Ellington Credit Co Files 8-K on Material Agreements & Equity Sales

TL;DR

Ellington Credit Co dropped an 8-K: new deals, equity sales, bylaws changed. Watch this space.

AI Summary

On December 9, 2024, Ellington Credit Company filed an 8-K report detailing several material events. These include entering into a material definitive agreement, unregistered sales of equity securities, and modifications to security holder rights. The filing also covers amendments to its articles of incorporation or bylaws and a change in its fiscal year, along with Regulation FD disclosures and financial statements.

Why It Matters

This 8-K filing indicates significant corporate actions by Ellington Credit Company, including potential new agreements and equity transactions, which could impact its financial structure and shareholder value.

Risk Assessment

Risk Level: medium — The filing involves material definitive agreements and unregistered sales of equity, which can introduce financial and operational risks.

Key Players & Entities

• Ellington Credit Company (company) — Registrant
• Maryland (jurisdiction) — State of Incorporation
• December 9, 2024 (date) — Date of Report

FAQ

Key Financial Figures

• $0.01 — Common Shares of Beneficial Interest, $0.01 par value per share EARN The New York
• $1,000 — aser for an aggregate purchase price of $1,000 (the "Purchase Price"). The sale closed

Filing Documents

• earn-20241209.htm (8-K) — 44KB
• exhibit31-articlessuppleme.htm (EX-3.1) — 30KB
• exhibit101-subscriptionagr.htm (EX-10.1) — 50KB
• exhibit991-supervotingpref.htm (EX-99.1) — 17KB
• 0001560672-24-000156.txt ( ) — 294KB
• earn-20241209.xsd (EX-101.SCH) — 2KB
• earn-20241209_lab.xml (EX-101.LAB) — 22KB
• earn-20241209_pre.xml (EX-101.PRE) — 13KB
• earn-20241209_htm.xml (XML) — 3KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. On December 9, 2024, Ellington Credit Company (the "Company") entered into a Subscription and Investment Representation Agreement (the "Subscription Agreement") with Ellington Credit Company Management LLC, the Company's external manager (the "Purchaser" or the "Manager"), pursuant to which the Company agreed to issue and sell one thousand (1,000) Series A Preferred Shares, par value $0.01 per share (the "Series A Preferred Shares"), to the Purchaser for an aggregate purchase price of $1,000 (the "Purchase Price"). The sale closed on December 9, 2024. The Series A Preferred Shares were issued to the Purchaser in connection with the special meeting of the shareholders of the Company (the "Special Meeting"), which has been announced by the Board of Trustees (the "Board") for the purpose of allowing the Company to effectuate its conversion to a closed-end investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act") (a "registered closed-end fund"), that would be treated as a regulated investment company under the Internal Revenue Code of 1986, as amended. As disclosed in the preliminary proxy statement filed today with the Securities and Exchange Commission (the "SEC") in connection with the Special Meeting (the "Preliminary Proxy Statement"), the Purchaser only has the right to vote on the following items at the Special Meeting (such items, the "Conversion Proposals"): To approve a change in the Company's legal form from a Maryland real estate investment trust to a Delaware statutory trust; To approve the Company's proposed Delaware Amended and Restated Declaration of Trust; and To approve a 1940 Act-compliant investment advisory agreement with the Manager, which would replace the Company's existing management agreement with the Manager. The Series A Preferred Shares would be automatically redeemed following the Company's shareholders approval of the Conversion Proposal

02. Unregistered Sales of Equity Securities

Item 3.02. Unregistered Sales of Equity Securities. The information contained in Item 1.01 of this Current Report is incorporated by reference herein. Based in part upon the representations of the Purchaser in the Subscription Agreement, the offering and sale of the Series A Preferred Shares was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

03. Material Modification to Rights of Security Holders

Item 3.03. Material Modification to Rights of Security Holders. The information contained in Item 5.03 of this Current Report is incorporated by reference herein.

03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. On December 9, 2024, the Company filed Articles Supplementary (the "Articles Supplementary" and, collectively with the Subscription Agreement, the "Issuance Documents") classifying and designating the Series A Preferred Shares with the State Department of Assessments and Taxation of Maryland, which Articles Supplementary became effective on December 9, 2024. The Articles Supplementary provides that each Series A Preferred Share will have twenty-five thousand (25,000) votes and will vote together with the Company's outstanding common shares, par value $0.01 (the "Common Shares"), as a single class, only with respect to the Conversion Proposals at the Special Meeting. The Articles Supplementary also provide that each Series A Preferred Share will also vote together with the Common Shares on any election of Trustees (a "Trustee Election" and, collectively with the Conversion Proposals, the "Applicable Proposals"); however, because the Series A Preferred Shares will be redeemed immediately after the passage of the Conversion Proposals, and in no event later than the date immediately prior to the record date for the Company's 2025 Annual Meeting of Shareholders (the "2025 Annual Meeting"), the holder of the Series A Preferred Shares will not be able to vote on any proposals that the Company expects to include on the agenda for 2 the 2025 Annual Meeting, including the election of Trustees and the advisory (non-binding) vote on executive compensation. The Series A Preferred Shares have no voting rights besides those enumerated above. The holder of the Series A Preferred Shares has granted an irrevocable proxy to certain officers of the Company to vote the Series A Preferred Shares in accordance with the terms of the Issuance Documents, in connection with the Special Meeting. Per the terms of the Issuance Documents, if voted, the Series A Preferred Shares are required to vote on the a

01. Other Events

Item 7.01. Other Events. On December 9, 2024, the Company issued a press release announcing that it has issued the Series A Preferred Shares. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 7.01 by reference.

Forward-Looking Statements

Forward-Looking Statements This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical in nature and can be identified by words such as "anticipate," "estimate," "will," "should," "may," "expect," "project," "believe," "intend," "seek," "plan" and similar expressions or their negative forms, or by references to strategy, plans, or intentions. Forward-looking statements are based on our beliefs, assumptions and expectations of our future operations, business strategies, performance, financial condition, liquidity and prospects, taking into account information currently available to us. These beliefs, assumptions, and expectations are subject to numerous risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations and strategies may vary materially from those expressed or implied in our forward-looking statements. The following factors are examples of those that could cause actual results to vary from those stated or implied by our forward-looking statements: changes in interest rates and the market value of the Company's investments, market volatility, changes in the default rates on corporate loans, the Company's ability to borrow to finance its assets, changes in government regulations affecting the Company's business, the Company's ability to maintain its exclusion from registration under the Investment Company Act of 1940, our ability to pivot our investment strategy to focus on collateralized loan obligations ("CLOs"), a deterioration in the CLO market, our ability to utilize our net operating loss carryforwards, our ability to convert to a closed end fund/RIC, including our ability to obtain shareholder approval of our conversion to a closed end fund/RIC, and other chang

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. The following exhibits are being filed with this Current Report on Form 8-K. 3.1 Articles Supplementary of Series A Preferred Shares , dated December 9 , 2024 10.1 Subscription and Investment Representation Agreement, dated December 9 , 2024, by and between Ellington Credit Company and Ellington Credit Company Management LLC 99.1 Press Release dated December 9, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 4

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ELLINGTON CREDIT COMPANY Dated: December 9, 2024 By: /s/ Christopher Smernoff Christopher Smernoff Chief Financial Officer 5

View Full Filing

View this 8-K filing on SEC EDGAR