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“We’re excited to pivot EARN’s funding technique to what we imagine is a extremely enticing house,” stated Ellington CEO and president Laurence Penn. “Ellington has a longstanding and profitable observe document of investing in secondary CLOs, spanning greater than a decade throughout varied market circumstances, and EARN’s CLO investments thus far have generated wonderful returns.”
Penn is assured that the change will enhance the corporate’s development and shareholder worth. He additionally highlighted the potential of the closed-end fund/RIC construction.
“We imagine that this strategic transformation will vastly improve our potential to develop guide worth per share over time and unlock further worth for our shareholders,” he stated. “Because of the excessive liquidity of our company MBS pool portfolio, the conversion to a closed-end fund/RIC, together with transitioning the funding portfolio, ought to entail solely modest prices. Lastly, we’re enthusiastic about the advantages of the closed-end fund/RIC construction, which we imagine will improve our entry to the capital markets, open extra channels for development, and – maybe most significantly – increase our valuation a number of.”
Learn subsequent: Ellington Monetary-Nice Ajax merger plan collapses
Ellington expects to finalize the conversion later this yr, pending shareholder approval. As a result of transformation, the 2024 annual shareholder assembly will likely be rescheduled, the corporate stated in its Press launch.
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