Sign in

    Steven Bavaria

    Research Analyst at Inside The Income Factory

    Steven Bavaria is the Founder and Lead Analyst of Inside the Income Factory, specializing in high-yield income investing strategies across closed-end funds, business development companies, senior loans, high-yield bonds, and other credit-focused asset classes. He covers a wide range of credit and income-generating companies through diversified funds, focusing on producing equity-like long-term average returns—typically in the 8% to 10% annualized range—using systematic reinvestment and compounding approaches. Bavaria began speaking about his Income Factory strategy over a decade ago on Seeking Alpha and previously held executive roles at Bank of Boston and Standard & Poor's, bringing decades of financial industry experience to his current work. He is a graduate of Georgetown University and the New England School of Law, is the author of the McGraw-Hill book 'The Income Factory,' and is recognized as a leading voice in the field of income investing, though he does not currently hold FINRA registrations or securities licenses.

    Steven Bavaria's questions to Eagle Point Income Co (EIC) leadership

    Steven Bavaria's questions to Eagle Point Income Co (EIC) leadership • Q1 2025

    Question

    Sought to confirm for retail investors that the dividend reduction was purely a result of interest rate movements (lower SOFR) and not indicative of any credit issues, capital losses, or concerns about the principal of the CLOs in the portfolio.

    Answer

    Management confirmed that the dividend change is entirely driven by the change in SOFR (short-term interest rates) and is not related to credit issues or capital losses. Because the company's CLO debt holdings are floating-rate instruments, their earnings decrease when rates fall and increase when rates rise. The portfolio's credit quality remains strong.

    Ask Fintool Equity Research AI

    Steven Bavaria's questions to Eagle Point Income Co (EIC) leadership • Q1 2025

    Question

    Steven Bavaria from Inside The Income Factory sought clarification that the dividend reduction was driven solely by interest rate movements (SOFR) and not by any underlying credit issues or capital losses within the CLO portfolio.

    Answer

    Thomas Majewski, CEO & Chairman, confirmed that the change in the distribution rate was "principally driven by the change in SOFR" and was "not a credit related move whatsoever." He reassured that the company remains highly confident in the credit quality of its CLO BB portfolio, citing very low historical default rates, and reiterated that the adjustment was entirely based on the impact of Federal Reserve rate movements on the company's floating-rate assets.

    Ask Fintool Equity Research AI

    Steven Bavaria's questions to Eagle Point Credit Co (ECC) leadership

    Steven Bavaria's questions to Eagle Point Credit Co (ECC) leadership • Q1 2025

    Question

    Steven Bavaria asked how Eagle Point accounts for future loan losses, questioning if the inability to create reserves like a traditional bank leads to a back-ending of losses that could make distributions function like a return of capital annuity.

    Answer

    CEO Thomas Majewski detailed the differences between GAAP, tax, and cash accounting. He explained that for GAAP purposes, a provision for future losses is embedded in the effective yield calculation, creating a reserve. For tax purposes, losses are realized on a cash basis, which can result in distributions being classified as a return of capital. He stressed that cash flow is the primary driver and remains robust, ensuring the ability to pay distributions regardless of accounting treatment.

    Ask Fintool Equity Research AI