield 19.02%, maturity 04/17/2030) | |
09/10/24 | |
| 4,510,000 | | |
| 3,051,268 | | |
| 3,044,677 | | |
| 2.87 | % |
| CIFC Funding 2019-V, Ltd. | |
Subordinated Note (effective
yield 17.65%, maturity 01/15/2035) | |
02/07/23 | |
| 800,000 | | |
| 551,304 | | |
| 524,568 | | |
| 0.49 | % |
| CIFC Funding 2019-VI Ltd. | |
Subordinated Note (effective
yield 15.36%, maturity 01/16/2033) | |
09/10/24 | |
| 3,700,000 | | |
| 2,837,164 | | |
| 2,688,440 | | |
| 2.53 | % |
| CIFC Funding 2020-II, Ltd. | |
Income Note (effective yield
17.14%, maturity 10/20/2034) | |
11/05/24 | |
| 200,000 | | |
| 140,950 | | |
| 135,196 | | |
| 0.13 | % |
| CIFC Funding 2020-II, Ltd. | |
Subordinated Note (effective
yield 17.14%, maturity 10/20/2034) | |
12/14/22 | |
| 650,000 | | |
| 432,716 | | |
| 434,242 | | |
| 0.41 | % |
| CIFC Funding 2022-IV, Ltd. | |
Subordinated Note (effective
yield 16.32%, maturity 07/16/2035) | |
10/23/23 | |
| 2,400,000 | | |
| 1,857,651 | | |
| 1,715,984 | | |
| 1.62 | % |
| CIFC Funding 2022-VI, Ltd. | |
Income Note (effective yield
24.58%, maturity 07/16/2035) ⁽⁹⁾ | |
08/01/22 | |
| 600,000 | | |
| 427,403 | | |
| 551,133 | | |
| 0.52 | % |
| CIFC Funding 2023-I, Ltd. | |
Income Note (effective yield
16.21%, maturity 10/15/2037) ⁽⁹⁾ | |
09/14/23 | |
| 4,350,000 | | |
| 3,233,109 | | |
| 3,662,761 | | |
| 3.45 | % |
| Clover CLO 2019-1 Ltd. | |
Subordinated Note (effective
yield 16.40%, maturity 04/18/2035) | |
02/15/24 | |
| 3,306,800 | | |
| 2,329,802 | | |
| 2,180,368 | | |
| 2.05 | % |
| Clover CLO 2021-2, Ltd. | |
Subordinated Note (effective
yield 20.59%, maturity 07/20/2034) | |
08/09/23 | |
| 2,150,000 | | |
| 1,390,037 | | |
| 1,430,620 | | |
| 1.35 | % |
| Danby Park CLO, Ltd. | |
Subordinated Note (effective
yield 14.44%, maturity 10/21/2035) | |
10/31/24 | |
| 2,950,000 | | |
| 2,986,875 | | |
| 2,882,105 | | |
| 2.71 | % |
| Dryden 78 CLO Ltd. | |
Subordinated Note (effective
yield 17.71%, maturity 04/17/2033) | |
07/31/24 | |
| 5,950,000 | | |
| 2,909,807 | | |
| 2,696,310 | | |
| 2.54 | % |
| Dryden 94 CLO, Ltd. | |
Income Note (effective yield
10.12%, maturity 07/15/2037) ⁽⁹⁾ | |
04/28/22 | |
| 4,775,000 | | |
| 2,800,503 | | |
| 2,090,568 | | |
| 1.97 | % |
| Dryden 109 CLO, Ltd. | |
Subordinated Note (effective
yield 14.94%, maturity 04/20/2035) | |
02/15/23 | |
| 2,550,000 | | |
| 1,633,175 | | |
| 1,305,881 | | |
| 1.23 | % |
| Eaton Vance CLO 2020-1, Ltd. | |
Subordinated Note (effective
yield 19.12%, maturity 10/15/2037) ⁽⁹⁾ | |
08/08/23 | |
| 2,435,000 | | |
| 1,544,999 | | |
| 1,555,558 | | |
| 1.46 | % |
| Eaton Vance CLO 2020-2, Ltd. | |
Subordinated Note (effective
yield 18.30%, maturity 01/15/2035) ⁽⁹⁾ | |
09/16/22 | |
| 800,000 | | |
| 509,286 | | |
| 492,632 | | |
| 0.46 | % |
| Elmwood CLO 14 Ltd. | |
Subordinated Note (effective
yield 15.25%, maturity 04/20/2035) | |
06/06/23 | |
| 1,000,000 | | |
| 666,807 | | |
| 680,859 | | |
| 0.64 | % |
| Elmwood CLO 17 Ltd. | |
Subordinated Note (effective
yield 19.95%, maturity 07/17/2035) | |
04/25/23 | |
| 650,000 | | |
| 451,436 | | |
| 567,627 | | |
| 0.53 | % |
| Elmwood CLO 21 Ltd. | |
Subordinated Note (effective
yield 10.83%, maturity 10/20/2036) | |
10/26/23 | |
| 2,900,000 | | |
| 1,790,015 | | |
| 1,673,898 | | |
| 1.58 | % |
| Generate CLO 3 Ltd. | |
Subordinated Note (effective
yield 09.99%, maturity 10/20/2036) | |
04/23/24 | |
| 5,874,000 | | |
| 3,298,595 | | |
| 2,462,604 | | |
| 2.32 | % |
| Generate CLO 4 Ltd. | |
Subordinated Note (effective
yield 15.81%, maturity 04/20/2032) | |
09/24/24 | |
| 1,125,000 | | |
| 841,168 | | |
| 762,513 | | |
| 0.72 | % |
| Generate CLO 9 Ltd. | |
Subordinated Note (effective
yield 19.35%, maturity 10/20/2034) | |
05/31/22 | |
| 600,000 | | |
| 419,252 | | |
| 398,951 | | |
| 0.38 | % |
| Invesco CLO 2022-2, Ltd. | |
Subordinated Note (effective
yield 19.99%, maturity 07/20/2035) | |
08/14/24 | |
| 1,550,000 | | |
| 902,369 | | |
| 881,775 | | |
| 0.83 | % |
| Invesco CLO 2022-2, Ltd. | |
Class Y Note (effective yield
19.99%, maturity 07/20/2035) | |
08/14/24 | |
| 120,000 | | |
| 22,878 | | |
| 27,960 | | |
| 0.03 | % |
| Invesco CLO 2022-3, Ltd. | |
Subordinated Note (effective
yield 19.01%, maturity 10/22/2037) | |
10/29/24 | |
| 3,850,000 | | |
| 3,007,813 | | |
| 2,920,503 | | |
| 2.75 | % |
| Invesco CLO 2022-3, Ltd. | |
Class Y Note (effective yield
19.01%, maturity 10/22/2037) | |
10/29/24 | |
| 385,000 | | |
| 39 | | |
| 181,836 | | |
| 0.17 | % |
| Kings Park CLO, Ltd. | |
Subordinated Note (effective
yield 25.57%, maturity 01/21/2035) | |
04/27/23 | |
| 925,000 | | |
| 519,651 | | |
| 531,236 | | |
| 0.50 | % |
| Madison Park Funding XXXIV,
Ltd. | |
Subordinated Note (effective
yield 16.81%, maturity 04/25/2048) | |
09/27/22 | |
| 1,162,000 | | |
| 648,268 | | |
| 679,525 | | |
| 0.64 | % |
| Madison Park Funding LII, Ltd. | |
Subordinated Note (effective
yield 10.64%, maturity 01/22/2035) | |
03/13/24 | |
| 4,200,000 | | |
| 2,754,117 | | |
| 2,213,459 | | |
| 2.08 | % |
| Madison Park Funding LXII,
Ltd. | |
Subordinated Note (effective
yield 09.09%, maturity 07/17/2036) | |
07/27/23 | |
| 1,300,000 | | |
| 947,080 | | |
| 840,732 | | |
| 0.79 | % |
| Morgan Stanley Eaton Vance
CLO 2023-20, Ltd. | |
Subordinated Note (effective
yield 13.42%, maturity 01/20/2037) | |
05/08/24 | |
| 3,780,000 | | |
| 2,877,484 | | |
| 2,724,028 | | |
| 2.56 | % |
| OCP CLO 2019-17, Ltd. | |
Preferred Share (effective
yield 14.52%, maturity 07/20/2037) | |
09/03/24 | |
| 4,940,000 | | |
| 2,976,350 | | |
| 2,869,642 | | |
| 2.70 | % |
| OCP CLO 2020-20, Ltd. | |
Subordinated Note (effective
yield 13.67%, maturity 04/18/2037) | |
04/25/24 | |
| 2,000,000 | | |
| 1,511,929 | | |
| 1,399,778 | | |
| 1.32 | % |
| OCP CLO 2021-22, Ltd. | |
Subordinated Note (effective
yield 14.23%, maturity 12/02/2034) | |
05/08/24 | |
| 3,425,000 | | |
| 2,392,290 | | |
| 2,266,195 | | |
| 2.13 | % |
| OCP CLO 2022-24, Ltd. | |
Subordinated Note (effective
yield 14.03%, maturity 10/20/2037) | |
10/29/24 | |
| 4,000,000 | | |
| 2,999,000 | | |
| 2,891,459 | | |
| 2.72 | % |
| OCP CLO 2023-30, Ltd. | |
Subordinated Note (effective
yield 10.46%, maturity 01/24/2037) | |
05/10/24 | |
| 4,425,000 | | |
| 3,421,117 | | |
| 3,165,539 | | |
| 2.98 | % |
| Octagon Investment Partners
38, Ltd. | |
Subordinated Note (effective
yield 19.93%, maturity 07/20/2030) | |
10/29/24 | |
| 13,965,030 | | |
| 2,967,569 | | |
| 3,117,687 | | |
| 2.93 | % |
| Octagon Investment Partners
45, Ltd. | |
Subordinated Note (effective
yield 15.45%, maturity 04/15/2035) | |
07/27/23 | |
| 1,600,000 | | |
| 872,712 | | |
| 692,874 | | |
| 0.65 | % |
| Octagon 58, Ltd. | |
Income Note (effective yield
16.06%, maturity 07/15/2037) ⁽⁹⁾ | |
04/21/22 | |
| 3,000,000 | | |
| 1,947,310 | | |
| 1,715,865 | | |
| 1.62 | % |
| Park Blue CLO 2024-V, Ltd. | |
Subordinated Note (effective
yield 18.41%, maturity 07/25/2037) | |
10/09/24 | |
| 3,750,000 | | |
| 3,001,875 | | |
| 2,957,777 | | |
| 2.78 | % |
| Point Au Roche Park CLO, Ltd. | |
Subordinated Note (effective
yield 22.08%, maturity 07/20/2034) | |
08/07/23 | |
| 2,275,000 | | |
| 1,385,992 | | |
| 1,331,504 | | |
| 1.25 | % |
| Regatta XII Funding Ltd. | |
Subordinated Note (effective
yield 35.75%, maturity 10/15/2032) | |
12/12/24 | |
| 3,550,000 | | |
| 2,094,500 | | |
| 2,079,164 | | |
| 1.96 | % |
| Regatta XII Funding Ltd. | |
Class R1A Note (effective yield
35.75%, maturity 10/15/2037) | |
12/12/24 | |
| 6,636,950 | | |
| 16,978 | | |
| 23,362 | | |
| 0.02 | % |
| Regatta XII Funding Ltd. | |
Class R2 Note (effective yield
35.75%, maturity 10/15/2037) | |
12/12/24 | |
| 6,636,950 | | |
| 152,804 | | |
| 210,260 | | |
| 0.20 | % |
| Regatta XVII Funding Ltd. | |
Subordinated Note (effective
yield 16.44%, maturity 10/15/2037) | |
11/19/24 | |
| 3,722,500 | | |
| 2,997,943 | | |
| 2,962,409 | | |
| 2.79 | % |
| Regatta XXI Funding Ltd. | |
Subordinated Note (effective
yield 14.40%, maturity 10/20/2034) | |
06/10/22 | |
| 650,000 | | |
| 428,098 | | |
| 436,859 | | |
| 0.41 | % |
| Regatta XXII Funding Ltd. | |
Subordinated Note (effective
yield 26.75%, maturity 07/20/2035) | |
06/20/23 | |
| 1,000,000 | | |
| 635,063 | | |
| 789,263 | | |
| 0.74 | % |
| Regatta XXIV Funding Ltd. | |
Subordinated Note (effective
yield 20.85%, maturity 01/20/2035) | |
12/27/24 | |
| 700,000 | | |
| 414,442 | | |
| 425,049 | | |
| 0.40 | % |
| Rockford Tower CLO 2022-3,
Ltd. | |
Subordinated Note (effective
yield 40.61%, maturity 07/20/2037) ⁽⁹⁾ | |
07/27/23 | |
| 1,400,000 | | |
| 605,240 | | |
| 1,003,213 | | |
| 0.94 | % |
| RR 23 Ltd. | |
Subordinated Note (effective
yield 12.41%, maturity 10/15/2035) | |
10/12/23 | |
| 3,250,000 | | |
| 1,866,949 | | |
| 2,000,390 | | |
| 1.88 | % |
| RR 28 Ltd. | |
Subordinated Note (effective
yield 14.08%, maturity 04/15/2120) | |
10/31/24 | |
| 6,450,000 | | |
| 3,008,925 | | |
| 2,964,715 | | |
| 2.79 | % |
| Shackleton 2019-XIV CLO, Ltd. | |
Subordinated Note (effective
yield 17.01%, maturity 07/20/2034) | |
01/24/24 | |
| 3,800,000 | | |
| 2,752,635 | | |
| 2,420,440 | | |
| 2.28 | % |
| Venture 45 CLO, Ltd. | |
Subordinated Note (effective
yield 23.61%, maturity 07/20/2035) | |
09/19/22 | |
| 1,275,000 | | |
| 664,036 | | |
| 419,278 | | |
| 0.39 | % |
| Wind River 2022-1 CLO Ltd. | |
Subordinated Note (effective
yield 15.43%, maturity 07/20/2035) | |
08/15/23 | |
| 3,118,610 | | |
| 1,955,461 | | |
| 1,464,205 | | |
| 1.38 | % |
| Wind River
2022-2 CLO Ltd. | |
Income
Note (effective yield 08.20%, maturity 07/20/2035) ⁽⁹⁾ | |
06/03/22 | |
| 600,000 | | |
| 386,495 | | |
| 208,355 | | |
| 0.20 | % |
| Total
Collateralized Loan Obligation Equity | |
| |
| |
| | | |
| 140,502,324 | | |
| 135,300,162 | | |
| 127.34 | % |
| | See accompanying notes to the consolidated financial statements | 16 |
Eagle Point Institutional Income Fund & Subsidiaries
Consolidated Schedule of Investments
As of December 31, 2024
(expressed in U.S. dollars)
| Issuer
(1) | |
Investment
(2) | |
Acquisition
Date (3) | |
Principal
Amount | |
Cost | |
Fair
Value (4) | |
%
of Net Assets |
| | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Loan
Accumulation Facilities (10) (8) | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Structured Finance | |
| |
| |
| | | |
| | | |
| | | |
| | |
| United States | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Steamboat XLVIII Ltd. | |
Loan Accumulation Facility | |
04/08/24 | |
| 1,911,000 | | |
| 1,911,000 | | |
| 1,932,161 | | |
| 1.82 | % |
| Steamboat XLIX Ltd. | |
Loan Accumulation Facility | |
06/03/24 | |
| 2,517,500 | | |
| 2,517,500 | | |
| 2,515,087 | | |
| 2.37 | % |
| Steamboat LI Ltd. | |
Loan Accumulation Facility | |
09/27/24 | |
| 2,137,500 | | |
| 2,137,500 | | |
| 2,137,852 | | |
| 2.01 | % |
| Steamboat
LII Ltd. | |
Loan Accumulation
Facility | |
10/09/24 | |
| 2,000,000 | | |
| 2,000,000 | | |
| 2,002,137 | | |
| 1.88 | % |
| Total
Loan Accumulation Facilities | |
| |
| |
| | | |
| 8,566,000 | | |
| 8,587,237 | | |
| 8.08 | % |
| | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Total investments at fair value as of December 31, 2024 | |
| |
| | | |
$ | 158,412,168 | | |
$ | 153,350,269 | | |
| 144.33 | % |
| | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Net assets above (below) fair value of investments | |
| |
| | | |
| | | |
| (47,113,953 | ) | |
| | |
| | |
| |
| |
| | | |
| | | |
| | | |
| | |
| Net
Assets as of December 31, 2024 | |
| |
| |
| | | |
| | | |
$ | 106,236,316 | | |
| | |
(1) The Fund is not affiliated with, nor does it “control” (as such term is defined in the Investment Fund Act of 1940, as amended (the “1940 Act”)), any of the issuers listed. In general, under the 1940 Act, the Fund would be presumed to “control” an issuer if it owned 25% or more of its voting securities.
(2) All securities exempt from registration under the Securities Act of 1933, as amended, and are deemed to be “restricted securities”.
(3) Acquisition date represents the initial purchase date of investment.
(4) Fair value is determined by the Adviser in accordance with written valuation policies and procedures, subject to oversight by the Fund’s Board of Trustees, in accordance with Rule 2a-5 under the 1940 Act.
(5) Country represents the principal country of risk where the investment has exposure.
(6) Variable rate investment. Interest rate shown reflects the rate in effect at the reporting date. Investment description includes the reference rate and spread.
(7) CLO subordinated notes and income notes are considered CLO equity positions. CLO equity positions are entitled to recurring distributions which are generally equal to the remaining cash flow of payments made by underlying assets less contractual payments to debt holders and fund expenses. The effective yield is estimated based upon the current projection of the amount and timing of these recurring distributions in addition to the estimated amount of terminal principal payment. It is the Fund’s policy to update the effective yield for each CLO equity position held within the Fund’s portfolio at the initiation of each investment and each subsequent quarter thereafter. The effective yield and investment cost may ultimately not be realized. As of December 31, 2024, the Fund’s weighted average effective yield on its aggregate CLO equity positions, based on current amortized cost, was 16.92%.
(8) Classified as Level III investments.
(9) Fair value includes the Fund’s interest in fee rebates on CLO subordinated and income notes.
(10) Loan accumulation facilities are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.
| Reference Key: |
| SOFR |
Secured Overnight Financing Rate |
| | See accompanying notes to the consolidated financial statements | 17 |
Eagle Point Institutional
Income Fund & Subsidiaries
Consolidated Statement
of Operations
For the year ended December
31, 2024
(expressed in U.S. dollars)
| INVESTMENT INCOME | |
|
| Interest income | |
$ | 14,308,731 | |
| Other income | |
| 336,677 | |
| Total Investment Income | |
| 14,645,408 | |
| | |
| | |
| EXPENSES | |
| | |
| Incentive fee | |
| 2,024,367 | |
| Management fee | |
| 1,617,248 | |
| Interest expense | |
| 1,133,581 | |
| Amortization of deferred offering costs attributed to common shares | |
| 988,442 | |
| Professional fees | |
| 617,556 | |
| Administration fees | |
| 476,617 | |
| Transfer agent fees | |
| 288,948 | |
| Trustees’ fees | |
| 106,500 | |
| Tax Expense | |
| 57,271 | |
| Other expenses | |
| 225,853 | |
| Total Expenses | |
| 7,536,383 | |
| | |
| | |
| NET INVESTMENT INCOME | |
| 7,109,025 | |
| | |
| | |
| NET REALIZED AND UNREALIZED GAIN (LOSS) | |
| | |
| Net realized gain (loss) on investments | |
| 109,152 | |
| Net change in unrealized appreciation (depreciation) on investments | |
| (4,918,729 | ) |
| NET REALIZED AND UNREALIZED GAIN (LOSS) | |
| (4,809,577 | ) |
| | |
| | |
| NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | |
$ | 2,299,448 | |
| | See accompanying notes to the consolidated financial statements | 18 |
Eagle Point Institutional
Income Fund & Subsidiaries
Consolidated Statements
of Changes in Net Assets
(expressed in U.S. dollars,
except share amounts)
| | |
For the | |
For the |
| | |
year ended | |
year ended |
| | |
December 31, 2024 | |
December 31, 2023 |
| Net Increase (decrease) in net assets resulting from operations: | |
| | | |
| | |
| Net investment income | |
$ | 7,109,025 | | |
$ | 3,691,383 | |
| Net realized gain (loss) on investments | |
| 109,152 | | |
| 130,199 | |
| Net change in unrealized appreciation (depreciation) on investments | |
| (4,918,729 | ) | |
| (91,023 | ) |
| Total net increase (decrease) in net assets resulting from operations | |
| 2,299,448 | | |
| 3,730,559 | |
| | |
| | | |
| | |
| Distributions to shareholders: | |
| | | |
| | |
| Total earnings distributions declared | |
| (7,865,585 | ) | |
| (2,401,908 | ) |
| Distributions from tax return of capital | |
| - | | |
| - | |
| Total distributions to shareholders | |
| (7,865,585 | ) | |
| (2,401,908 | ) |
| | |
| | | |
| | |
| Capital share transactions: | |
| | | |
| | |
| Proceeds from shares sold | |
| 63,197,675 | | |
| 32,544,606 | |
| Reinvestment of distributions resulting in the issuance of shares | |
| 2,881,994 | | |
| 1,360,921 | |
| Repurchase of shares | |
| (3,424,426 | ) | |
| (60,866 | ) |
| Total increase (decrease) in net assets from capital transactions | |
| 62,655,243 | | |
| 33,844,661 | |
| | |
| | | |
| | |
| Total increase (decrease) in net assets | |
| 57,089,106 | | |
| 35,173,312 | |
| Net assets at beginning of period | |
| 49,147,210 | | |
| 13,973,898 | |
| Net assets at end of period | |
$ | 106,236,316 | | |
$ | 49,147,210 | |
| | |
| | | |
| | |
| Capital share activity: | |
| | | |
| | |
| Shares sold | |
| 6,286,312 | | |
| 3,271,466 | |
| Shares sold pursuant to the Fund’s distribution reinvestment plan | |
| 300,404 | | |
| 136,251 | |
| Repurchase of shares | |
| (344,318 | ) | |
| (5,961 | ) |
| Total increase (decrease) in capital share activity | |
| 6,242,398 | | |
| 3,401,756 | |
| | See accompanying notes to the consolidated financial statements | 19 |
Eagle Point Institutional
Income Fund & Subsidiaries
Consolidated Statement
of Cash Flows
For the year ended December
31, 2024
(expressed in U.S. dollars)
| CASH FLOWS FROM OPERATING ACTIVITIES: | |
|
| Net increase (decrease) in net assets from operations | |
$ | 2,299,448 | |
| Adjustments to reconcile net increase (decrease) in net assets from operations to net cash provided by (used in) operating activities: | |
| | |
| Purchase of investments | |
| (125,016,732 | ) |
| Proceeds from sales of investments and repayments of principal (1) | |
| 8,245,366 | |
| Net realized (gain) loss on investments | |
| (109,152 | ) |
| Net change in unrealized (appreciation) depreciation on investments | |
| 4,918,729 | |
| Amortization of deferred financing costs | |
| 191,713 | |
| Amortization of deferred offering costs attributed to common shares | |
| 988,442 | |
| Amortization (accretion) of premiums or discounts on CLO debt securities | |
| (8,412 | ) |
| Change in assets and liabilities: | |
| | |
| Interest receivable | |
| (3,263,374 | ) |
| Prepaid expenses | |
| 6,029 | |
| Incentive fee payable | |
| 649,585 | |
| Management fee payable | |
| 669,767 | |
| Interest payable | |
| 338,864 | |
| Professional fees payable | |
| 160,949 | |
| Administration fees payable | |
| 39,916 | |
| Transfer agent fees payable | |
| 8,063 | |
| Other expenses payable | |
| 122,293 | |
| Net cash provided by (used in) operating activities | |
| (109,758,506 | ) |
| | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | |
| Borrowings under credit facility | |
| 36,700,000 | |
| Repayments under credit facility | |
| (17,200,000 | ) |
| Proceeds from issuance of 8.125% Series A Term Preferred Shares due 2029 | |
| 35,000,000 | |
| Deferred financing costs | |
| (1,973,767 | ) |
| Distributions to shareholders, net of reinvestment | |
| (4,983,591 | ) |
| Proceeds from shares sold | |
| 62,268,580 | |
| Repurchase of shares | |
| (3,424,426 | ) |
| Deferred offering costs attributed to common shares | |
| (1,227,252 | ) |
| Net cash provided by (used in) financing activities | |
| 105,159,544 | |
| | |
| | |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | |
| (4,598,962 | ) |
| | |
| | |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | |
| 5,942,067 | |
| | |
| | |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | |
$ | 1,343,105 | |
| | |
| | |
| Supplemental disclosures: | |
| | |
| Cash paid for interest expense | |
$ | 603,004 | |
| Cash paid for excise tax | |
$ | 50,000 | |
| (1) | Proceeds from sales or maturity of investments includes
$6,718,611 of return of capital on CLO equity investments from recurring cash flows. |
| | See accompanying notes to the consolidated financial statements | 20 |
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
Eagle
Point Institutional Income Fund (the “Fund”) was formed as a Delaware statutory trust on October 22, 2021, and
is an externally managed, non-diversified closed-end management investment company registered under the Investment Company
Act of 1940, as amended (the “1940 Act”). The Fund’s primary investment objective is to generate
high current income, with a secondary objective to generate capital appreciation. The Fund seeks to achieve its investment
objectives by investing primarily in equity and junior debt tranches of collateralized loan obligations (“CLOs”)
that are collateralized by a portfolio consisting primarily of below investment grade U.S. senior secured loans with a large
number of distinct underlying borrowers across various industry sectors. The Fund may also invest in other related securities
and instruments or other securities and instruments that Eagle Point Credit Management LLC (the “Adviser”)
believes are consistent with the Fund’s investment objectives, including senior debt tranches of CLOs, loan
accumulation facilities (“LAFs”) and securities and instruments of corporate issuers. From time to time, in
connection with the acquisition of CLO equity, the Fund may receive fee rebates from the CLO issuer. The CLO securities in
which the Fund primarily seeks to invest are unrated or rated below investment grade and are considered speculative with
respect to timely payment of interest and repayment of principal.
The
Fund commenced operations on June 1, 2022 and is offering its common shares of beneficial interest (“Shares”) on a
continuous basis at the applicable period end net asset value (“NAV”) per share plus any applicable sales loads.
The
Fund intends to operate so as to qualify to be taxed as a regulated investment company (“RIC”) under subchapter M
of the Internal Revenue Code of 1986, as amended (the “Code”), for federal income tax purposes.
The
Adviser is the investment adviser of the Fund and manages the investments of the Fund subject to the supervision of the Fund’s
Board of Trustees (the “Board”). The Adviser is registered as an investment adviser with the U.S. Securities and Exchange
Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended. Eagle Point Administration LLC, an affiliate
of the Adviser, is the administrator of the Fund (the “Administrator”).
The
consolidated financial statements include the accounts of the Fund and its wholly-owned subsidiaries: EPIIF Sub (Cayman) Ltd.
(“Sub I”) and EPIIF Sub II (Cayman) Ltd. (“Sub II”), each a Cayman Islands exempted company. All intercompany
accounts and transactions have been eliminated upon consolidation. As of December 31, 2024, Sub I and Sub II represented 0.42%
and 2.00% of the Fund’s net assets, respectively.
| 2. | SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES |
Basis
of Accounting
The
consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S.
GAAP”). The Fund is an investment company and follows the accounting and reporting guidance applicable to investment companies
in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946
Financial Services – Investment Companies. Items included in the consolidated financial statements are measured and
presented in United States dollars.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions which affect
the reported amounts included in the consolidated financial statements and accompanying notes as of the reporting date. Actual
results may differ from those estimates.
Operating
Segments
The
Fund has a single reportable segment with investment objectives described in Note 1 “Organization”. The chief operating
decision maker (“CODM”) of the Fund is comprised of the Chief Executive Officer and the Chief Financial Officer. Key
financial information in the form of the Fund’s portfolio composition, total return, changes in net assets and expense ratios
which are used by the CODM to assess the Fund’s performance and to
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
make operational decisions for the Fund’s single
segment, is consistent with the presentation within the Fund’s consolidated financial statements. Segment assets are reflected
on the accompanying Consolidated Statement of Assets and Liabilities as “total assets” and significant segment expenses
are listed on the Consolidated Statement of Operations.
Valuation
of Investments
The
most significant estimate inherent in the preparation of the consolidated financial statements is the valuation of investments.
The
Fund accounts for its investments in accordance with U.S. GAAP, and fair values its investment portfolio in accordance with the
provisions of the FASB ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a
framework for measuring fair value and requires enhanced disclosures about fair value measurements. Investments are reflected
in the consolidated financial statements at fair value. Fair value is the estimated amount that would be received to sell an asset,
or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., the exit
price).
Pursuant
to Rule 2a-5 under the 1940 Act adopted by the SEC in December 2020 (“Rule 2a-5”), the Board has elected to designate
the Adviser as “valuation designee” to perform fair value determinations, subject to Board oversight and certain other
conditions. In the absence of readily available market quotations, as defined by Rule 2a-5, the Adviser determines the fair value
of the Fund’s investments in accordance with its written valuation policy approved by the Board. There is no single method
for determining fair value in good faith. As a result, determining fair value requires judgment be applied to the specific facts
and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments
held by the Fund. Due to the uncertainty of valuation, this estimate may differ significantly from the value that would have been
used had a ready market for the investments existed, and the differences could be material.
The
Fund determines fair value based on assumptions that market participants would use in pricing an asset or liability in an orderly
transaction at the measurement date. When considering market participant assumptions in fair value measurements, the following
fair value hierarchy prioritizes and ranks the level of market price observability used in measuring investments:
Level
I – Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund is able to access as
of the reporting date.
Level
II – Inputs, other than quoted prices included in Level I, that are observable either directly or indirectly as of the
reporting date. These inputs may include (a) quoted prices for similar assets in active markets, (b) quoted prices for identical
or similar assets in markets that are not active, (c) inputs other than quoted prices that are observable for the asset, or (d)
inputs derived principally from or corroborated by observable market data by correlation or other means.
Level
III – Pricing inputs are unobservable for the investment and little, if any, active market exists as of the reporting
date. Fair value inputs require significant judgment or estimation from the Adviser.
In
certain cases, inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the
determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest
level of input significant to that fair value measurement. The assessment of the significance of a particular input to the fair
value measurement in its entirety requires judgment and consideration of factors specific to the investment.
Market
price observability is impacted by a number of factors, including the type of investment, the characteristics specific to the
investment and the state of the marketplace (including the existence and transparency of transactions between market participants).
Investments with readily available actively quoted prices, or for which
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
fair value can be measured from actively quoted prices
in an orderly market, will generally have a higher degree of market price observability and a lesser degree of judgment used in
measuring fair value.
Investments
for which observable, quoted prices in active markets do not exist are reported at fair value based on Level III inputs. The amount
determined to be fair value may incorporate the Adviser’s own assumptions (including assumptions the Adviser believes market
participants would use in valuing investments and assumptions relating to appropriate risk adjustments for nonperformance and
lack of marketability), as provided for in the Adviser’s valuation policy.
An
estimate of fair value is made for each investment at least monthly taking into account information available as of the reporting
date.
See
Note 3 “Investments” for further discussion relating to the Fund’s investments.
Investment
Income Recognition
Interest
income from investments in CLO debt is recorded using the accrual basis of accounting to the extent such amounts are expected
to be collected. Interest income on investments in CLO debt is generally expected to be received in cash. The Fund applies the
provisions of Accounting Standards Update No. 2017-08 Premium Amortization on Purchased Callable Debt Securities (“ASU
2017-08”) in calculating amortization of premium for purchased CLO debt securities. Amortization of premium or accretion
of discount is recognized using the effective interest method.
In
certain circumstances, all or a portion of interest income from a given investment may be paid in the form of additional investment
principal, often referred to as payment-in-kind (“PIK”) interest. PIK interest is included in interest income and
interest receivable through the payment date. The PIK interest rate for CLO debt securities represents the coupon rate at payment
date when PIK interest is received. On the payment date, interest receivable is capitalized as additional investment principal
in the CLO debt security. To the extent the Fund does not believe it will ultimately be able to collect PIK interest, the CLO
debt security will be placed on non-accrual status, and previously recorded PIK interest income will be reversed. The Fund had
no investments with PIK interest as of December 31, 2024.
CLO
equity investments and fee rebates recognize investment income for U.S. GAAP purposes on the accrual basis utilizing an effective
interest methodology based upon an effective yield to maturity utilizing projected cash flows. ASC Topic 325-40, Beneficial
Interests in Securitized Financial Assets, requires investment income from CLO equity investments and fee rebates to be recognized
under the effective interest method, with any difference between cash distributed and the amount calculated pursuant to the effective
interest method being recorded as an adjustment to the cost basis of the investment. It is the Fund’s policy to update the
effective yield for each CLO equity position held within the Fund’s portfolio at the initiation of each investment and each
subsequent quarter thereafter.
LAFs
recognize interest income according to the guidance noted in ASC Topic 325-40-35-1, Beneficial Interest in Securitized Financial
Assets, which states that the holder of a beneficial interest in securitized financial assets shall determine interest income
over the life of the beneficial interest in accordance with the effective yield method, provided such amounts are expected to
be collected. FASB ASC 325-40-20 further defines “beneficial interests,” among other things, as “rights to receive
all or portions of specified cash inflows received by a trust or other entity.” FASB ASC 325-40-15-7 also states that for
income recognition purposes, beneficial interests in securitized financial assets (such as those in LAFs) are within the scope
of ASC 325-40 because it is customary for certain industries, such as investment companies, to report interest income as a separate
item in their income statements even though the investments are accounted for at fair value. The amount of interest income from
LAFs recorded for the year ended December 31, 2024 was $0.3 million.
Other
Income
Other
income includes the Fund’s share of income under the terms of fee rebate agreements.
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
Interest
Expense
Interest
expense includes the Fund’s distributions associated with its 8.125% Series A Term Preferred Shares due 2029 (the “Preferred
Shares”) and amounts due under the Revolving Credit Facility (as defined below) in relation to outstanding borrowings and
unused commitment fees.
The
following table summarizes the components of interest expense for the year ended December 31, 2024:
| | |
Preferred Shares | | |
Revolving Credit
Facility | | |
Total | |
| Distributions declared and paid | |
$ | 0.6 | | |
$ | - | | |
$ | 0.6 | |
| | |
| | | |
| | | |
| | |
| Interest expense on credit facility | |
| - | | |
| 0.3 | | |
| 0.3 | |
| | |
| | | |
| | | |
| | |
| Amortization of deferred financing costs | |
| 0.1 | | |
| 0.1 | | |
| 0.2 | |
| | |
| | | |
| | | |
| | |
| Total interest expense | |
$ | 0.7 | | |
$ | 0.4 | | |
$ | 1.1 | |
Amounts
in millions.
The
Fund’s Preferred Shares had no interest payable outstanding as of December 31, 2024.
Please
refer to Note 8 “Revolving Credit Facility” and Note 9 “Preferred Shares” for further discussion relating
to the interest expense due under the Revolving Credit Facility and the Preferred Shares issuances, respectively.
Securities
Transactions
The
Fund records the purchase and sale of securities on trade date. Realized gains and losses on investments sold are recorded on
the basis of the specific identification method.
Cash
and Cash Equivalents
The
Fund has defined cash and cash equivalents as cash and short-term, highly liquid investments with original maturities of three
months or less from the date of purchase. The Fund maintains its cash in bank accounts, which, at times, may exceed federal insured
limits. The Adviser monitors the performance of the financial institution where the accounts are held in order to manage any risk
associated with such accounts. As of December 31, 2024, the Fund held $1.3 million in UMB IB Money Market II. The position is
classified as Level I in the fair value hierarchy.
Expense
Recognition
Expenses
are recorded on the accrual basis of accounting.
Prepaid
Expenses
Prepaid
expenses consist primarily of insurance premiums and state registration fees. Insurance premiums are amortized over the term of
the current policy. State registration fees are amortized over twelve months from the time of payment.
Offering
Costs Attributed to Common Shares
Offering
costs of the Fund are capitalized and amortized to expense over the twelve month period following such capitalization on a straight
line basis. Since inception of the Fund, a portion of the offering costs incurred by the Fund have been paid for by the Adviser,
for which the Adviser has not yet sought reimbursement. See Note 4 “Related Party Transactions” for further discussion
of the Fund’s offering costs.
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
Organization
Costs
Organizational
costs of the Fund are expensed as incurred. Since inception, organizational costs incurred by the Fund have been paid for by the
Adviser, for which the Adviser has not yet sought reimbursement. See Note 4 “Related Party Transactions” for further
discussion of the Fund’s organizational costs.
Deferred
Financing Costs
Deferred
financing costs on liabilities consist of fees and expenses incurred in connection with the issuance of the Preferred Shares and
the Revolving Credit Facility. The deferred financing costs are capitalized at the time of issuance and amortized using the effective
interest method over the respective terms of the Preferred Shares and Revolving Credit Facility. Amortization of deferred financing
costs is reflected in interest expense on the Preferred Shares and interest expense on the Revolving Credit Facility in the Consolidated
Statement of Operations.
Federal
and Other Taxes
The
Fund intends to operate so as to continue to qualify to be taxed as a RIC under the Code and, as such, to not be subject to U.S.
federal income tax on the portion of its taxable income and gains distributed to shareholders. To qualify for RIC tax treatment,
among other requirements, the Fund is required to distribute at least 90% of its investment company taxable income, as defined
by the Code. Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in
accordance with timing requirements imposed by the Code. Therefore, no federal income provision is required.
The
Fund has adopted November 30th as its fiscal tax year end. The Fund intends to file U.S. federal income and excise tax returns
as well as any applicable state tax filings. The statute of limitations on the Fund’s tax return filings generally remains
open for three years. The Fund has analyzed its tax positions for the year ended December 31, 2024, and does not believe there
are any uncertain tax positions requiring recognition in the Fund’s consolidated financial statements.
Because
U.S. federal income tax regulations differ from U.S. GAAP, characteristics of distributions may differ for financial reporting
and tax purposes. Differences may be permanent or temporary. Permanent differences are reclassified among capital accounts in
the consolidated financial statements to reflect their tax character. Temporary differences arise when certain items of income,
expense, gain or loss are recognized at some time in the future. Differences in classification may also result from the treatment
of short-term capital gains as ordinary income for federal income tax purposes. The tax basis components of distributable earnings
may differ from the amounts reflected under “aggregate distributable earnings (loss)” in the Consolidated Statement
of Assets and Liabilities due to temporary book/tax differences arising primarily from the Fund’s investments that are classified
for tax purposes as partnerships and passive foreign investment companies.
For
the year ended December 31, 2024, $1,150,353 was reclassified from aggregate distributable earnings (losses) to paid-in capital
reported on the Consolidated Statement of Assets and Liabilities. This amount represents the net of $1,093,082 of nondeductible
offering costs and $57,271 of nondeductible U.S. federal excise taxes incurred in relation to the 2023 excise tax year. The reclassification
of distribution characteristics has no effect on the Fund’s total net assets or net asset value per share of the Fund’s
common shares.
For
the tax year ended November 30, 2024, the estimated components of distributable earnings (accumulated loss) reported on the Consolidated
Statement of Assets and Liabilities on a tax basis were as follows:
| Undistributed
ordinary income |
$2,009,582 |
| Distributable
accumulated capital losses (carry forward) |
75,172 |
| Unrealized
appreciation (depreciation) on investments |
(121,556) |
As
of the tax period ended November 30, 2024, the Fund has $72,757 of short-term capital losses and $2,415 of long-term capital losses
which are available to carry forward to the next year without expiration.
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
The
following table summarizes the tax character of distributions to common and preferred shareholders for the respective tax years.
Tax information for the tax year ended November 30, 2024 is estimated and is not considered final until the Fund files its tax
return.
| Tax Year | | |
Ordinary Dividend | | |
Return of Capital | |
| 2024 | | |
$ | 7,672,891 | | |
$ | - | |
| 2023 | | |
$ | 2,132,810 | | |
$ | - | |
| 2022 | | |
$ | - | | |
$ | 480,820 | |
For
the year ended December 31, 2024, the estimated components of distributable earnings (accumulated loss) reported on the Consolidated
Statement of Assets and Liabilities on a tax basis were as follows:
| Undistributed
ordinary income |
$2,009,582 |
| Distributable
accumulated capital losses (carry forward) |
75,172 |
| Unrealized
appreciation (depreciation) on investments |
(121,556) |
| Other
Timing Differences* |
|
(4,119,798) |
|
| Total |
$(2,306,944) |
*Other
timing differences include book/tax differences in the Fund’s CLO equity and partnership investments as well as timing differences
caused by the difference between book and tax year end.
As
of December 31, 2024, net unrealized appreciation (depreciation) of the Fund’s investments on a tax basis was as follows:
| Cost for federal income tax purposes | |
$ | 153,471,824 | |
| | |
| | |
| Gross unrealized appreciation | |
$ | 5,669,633 | |
| Gross unrealized depreciation | |
| (5,791,189 | ) |
| Net unrealized appreciation | |
$ | (121,556 | ) |
Depending
on the level of taxable income earned in a tax year, the Fund is permitted to carry forward taxable income (including net capital
gains, if any) in excess of its current year distributions from the current tax year taxable income into the next tax year and
pay a nondeductible 4% U.S federal excise tax on such taxable income, as required.
The
Fund has not accrued U.S. federal excise tax related to the 2024 tax year. The Fund may record an excise tax on undistributable
taxable income when the Fund determines its final taxable income and files its final tax return.
During
the year ended December 31, 2024, the Fund incurred $57,271 of excise tax related to the 2023 tax year.
Distributions
The
composition of distributions paid to common shareholders from net investment income and capital gains are determined in accordance
with U.S. federal income tax regulations, which differ from U.S. GAAP. Distributions to common shareholders can be comprised of
net investment income, net realized capital gains and return of capital for U.S. federal income tax purposes and are intended
to be paid monthly. Distributions payable to common shareholders are recorded as a liability on ex-dividend date. If a common
shareholder opts-in to the Fund’s distribution reinvestment plan (the “DRIP”), distributions are automatically
reinvested in full common
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
shares of the Fund as of the payment date, pursuant to the DRIP. The Fund’s common shareholders
who choose not to participate in the DRIP generally will receive all distributions in cash.
In
addition to the regular monthly distributions, and subject to available taxable earnings of the Fund, the Fund may make periodic
special distributions representing the excess of the Fund’s net taxable income over the Fund’s aggregate monthly distributions
paid during the year (or for other purposes).
The
characterization of distributions paid to common shareholders, as set forth in the Consolidated Financial Highlights, reflect
estimates made by the Fund for U.S. federal income tax purposes. Such estimates are subject to change once the final determination
of the source of all distributions has been made and the final tax return has been filed by the Fund.
For
the year ended December 31, 2024, the Fund declared distributions to common shareholders of $7.9 million or $0.981 per common
share.
Fair
Value Measurement
The
following tables summarize the valuation of the Fund’s investments measured and reported at fair value under the fair value
hierarchy levels described in Note 2 “Summary of Significant Accounting Policies” as of December 31, 2024:
Fair
Value Measurement (in millions)
| Investments
at Fair Value | |
Level
I | | |
Level
II | | |
Level
III | | |
Total | |
| CLO
Debt | |
$ | - | | |
$ | 9.5 | | |
$ | - | | |
$ | 9.5 | |
| CLO
Equity | |
| - | | |
| - | | |
| 135.3 | | |
| 135.3 | |
| Loan
Accumulation Facilities | |
| - | | |
| - | | |
| 8.6 | | |
| 8.6 | |
| Total
Investments at Fair Value | |
$ | - | | |
$ | 9.5 | | |
$ | 143.9 | | |
$ | 153.4 | |
Significant
Unobservable Inputs
The
following table summarizes the quantitative inputs and assumptions used for investments categorized within Level III of the fair
value hierarchy as of December 31, 2024:
| | |
Quantitative
Information about Level III Fair Value Measurements | |
| Assets | |
Fair
Value
(in millions) | |
Valuation
Techniques/Methodologies | |
Unobservable
Inputs |
| Range
/ Weighted Average (1) | |
| | |
| |
| |
|
| | |
| CLO Equity | |
$ |
107.1 | |
Discounted Cash Flows | |
Annual
Default Rate (2) |
| 0.00%
- 4.45% | |
| | |
|
| |
| |
Annual
Prepayment Rate (3) |
| 25.00% | |
| | |
| |
| |
Reinvestment Spread |
| 3.19%
- 3.81% / 3.39% | |
| | |
| |
| |
Reinvestment Price |
| 99.50% | |
| | |
| |
| |
Recovery Rate |
| 68.92%
- 70.00% / 69.73% | |
| | |
| |
| |
Expected
Yield (4) |
| 8.83%
- 51.71% / 16.90% | |
(1)
Weighted average calculations are based on the fair value of investments.
(2)
A weighted average is not presented as the input in the discounted cash flow model varies over the life of an investment.
(3)
0% is assumed for defaulted and non-performing assets.
(4)
Represents yield based on fair value and projected future cash flow.
In
addition to the techniques and inputs noted in the above table, the Adviser may use other valuation techniques and methodologies
when determining the fair value measurements of the Fund’s investments, as provided for in the Adviser’s valuation
policy approved by the Board. Please refer to Note 2 “Valuation of Investments”. The table is not intended to be all-inclusive,
but rather provides information on the significant Level III inputs as they
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
relate to the Fund’s fair value measurements
as of December 31, 2024. Unobservable inputs and assumptions are reviewed at each measurement date and updated as necessary to
reflect current market conditions.
Increases
(decreases) in the annual default rate, reinvestment price and expected yield in isolation would result in a lower (higher) fair
value measurement. Increases (decreases) in the reinvestment spread and recovery rate in isolation would result in a higher (lower)
fair value measurement. Changes in the annual prepayment rate may result in a higher (lower) fair value, depending on the circumstances.
Generally, a change in the assumption used for the annual default rate may be accompanied by a directionally opposite change in
the assumption used for the annual prepayment rate and recovery rate.
Certain
of the Fund’s Level III investments have been valued using unadjusted inputs that have not been internally developed by
the Adviser, including third-party transactions, recent transactions and data reported by trustees. As a result, investments with
a fair value of $36.8 million have been excluded from the preceding table.
Change
in Investments Classified as Level III
The
changes in investments classified as Level III are as follows for the year ended December 31, 2024:
| | |
CLO Equity | | |
Loan
Accumulation
Facilities | |
| | |
| | |
| |
| Balance as of January 1, 2024 | |
$ | 39.8 | | |
$ | - | |
| | |
| | | |
| | |
| Purchases of investments | |
| 107.0 | | |
| 8.6 | |
| | |
| | | |
| | |
| Proceeds from sales, maturity of investments or return of capital | |
| (6.7 | )(1) | |
| - | |
| | |
| | | |
| | |
| Net realized gains (losses) and net change in unrealized appreciation (depreciation) | |
| (4.8 | ) | |
| 0.0 | |
| | |
| | | |
| | |
| Balance as of December 31, 2024(2) | |
$ | 135.3 | | |
$ | 8.6 | |
| | |
| | | |
| | |
| Change in unrealized appreciation (depreciation) on investments still held as of December 31, 2024 | |
$ | (5.0 | ) | |
$ | - | |
Amounts
in millions.
(1)
Includes $6.7 million of return of capital on CLO equity investments from recurring cash flows and distributions from called
deals.
(2)
There were no transfers into or out of level III investments during the period.
The
net realized gains (losses) recorded for Level III investments are reported in the net realized gain (loss) on investments account
in the Consolidated Statement of Operations, if applicable. Net changes in unrealized appreciation (depreciation) are reported
in the net change in unrealized appreciation (depreciation) on investments account in the Consolidated Statement of Operations.
Fair
Value – Valuation Techniques and Inputs
The
Adviser establishes valuation processes and procedures to ensure the valuation techniques are fair and consistent, and valuation
inputs are supportable. The Adviser has a Valuation Committee comprised of various senior personnel of the Adviser, the majority
of which are not members of the Fund’s portfolio management function. The Valuation Committee is responsible for overseeing
the valuation process, evaluating the overall fairness and consistent application of the Adviser’s written valuation policies
approved by the Board. The Valuation Committee reviews and approves the valuation on a monthly basis.
Valuation
of CLO Equity
The
Adviser estimates the fair value of CLO equity investments utilizing the output from a third-party financial tool based on assumptions
derived from internal and external (market) data. The tool contains detailed information on the characteristics of each CLO, including
recent information about assets and liabilities from data sources such as trustee reports, and uses market data inputs to project
future cash flows to CLO equity tranches. Key inputs to the tool, including, but not limited to assumptions for future loan default
rates, recovery rates,
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
prepayment rates, reinvestment rates and discount rates are determined by considering both observable and
third-party market data and prevailing general market assumptions and conventions as well as those of the Adviser. Additionally,
a third-party independent valuation firm is used as an input by the Adviser to determine the fair value of the Fund’s investments
in CLO equity. The valuation firm’s advice is only one factor considered in the valuation of such investments, and the Adviser
does not solely rely on such advice in determining the fair value of the Fund’s investments in accordance with the 1940
Act.
The
Adviser categorizes CLO equity as Level III investments. Certain pricing inputs may be unobservable. An active market may exist,
but not necessarily for CLO equity investments that the Fund holds as of the reporting date.
Valuation
of CLO Debt
The
Fund’s investments in CLO debt have been valued using an independent pricing service. The valuation methodology of the independent
pricing service includes incorporating data comprised of observable market transactions, executable bids, broker quotes from dealers
with two sided markets, as well as transaction activity from comparable securities to those being valued. As the independent pricing
service contemplates real time market data and no unobservable inputs or significant judgment has been used by the Adviser in
the valuation of the Fund’s investment in CLO debt, such positions are considered Level II assets.
Valuation
of Loan Accumulation Facilities
The
Adviser determines the fair value of LAFs in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures, utilizing
the income approach as noted in ASC 820-10-55-3F (the “Income Approach”), in which fair value measurement reflects
current market expectations about the receipt of future amounts (i.e., exit price). LAFs are typically short- to medium-term in
nature and formed to acquire loans on an interim basis that are expected to form part of a specific CLO transaction. Pursuant
to LAF governing documents, loans acquired by the LAF are typically required to be transferred to the contemplated CLO transaction
at original cost plus accrued interest. In such situations, because the LAF will receive its full cost basis in the underlying
loan assets and the accrued interest thereon upon the consummation of the CLO transaction, the Adviser determines the fair value
of the LAF as follows: (A) the cost of the Fund’s investment (i.e., the principal amount invested), and (B) to the extent
the LAF has realized gains (losses) on its underlying loan assets which are reported by the trustee during the applicable reporting
period, its attributable portion of such realized gains (losses).
In
certain circumstances, the LAF documents can contemplate transferring the underlying loans at a price other than original cost
plus accrued interest or the Adviser may determine that, despite the initial expectation that a CLO transaction would result from
a LAF, such a transaction is in fact unlikely to occur and, accordingly, it is unlikely the loans held by the LAF will be transferred
at cost. Rather, the loans held by the LAF will most likely be sold at market value. In such situations, the Adviser will continue
to fair value the LAF consistent with the Income Approach, but modify the fair value measurement to reflect the change in exit
strategy of the LAF to incorporate market expectations of the receipt of future amounts (i.e., exit price). As such, the fair
value of the LAF is most appropriately determined by reference to the market value of the LAF’s underlying loans, which
is reflective of the price at which the LAF could sell its loan assets in an orderly transaction between market participants.
As such, in these situations, the Adviser will continue utilizing the Income Approach and determine the fair value of the LAF
as follows: (A) the cost of the Fund’s investment (i.e., the principal amount invested), (B) the Fund’s attributable
portion of the unrealized gain (loss) on the LAF’s underlying loan assets, and (C) to the extent the LAF has realized gains
(losses) on its underlying loan assets which are reported by the trustee during the applicable reporting period, its attributable
portion of such realized gains (losses). The Adviser’s measure of the Fund’s attributable portion of the unrealized
gain (loss) on the LAF’s underlying loan assets takes into account the Adviser’s current market expectations of the
receipt of future amounts on such assets, which may be impacted by various factors including any applicable change in market conditions
or new information.
The
Adviser categorizes LAFs as Level III investments. There is no active market and prices are unobservable.
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
Investment
Risk Factors
The
following list is not intended to be a comprehensive list of all of the potential risks associated with the Fund. The Fund’s
prospectus provides a detailed discussion of the Fund’s risks and considerations. The risks described in the prospectus
are not the only risks the Fund faces. Additional risks and uncertainties not currently known to the Fund or that are currently
deemed to be immaterial also may materially and adversely affect its business, financial condition and/or operating results.
Risks
of Investing in CLOs and Other Structured Debt Securities
CLOs
and other structured finance securities are generally backed by a pool of credit-related assets that serve as collateral. Accordingly,
CLO and structured finance securities present risks similar to those of other types of credit investments, including default (credit),
interest rate and prepayment risks. Adverse credit events impacting a CLO’s or structured finance security’s underlying
collateral would be expected to reduce cash flows payable to the Company as CLO equity investor. In addition, there is a risk
that majority lenders to an underlying loan held by a CLO could amend or otherwise modify the loan to the detriment of the CLO
(including, for example, by transferring collateral or otherwise reducing the priority of the CLO’s investment within the
borrower’s capital structure). Such actions would impair the value of the CLO’s investment and, ultimately, the Company.
In addition, CLO and structured finance securities also present risks related to the capability of the servicer of the securitized
assets. CLOs and other structured finance securities are often governed by a complex series of legal documents and contracts,
which increases the risk of dispute over the interpretation and enforceability of such documents relative to other types of investments.
There is also a risk that the trustee of a CLO does not properly carry out its duties to the CLO, potentially resulting in loss
to the CLO. CLOs are also inherently leveraged vehicles and are subject to leverage risk.
Subordinated
Securities Risk
CLO
equity and junior debt securities that the Fund may acquire are subordinate to more senior tranches of CLO debt. CLO equity and
junior debt securities are subject to increased risks of default relative to the holders of superior priority interests in the
same CLO. In addition, at the time of issuance, CLO equity securities are under-collateralized in that the face amount of the
debt and equity of a CLO at inception exceeds the CLO’s total assets. The Fund will typically be in a subordinated or first
loss position with respect to realized losses on the underlying assets held by the CLOs in which the Fund is invested.
High
Yield Investment Risk
The
CLO equity and junior debt securities that the Fund acquires are typically rated below investment grade, or in the case of CLO
equity securities unrated, and are therefore considered “higher yield” or “junk” securities and are considered
speculative with respect to timely payment of interest and repayment of principal. The senior secured loans and other credit-related
assets underlying CLOs are also typically higher yield investments. Investing in CLO equity and junior debt securities and other
high yield investments involves greater credit and liquidity risk than investment grade obligations, which may adversely impact
the Fund’s performance.
Leverage
Risk
The
use of leverage, whether directly or indirectly through investments such as CLO equity or junior debt securities that inherently
involve leverage, may magnify the Fund’s risk of loss. CLO equity or junior debt securities are very highly leveraged (with
CLO equity securities typically being leveraged ten times), and therefore the CLO securities in which the Fund invests are subject
to a higher degree of risk of loss since the use of leverage magnifies losses.
Credit
Risk
If
(1) a CLO in which the Fund invests, (2) an underlying asset of any such CLO or (3) any other type of credit investment in the
Fund’s portfolio declines in price or fails to pay interest or principal when due because the issuer or debtor, as the case
may be, experiences a decline in its financial status, the Fund’s income, NAV and/or market price would be adversely impacted.
Additionally, interest on a CLO may be paid in kind or deferred and capitalized (paid in the form of obligations of the same type
rather than cash), which involves continued exposure to default risk with respect to such payments.
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
Key
Personnel Risk
The
Adviser manages our investments. Consequently, the Fund’s success depends, in large part, upon the services of the Adviser
and the skill and expertise of the Adviser’s professional personnel. There can be no assurance that the professional personnel
of the Adviser will continue to serve in their current positions or continue to be employed by the Adviser. We can offer no assurance
that their services will be available for any length of time or that the Adviser will continue indefinitely as the Fund’s
investment adviser.
Conflicts
of Interest Risk
The
Fund’s executive officers and trustees, and the Adviser and certain of its affiliates and their officers and employees,
including the members of the Investment Committee, have several conflicts of interest as a result of the other activities in which
they engage.
Prepayment
Risk
The
assets underlying the CLO securities in which the Fund invests are subject to prepayment by the underlying corporate borrowers.
As such, the CLO securities and related investments in which the Fund invests are subject to prepayment risk. If the Fund or a
CLO collateral manager are unable to reinvest prepaid amounts in a new investment with an expected rate of return at least equal
to that of the investment repaid, the Fund’s investment performance will be adversely impacted.
Liquidity
Risk
Generally,
there is no public market for the CLO investments in which the Fund invests. As such, the Fund may not be able to sell such investments
quickly, or at all. If the Fund is able to sell such investments, the prices the Fund receives may not reflect the Adviser’s
assessment of their fair value or the amount paid for such investments by the Fund.
Incentive
Fee Risk
The
Fund’s incentive fee structure and the formula for calculating the fee payable to the Adviser may incentivize the Adviser
to pursue speculative investments and use leverage in a manner that adversely impacts the Fund’s performance.
Fair
Valuation of the Fund’s Portfolio Investments
Generally,
there is no public market for the CLO investments and certain other credit assets in which the Fund may invest. The Adviser values
these securities at least monthly, or more frequently as may be required from time to time, at fair value. The Adviser’s
determinations of the fair value of the Fund’s investments have a material impact on the Fund’s net earnings through
the recording of unrealized appreciation or depreciation of investments and may cause the Fund’s NAV on a given date to
understate or overstate, possibly materially, the value that the Fund ultimately realizes on one or more of the Fund’s investments.
Limited
Investment Opportunities Risk
The
market for CLO securities is more limited than the market for other credit related investments. The Fund can offer no assurances
that sufficient investment opportunities for the Fund’s capital will be available. In recent years there has been a marked
increase in the number of, and flow of capital into, investment vehicles established to pursue investments in CLO securities whereas
the size of this market is relatively limited. While the Fund cannot determine the precise effect of such competition, such increase
may result in greater competition for investment opportunities, which may result in an increase in the price of such investments
relative to the risk taken on by holders of such investments. Such competition may also result under certain circumstances in
increased price volatility or decreased liquidity with respect to certain positions.
Non-Diversification
Risk
The
Fund is a non-diversified investment company under the 1940 Act and expect to hold a narrower range of investments than a diversified
fund under the 1940 Act.
Market
Risk
Political,
regulatory, economic and social developments, and developments that impact specific economic sectors,
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
industries or segments of
the market, can affect the value of the Fund’s investments. A disruption or downturn in the capital markets and the credit
markets could impair the Fund’s ability to raise capital, reduce the availability of suitable investment opportunities for
the Fund, or adversely and materially affect the value of the Fund’s investments, any of which would negatively affect the
Fund’s business. These risks may be magnified if certain events or developments adversely interrupt the global supply chain,
and could affect companies worldwide.
Synthetic
Investments Risk
The
Fund may invest in synthetic investments, such as significant risk transfer securities and credit risk transfer securities issued
by banks or other financial institutions, or acquire interests in lease agreements that have the general characteristics of loans
and are treated as loans for withholding tax purposes. In addition to the credit risks associated with the applicable reference
assets, the Fund will usually have a contractual relationship only with the counterparty of such synthetic investment, and not
with the reference obligor of the reference asset. Accordingly, the Fund generally will have no right to directly enforce compliance
by the reference obligor with the terms of the reference asset nor will it have any rights of setoff against the reference obligor
or rights with respect to the reference asset. The Fund will not directly benefit from the collateral supporting the reference
asset and will not have the benefit of the remedies that would normally be available to a holder of such reference asset. In addition,
in the event of the insolvency of the counterparty, the Fund may be treated as a general creditor of such counterparty, and will
not have any claim with respect to the reference asset. Consequently, the Fund will be subject to the credit risk of the counterparty
as well as that of the reference obligor. As a result, concentrations of synthetic securities in any one counterparty subjects
the Fund to an additional degree of risk with respect to defaults by such counterparty as well as by the reference obligor.
Loan
Accumulation Facilities Risk
The
Fund may invest in LAFs, which are short to medium term facilities often provided by the bank that will serve as placement agent
or arranger on a CLO transaction and which acquire loans on an interim basis which are expected to form part of the portfolio
of a future CLO. Investments in LAFs have risks similar to those applicable to investments in CLOs. Leverage is typically utilized
in such a facility and as such the potential risk of loss will be increased for such facilities employing leverage. In the event
a planned CLO is not consummated, or the loans are not eligible for purchase by the CLO, the Fund may be responsible for either
holding or disposing of the loans. This could expose the Fund primarily to credit and/or mark-to-market losses, and other risks.
Currency
Risk
Although
the Fund primarily makes investments denominated in U.S. dollars, the Fund may make investments denominated in other currencies.
The Fund’s investments denominated in currencies other than U.S. dollars will be subject to the risk that the value of such
currency will decrease in relation to the U.S. dollar. The Fund may or may not hedge currency risk.
Hedging
Risk
Hedging
transactions seeking to reduce risks may result in poorer overall performance than if the Fund had not engaged in such hedging
transactions. Additionally, such transactions may not fully hedge the Fund’s risks.
Reinvestment
Risk
CLOs
will typically generate cash from asset repayments and sales that may be reinvested in substitute assets, subject to compliance
with applicable investment tests. If the CLO collateral manager causes the CLO to purchase substitute assets at a lower yield
than those initially acquired or sale proceeds are maintained temporarily in cash, it would reduce the excess interest-related
cash flow, thereby having a negative effect on the fair value of the Fund’s assets and the market value of the Fund’s
securities. In addition, the reinvestment period for a CLO may terminate early, which would cause the holders of the CLO’s
securities to receive principal payments earlier than anticipated. There can be no assurance that the Fund will be able to reinvest
such amounts in an alternative investment that provides a comparable return relative to the credit risk assumed.
Interest
Rate Risk
The
price of certain of the Fund’s investments may be significantly affected by changes in interest rates, including increases
and decreases in interest rates caused by governmental actions and/or other factors. Although senior
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
secured loans are generally
floating rate instruments, the Fund’s investments in senior secured loans through investments in junior equity and debt
tranches of CLOs are sensitive to interest rate levels and volatility. For example, because the senior secured loans constituting
the underlying collateral of CLOs typically pay a floating rate of interest, a reduction in interest rates would generally result
in a reduction in the residual payments made to the Fund as a CLO equity holder (as well as the cash flow the Fund receives on
the Fund’s CLO debt investments and other floating rate investments). Further, there may be some difference between the
timing of interest rate resets on the assets and liabilities of a CLO. Such a mismatch in timing could have a negative effect
on the amount of funds distributed to CLO equity investors. In addition, CLOs may not be able to enter into hedge agreements,
even if it may otherwise be in the best interests of the CLO to hedge such interest rate risk. Furthermore, in the event of a
significant rising interest rate environment and/or economic downturn, loan defaults may increase and result in credit losses
that may adversely affect the Fund’s cash flow, fair value of the Fund’s assets and operating results. Because CLOs
generally issue debt on a floating rate basis, an increase in the relevant reference rate will increase the financing costs of
CLOs.
Refinancing
Risk
If
the Fund incurs debt financing and subsequently refinances such debt, the replacement debt may be at a higher cost and on less
favorable terms and conditions. If the Fund fails to extend, refinance or replace such debt financings prior to their maturity
on commercially reasonable terms, the Fund’s liquidity will be lower than it would have been with the benefit of such financings,
which would limit the Fund’s ability to grow, and holders of the Fund’s common shares would not benefit from the potential
for increased returns on equity that incurring leverage creates.
Tax
Risk
If
the Fund fails to qualify for tax treatment as a RIC under Subchapter M of the Code for any reason, or otherwise becomes subject
to corporate income tax, the resulting corporate taxes (and any related penalties) could substantially reduce the Fund’s
net assets, the amount of income available for distributions to the Fund’s common shareholders, and the amount of income
available for payment of the Fund’s other liabilities.
Derivatives
Risk
Derivative
instruments in which the Fund may invest may be volatile and involve various risks different from, and in certain cases greater
than, the risks presented by other instruments. The primary risks related to derivative transactions include counterparty, correlation,
liquidity, leverage, volatility, over-the-counter trading, operational and legal risks. In addition, a small investment in derivatives
could have a large potential impact on the Fund’s performance, effecting a form of investment leverage on the Fund’s
portfolio. In certain types of derivative transactions, the Fund could lose the entire amount of the Fund’s investment;
in other types of derivative transactions the potential loss is theoretically unlimited.
Counterparty
Risk
The
Fund may be exposed to counterparty risk, which could make it difficult for the Fund or the issuers in which the Fund invests
to collect on obligations, thereby resulting in potentially significant losses.
Price
Risk
Investors
who buy common shares at different times will likely pay different prices.
Global
Risks
Due
to highly interconnected global economies and financial markets, the value of the Fund’s securities and its underlying investments
may go up or down in response to governmental actions and/or general economic conditions throughout the world. Events such as
war, military conflict, acts of terrorism, social unrest, natural disasters, recessions, inflation, rapid interest rate changes,
supply chain disruptions, sanctions, the spread of infectious illness or other public health threats could also significantly
impact the Fund and its investments.
Banking
Risk
The
possibility of future bank failures poses risks of reduced financial market liquidity at clearing, cash management and other custodial
financial institutions. The failure of banks which hold cash on behalf of the Fund,
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
the Fund’s underlying obligors, the
collateral managers of the CLOs in which the Fund invests (or managers of other securitized or pooled vehicles in which the Fund
invests), or the Fund’s service providers could adversely affect the Fund’s ability to pursue its investment strategies
and objectives. For example, if an underlying obligor has a commercial relationship with a bank that has failed or is otherwise
distressed, such obligor may experience delays or other disruptions in meeting its obligations and consummating business transactions.
Additionally, if a collateral manager has a commercial relationship with a distressed bank, the manager may experience issues
conducting its operations or consummating transactions on behalf of the CLOs it manages, which could negatively affect the performance
of such CLOs (and, therefore, the performance of the Fund).
Illiquid
Shares Risk
The
Fund’s common shares are not publicly traded and the Fund does not expect a secondary market in the common shares to develop
in the foreseeable future, if ever. To provide common shareholders with limited liquidity, the Fund intends to offer to repurchase
common shares from common shareholders in each quarter in an amount up to 5% of the Fund’s NAV, calculated as of the prior
calendar quarter end. The Board has complete discretion to determine whether the Fund will engage in any common share repurchase,
and if so, the terms of such repurchase. An investment in the Fund is not suitable for investors that require short-term liquidity.
| 4. | RELATED
PARTY TRANSACTIONS |
Investment
Advisory Agreement
Effective
February 11, 2022, the Fund entered into an investment advisory agreement with the Adviser (the “Advisory Agreement”).
Pursuant to the terms of the Advisory Agreement, the Fund will pay the Adviser a management fee and an incentive fee for its services.
Management
fee
The
management fee is calculated monthly and payable quarterly in arrears at an annual rate of 1.75% of the Fund’s “Managed
Assets”, provided, that, if the Fund calculates its NAV more frequently than monthly, the management fee shall be calculated
on the same frequency as the NAV is calculated. Managed Assets are defined as the Fund’s total assets (including assets
attributable to the Fund’s use of leverage) minus the sum of the Fund’s accrued liabilities (other than liabilities
incurred for the purpose of creating leverage). The Fund was charged a management fee of $1.6 million for the year ended December
31, 2024, and has a payable balance of $1.2 million as of December 31, 2024. The payable balance includes $0.6 million in management
fees charged to the Fund for the period from June 1, 2022 (commencement of operations) to December 31, 2023.
Incentive
fee
The
incentive fee is payable quarterly, in arrears, on the pre-incentive fee net investment income (“PNII”) for the immediately
preceding quarter. For this purpose, PNII means (a) interest income, dividend income and any other income (including any other
fees, such as commitment, origination, structuring, diligence and consulting fees) accrued during the calendar quarter, minus
(b) the Fund’s operating expenses for the quarter (including the management fee, expenses payable under the Administration
Agreement (as defined below) to the Administrator, and any interest expense and/or dividends paid on any issued and outstanding
debt or preferred shares, but excluding organizational and offering expenses and the incentive fee) after giving application to
any reimbursement or recoupment under the ELA (as defined below). PNII includes, in the case of investments with a deferred interest
feature (such as original issue discount, debt instruments payment-in-kind interest and zero coupon securities), accrued income
that the Fund has not yet received in cash. PNII does not include any realized or unrealized capital gains or losses.
PNII,
expressed as a rate of return on the value of the Fund’s net assets at the end of the immediately preceding calendar quarter,
is compared to a hurdle rate of 2.00% per quarter. The Fund pays the Adviser an incentive fee with respect to the Fund’s
PNII in each calendar quarter as follows: (1) no incentive fee in any calendar quarter in which the Fund’s PNII does not
exceed the hurdle rate of 2.00%; (2) 100% of the Fund’s PNII with respect to that portion of such PNII, if any, exceeding
the hurdle rate but equal to or less than 2.50% in any calendar quarter; and (3) 20% of the amount of the Fund’s PNII, if
any, exceeding 2.50% in any calendar quarter. The Fund incurred incentive fees of $2.0 million for the year ended December 31,
2024, and has a payable balance of $1.7
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
million as of December 31, 2024. The payable balance includes $1.1 million in incentive
fees charged to the Fund for the period from June 1, 2022 (commencement of operations) to December 31, 2023.
Administration
Agreement
Effective
February 11, 2022, the Fund entered into an administration agreement (the “Administration Agreement”) with the Administrator,
an affiliate of the Adviser. Pursuant to the Administration Agreement, the Administrator performs, or arranges for the performance
of, the Fund’s required administrative services, which include being responsible for the financial records which the Fund
is required to maintain and preparing reports which are disseminated to the Fund’s shareholders. In addition, the Administrator
provides the Fund with accounting services, assists the Fund in determining and publishing its NAV, oversees the preparation and
filing of the Fund’s tax returns, monitors the Fund’s compliance with tax laws and regulations, and prepares and assists
the Fund with any audit of the financial statements by an independent public accounting firm. The Administrator is also responsible
for managing the printing and disseminating reports to the Fund’s shareholders and maintaining the Fund’s website,
providing support to investor relations, generally overseeing the payment of the Fund’s expenses and the performance of
administrative and professional services rendered to the Fund by others, and providing such other administrative services as the
Fund may designate from time to time.
Payments
under the Administration Agreement are equal to an amount based upon the Fund’s allocable portion of the Administrator’s
overhead in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with
performing compliance functions and the Fund’s allocable portion of the compensation of the Fund’s chief compliance
officer, chief financial officer, chief operating officer and the Fund’s allocable portion of the compensation of any related
support staff. The Fund’s allocable portion of such compensation is based on an allocation of the time spent on the Fund
relative to other matters. To the extent the Administrator outsources any of its functions, the Fund pays the fees on a direct
basis, without profit to the Administrator. For the period from June 1, 2022 (commencement of operations) to March 31, 2024, certain
accounting and other administrative services had been delegated by the Administrator to UMB Fund Services, Inc. (“UMB”).
Commencing April 1, 2024, the Fund transferred delegation of these services to ALPS Fund Services, Inc. (“SS&C ALPS”,
collectively with UMB, the “Sub Administrators”). The Administration Agreement may be terminated by the Fund without
penalty upon not less than sixty days’ written notice to the Administrator and by the Administrator upon not less than ninety
days’ written notice to the Fund. The Administration Agreement is approved by the Board on an annual basis.
For
the year ended December 31, 2024, the Fund was charged a total of $0.5 million in administration fees consisting of $0.4 million
and $0.1 million, relating to services provided by the Administrator and Sub Administrators, respectively, which are included
in the Consolidated Statement of Operations and, of which $0.1 million was payable as of December 31, 2024.
Expense
Limitation and Reimbursement Agreement
On
February 11, 2022, the Fund and the Adviser entered into an expense limitation and reimbursement agreement, which was amended
and restated on February 13, 2024 and July 30, 2024 (the “ELA”). Pursuant to the ELA, the Adviser may provide expense
support by paying, directly or indirectly, the Fund’s operating expenses or waive fees due by the Fund to the Adviser or
affiliates of the Adviser to the extent deems appropriate in the effort to limit expenses borne by the Fund. Expense support payments
or fee waivers made by the Adviser may be subject to reimbursement from the Fund for up to three years after such expense support
payment or waiver was made. Reimbursement to the Adviser must be approved by the Board prior to recoupment by the Adviser. The
Adviser did not provide expense support for the year ended December 31, 2024.
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
The
following amounts are subject to reimbursement by the Adviser by the following dates:
| Period
Ended | | |
Expense
Support Payments
Due From Adviser | | |
Expense
Support Payments
Reimbursed to Adviser | | |
Unreimbursed
Expense
Support | | |
Eligible
to be Paid
Through |
| June
30, 2022 | | |
$ | 14,094 | | |
$ | - | | |
$ | 14,094 | | |
June 30, 2025 |
| September
30, 2022 | | |
| 53,891 | | |
| - | | |
| 53,891 | | |
September 30, 2025 |
| December
31, 2022 | | |
| 172,748 | | |
| - | | |
| 172,748 | | |
December 31, 2025 |
| March
31, 2023 | | |
| 181,991 | | |
| - | | |
| 181,991 | | |
March 31, 2026 |
| June
30, 2023 | | |
| 205,617 | | |
| - | | |
| 205,617 | | |
June 30, 2026 |
| September
30, 2023 | | |
| 413,782 | | |
| - | | |
| 413,782 | | |
September 30, 2026 |
| December
31, 2023 | | |
| 623,430 | | |
| - | | |
| 623,430 | | |
December 31, 2026 |
| Total | | |
$ | 1,665,553 | | |
$ | - | | |
$ | 1,665,553 | | |
|
Organizational
and Offering Expense Support and Reimbursement Agreement
On
February 11, 2022, the Fund and the Adviser entered into an organizational and offering (“O&O”) expense support
and reimbursement agreement, which was amended and restated on February 13, 2024 (“O&O Agreement”). Pursuant to
the O&O Agreement, the Fund may pay O&O expenses up to a limit of 1.50% of gross proceeds raised in the Fund’s offering
of its shares. As of December 31, 2023, the Fund had $0.3 million in O&O expenses capitalized as a deferred asset in the Consolidated
Statement of Assets and Liabilities. For the year ended December 31, 2024, the Fund incurred and capitalized additional offering
expenses of $1.2 million, and amortized to expense on the Consolidated Statement of Operations $1.0 million of capitalized offering
expenses. In addition to offering expenses incurred by the Fund, the Adviser, on behalf of the Fund, paid O&O costs of approximately
$2.3 million for the period from the Fund’s formation on October 22, 2021 to December 31, 2024. O&O expenses paid by
the Adviser are subject to reimbursement by the Fund up to three years after the date on which such O&O expenses were paid
on the Fund’s behalf. Reimbursement must be approved by the Board. As of December 31, 2024, the Adviser has not sought reimbursement
for any O&O expenses it incurred.
The
following amounts may be subject to reimbursement by the Adviser by the following dates:
| | | |
O&O expenses
paid by Adviser | | |
Unreimbursed
O&O expenses | | |
Eligible to be paid
through quarter ended |
| | | | |
$ | 35,093 | | |
$ | 35,093 | | |
December 31, 2024 |
| | | | |
| 560,093 | | |
| 560,093 | | |
March 31, 2025 |
| | | | |
| 351,412 | | |
| 351,412 | | |
June 30, 2025 |
| | | | |
| 150,629 | | |
| 150,629 | | |
September 30, 2025 |
| | | | |
| 227,336 | | |
| 227,336 | | |
December 31, 2025 |
| | | | |
| 126,179 | | |
| 126,179 | | |
March 31, 2026 |
| | | | |
| 324,003 | | |
| 324,003 | | |
June 30, 2026 |
| | | | |
| 116,004 | | |
| 116,004 | | |
September 30, 2026 |
| | | | |
| 249,796 | | |
| 249,796 | | |
December 31, 2026 |
| | | | |
| 44,753 | | |
| 44,753 | | |
March 31, 2027 |
| | | | |
| 57,740 | | |
| 57,740 | | |
June 30, 2027 |
| | | | |
| 62,542 | | |
| 62,542 | | |
September 30, 2027 |
| | | | |
| 243 | | |
| 243 | | |
December 31, 2027 |
| | Total | | |
$ | 2,305,823 | | |
$ | 2,305,823 | | |
|
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
Exemptive
Relief
On
March 17, 2015, the SEC granted exemptive relief to the Adviser and its affiliates which permits the Fund to participate in certain
negotiated co-investments alongside other accounts managed by the Adviser, or its affiliates, subject to certain conditions.
Affiliated
Ownership
As
of December 31, 2024, the Adviser and senior investment team held an aggregate of 13.52% of the Fund’s common shares.
Dealer
Manager
On
March 1, 2024, the Fund entered into a dealer manager agreement (the “Dealer Manager Agreement”) with Eagle Point
Securities LLC (the “Dealer Manager”), a registered broker-dealer and an affiliate of the Adviser. Pursuant to the
terms of the Dealer Manager Agreement, the Dealer Manager acts as a distributor of the Fund’s common shares on a best-efforts
basis, subject to various conditions. Common shares are offered for sale through the Dealer Manager at NAV plus any applicable
sales load. Under the Dealer Manager Agreement, the Dealer Manager also provides certain marketing and wholesale services in consideration
of receipt of a dealer manager fee.
Common
shareholders purchasing the Fund’s common shares may pay a sales load of up to 6.75% of the investment amount. The 6.75%
sales load is comprised of up to 6.0% selling commission and up to 0.75% dealer manager fee. For the year ended December 31, 2024,
the total amount of sales loads earned by the Dealer Manager was $2.5 million. The Dealer Manager may reallow a portion or all
of the earned selling commissions and/or the dealer manager fees to participating broker-dealers and/or financial advisors for
selling shares to their customers.
In
addition, the Fund may reimburse the Adviser and its affiliates (including the Dealer Manager) for compensation of employees engaged
in registering and marketing the Fund’s common shares, which includes development of the Fund’s marketing materials
and marketing presentations, training and education, and general coordination of the marketing process for the Fund. For the period
from March 1, 2024, the date the Fund entered into the Dealer Manager Agreement, to December 31, 2024, the Fund has reimbursed
the Dealer Manager $0.2 million for such expenses, which is included in deferred offering costs attributed to common shares in
the Consolidated Statement of Assets and Liabilities.
The
Fund offers its common shares on a continuous basis at the applicable period end NAV per share plus any applicable sales load.
The Fund is authorized to issue an unlimited number of common shares.
For
the year ended December 31, 2024, the Fund sold 6,286,312 common shares for total net proceeds to the Fund of $63.2 million.
For
the year ended December 31, 2024, the Fund issued 300,404 common shares pursuant to the Fund’s distribution reinvestment
plan for total net proceeds to the Fund of $2.9 million.
As
of December 31, 2024, the Fund had 11,045,767 common shares issued and outstanding.
Repurchases
of Common Shares by the Fund
Subject
to the Board’s discretion, the Fund conducts quarterly tender offers in accordance with the Fund’s common share repurchase
program in an amount up to 5% of the Fund’s NAV. The Fund may extend multiple offers to repurchase common shares in a quarter
in an aggregate amount of 5% of the Fund’s NAV.
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
The
following table summarizes the number of common shares that were repurchased by the Fund for the year ended December 31, 2024:
| Commencement
Date | |
Valuation
Date | |
Repurchase
Price per Share | | |
Shares
Repurchased | | |
Total
Paid for Repurchased
Shares (in millions) | |
| November 30, 2023 | |
December 29, 2023 | |
$ | 10.23 | | |
| 13,527 | | |
$ | 0.1 | |
| February 29, 2024 | |
March 28, 2024 | |
| 10.29 | | |
| 26,244 | | |
| 0.3 | |
| May 31, 2024 | |
June 28, 2024 | |
| 9.97 | | |
| 184,915 | | |
| 1.8 | |
| August 30, 2024 | |
September 30, 2024 | |
| 9.80 | | |
| 119,632 | | |
| 1.2 | |
| | |
| |
| | | |
| 344,318 | | |
$ | 3.4 | |
| 6. | COMMITMENTS
AND CONTINGENCIES |
The
Fund is not currently subject to any material legal proceedings. From time to time, the Fund may be a party to certain legal proceedings
in the ordinary course of business, including proceedings relating to the enforcement of the Fund’s rights under contracts.
While the outcome of these legal proceedings cannot be predicted with certainty, the Fund does not expect these proceedings will
have a material effect upon its financial condition or results of operations.
As
of December 31, 2024, the Fund has received support from the Adviser pursuant to the O&O Agreement and ELA which may be subject
to reimbursement in the future. See Note 4 “Related Party Transactions” for further details. The Fund had no other
unfunded commitments as of December 31, 2024.
Under
the Fund’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of
the performance of their duties to the Fund. In addition, during the normal course of business, the Fund enters into contracts
containing a variety of representations which provide general indemnifications. The Fund’s maximum exposure under these
agreements cannot be known; however, the Fund expects any risk of loss to be remote.
| 8. | REVOLVING
CREDIT FACILITY |
On
June 28, 2024 the Fund entered into a credit agreement with BNP Paribas, as lender, that established a revolving credit facility
(the “Revolving Credit Facility”). Pursuant to the terms of the Revolving Credit Facility, the Fund can borrow up
to an aggregate principal balance of $25.0 million (the “Commitment Amount”). The Revolving Credit facility is collateralized
by certain investments held by the Fund. The Fund has granted a security interest in certain assets to BNP Paribas, as lender.
Such borrowings under the Revolving Credit Facility bear interest at Term SOFR plus a spread under the credit agreement. The Fund
is required to pay a commitment fee on the unused amount.
The
Revolving Credit Facility will mature on the earlier of (i) the termination of the Commitment, as defined by the terms of the
Revolving Credit Facility or (ii) the scheduled maturity date of June 28, 2025. The Fund has the option to extend the maturity
from time to time in accordance with the Revolving Credit Facility agreement.
For
the year ended December 31, 2024, the Fund had an average outstanding borrowing and average interest rate of approximately $7.2
million and 7.03%, respectively. The interest expense for the year ended December 31, 2024 on the Revolving Credit Facility was
approximately $0.4 million, inclusive of the unused fee, and is recorded on the Consolidated Statement of Operations. As of December
31, 2024, the Fund had an outstanding borrowing amount of $19.5 million.
See
Note 10 “Asset Coverage” for further discussion on the Fund’s calculation of asset coverage with respect to
the Revolving Credit Facility.
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
| 9. | MANDATORILY
REDEEMABLE PREFERRED SHARES |
As
of December 31, 2024, there were 1,426,000 Preferred Shares authorized, par value $0.001 per share, of which 1,400,000 Preferred
Shares were issued and outstanding.
On
October 17, 2024, the Fund closed an underwritten public offering of 1,240,000 of the Preferred Shares, resulting in net proceeds
to the Fund of $29.3 million after payment of underwriting discounts and commissions of $1.0 million and offering expenses of
$0.7 million.
Subsequently,
on October 22, 2024, the underwriters purchased an additional 160,000 of its Preferred Shares pursuant to the underwriters’
overallotment option, which resulted in additional net proceeds to the Fund of $3.9 million after payment of underwriting discounts
and commissions of $0.1 million.
The
Fund is required to redeem all outstanding Preferred Shares on October 31, 2029 at a redemption price of $25 per share, plus accrued
but unpaid dividends, if any. At any time on or after October 19, 2026, the Fund may, at its sole option, redeem the outstanding
Preferred Shares in whole or in part from time to time.
The
Fund has accounted for its Preferred Shares as a liability under ASC Topic 480 – Distinguishing Liabilities from Equity
(“ASC 480”), due to their mandatory redemption requirements.
The
Fund may in the future engage a broker-dealer to repurchase opportunistically, on the Fund’s behalf, shares of the Preferred
Shares through open market transactions. The price and other terms of any such repurchases will depend on prevailing market conditions,
the Fund’s liquidity and other factors. Depending on market conditions, the amount of Preferred Shares repurchases may be
material and may continue through year-end 2025; however, the Fund may reduce or extend this time frame in its discretion and
without notice. Any Preferred Shares repurchases will comply with the provisions of the 1940 Act and the Securities Exchange Act
of 1934. The repurchase of any such Preferred Shares would reduce the Fund’s outstanding leverage. The Fund did not repurchase
Preferred Shares for the year ended December 31, 2024.
Except
where otherwise stated in the 1940 Act or the Fund’s declaration of trust, each holder of Preferred Shares will be entitled
to one vote for each Preferred Share held on each matter submitted to a vote of the Fund’s shareholders. The Fund’s
preferred shareholders and common shareholders will vote together as a single class on all matters submitted to the Fund’s
shareholders. Additionally, the Fund’s preferred shareholders will have the right to elect two Preferred Trustees at all
times, while the Fund’s preferred shareholders and common shareholders, voting together as a single class, will elect the
remaining members of the Board.
Under
the provisions of the 1940 Act, the Fund is permitted to issue senior securities, including debt securities and preferred shares,
and borrow from banks or other financial institutions, provided that the Fund satisfies certain asset coverage requirements.
With
respect to senior securities that are shares, such as the Preferred Shares, the Fund is required to have asset coverage of at
least 200%, as measured at the time of issuance of any such senior securities that are shares and calculated as the ratio of the
Fund’s total consolidated assets, less all liabilities and indebtedness not represented by senior securities, over the aggregate
amount of the Fund’s outstanding senior securities representing indebtedness plus the aggregate liquidation preference of
any outstanding shares of senior securities that are shares.
With
respect to senior securities representing indebtedness, such as any bank borrowings (other than temporary borrowings as defined
under the 1940 Act), the Fund is required to have asset coverage of at least 300%, as measured at the time of borrowing and calculated
as the ratio of the Fund’s total consolidated assets, less all liabilities and indebtedness not represented by senior securities,
over the aggregate amount of the Fund’s outstanding senior securities representing indebtedness.
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
If
the Fund’s asset coverage declines below 300% (or 200%, as applicable), the Fund would be prohibited under the 1940 Act
from incurring additional debt or issuing additional Preferred Shares and from declaring certain distributions to its shareholders.
In addition, the terms of the Preferred Shares require the Fund to redeem Preferred Shares if such failure to maintain the applicable
asset coverage is not cured by a certain date.
The
following table summarizes the Fund’s asset coverage with respect to its Preferred Shares and Revolving Credit Facility
as of December 31, 2024:
| Total assets | |
$ | 162,913,657 | |
| Less liabilities and indebtedness
not represented by senior securities | |
| (3,959,395 | ) |
| Net total assets and liabilities | |
$ | 158,954,262 | |
| | |
| | |
| Preferred
Shares (3) | |
$ | 35,000,000 | |
| Revolving
Credit Facility (3) | |
| 19,500,000 | |
| Total senior securities | |
$ | 54,500,000 | |
| | |
| | |
| Asset
coverage for senior securities (1) | |
| 292 | % |
| Asset
coverage for Revolving Credit Facility (2)(3) | |
| 815 | % |
(1)
The asset coverage for senior securities is calculated in accordance with section 18(h) of the 1940 Act, as generally described
above.
(2)
The asset coverage ratio for the Revolving Credit Facility is calculated in accordance with section 18(h) of the 1940 Act, as
generally described above.
(3)
Amounts are based on outstanding principal balance as of the date presented.
| 11. | RECENT
ACCOUNTING PRONOUNCEMENTS |
In
June 2022, the FASB issued Accounting Standards Update No. 2022-03 (“ASU 2022-03”) related to FASB ASC Topic 820 Fair
Value Measurements - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This change prohibits
entities from taking into account contractual restrictions on the sale of equity securities when estimating fair value and introduces
required disclosures for such transactions. The Fund has fully adopted the provisions of ASU 2022-03, which did not have a material
impact on the Fund’s consolidated financial statements and related disclosures.
In
November 2023, the FASB issued Accounting Standards Update No. 2023-07 (“ASU 2023-07”) related to FASB ASC Topic 280
Segment Reporting - Improvements to Reportable Segment Disclosures. The amendments in this update improve reportable segment
disclosure requirements. The Fund has fully adopted the provisions of ASU 2023-07, which did not have a material impact on the
Fund’s consolidated financial statements and related disclosures. See Note 2 “Summary of Significant Accounting Policies”
for additional information.
Pursuant
to the continuous offering, in the period from January 1, 2025 through February 21, 2025, the Fund issued common shares for total
net proceeds to the Fund of $8.1 million. On January 22, 2025, the Fund paid $3.2 million related to the repurchase of 336,516
common shares in accordance with the tender offer that commenced November 29, 2024.
On
January 31, 2025, the Fund paid a distribution of $0.083 per share to common shareholders of record as of January 22, 2025.
The
Fund’s NAV per share as of January 31, 2025 was $9.56.
Management
of the Fund has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date of release
of this report. Management has determined there are no events in addition to
Eagle
Point Institutional Income Fund & Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2024
those described above which would require adjustment
to or disclosure in the consolidated financial statements and related notes through the date of release of this report.
Eagle
Point Institutional Income Fund & Subsidiaries
Consolidated
Financial Highlights
| Per Share Data: | |
For the year ended
December 31, 2024 | |
For the year ended
December 31, 2023 | |
For the period from
June 1, 2022
(Commencement of
Operations) through
December 31, 2022 |
| Net asset value at beginning of period | |
$ | 10.23 | | |
$ | 9.97 | | |
$ | 10.00 | |
| | |
| | | |
| | | |
| | |
| Net investment income (1) | |
| 0.89 | | |
| 1.40 | | |
| 0.52 | |
| | |
| | | |
| | | |
| | |
| Net realized gain (loss) and change in unrealized appreciation (depreciation) on investments (1) (2) | |
| (0.52 | ) | |
| (0.23 | ) | |
| (0.08 | ) |
| | |
| | | |
| | | |
| | |
| Net income (loss) and net increase (decrease) in net assets resulting from operations (1) | |
| 0.37 | | |
| 1.17 | | |
| 0.44 | |
| | |
| | | |
| | | |
| | |
| Distributions to shareholders from net investment income (3) | |
| (0.98 | ) | |
| (0.91 | ) | |
| (0.08 | ) |
| Distributions to shareholders from net realized gains on investments (3) | |
| - | | |
| - | | |
| - | |
| | |
| | | |
| | | |
| | |
| Distributions to shareholders from tax return of capital (3) | |
| - | | |
| - | | |
| (0.38 | ) |
| | |
| | | |
| | | |
| | |
| Total distributions declared to shareholders | |
| (0.98 | ) | |
| (0.91 | ) | |
| (0.46 | ) |
| | |
| | | |
| | | |
| | |
| Distributions to shareholders based on weighted average shares impact(4) | |
| (0.00 | ) | |
| (0.00 | ) | |
| (0.01 | ) |
| | |
| | | |
| | | |
| | |
| Total distributions to shareholders | |
| (0.98 | ) | |
| (0.91 | ) | |
| (0.47 | ) |
| | |
| | | |
| | | |
| | |
| Net asset value at end of period | |
$ | 9.62 | | |
$ | 10.23 | | |
$ | 9.97 | |
| | |
| | | |
| | | |
| | |
| Total net asset value return (5) | |
| 4.02 | % | |
| 12.35 | % | |
| 4.30 | % |
| | |
| | | |
| | | |
| | |
| Common shares outstanding at end of period | |
| 11,045,767 | | |
| 4,803,369 | | |
| 1,401,613 | |
| | |
| | | |
| | | |
| | |
| Ratios and Supplemental Data: | |
| | | |
| | | |
| | |
| Net asset value at end of period | |
$ | 106,236,316 | | |
$ | 49,147,210 | | |
$ | 13,973,898 | |
| Ratio of expenses to average net assets, before expense support (6) | |
| 9.43 | % | |
| 9.93 | % | |
| 9.62 | % |
| Ratio of expenses to average net assets, after expense support (7) (8) | |
| 9.43 | % | |
| 4.54 | % | |
| 6.35 | % |
| Ratio of net investment income to average net assets (7) (8) | |
| 8.90 | % | |
| 13.95 | % | |
| 10.34 | % |
| Portfolio turnover rate (9) | |
| 9.43 | % | |
| 11.74 | % | |
| 4.63 | % |
| Asset coverage for senior securities | |
| 292 | % | |
| N/A | | |
| N/A | |
| Asset coverage for Revolving Credit Facility | |
| 815 | % | |
| N/A | | |
| N/A | |
| | |
| | | |
| | | |
| | |
| Revolving Credit Facility: | |
| | | |
| | | |
| | |
| Principal amount outstanding at end of period | |
$ | 19,500,000 | | |
$ | - | | |
$ | - | |
| Asset coverage per $1,000 at end of period (10) | |
$ | 8,152 | | |
$ | - | | |
$ | - | |
Footnotes
to Financial Highlights:
| (1) | Per
share amounts are based on weighted average of shares outstanding for the period. |
| (2) | Net
realized gain (loss) and change in unrealized appreciation (depreciation) on investments
includes a balancing figure to reconcile to the change in NAV per share at the end of
each period. The amount per share may not agree with the change in the aggregate
net realized gain (loss) and change in unrealized appreciation (depreciation) on investments
for the period because of the timing of issuance of the Fund’s shares in relation
to fluctuating market values for the portfolio. |
| (3) | The
information provided is based on estimates available at each respective period. The Fund’s
final taxable income and the actual amount required to be distributed will be finally
determined when the Fund files its final tax returns and may vary from these estimates. |
| (4) | Represents
the difference between the per share amount distributed to shareholders of record and
the per share amount distributed based on the weighted average of shares outstanding
for the period. |
| (5) | Total
return for the period from June 1, 2022 to December 31, 2022 is not annualized. Total
return is calculated based on a change in NAV per share between the beginning and end
of period NAV per share and assumes distributions
paid to shareholders during the period were reinvested in accordance with the Fund’s
distribution reinvestment plan. |
| (6) | Ratios
for the period from June 1, 2022 to December 31, 2022 are annualized. Ratios
for the year ended December 31, 2023 and the period from June 1, 2022 to December 31,
2022 exclude expense limitation provided by the Adviser. |
| (7) | Ratio
for the year ended December 31, 2024 includes interest expense on the credit facility
of 0.57% of average net assets. Ratio for the year ended December 31, 2024 includes interest
expense on the Series A Term Preferred Shares of 0.85% of average net assets. |
| (8) | Ratios
for the period from June 1, 2022 to December 31, 2022 are annualized. Ratios
for the year ended December 31, 2023 and the period from June 1, 2022 to December 31,
2022 reflect expense limitation provided by the Adviser. |
| (9) | The
portfolio turnover rate is calculated as the lesser of total investment purchases executed
during the period or the total investment sales executed during the period and repayments
of principal, divided by the average fair value of investments for the same period. |
| (10) | The
asset coverage per unit figure is the ratio of the Fund’s total assets, less liabilities
and indebtedness not represented by the credit facility, to the aggregate dollar amount
of outstanding borrowings of the credit facility, in accordance with section 18(h) of
the 1940 Act. The asset coverage per unit figure is expressed in terms of dollar amounts
per $1,000 principal amount. |
Eagle
Point Institutional Income Fund & Subsidiaries
Supplemental
Information
| Senior
Securities Table |
| |
| Information
about the Fund’s senior securities shown in the following table has been derived from the Fund’s consolidated
financial statements as of and for the dates noted. |
| Type
of Security |
|
Total
Amount Outstanding |
|
Asset
Coverage Per Unit (1) |
|
Involuntary
Liquidating
Preference Per Unit (2) |
|
Average
Market Value Per
Unit (3) |
| |
|
|
|
|
|
|
|
|
| For
the year ended December 31, 2024 |
|
|
|
|
|
|
|
|
| Preferred
Shares |
|
$35,000,000 |
|
$72.91 |
|
$25.00 |
|
$24.97 |
| Revolving
Credit Facility (BNP Paribas) |
|
$19,500,000 |
|
$8,151.50 |
|
N/A |
|
N/A |
| (1) | The
asset coverage per unit figure is the ratio of the Fund’s total assets, less all liabilities and indebtedness not represented
by senior securities,to the aggregate dollar amount of senior securities, as calculated separately for each of the Preferred
Shares and Revolving Credit Facility in accordance with section 18(h) of the 1940 Act. With respect to the Preferred Shares, the
asset coverage per unit figure is expressed in terms of dollar amounts per preferred share outstanding (based on a per
share liquidation preference of $25). With respect to the Revolving Credit Facility, the asset coverage per unit figure is expressed
in terms of dollar amounts per $1,000 of indebtedness. |
| (2) | The
involuntary liquidating preference per unit is the amount to which a Preferred Share would be entitled in preference to any security
junior to it upon our involuntary liquidation. |
| (3) | The
average market value per unit is calculated by taking the average of the closing price of the Series A Term Preferred Shares (NYSE:
EIIA). |
| |
KPMG
LLP
345
Park Avenue
New
York, NY 10154-0102
|
Report
of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees Eagle Point
Institutional Income Fund:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statement
of assets and liabilities of Eagle Point Institutional Income Fund & Subsidiaries (the Fund), including the consolidated schedule
of investments, as of
December 31, 2024, the related consolidated statements
of operations and cash flows for the year then ended, the consolidated statements of changes in net assets for each years in the two-year
period then ended, and the related notes (collectively, the consolidated financial statements) and the consolidated financial highlights
for each of the years in the two-year period then ended, and the period from June 1, 2022 (Commencement of Operations) to December 31,
2022. In our opinion, the consolidated financial statements and consolidated financial highlights present fairly, in all material respects,
the financial position of the Fund as of December 31, 2024, the results of its operations and its cash flows for the year then ended,
the changes in its net assets for each of the years in the two-year period then ended, and the consolidated financial highlights for each
of the years in two-year period then ended, and the period from June 1, 2022 to December 31, 2022, in conformity with U.S. generally accepted
accounting principles.
Basis for Opinion
These consolidated financial statements and consolidated
financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these consolidated
financial statements and consolidated financial highlights based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements and consolidated financial highlights are free of material misstatement, whether due to error or fraud. Our audits
included performing procedures to assess the risks of material misstatement of the consolidated financial statements and consolidated
financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining,
on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements and consolidated financial highlights.
Such procedures also included confirmation of securities owned as of December 31, 2024, by correspondence with custodians, brokers and
other counterparties; when replies were not received from other counterparties, we performed other appropriate auditing procedures. Our
audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the
overall presentation of the consolidated financial statements and consolidated financial highlights. We believe that our audits provide
a reasonable basis for our opinion.
Accompanying Supplemental Information
We have also previously audited, in accordance with
the standards of the PCAOB, the consolidated statements of assets and liabilities of the Fund, including the consolidated schedules of
investments, as of December 31, 2023, and 2022, and the related consolidated statements of operations and cash flows for the year ended
| |
KPMG
LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent
member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
|
|
December 31, 2023, and for the period from June 1, 2022 (Commencement
of Operations) to December 31, 2022, and the consolidated statement of changes in net assets for the period from June 1, 2022 to
December 31, 2022, and the
related notes (none of which are presented herein), and we expressed unqualified opinions on those consolidated financial statements.
The senior securities information on page 43, as of December 31, 2024, under the caption “Supplemental Information” (the Supplemental
Information) has been subjected to audit procedures performed in conjunction with the audits of the Fund’s respective consolidated
financial statements. The Supplemental Information is the responsibility of the Fund’s management. Our audit procedures included
determining whether the Supplemental Information reconciles to the respective consolidated financial statements or the underlying accounting
and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the
Supplemental Information. In forming our opinion on the Supplemental Information, we evaluated whether the Supplemental Information, including
its form and content, is presented in conformity with the instructions in Form N-2. In our opinion, the Supplemental Information is fairly
stated, in all material respects, in relation to the respective consolidated financial statements as a whole.
| |
 |
We have served as the auditor of one or more Eagle Point
Credit Management LLC advised companies since2014.
New York, New York
February 26, 2025
Distribution
Reinvestment Plan
Subject
to our discretion and applicable legal restrictions, we intend to authorize and declare ordinary cash distributions on a quarterly
basis and pay such distributions on a monthly basis. We have adopted an “opt in” distribution reinvestment plan (“DRIP”)
pursuant to which shareholders may elect to have the full amount of your cash distributions reinvested in additional Shares. Shares
will be issued pursuant to the DRIP at a price equal to 95% of their most recently determined net asset value as of the payment
date (generally the last business day of each calendar month). There is no sales load or other charge for distributions reinvestment.
A request must be received by the Fund before the record date to be effective for that dividend or capital gain distribution.
Participants in our DRIP are free to elect or revoke reinstatement in the DRIP within a reasonable time as specified in the plan.
If shareholders elect to participate in the DRIP, distributions on Shares are automatically reinvested in additional Shares by
one or more affiliates of SS&C Technologies Holdings, Inc. (collectively, “SS&C”), or the “DRIP Agent.”
Holders of our Shares who receive distributions in the form of additional Shares are nonetheless required to pay applicable federal,
state or local taxes on the reinvested distribution and will not receive a corresponding cash distribution with which to pay any
applicable tax. Reinvested distributions increase our Shareholders’ equity on which a management fee is payable to the Adviser.
We
and the DRIP Agent reserve the right to amend or terminate the DRIP upon written notice to each participant at least 30 days
before the record date for the payment of any dividend or distribution by us.
All
correspondence or additional information about the DRIP should be directed to SS&C, at (833) 360-5520 or by mail:
80 Lamberton Rd, Windsor, Connecticut 06095.
Additional
Information
Portfolio
Information
The
Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an
exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT is available without charge, upon request by calling (203)
340-8500, or from the EDGAR Database on the SEC’s website (www.sec.gov).
Proxy
Voting Records
The
Fund has delegated its proxy voting responsibility to the Adviser. A description of these policies and procedures is available
(1) without charge, upon request, by calling toll free (844) 810-6501; and (2) in the Fund’s prospectus, filed with the
SEC, which can be found on the SEC’s website (www.sec.gov).
Information
regarding how we voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available:
(1) without charge, upon request, by calling toll free (844) 810-6501; and (2) in the Fund’s Form N-PX filing, which can
be found on the SEC’s website (www.sec.gov).
You may also obtain information about how we voted proxies by making a written request for proxy voting information to: Eagle
Point Credit Management LLC, 600 Steamboat Road, Suite 202, Greenwich, CT 06830.
Privacy
Notice
The
Fund is committed to protecting your privacy. This privacy notice explains the privacy policies of Eagle Point Institutional Income
Fund and its affiliated companies. The terms of this notice apply to both current and former shareholders. The Fund will safeguard,
according to strict standards of security and confidentiality, all information it receives about you. With regard to this information,
the Fund maintains procedural safeguards that are reasonably designed to comply with federal standards. We have implemented procedures
that are designed to restrict access to your personal information to authorized employees of the Fund’s investment adviser,
Eagle Point Credit Management LLC and its affiliates who need to know your personal information to perform their jobs, and in
connection with servicing your account. The Fund’s goal is to limit the collection and use of information about you. While
we may share your personal information with our affiliates in connection with servicing your account, our affiliates are not permitted
to share your information with non-affiliated entities, except as permitted or required by law.
When
you purchase shares of the Fund and in the course of providing you with products and services, we and certain of our service providers,
such as a transfer agent, may collect personal information about you, such as your name, address, social security number or tax
identification number. This information may come from sources such as account applications and other forms, from other written,
electronic or verbal correspondence, from your transactions, from your brokerage or financial advisory firm, financial adviser
or consultant, and/or information captured on applicable websites.
We
do not disclose any personal information provided by you or gathered by us to non-affiliated third parties, except as permitted
or required by law or for our everyday business purposes, such as to process transactions or service your account. For example,
we may share your personal information in order to send you annual and semiannual reports and other information required by law,
and to send you information the Fund believes may be of interest to you. We may disclose your personal information to unaffiliated
third party financial service providers (which may include a custodian, transfer agent, accountant or financial printer) who need
to know that information in order to provide services to you or to the Fund. These companies are required to protect your information
and use it solely for the purpose for which they received it or as otherwise permitted by law. We may also provide your personal
information to your brokerage or financial advisory firm and/or to your financial adviser or consultant, as well as to professional
advisors, such as accountants, lawyers and consultants.
We
reserve the right to disclose or report personal or account information to non-affiliated third parties in limited circumstances
where we believe in good faith that disclosure is required by law, such as in accordance with a court order or at the request
of government regulators or law enforcement authorities or to protect our rights or property. We may also disclose your personal
information to a non-affiliated third party at your request or if you consent in writing to the disclosure.
If
you have any queries or concerns about the privacy of your personal information, please contact our investor relations team (203)
340-8500.
We
will review this policy from time to time and may update it at our discretion.
* * *
End of Annual Report.
Back Cover Follows.
Item 2. Code of Ethics
As of the end of the period covered by this report,
Eagle Point Institutional Income Fund (the “registrant”) has adopted a code of ethics that applies to the registrant’s
principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a third party (the “SOX Code of Ethics”). The registrant
did not amend, or grant any waivers from, any provisions of the SOX Code of Ethics during the period covered by this report. The registrant’s
SOX Code of Ethics is available upon request to any person without charge. Such requests should be submitted to the registrant’s
Chief Compliance Officer at (203) 340-8500, toll free (844) 810-6501 or cco@eaglepointcredit.com.
Item 3. Audit Committee Financial Expert
The registrant’s board of trustees has determined
that the registrant has at least one “audit committee financial expert” (as defined in Item 3 of Form N-CSR) serving on its
Audit Committee. The board of trustees has determined that Jeffrey L. Weiss satisfies the requirements of an audit committee financial
expert. Mr. Weiss is “independent” within the meaning of that term used in Form N-CSR.
Item 4. Principal Accountant Fees and Services
| (a) | Audit Fees. The aggregate fees billed for professional services rendered by KPMG LLP (“KPMG”),
the registrant’s independent registered public accounting firm, for the audit of the registrant’s annual financial statements
or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal
years ended December 31, 2023 and December 31, 2024 were $127,251 and $205,250, respectively. |
| (b) | Audit-Related Fees. The aggregate fees billed for assurance and related services by KPMG that are
reasonably related to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a)
of this Item 4 in the fiscal years December 31, 2023 and December 31, 2024 were $0 and $72,000, respectively. |
| (c) | Tax Fees. The aggregate fees billed for professional services by KPMG for tax compliance, tax advice
and tax planning in the fiscal years ended December 31, 2023 and December 31, 2024 were $96,162 and $176,589, respectively. These fees
were in connection with the preparation of the registrant’s regulated investment company tax compliance and related tax advice. |
| (d) | All Other Fees. The aggregate fees billed for all other services not listed in (a) through (c)
above by KPMG in the fiscal years ended December 31, 2023 and December 31, 2024 were $0 and $0, respectively. |
| (e) | (1) The registrant’s Audit Committee has adopted written policies relating to the pre-approval of
audit and permitted non-audit services to be performed by the registrant’s independent registered public accounting firm. Under
the policies, on an annual basis, the registrant’s Audit Committee reviews and pre-approves proposed audit and permitted non-audit
services to be performed by the independent registered public accounting firm on behalf of the registrant. |
In addition, the registrant’s
Audit Committee pre-approves annually any permitted non-audit services (including audit-related services) to be provided by the independent
registered public accounting firm to the registrant’s investment adviser and any entity controlling, controlled by, or under common
control with the registrant’s investment adviser that provides ongoing services to the registrant (together, the “Service
Affiliates”), provided, in each case, that the engagement relates directly to the operations and financial reporting of the registrant.
Although the Audit Committee does not pre-approve all services provided by the independent registered public accounting firm to Service
Affiliates (for instance, if the engagement does not relate directly to the operations and financial reporting of the registrant), the
Audit Committee receives an annual report showing the aggregate fees paid by Service Affiliates for such services.
The registrant’s Audit Committee
may also from time to time pre-approve individual non-audit services to be provided to the registrant or a Service Affiliate that were
not pre-approved as part of the annual process described above. The Audit Committee may form and delegate authority to subcommittees consisting
of one (1) or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services,
provided that any decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next
scheduled meeting.
The pre-approval policies provide for
waivers of the requirement that the Audit Committee pre-approve permitted non-audit services provided to the registrant pursuant to de
minimis exceptions described in Section 10A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and applicable
regulations.
(2) None of the independent accountant’s
expenses described in paragraphs (b) through (d) of this item were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C)
of Rule 2-01 of Regulation S-X as all such expenses were pre-approved by the Audit Committee.
| (g) | For the fiscal years ended December 31, 2023 and December 31, 2024, the aggregate fees billed by KPMG
for non-audit services rendered to the registrant and for non-audit services rendered to the registrant’s investment adviser and/or
to any entity controlling, controlled by or under common control with the registrant’s investment adviser that provides ongoing
services to the registrant were $96,162 and $248,589, respectively. These fees were for the services rendered in connection with the tax
compliance, tax advice, tax planning, and filing of registration statements during the period for the registrant. These fees exclude any
fees paid by Eagle Point Income Management LLC, Eagle Point Enhanced Income Management LLC and Eagle Point Defensive Income Management
LLC. |
| (h) | The registrant’s Audit Committee has considered whether the provision of non-audit services that
were rendered to the investment adviser and/or to any entity controlling, controlled by or under common control with the registrant’s
investment adviser that provides ongoing services to the registrant that were not required to be pre-approved pursuant to paragraph (c)(7)(ii)
of Rule 2-01 of Regulation S-X is compatible with maintaining KPMG’s independence. |
Item 5. Audit
Committee of Listed Registrant
| (a) | The registrant has a separately-designated standing Audit Committee established in accordance with Section
3(a)(58)(A) of the Exchange Act. The members of the committee are Jeffrey L. Weiss (chair), Scott Appleby, Kevin McDonald and Paul Tramontano. |
Item 6. Investments
| (a) | A schedule of investments is included in the Company’s
report to shareholders under Item 1. |
Item 7. Financial Statements and Financial Highlights for Open-End
Management Investment Companies
Item 8. Changes in and Disagreements with Accountants for Open-End
Management Investment Companies
Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies
Not applicable.
Item 10. Remuneration Paid to Directors, Officer, and Others of
Open-End Management Investment Companies
Not applicable.
Item 11. Statement Regarding Basis for Approval of Investment Advisory
Contract
Not applicable.
Item 12. Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies
The registrant has delegated its proxy voting
responsibility to Eagle Point Credit Management LLC (the “Adviser”). The Proxy Voting Policies and Procedures of the Adviser
are set forth below. The guidelines will be reviewed periodically by the Adviser and the registrant’s independent trustees, and,
accordingly, are subject to change.
Introduction
An investment adviser registered under the Investment
Advisers Act of 1940, as amended (the “Advisers Act”) has a fiduciary duty to act solely in the best interests of its clients.
As part of this duty, the Adviser recognizes that it must vote client securities in a timely manner free of conflicts of interest and
in the best interests of the Adviser’s clients.
These policies and procedures for voting proxies
for the Adviser’s investment advisory clients are intended to comply with Section 206 of, and Rule 206(4)-6 under, the Advisers
Act.
Proxy Policies
Based on the nature of the registrant’s
investment strategy, the Adviser does not expect to receive proxy proposals but may from time to time receive amendments, consents or
resolutions applicable to investments held by the registrant. The Adviser’s general policy is to exercise voting or consult authority
in a manner that serves the interests of the registrant’s shareholders. The Adviser may occasionally be subject to material conflicts
of interest in voting proxies due to business or personal relationships it maintains with persons having an interest in the outcome of
certain votes. If at any time the Adviser becomes aware of a material conflict of interest relating to a particular proxy proposal, the
Adviser’s Chief Compliance Officer will review the proposal and determine how to vote the proxy in a manner consistent with interests
of the registrant’s shareholders.
Proxy Voting Records
Information regarding how the Adviser voted proxies
relating to the registrant’s portfolio securities is available: (1) without charge, upon request, by calling toll free (844) 810-6501;
and (2) on the SEC’s website at http://www.sec.gov. You may also obtain information about how the Adviser voted proxies
by making a written request for proxy voting information to: Eagle Point Credit Management LLC, 600 Steamboat Road, Suite 202, Greenwich,
CT 06830 or cco@eaglepointcredit.com.
Item 13. Portfolio Managers of Closed-End Investment Companies
Information pertaining to the portfolio managers
of the registrant, and information relating to the registrant’s investment adviser, is set forth below as of December 31, 2024.
The management of the registrant’s
investment portfolio is the responsibility of the Adviser pursuant to an investment advisory agreement (“Investment Advisory Agreement”).
The Adviser provides investment advisory services to pooled investment vehicles, separately managed accounts, and the registrant (collectively,
the “Accounts”). The terms and conditions of the Accounts may vary depending on the type of services provided or the type
of client, and these terms and conditions may also vary from client to client.
There are no restrictions on the ability
of the Adviser and certain of its affiliates to manage accounts for multiple clients, including accounts for affiliates of the Adviser
or their directors, officers or employees, following the same, similar or different investment objectives, philosophies and strategies
as those used by the Adviser for the registrant’s account. In those situations, the Adviser and its affiliates may have conflicts
of interest in allocating investment opportunities between the registrant and any other account managed by the Adviser or an affiliate.
Such conflicts of interest would be expected to be heightened where the Adviser manages an account for an affiliate or its directors,
officers or employees. In addition, certain of these accounts may provide for higher management fees or have incentive fees or may allow
for higher expense reimbursements, all of which may contribute to a conflict of interest and create an incentive for the Adviser to favor
such other accounts. Further, accounts managed by the Adviser or certain of its affiliates hold, and may in the future be allocated, certain
investments in collateralized loan obligations (“CLOs”), such as debt tranches, which conflict with the positions held by
other accounts in such CLOs, such as the registrant. In these cases, when exercising the rights of each account with respect to such investments,
the Adviser and/or its affiliates will have a conflict of interest as actions on behalf of one account may have an adverse effect on another
account managed by the Adviser or such affiliate, including the registrant. In such cases, such conflicts may not be resolved in a manner
that is always or exclusively in our best interests.
In addition, certain of the Adviser’s
affiliates (and the investment funds that they manage) may also invest in companies that compete with the Adviser and that therefore manage
other accounts and funds that compete for investment opportunities with the registrant. The registrant’s executive officers and
trustees, as well as other current and potential future affiliated persons, officers and employees of the Adviser and certain of its affiliates,
may serve as officers, directors or principals of, or manage the accounts for, other entities with investment strategies that substantially
or partially overlap with the strategy that the registrant pursues. Accordingly, they may have obligations to investors in those entities,
the fulfillment of which obligations may not be in the best interests of the registrant or the registrant’s common shareholders.
Further, the professional staff of the Adviser
will devote as much time to the registrant as such professionals deem appropriate to perform their duties in accordance with the Investment
Advisory Agreement. However, such persons are also committed to providing investment advisory and other services for other clients and
engage in other business ventures in which the registrant has no interest. Certain of the Adviser’s and its affiliates’ senior
personnel and ultimate managers serve and may serve as officers, directors, managers or principals of other entities that operate in the
same or a related line of business as the Adviser, and its affiliates, or that are service providers to firms or entities such as the
Adviser, the registrant, CLOs or other similar entities. Accordingly, such persons may have obligations to investors in those entities
the fulfillment of which may not be in the registrant’s best interest. In addition, certain of such persons hold direct and indirect
personal investments in various companies, including certain investment advisers and other operating companies, some of which do or may
provide services to the Adviser, the registrant, or other accounts serviced by the Adviser or its affiliates, or to any issuer in which
the registrant may invest. The registrant may pay fees or other compensation to any such operating company or financial institution for
services received. Further, these relationships may result in conflicts of interest that may not be foreseen or may not be resolved in
a manner that is always or exclusively in the registrant’s best interest. As a result of these separate business activities and
payment structures, the Adviser has conflicts of interest in allocating management time, services and functions among the registrant and
its affiliates and other business ventures or clients.
As a fiduciary, the Adviser owes a duty of loyalty
to its clients, including the registrant, and must treat each client fairly. When the Adviser purchases or sells securities for more than
one account, the trades must be allocated in a manner consistent with its fiduciary duties. To this end, the Adviser has adopted and reviewed
policies and procedures pursuant to which it allocates investment opportunities appropriate for more than one client account in a manner
deemed appropriate in its sole discretion to achieve a fair and equitable result over time. Pursuant to these policies and procedures,
when allocating investment opportunities, the Adviser may take into account regulatory, tax or legal requirements applicable to an account.
In allocating investment opportunities, the Adviser may use rotational, percentage or other allocation methods provided that doing so
is consistent with the Adviser’s internal conflict of interest and allocation policies and the requirements of the Advisers Act,
the Investment Company Act of 1940, as amended (the “1940 Act”), and other applicable laws. In addition, an account managed
by the Adviser, such as the registrant, is expected to be considered for the allocation of investment opportunities together with other
accounts managed by affiliates of the Adviser. There is no assurance that investment opportunities will be allocated to any particular
account equitably in the short-term or that any such account, including the registrant, will be able to participate in all investment
opportunities that are suitable for it.
In the ordinary course of business, the registrant
may enter into transactions with persons who are affiliated with the registrant by reason of being under common control of the Adviser
or its affiliates. In order to ensure that the registrant does not engage in any prohibited transactions with any affiliated persons,
the registrant has implemented certain policies and procedures whereby its executive officers screen each of its transactions for any
possible affiliations between the registrant, the Adviser and its affiliates and the registrant’s employees, officers and directors.
The registrant will not enter into any such transactions unless and until it is satisfied that doing so is consistent with the 1940 Act,
applicable SEC exemptive rules, interpretations or guidance, or the terms of the registrant’s exemptive order (discussed below),
as applicable. The registrant’s affiliations may require it to forgo attractive investment opportunities.
The registrant may co-invest on a concurrent
basis with other accounts managed by the Adviser and may do so with other accounts managed by certain of our Adviser’s affiliates
subject to compliance with applicable regulations and regulatory guidance and applicable written allocation procedures. The registrant
has received exemptive relief from the SEC that permits it to participate in certain negotiated co-investments alongside other accounts
managed by the Adviser and certain of its affiliates, subject to certain conditions including that (i) a majority of the registrant’s
trustees who have no financial interest in the transaction and a majority of the registrant’s trustees who are not interested persons,
as defined in the 1940 Act, of the registrant approve the co-investment and (ii) the price, terms and conditions of the co-investment
are the same for each participant. The Adviser may determine not to allocate certain potential co-investment opportunities to the registrant
after taking into account regulatory requirements or other considerations. A copy of the registrant’s application for exemptive
relief, including all of the conditions, and the related order are available on the SEC’s website at www.sec.gov.
In order to address such conflicts of interest,
the registrant has adopted a Code of Ethics. Similarly, the Adviser has separately adopted a Code of Ethics (“Code”). The
Adviser’s Code requires the officers and employees of the Adviser to act in the best interests of its client accounts (including
the registrant), act in good faith and in an ethical manner, avoid conflicts of interests with the client accounts to the extent reasonably
possible and identify and manage conflicts of interest to the extent that they arise. Personnel subject to each code of ethics may invest
in securities for their personal investment accounts, including securities that may be purchased or held by us, so long as such investments
are made in accordance with the code’s requirements. The registrant’s trustees and officers, and the officers and employees
of the Adviser, are also required to comply with applicable provisions of the U.S. federal securities laws and make prompt reports to
supervisory personnel of any actual or suspected violations of law.
In addition, the Adviser has built a professional
working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives
that may favor one account over another. The Adviser has adopted policies and procedures that address the allocation of investment opportunities,
execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure
that all client accounts are treated equitably over time.
Investment Personnel. The senior investment
team of the Adviser is primarily responsible for the registrant’s day-to-day investment management and the implementation of the
registrant’s investment strategy and process, with oversight provided by the Adviser’s board of managers. Biographical information
on the senior investment team, each of whom has served as a portfolio manager since the registrant’s inception, is set forth below:
Thomas P. Majewski, Managing Partner
(Since November 2012). Mr. Majewski is the Founder and Managing Partner of the Adviser. He manages the Adviser and its
affiliates (“Eagle Point” or the “firm”), oversees all of the firm’s investment offerings and is the lead
Portfolio Manager for Eagle Point’s multi-credit strategies. Mr. Majewski is Chairman of the firm’s Investment Committee.
Mr. Majewski has over 30 years of experience
in credit and structured finance. He led the creation of some of the earliest refinancing CLOs, pioneering techniques that are now commonplace
in the market. Prior to founding Eagle Point in 2012, Mr. Majewski held leadership positions within the fixed income divisions at J.P.
Morgan, Merrill Lynch, Bear Stearns, and Royal Bank of Scotland. He was the US Country Head at AMP Capital/AE Capital, where he oversaw
a diverse portfolio of credit and other private investments on behalf of Australian investors. Mr. Majewski began his career in the securitization
group at Arthur Andersen.
Mr. Majewski earned a BS in Accounting from Binghamton
University.
Mr. Majewski also serves as a director
and Chief Executive Officer of Eagle Point Credit Company; director, Chairman and Chief Executive Officer of Eagle Point Income Company;
trustee, Chairman and Chief Executive Officer of Eagle Point Enhanced Income Trust; trustee, Chairman and Chief Executive Officer of Eagle
Point Institutional Income Fund; and trustee, Chairman and Chief Executive Officer of Eagle Point Defensive Income Trust.
Daniel
W. Ko, Principal and Portfolio Manager (Since December 2012). Mr.
Ko is a Senior Principal and Portfolio Manager at the Adviser. He is a member of the firm’s Investment Committee.
Mr. Ko has over 17 years of experience
in structured finance. Prior to joining Eagle Point in 2012, he was a Vice President in Bank of America’s (f/k/a Bank of America
Merrill Lynch) CLO structuring group, where he modeled cash flows, negotiated terms with debt and equity investors, and coordinated the
rating process. Mr. Ko was also responsible for exploring non-standard structuring initiatives, including financing trades with dynamic
leverage, emerging market CBOs and European CLOs. Earlier, he managed their legacy CLO, TruPS CDO, and ABS CDO portfolios and started
in their CDO/CLO structuring group.
Mr. Ko holds a BS in Finance and Accounting,
magna cum laude, from The Wharton School of the University of Pennsylvania.
Daniel
M. Spinner (CAIA), Principal and Portfolio Manager (Since February 2013). Mr.
Spinner is a Senior Principal and Portfolio Manager at the Adviser. He is a member of the firm’s Investment Committee.
Mr. Spinner has over 27 years of experience
in credit and advising, financing, and investing in alternative asset management firms and funds. He has been involved in the credit markets
for the majority of his career. Prior to joining Eagle Point in 2013, Mr. Spinner oversaw the Private Equity, Special Opportunities Credit,
and Real Estate allocations for the 1199SEIU Benefit and Pension Funds. He was also a Managing Director in the Financial Institutions
Group at Bear Stearns focused on alternative asset managers, and a co-founder and President of Structured Capital Partners (a financial
holding company formed to invest in CLO and structured credit managers). Mr. Spinner started his career in the Financial Institutions
Group at Chase Manhattan Bank.
Mr. Spinner holds a BA in Business
Management, summa cum laude, from Gettysburg College and an MBA from Columbia Business School.
The following table sets forth other accounts
within each category listed for which members of the senior investment team are jointly and primarily responsible for day-to-day portfolio
management as of December 31, 2024. Among the accounts listed below, three of the “Registered Investment Companies” (with
total assets of $1,731.2), nine of the “Other Pooled Investment Vehicles” (with total assets of $2,904.8) and 31 of the “Other
Accounts” (with total assets of $2,385.9) are subject to a performance fee.
| | |
Registered Investment Companies | | |
Other Pooled
Investment Vehicles | | |
Other
Accounts | |
| Portfolio Manager | |
Number of
Accounts | | |
Total Assets
(in millions) | | |
Total Assets
(in millions) | | |
Total Assets
(in millions) | | |
Number of
Accounts | | |
Total Assets
(in millions) | |
| Thomas P. Majewski | |
| 4 | | |
$ | 2,186.9 | | |
| 15 | | |
$ | 3,649.4 | | |
| 62 | | |
$ | 6,138.5 | |
| Daniel W. Ko | |
| 4 | | |
$ | 2,186.9 | | |
| 15 | | |
$ | 3,649.4 | | |
| 62 | | |
$ | 6,138.5 | |
| Daniel M. Spinner | |
| 4 | | |
$ | 2,186.9 | | |
| 15 | | |
$ | 3,649.4 | | |
| 62 | | |
$ | 6,138.5 | |
* Total Assets are estimated and unaudited and
may vary from final audited figures. Total Assets exclude amounts invested in the equity of another investment vehicle managed by the
portfolio manager so as to avoid double counting.
Compensation.
The Adviser’s investment professionals are
paid out of the total revenues of the Adviser and certain of its affiliates, including the advisory fees earned with respect to providing
advisory services to the registrant. Professional compensation is structured so that key professionals benefit from strong investment
performance generated on the accounts that the Adviser and such affiliates manage and from their longevity with the Adviser. Each member
of the senior investment team has indirect equity ownership interests in the Adviser and related long-term incentives. Members of the
senior investment team also receive a fixed base salary and an annual market and performance-based cash bonus. The bonus is determined
by the Adviser’s board of managers, and is based on both quantitative and qualitative analysis of several factors, including the
profitability of the Adviser and its affiliates, and the contribution of the individual employee. Many of the factors considered by management
in reaching its compensation determinations will be impacted by the registrant’s long-term performance and the value of the registrant’s
assets as well as the portfolios managed for the Adviser’s and such affiliates’ other clients.
Securities Owned in the Company by Portfolio
Managers.
The table below sets forth the dollar range of
the value of the shares of the registrant’s common shares which are owned beneficially by each portfolio manager as of December
31, 2024. For purposes of this table, beneficial ownership is defined to mean a direct or indirect pecuniary interest.
| Name of Portfolio Manager |
|
Dollar Range
of Equity Securities
in the Company (1) |
| Thomas P. Majewski |
|
None |
| Daniel W. Ko |
|
$100,001 – $500,000 |
| Daniel M. Spinner |
|
$50,001 – $100,000 |
| (1) |
Dollar ranges are as follows: None, $1 – $10,000, $10,001 – $50,000, $50,001 – $100,000, $100,001 – $500,000, $500,001 – $1,000,000 and over $1,000,000. |
Item 14. Purchases of Equity Securities by Closed-End Management
Investment Company and Affiliated Purchases
There have been no purchases by or on behalf of the registrant of shares
or other units of any class of the registrant’s equity securities that are registered pursuant to Section 12 of the Exchange Act
during the period covered by this report.
Item 15. Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders
may recommend nominees to the registrant’s board of trustees.
Item 16. Controls and Procedures
| (a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded
that the registrant’s disclosure controls and procedures (as defined in Rule 30(a)-3(c) under the Investment Company Act of 1940,
as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report, based on the evaluation
of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Exchange Act. |
| (b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940
Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect,
the registrant’s internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End
Management Investment Companies
The registrant did not engage in securities lending activity during
the fiscal year ended December 31, 2024.
Item 18. Recovery of Erroneously Awarded Compensation
Not applicable.
Item 19. Exhibits
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
| |
EAGLE POINT INSTITUTIONAL INCOME FUND |
| |
|
|
|
| |
By: |
/s/ Thomas P. Majewski |
|
| |
|
Thomas P. Majewski |
|
| |
|
Chief Executive Officer |
|
| |
Date: |
February 27, 2025 |
|
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of
the registrant and in the capacity and on the dates indicated.
| By: |
/s/ Thomas P. Majewski |
|
| |
Thomas P. Majewski |
|
| |
Chief Executive Officer (principal
executive officer) |
|
| Date: |
February 27, 2025 |
|
| By: |
/s/ Kenneth P. Onorio |
|
| |
Kenneth P. Onorio |
|
| |
Chief Financial Officer (principal
financial officer) |
|
| Date: |
February 27, 2025 |
|
Eagle Point Institutional Income Fund N-CSR
Exhibit 99.(a)(2)
CERTIFICATIONS
(Section 302)
I, Thomas P. Majewski, Chief Executive Officer of the Registrant, certify
that:
| 1. | I have reviewed this report on Form N-CSR of Eagle Point Institutional Income Fund; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required
to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have; |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report
based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period
covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the Audit Committee
of the registrant’s board of trustees (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information;
and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting. |
Dated: February 27, 2025
| By: |
/s/ Thomas P. Majewski |
|
| |
Thomas P. Majewski |
|
| |
Chief Executive Officer |
|
CERTIFICATIONS
(Section 302)
I, Kenneth P. Onorio, Chief Financial Officer of the Registrant, certify
that:
| 1. | I have reviewed this report on Form N-CSR of Eagle Point Institutional Income Fund; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required
to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have; |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report
based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period
covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the Audit Committee
of the registrant’s board of trustees (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information;
and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting. |
Dated: February 27, 2025
| By: |
/s/ Kenneth P. Onorio |
|
| |
Kenneth P. Onorio |
|
| |
Chief Financial Officer |
|
Eagle Point Institutional Income Fund N-CSR
Exhibit 99.(b)
Certification Under Section 906
of the Sarbanes-Oxley Act of 2002
Thomas P. Majewski, Chief Executive Officer, and Kenneth P. Onorio,
Chief Financial Officer of Eagle Point Institutional Income Fund (the “registrant”), each certify to the best of his knowledge
that:
| 1. | The registrant’s periodic report on Form N-CSR for the period ended December 31, 2024 (the “Form N-CSR”) fully complies
with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| 2. | The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations
of the registrant. |
| Chief Executive Officer |
|
Chief Financial Officer |
|
| Eagle Point Institutional Income Fund |
|
Eagle Point Institutional
Income Fund |
|
| |
|
|
|
| /s/ Thomas P. Majewski |
|
/s/ Kenneth P.
Onorio |
|
| |
|
|
|
| Thomas P. Majewski |
|
Kenneth P. Onorio |
|
| Date: February 27, 2025 |
|
Date: February 27, 2025 |
|
This certification is being furnished to the Securities and Exchange
Commission pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. 1350 and is not being filed as
part of the Form N-CSR with the Securities and Exchange Commission.
Eagle Point Institutiona... (NYSE:EIIA)
Historical Stock Chart
From Feb 2025 to Mar 2025
Eagle Point Institutiona... (NYSE:EIIA)
Historical Stock Chart
From Mar 2024 to Mar 2025
