Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCC, ECC PRD, ECCV, ECCW, ECCX) today announced financial results
for the quarter ended June 30, 2022, net asset value (“NAV”) as of
June 30, 2022 and certain additional activity through July 31,
2022.
SECOND QUARTER 2022 HIGHLIGHTS
- Net investment income (“NII”) and realized capital gains of
$0.43 per weighted average common share.1, 2
- NAV per common share of $10.08 as of June 30, 2022, compared to
$12.64 as of March 31, 2022.
- GAAP net loss (inclusive of unrealized mark-to-market losses)
of $100.9 million, or $2.35 per weighted average common share.
- Weighted average effective yield of the Company’s
collateralized loan obligation (“CLO”) equity portfolio (excluding
called CLOs), based on amortized cost, was 16.71% as of June 30,
2022. Weighted average expected yield of the Company’s CLO equity
portfolio (excluding called CLOs), based on fair market value, was
22.18% as of June 30, 2022.3
- Deployed $82.4 million in net capital into CLO equity and debt
investments and received $47.8 million in recurring cash
distributions4 from the Company’s investment portfolio.
- Issued 2,285,789 shares of common stock, 42,848 shares of
Series C Term Preferred Stock, and 1,500 shares of Series D
Preferred Stock pursuant to the Company’s “at-the-market” offering
program, for total net proceeds of approximately $30.5
million.
SUBSEQUENT EVENTS
- NAV per common share is estimated to be between $10.79 and
$10.89 as of July 31, 2022. At the midpoint of the range, this
represents an increase of 7.5% from June 30, 2022.
- Received $38.8 million of recurring cash distributions from the
Company’s investment portfolio during July 2022.
- Deployed $11.1 million in net capital into CLO equity and debt
investments during July 2022.
- Issued 1,041,453 shares of common stock pursuant to the
Company’s “at-the-market” offering program, for total net proceeds
of approximately $11.9 million during July 2022.
- Declared a special distribution to common stockholders of $0.25
per share to be paid on October 31, 2022 to stockholders of record
as of October 11, 2022.
“We generated another quarter of strong NII and realized capital
gains. For the second quarter, these totaled $0.43 per share, an
amount exceeding our common distributions for the quarter,” said
Thomas Majewski, Chief Executive Officer. “We also further
strengthened our liquidity position in the quarter through our ATM
offering program, issuing shares accretive to NAV, and using the
proceeds to opportunistically deploy capital into new
investments.”
“While the reduction in CLO security prices during the quarter
impacted our NAV, we have found multiple opportunities to invest in
secondary CLO securities at significant discounts,” added Mr.
Majewski. “We believe the recent sell-off was more technical in
nature and the prices of many securities have risen so far in the
third quarter. With a strong balance sheet – 100% fixed-rate
financing, no debt maturities prior to 2028 and approximately $50.8
million in available cash for investment as of July 31 – we remain
well positioned to generate attractive risk-adjusted returns over
the long term.”
SECOND QUARTER 2022 RESULTS
The Company’s NII and realized capital gains for the quarter
ended June 30, 2022 was $0.43 per weighted average common share.
This compared to $0.30 of NII and realized capital losses per
weighted average common share for the quarter ended March 31, 2022,
and $0.32 of NII and realized capital gains per weighted average
common share for the quarter ended June 30, 2021.
For the quarter ended June 30, 2022, the Company recorded a GAAP
net loss of $100.9 million, or $2.35 per weighted average common
share. The net loss was comprised of total investment income of
$28.9 million and realized capital gains of $1.0 million, offset by
total net unrealized depreciation (or unrealized mark-to-market
losses in the value of the Company’s investments and certain
liabilities at fair value) of $119.3 million, expenses of $11.0
million and distributions on the Series D Preferred Stock of $0.5
million.
NAV as of June 30, 2022 was $440.2 million, or $10.08 per common
share, which is $2.56 per common share lower than the Company’s NAV
as of March 31, 2022, and $2.89 per common share lower than the
Company’s NAV as of June 30, 2021.
During the quarter ended June 30, 2022, the Company deployed
$82.4 million in net capital into CLO equity and debt investments,
and converted 5 loan accumulation facilities into CLOs. The
weighted average effective yield of new CLO equity investments made
by the Company during the quarter, which includes a provision for
credit losses, was 17.8% as measured at the time of investment.
During the quarter ended June 30, 2022, the Company received
$47.8 million of recurring cash distributions from its investment
portfolio, or $1.12 per weighted average common share, which was
well in excess of the Company’s aggregate distributions on its
common stock and operating costs for the quarter.
As of June 30, 2022, based on amortized cost, the weighted
average effective yield on the Company’s CLO equity portfolio
(excluding called CLOs) was 16.71%, compared to 16.78% as of March
31, 2022 and 14.98% as of June 30, 2021.
Pursuant to the Company’s “at-the-market” offering, the Company
sold 2,285,789 shares of common stock, 42,848 shares of Series C
Term Preferred Stock, and 1,500 shares of Series D Preferred Stock
during the second quarter for total net proceeds of approximately
$30.5 million. The common stock issuance resulted in $0.03 per
share of NAV accretion for the quarter ended June 30, 2022.
PORTFOLIO STATUS
As of June 30, 2022, on a look-through basis, and based on the
most recent CLO trustee reports received by such date, the Company
had indirect exposure to approximately 1,862 unique corporate
obligors. The largest look-through obligor represented 0.8% of the
Company’s CLO equity portfolio. The top-ten largest look-through
obligors together represented 5.7% of the Company’s CLO equity
portfolio.
The look-through weighted average spread of the loans underlying
the Company’s CLO equity investments was 3.60% as of June 2022, an
increase of two basis points from 3.58% as of March 2022.
As of June 30, 2022, the Company had debt and preferred
securities outstanding which totaled approximately 37% of its total
assets (less current liabilities). Over the long-term, management
expects to operate the Company generally with leverage within a
range of 25% to 35% of total assets under normal market conditions.
Based on applicable market conditions at any given time, or should
significant opportunities present themselves, the Company may incur
leverage outside of this range, subject to applicable regulatory
limits.
THIRD QUARTER 2022 PORTFOLIO ACTIVITY THROUGH JULY 31, 2022
AND OTHER UPDATES
During July 2022, the Company received $38.8 million of
recurring cash distributions from its investment portfolio. As of
July 31, 2022, some of the Company’s investments had not yet
reached their payment date for the quarter. During July, the
Company deployed $11.1 million in net capital into CLO debt and
equity investments.
As of July 31, 2022, the Company had approximately $50.8 million
of cash available for investment.
Pursuant to the Company’s “at-the-market” offerings, the Company
issued 1,041,453 shares of common stock during July 2022 for total
net proceeds to the Company of approximately $11.9 million.
As previously published on the Company’s website, management’s
estimate of the range of the Company’s NAV per common share as of
July 31, 2022 was $10.79 to $10.89.
DISTRIBUTIONS
The Company paid a monthly distribution of $0.14 per common
share on July 29, 2022 to stockholders of record as of July 11,
2022. Additionally, and as previously announced, the Company
declared distributions of $0.14 per share of common stock payable
on August 31, 2022, September 30, 2022, October 31, 2022, November
30, 2022 and December 30, 2022 to stockholders of record as of
August 11, 2022, September 12, 2022, October 11, 2022, November 10,
2022 and December 12, 2022, respectively. The ability of the
Company to declare and pay distributions is subject to a number of
factors, including the Company’s results of operations.
The Company paid a distribution of $0.135417 per share of the
Series C Term Preferred Stock (NYSE: ECCC) on July 29, 2022, to
stockholders of record as of July 11, 2022. The distribution
represented a 6.50% annualized rate, based on the $25 liquidation
preference per share for the Series C Term Preferred Stock.
Additionally, and as previously announced, the Company declared
distributions of $0.135417 per share on its Series C Term Preferred
Stock, payable on each of August 31, 2022, September 30, 2022,
October 31, 2022, November 30, 2022 and December 30, 2022 to
stockholders of record as of August 11, 2022, September 12, 2022,
October 11, 2022, November 10, 2022 and December 12, 2022,
respectively.
The Company paid a distribution of $0.140625 per share of the
Series D Preferred Stock (NYSE: ECC PRD) on July 29, 2022, to
stockholders of record as of July 11, 2022. The distribution
represented a 6.75% annualized rate, based on the $25 liquidation
preference per share for the Series D Preferred Stock.
Additionally, and as previously announced, the Company declared
distributions of $0.140625 per share on its Series D Preferred
Stock, payable on each of August 31, 2022, September 30, 2022,
October 31, 2022, November 30, 2022 and December 30, 2022 to
stockholders of record as of August 11, 2022, September 12, 2022,
October 11, 2022, November 10, 2022 and December 12, 2022,
respectively.
Distributions on stock are generally paid from net investment
income (regular interest and dividends) and may also include
capital gains and/or a return of capital. The specific tax
characteristics of the distributions will be reported to the
Company’s stockholders on Form 1099 after the end of the calendar
year.
SPECIAL DISTRIBUTION
As one of the requirements for the Company to maintain its
ability to be taxed as a “regulated investment company” (which it
has elected to be), the Company is generally required to pay
distributions to holders of its common stock in an amount equal to
substantially all of the Company’s taxable income within one year
of the end of its tax year, which is November 30.
Based on preliminary estimates, the Company’s taxable income for
the tax year ending November 30, 2022 is anticipated to exceed the
aggregate regular distributions paid to common stockholders with
respect to such tax year. As a result, the Company today declared a
special distribution of $0.25 per share of common stock payable in
October 2022. The following schedule applies to the special
distribution:
Record Date
Payable Date
Amount per common share
October 11, 2022
October 31, 2022
$0.25
CONFERENCE CALL
The Company will host a conference call at 10:00 a.m. (Eastern
Time) today to discuss the Company’s financial results for the
quarter ended June 30, 2022, as well as a portfolio update.
All interested parties may participate in the conference call by
dialing (877) 407-0789 (toll-free) or (201) 689-8562
(international), and referencing Conference ID 13730769
approximately 10 to 15 minutes prior to the call.
A live webcast will also be available on the Company’s website
(www.eaglepointcreditcompany.com).
Please go to the Investor Relations section at least 15 minutes
prior to the call to register, download and install any necessary
audio software.
An archived replay of the call will be available shortly
afterwards until September 16, 2022. To hear the replay, please
dial (844) 512-2921 (toll-free) or (412) 317-6671 (international).
For the replay, enter Conference ID 13730769.
ADDITIONAL INFORMATION
The Company has made available on the investor relations section
of its website, www.eaglepointcreditcompany.com (in the financial
statements and reports section), its semiannual stockholder report
for the period ended June 30, 2022 (which includes the Company’s
unaudited consolidated financial statements as of and for the
period ended June 30, 2022). The Company has also filed this report
with the Securities and Exchange Commission. The Company also
published on its website (in the presentations and events section)
an investor presentation, which contains additional information
about the Company and its portfolio as of and for the quarter ended
June 30, 2022.
ABOUT EAGLE POINT CREDIT COMPANY
The Company is a non-diversified, closed-end management
investment company. The Company’s primary investment objective is
to generate high current income, with a secondary objective to
generate capital appreciation, primarily by investing in equity and
junior debt tranches of collateralized loan obligations. The
Company is externally managed and advised by Eagle Point Credit
Management LLC.
The Company makes certain unaudited portfolio information
available each month on its website in addition to making certain
other unaudited financial information available on its website
(www.eaglepointcreditcompany.com). This information includes (1) an
estimated range of the Company’s net investment income (“NII”) and
realized capital gains or losses per share of common stock for each
calendar quarter end, generally made available within the first
fifteen days after the applicable calendar month end, (2) an
estimated range of the Company’s NAV per share of common stock for
the prior month end and certain additional portfolio-level
information, generally made available within the first fifteen days
after the applicable calendar month end, and (3) during the latter
part of each month, an updated estimate of NAV, if applicable, and,
with respect to each calendar quarter end, an updated estimate of
the Company’s NII and realized capital gains or losses per share
for the applicable quarter, if available.
FORWARD-LOOKING STATEMENTS
This press release may contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. Statements other than statements of historical facts
included in this press release may constitute forward-looking
statements and are not guarantees of future performance or results
and involve a number of risks and uncertainties. Actual results may
differ materially from those in the forward-looking statements as a
result of a number of factors, including those described in the
Company’s filings with the U.S. Securities and Exchange Commission
(“SEC”). The Company undertakes no duty to update any
forward-looking statement made herein. All forward-looking
statements speak only as of the date of this press release.
1 “Per weighted average common share” data are on a weighted
average basis based on the average daily number of shares of common
stock outstanding for the period and “per common share” refers to
per share of the Company’s common stock.
2 NII is net of distributions made on the Company’s Series D
Preferred Stock of $0.01 per weighted average common share.
3 Weighted average effective yield is based on an investment’s
amortized cost whereas weighted average expected yield is based on
an investment’s fair market value as of the applicable period end
as disclosed in the Company’s financial statements, which is
subject to change from period to period. Please refer to the
Company’s quarterly unaudited financial statements for additional
disclosures.
4 “Recurring cash distributions” refers to the quarterly
distributions received by the Company from its CLO equity and debt
investments and distributions from loan accumulation facilities in
excess of capital invested and excludes funds received from CLOs
called.
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version on businesswire.com: https://www.businesswire.com/news/home/20220816005406/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
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