OLD GREENWICH, Conn. - Ellington Residential Mortgage (NYSE:EARN) REIT, now known as Ellington Credit Company, has announced a strategic shift to concentrate on corporate collateralized loan obligations (CLOs). As part of this reorientation, the company has officially changed its name and updated its declaration of trust and bylaws. The rebranding includes a new web address, www.ellingtoncredit.com, reflecting the company's new focus.
The company's CEO, Laurence Penn, stated that the move builds on Ellington's successful history in the CLO market, which has already yielded strong returns for the company. This transition is part of a broader strategy to pivot investment towards corporate CLOs, particularly in mezzanine debt and equity tranches. On March 29, 2024, the Board of Trustees approved the strategic change in investment strategy.
Despite the name change, Ellington Credit Company will maintain its presence on the New York Stock Exchange under the ticker symbol "EARN," with the name change officially taking effect on the NYSE on April 29, 2024. Shareholders' rights remain unaffected, and existing share certificates do not require replacement.
Formerly a real estate investment trust focusing on residential mortgage-backed securities (MBS), Ellington Credit Company revoked its REIT election as of January 1, 2024. Later in 2024, subject to shareholder approval, the company plans to convert to a closed-end fund, completing its transition from an MBS-centric organization to one centered on CLO investments.
Ellington Credit Company is managed by Ellington Credit Company Management LLC, an entity affiliated with Ellington Management Group, L.L.C. This announcement is based on a press release statement from the company.
InvestingPro Insights
As Ellington Credit Company embarks on its strategic shift towards corporate collateralized loan obligations (CLOs), the market is closely monitoring its financial metrics and performance. According to InvestingPro data, the company has a market capitalization of 133.39 million USD, indicating its size within the financial sector. With a Price/Earnings (P/E) ratio standing at 21.93 and an adjusted P/E ratio for the last twelve months as of Q4 2023 at 96.1, investors are assessing the company's earnings relative to its share price. Notably, the dividend yield as of March 2024 is substantial at 14.26%, which may attract income-focused investors. This is particularly relevant given that Ellington Credit Company has maintained dividend payments for 12 consecutive years, as per one of the InvestingPro Tips.
With the transition to focusing on CLOs, the company's anticipated profitability this year, highlighted by another InvestingPro Tip, could be a critical factor for investors considering the company's new direction. The InvestingPro platform offers additional insights and tips for Ellington Credit Company, which can be accessed at https://www.investing.com/pro/EARN. For those looking to delve deeper into the company's analytics, a special offer is available: use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Investors can find more comprehensive analysis and tips on the InvestingPro platform, where there are a total of 10 InvestingPro Tips available for Ellington Credit Company, providing a broader perspective on the company's financial health and market position.
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