Correspondence 0001104659-24-114830 from Eagle Point Defensive Income Trust (CIK 0002013536)
Eagle Point Defensive Income Trust (CIK 0002013536)
Date: Nov. 6, 2024 · CIK: 0002013536 · Accession: 0001104659-24-114830
AI Filing Summary & Sentiment
File numbers found in text: 333-281462, 811-23994
Referenced dates: September 10, 2024
Letter
VIA EDGAR Division of Investment Management Washington, D.C. 20549 Re: Eagle Point Defensive Income Trust Registration Statement on Form N-2 File Nos. 333-281462 and 811-23994
Dear Ms. Larkin:
This letter responds to comments that you conveyed in a letter dated September 10, 2024 with respect to the registration statement filed on Form N-2 (the “Registration Statement”) under the Securities Act of 1933, as amended (“Securities Act”), and the Investment Company Act of 1940, as amended (the “1940 Act”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 12, 2024 on behalf of Eagle Point Defensive Income Trust (the “Fund”). The Fund has considered your comments and has authorized us to make the responses and changes discussed below to the Registration Statement on its behalf. Capitalized terms have the meanings attributed to such terms in the Registration Statement.
Concurrently with this letter, the Fund is filing Pre-Effective Amendment No. 1 to its Registration Statement, which reflects the disclosure changes discussed below.
On behalf of the Fund, set forth below are the comments of the SEC staff (“Staff”) along with our responses to or any supplemental explanations of such comments, as requested.
Prospectus
1. Comment: General. Please tell us if you have presented any test-the-waters materials to potential investors in connection with this offering. If so, we may have additional comments.
Response: The Fund confirms that it has not presented any test the waters materials to potential investors in connection with this offering.
2. Comment: Cover Page. In the first paragraph of the section titled, “Investment Objectives and Principal Investment Strategy,” disclosure refers to “opportunistic credit opportunities.” Please describe this phrase using plain English.
Response: The Fund has revised the disclosure accordingly.
Ms. Larkin
November 6, 2024
Page 2
3. Comment: Cover Page. In the sixth bullet point, disclosure refers to a “return of capital.” Please describe this term using plain English.
Response: The Fund has revised the disclosure accordingly.
4. Comment: Cover Page. In the seventh bullet point, disclosure describes the sources from which distributions may be paid. Please confirm that such sources do not include amounts from the Fund’s affiliates that are subject to repayment by investors. Otherwise, please add such disclosure.
Response: The Fund confirms that such sources do not include amounts from the Fund’s affiliates that are subject to repayment by investors.
5. Comment: Cover Page. Please review Form N-2 Item 2.2 and 2.3 and, if applicable, include the disclosure required by rule 481(d) and (e) of the Securities Act regarding stabilization efforts and prospectus delivery obligations, respectively.
Response: The Fund respectfully notes that this disclosure is not applicable.
6. Comment: Prospectus Summary. Disclosure describes with specificity some of the Fund’s investments, but also refers to “investment vehicles (among others),” “similar investment vehicles (including special purpose vehicles, and companies and sponsors of such vehicles,” and “other securities or instruments.” Please revise these generally-described sections to be more specific and to align with risk disclosure about specific investments that have not yet been described in the strategies section (e.g., secured debt, unsecured debt, distressed investments, high-yield investments, synthetic securities, ETFs, CLOs, loan accumulation facilities, etc.).
Response: The Fund has revised the disclosure accordingly.
7. Comment: Prospectus Summary. Please disclose the expected credit quality and maturity of the Fund’s debt investments.
Response: The Fund has revised the disclosure accordingly.
8. Comment: Prospectus Summary. The Fund’s name includes the term “defensive.” Please add disclosure to the summary and main prospectus that explains the “defensive” aspect of the Fund’s strategy. Otherwise, please remove the term from the name.
Response: The Fund has revised the disclosure accordingly.
9. Comment: Portfolio Construction Process. Disclosure refers to “capital deployment optimization” and “macroeconomic conditions.” Please revise these phrases using plain English.
Response: The Fund has revised the disclosure accordingly.
Ms. Larkin
November 6, 2024
Page 3
10. Comment: Financing Strategy. Disclosure refers to a credit agreement that the Fund entered into with City National Bank. Please file the executed agreement as an exhibit to the registration statement.
Response: The Fund believes that the filing of credit agreements is not required by Form N-2. Item 25.2 of Form N-2 requires certain exhibits to be filed as part of a fund’s registration statement. Credit agreements are not specifically referenced among the required exhibits listed in Item 25.2, but Item 25.2.k contains a catch-all that requires “copies of all other material contracts not made in the ordinary course of business that are to be performed in whole or in part at or after the date of filing the registration statement” to be filed as exhibits to the registration statement. In light of the fact that the purpose of a credit agreement will be to permit the Fund to employ leverage to enhance its potential for achieving its investment objective, the Fund believes that such credit agreement would be made in the ordinary course of business—that is, the borrowings under a credit agreement only will be used to invest in additional securities that are in accordance with the Fund’s investment objective and investment strategies, which the Fund considers to be its “ordinary course of business.” In addition, to the extent a credit agreement is required to be filed as an exhibit to the Registration Statement, the Fund would need the consent of any lender to do so.
11. Comment: Summary Risk Factors. Please add a risk that addresses the Fund’s investments in various kinds of underlying funds, such as business development companies, closed-end funds, private funds, etc. (e.g., see disclosure on pages 37 and 53).
Response: The Fund has revised the disclosure accordingly.
12. Comment: Summary of the Offering. Disclosure states that the Fund is offering three classes of common shares and that the Fund may rely on exemptive relief from the Securities and Exchange Commission to, among other things, issue multiple classes of shares and to impose asset-based distribution and/or shareholders servicing fees. Please revise the registration statement to clarify that the Fund has applied, or will apply, for such relief and there is no assurance that the Fund will receive such relief. Also, state which class of shares the Fund will offer until such relief is granted.
Response: The Fund notes that such relief has already been granted in the SEC’s order issued to Eagle Point Enhanced Income Trust, et al. on June 25, 2024 (Release No. 35219). The Fund respectfully notes that this relief applies to any continuously offered registered closed-end management investment company that has been previously organized or that may be organized in the future for which any entity controlling, controlled by, or under common control with Eagle Point Enhanced Income Management LLC or Eagle Point Credit Management LLC acts as investment adviser and which operates as an interval fund pursuant to Rule 23c-3 under the 1940 Act. Given that the Fund’s Adviser is under common control with Eagle Point Enhanced Income Management LLC and Eagle Point Credit Management LLC and the Fund will operate as an interval fund, the exemptive relief provided by the SEC applies to the Fund.
Ms. Larkin
November 6, 2024
Page 4
13. Comment: Summary of Fees and Expenses. Disclosure states that the Fund may invest in other investment companies. Unless the Fund anticipates that the indirect expenses from such investments will be less than one basis point, please add a caption for acquired fund fees and expenses (“AFFE”) to the fee table and reflect such fees in the expense table. Also, please disclose in a footnote to the fee table that AFFE are based on estimated amount for the current fiscal year. See Item 3, Instrs.10.a. and f. of Form N-2.
Response: The Fund confirms that AFFE is not expected to exceed one basis point of the Fund’s net assets.
14. Comment: Investment Objectives, Strategies, and Policies. In the third paragraph, disclosure refers to the Fund seeking “‘wholesale economics’ in the form of original issue discount while driving key terms and conditions, or may be acquired on the secondary market.” Please revise this sentence using plain English.
Response: The Fund has revised the disclosure accordingly.
15. Comment: Subsidiaries. Disclosure states that the Fund may invest indirectly through wholly-owned subsidiaries (a “Subsidiary”). Please respond to the following comments:
· Identify the custodian of the Subsidiary.
Response: The Fund does not currently have a Subsidiary. If a Subsidiary is formed, it would be intended for the Subsidiary to use the same custodian as the Fund.
· Confirm to us that (a) if a Subsidiary is not organized in the U.S., the Subsidiary and its board of directors will agree to designate an agent for service of process in the U.S.; and (b) a Subsidiary and its board of directors will agree to inspection by the staff of the Subsidiary’s books and records, which will be maintained in accordance with section 31 of the 1940 Act.
Response: The Fund confirms that: (a) the Subsidiary, if organized and operating outside the United States, its board of directors will agree to designate an agent for service of process in the United States; and (b) the Subsidiary and its board of directors will agree to inspection by the Staff of the Subsidiary’s books and records, which will be maintained in accordance with Section 31 of the 1940 Act.
· Explain to us whether the financial statements of the Subsidiary will be consolidated with those of the Fund. If not, please explain why not.
Response: The Fund confirms that the financial statements of any Subsidiary will be consolidated with those of the Fund.
Ms. Larkin
November 6, 2024
Page 5
· Confirm to us that any wholly-owned Subsidiary’s management fee (including any performance fee), if any, will be included in the management fee line item of the Fund’s fee table and the wholly-owned Subsidiary’s expenses will be included in the other expenses line item of the Fund’s fee table.
Response: The Fund confirms that for any Subsidiary that is wholly-owned, the Fund undertakes to include the Subsidiary’s management fee (including any performance fee), if any, in the management fee line item of the Fund’s fee table and the wholly-owned Subsidiary’s expenses in the other expenses line item of the Fund’s fee table.
16. Comment: Historical Performance Data of the Adviser. Disclosure states that the Adviser is under common control with Eagle Point Credit Management, the investment adviser to funds and accounts that have investment objectives, policies and strategies substantially similar to those of the Fund. The Adviser and Eagle Point Credit Management appear to be affiliates. For the purposes of utilizing historical performance, please tell us whether the Adviser and Eagle Point Credit Management have in common virtually all of their investment professionals. See GE Funds (pub. avail. Feb. 7, 1997).
Response: The Fund confirms that the Adviser and Eagle Point Credit Management are affiliates and have in common virtually all of their investment professionals.
17. Comment: Historical Performance Data of the Adviser. The table must be presented either (1) net of all actual fees/expenses, including sales loads relating to the accounts, or (2) adjusted to reflect all of the Fun
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CORRESP
1
filename1.htm
1900 K
Street, NW
Washington, DC 20006-1110
+1 202 261 3300 Main
+1 202 261 3333 Fax
www.dechert.com
November 6, 2024
Alexander C. Karampatsos
alexander.karampatsos@dechert.com
+1 202 261 3402 Direct
+1 617 275 8365 Fax
VIA
EDGAR
Ms. Lisa N. Larkin
U.S. Securities
and Exchange Commission
Division of
Investment Management
100 F Street,
NE
Washington,
D.C. 20549
Re: Eagle Point Defensive Income Trust
Registration Statement on Form N-2
File Nos. 333-281462 and 811-23994
Dear Ms. Larkin:
This letter responds to comments that you conveyed
in a letter dated September 10, 2024 with respect to the registration statement filed on Form N-2 (the “Registration
Statement”) under the Securities Act of 1933, as amended (“Securities Act”), and the Investment Company Act of 1940,
as amended (the “1940 Act”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 12,
2024 on behalf of Eagle Point Defensive Income Trust (the “Fund”). The Fund has considered your comments and has authorized
us to make the responses and changes discussed below to the Registration Statement on its behalf. Capitalized terms have the meanings
attributed to such terms in the Registration Statement.
Concurrently with this letter, the Fund is filing
Pre-Effective Amendment No. 1 to its Registration Statement, which reflects the disclosure changes discussed below.
On behalf of the Fund, set forth below are the
comments of the SEC staff (“Staff”) along with our responses to or any supplemental explanations of such comments, as requested.
Prospectus
1. Comment: General.
Please tell us if you have presented any test-the-waters materials to potential investors
in connection with this offering. If so, we may have additional comments.
Response: The
Fund confirms that it has not presented any test the waters materials to potential investors in connection with this offering.
2. Comment: Cover
Page. In the first paragraph of the section titled, “Investment Objectives and
Principal Investment Strategy,” disclosure refers to “opportunistic credit opportunities.”
Please describe this phrase using plain English.
Response: The
Fund has revised the disclosure accordingly.
Ms. Larkin
November 6, 2024
Page 2
3. Comment: Cover
Page. In the sixth bullet point, disclosure refers to a “return of capital.”
Please describe this term using plain English.
Response: The
Fund has revised the disclosure accordingly.
4. Comment: Cover
Page. In the seventh bullet point, disclosure describes the sources from which distributions
may be paid. Please confirm that such sources do not include amounts from the Fund’s
affiliates that are subject to repayment by investors. Otherwise, please add such disclosure.
Response: The
Fund confirms that such sources do not include amounts from the Fund’s affiliates that are subject to repayment by investors.
5. Comment: Cover
Page. Please review Form N-2 Item 2.2 and 2.3 and, if applicable, include the disclosure
required by rule 481(d) and (e) of the Securities Act regarding stabilization
efforts and prospectus delivery obligations, respectively.
Response: The
Fund respectfully notes that this disclosure is not applicable.
6. Comment: Prospectus
Summary. Disclosure describes with specificity some of the Fund’s investments,
but also refers to “investment vehicles (among others),” “similar investment
vehicles (including special purpose vehicles, and companies and sponsors of such vehicles,”
and “other securities or instruments.” Please revise these generally-described
sections to be more specific and to align with risk disclosure about specific investments
that have not yet been described in the strategies section (e.g., secured debt, unsecured
debt, distressed investments, high-yield investments, synthetic securities, ETFs, CLOs, loan
accumulation facilities, etc.).
Response: The
Fund has revised the disclosure accordingly.
7. Comment: Prospectus
Summary. Please disclose the expected credit quality and maturity of the Fund’s
debt investments.
Response: The
Fund has revised the disclosure accordingly.
8. Comment: Prospectus
Summary. The Fund’s name includes the term “defensive.” Please add
disclosure to the summary and main prospectus that explains the “defensive” aspect
of the Fund’s strategy. Otherwise, please remove the term from the name.
Response: The
Fund has revised the disclosure accordingly.
9. Comment: Portfolio
Construction Process. Disclosure refers to “capital deployment optimization”
and “macroeconomic conditions.” Please revise these phrases using plain English.
Response: The
Fund has revised the disclosure accordingly.
Ms. Larkin
November 6, 2024
Page 3
10. Comment: Financing
Strategy. Disclosure refers to a credit agreement that the Fund entered into with
City National Bank. Please file the executed agreement as an exhibit to the registration
statement.
Response: The
Fund believes that the filing of credit agreements is not required by Form N-2. Item 25.2 of Form N-2 requires certain exhibits
to be filed as part of a fund’s registration statement. Credit agreements are not specifically referenced among the required exhibits
listed in Item 25.2, but Item 25.2.k contains a catch-all that requires “copies of all other material contracts not made in the
ordinary course of business that are to be performed in whole or in part at or after the date of filing the registration statement”
to be filed as exhibits to the registration statement. In light of the fact that the purpose of a credit agreement will be to permit
the Fund to employ leverage to enhance its potential for achieving its investment objective, the Fund believes that such credit agreement
would be made in the ordinary course of business—that is, the borrowings under a credit agreement only will be used to invest in
additional securities that are in accordance with the Fund’s investment objective and investment strategies, which the Fund considers
to be its “ordinary course of business.” In addition, to the extent a credit agreement is required to be filed as an exhibit
to the Registration Statement, the Fund would need the consent of any lender to do so.
11. Comment: Summary
Risk Factors. Please add a risk that addresses the Fund’s investments in various
kinds of underlying funds, such as business development companies, closed-end funds, private
funds, etc. (e.g., see disclosure on pages 37 and 53).
Response: The
Fund has revised the disclosure accordingly.
12. Comment: Summary
of the Offering. Disclosure states that the Fund is offering three classes of common
shares and that the Fund may rely on exemptive relief from the Securities and Exchange Commission
to, among other things, issue multiple classes of shares and to impose asset-based distribution
and/or shareholders servicing fees. Please revise the registration statement to clarify that
the Fund has applied, or will apply, for such relief and there is no assurance that the Fund
will receive such relief. Also, state which class of shares the Fund will offer until such
relief is granted.
Response: The
Fund notes that such relief has already been granted in the SEC’s order issued to Eagle Point Enhanced Income Trust, et al. on
June 25, 2024 (Release No. 35219). The Fund respectfully notes that this relief applies to any continuously offered registered
closed-end management investment company that has been previously organized or that may be organized in the future for which any entity
controlling, controlled by, or under common control with Eagle Point Enhanced Income Management LLC or Eagle Point Credit Management
LLC acts as investment adviser and which operates as an interval fund pursuant to Rule 23c-3 under the 1940 Act. Given that the
Fund’s Adviser is under common control with Eagle Point Enhanced Income Management LLC and Eagle Point Credit Management LLC and
the Fund will operate as an interval fund, the exemptive relief provided by the SEC applies to the Fund.
Ms. Larkin
November 6, 2024
Page 4
13. Comment: Summary
of Fees and Expenses. Disclosure states that the Fund may invest in other investment
companies. Unless the Fund anticipates that the indirect expenses from such investments will
be less than one basis point, please add a caption for acquired fund fees and expenses (“AFFE”)
to the fee table and reflect such fees in the expense table. Also, please disclose in a footnote
to the fee table that AFFE are based on estimated amount for the current fiscal year. See
Item 3, Instrs.10.a. and f. of Form N-2.
Response: The
Fund confirms that AFFE is not expected to exceed one basis point of the Fund’s net assets.
14. Comment: Investment
Objectives, Strategies, and Policies. In the third paragraph, disclosure refers to the
Fund seeking “‘wholesale economics’ in the form of original issue discount
while driving key terms and conditions, or may be acquired on the secondary market.”
Please revise this sentence using plain English.
Response: The
Fund has revised the disclosure accordingly.
15. Comment: Subsidiaries.
Disclosure states that the Fund may invest indirectly through wholly-owned subsidiaries (a
“Subsidiary”). Please respond to the following comments:
· Identify
the custodian of the Subsidiary.
Response: The
Fund does not currently have a Subsidiary. If a Subsidiary is formed, it would be intended for the Subsidiary to use the same custodian
as the Fund.
· Confirm
to us that (a) if a Subsidiary is not organized in the U.S., the Subsidiary and its
board of directors will agree to designate an agent for service of process in the U.S.; and
(b) a Subsidiary and its board of directors will agree to inspection by the staff of
the Subsidiary’s books and records, which will be maintained in accordance with section
31 of the 1940 Act.
Response: The
Fund confirms that: (a) the Subsidiary, if organized and operating outside the United States, its board of directors will agree
to designate an agent for service of process in the United States; and (b) the Subsidiary and its board of directors will agree
to inspection by the Staff of the Subsidiary’s books and records, which will be maintained in accordance with Section 31 of
the 1940 Act.
· Explain
to us whether the financial statements of the Subsidiary will be consolidated with those
of the Fund. If not, please explain why not.
Response: The
Fund confirms that the financial statements of any Subsidiary will be consolidated with those of the Fund.
Ms. Larkin
November 6, 2024
Page 5
· Confirm
to us that any wholly-owned Subsidiary’s management fee (including any performance
fee), if any, will be included in the management fee line item of the Fund’s fee table
and the wholly-owned Subsidiary’s expenses will be included in the other expenses line
item of the Fund’s fee table.
Response:
The Fund confirms that for any Subsidiary that is wholly-owned, the Fund undertakes to include the Subsidiary’s management
fee (including any performance fee), if any, in the management fee line item of the Fund’s fee table and the wholly-owned Subsidiary’s
expenses in the other expenses line item of the Fund’s fee table.
16. Comment: Historical
Performance Data of the Adviser. Disclosure states that the Adviser is under common control
with Eagle Point Credit Management, the investment adviser to funds and accounts that have
investment objectives, policies and strategies substantially similar to those of the Fund.
The Adviser and Eagle Point Credit Management appear to be affiliates. For the purposes of
utilizing historical performance, please tell us whether the Adviser and Eagle Point Credit
Management have in common virtually all of their investment professionals. See GE
Funds (pub. avail. Feb. 7, 1997).
Response: The
Fund confirms that the Adviser and Eagle Point Credit Management are affiliates and have in common virtually all of their investment
professionals.
17. Comment: Historical
Performance Data of the Adviser. The table must be presented either (1) net of all
actual fees/expenses, including sales loads relating to the accounts, or (2) adjusted
to reflect all of the Fun