Company Summary of Ellington Credit Company

Overview:
Ellington Credit Company (formerly Ellington Residential Mortgage REIT) is a Maryland-based investment management firm formed in August 2012 through a strategic venture between affiliates of Ellington Management Group and The Blackstone Group. The company primarily invests in fixed income securities with a focus on mortgage-backed securities (MBS), collateralized loan obligations (CLOs), and related assets.

Business Focus:

• Historically specialized in acquiring, investing in, and managing residential mortgage- and real estate-related assets.
• As of March 29, 2024, shifted its investment strategy to focus on corporate collateralized loan obligations (CLOs), including CLO mezzanine debt and equity tranches.
• Engages in opportunistic management of Agency RMBS (Residential Mortgage-Backed Securities) prior to its strategic transformation and potential future conversion to a closed-end fund registered as a Regulated Investment Company (RIC).

Investment Strategy:

• Construct and actively manage a portfolio composed mainly of CLOs (collateralized loan obligations), especially mezzanine debt and equity tranches collateralized by below-investment-grade corporate loans.
• Invest in CLO warehouse facilities (loan accumulation facilities) and corporate debt/equity.
• Maintain a core liquid portfolio of Agency MBS to preserve exemption from the Investment Company Act of 1940 until the successful completion of a planned conversion to a RIC.
• Use hedging instruments to mitigate risks related to interest rates, prepayment, and credit.

Assets Under Management (as of December 31, 2024):

• Total assets under management approximate $13.7 billion.
  • Assets related to Ellington’s own investments, including the Company, Ellington Financial Inc., and hedge funds, total about $7.4 billion.
  • Other accounts not utilizing leverage or with different structures account for approximately $6.2 billion.

Employees:

• As of December 31, 2024, Ellington employed over 160 professionals.

Market Capitalization:

• As of the last business day of the most recent completed second fiscal quarter, the aggregate market value of common shares held by non-affiliates was approximately $143.8 million (based on closing price on that date).

Shareholders and Stock:

• Outstanding common shares as of March 28, 2025: 37,559,195 shares.
• The company is listed on the New York Stock Exchange under the trading symbol EARN.

Corporate Reorganization and Plans:

• Revoked its REIT election effective January 1, 2024, transitioning to operate as a taxable C-Corp.
• Plans to convert on April 1, 2025, to a Delaware-registered closed-end fund that qualifies as a RIC under the Internal Revenue Code, with a goal to operate as a tax-efficient entity and liquidate most of its mortgage-related assets.

Key Officers:

• Michael Vranos (Founder and CEO of Ellington) – serves as Co-CIO and Trustee.
• Laurence Penn (Vice Chairman and COO) – serves as President and CEO, Trustee.
• Other officers include Mark Tecotzky, Christopher Smernoff, JR Herlihy, Daniel Margolis, Vincent Ambrico, and Alaael-Deen Shilleh, all affiliated with Ellington.

Regulatory & Structural Notes:

• Exempt from registration under the Investment Company Act of 1940 through various legal structures and subsidiaries.
• Undergoing planned transformation to operate as a registered closed-end fund and RIC, which will impact leverage, operation, and investment policies.

Summary:
Ellington Credit Company is an investment firm transitioning from a mortgage-focused REIT to a CLO-centric taxable corporate structure, employing a broad and flexible investment approach with substantial assets under management, leveraging proprietary analytics, and managed by an experienced team affiliated with Ellington Management Group.