Ellington Residential to focus on CLOs, revoke REIT election

Ellington Residential announced that its board of trustees has unanimously approved a strategic transformation of its investment strategy to focus on corporate collateralized loan obligations, or CLOs. The company intends to build upon its current $44M CLO portfolio, with an emphasis on secondary CLO mezzanine debt and equity tranches. In connection with its strategic transformation, the company has decided to revoke its REIT election for tax year 2024. Later this year, the company intends to convert to a registered closed end fund to be treated as a regulated investment company and, in the meantime, will operate as a taxable C-Corp and plans to take advantage of its significant existing net operating loss carryforwards to offset the majority of its U.S. federal taxable income. The company intends to complete all necessary steps for the closed end fund/RIC conversion later this year, subject to receiving shareholder approval of certain matters. In light of the strategic transformation, the company will reschedule its 2024 annual meeting of shareholders.