Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCC, ECC PRD, ECCV, ECCW, ECCX) today announced financial results
for the quarter ended September 30, 2022, net asset value (“NAV”)
as of September 30, 2022 and certain additional activity through
October 31, 2022.
THIRD QUARTER 2022 HIGHLIGHTS
- Net investment income (“NII”) and realized capital gains of
$0.47 per weighted average common share.[1],[2]
- NAV per common share of $10.23 as of September 30, 2022,
compared to $10.08 as of June 30, 2022.
- GAAP net income (inclusive of unrealized mark-to-market losses)
of $9.7 million, or $0.21 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 16.29% as of September
30, 2022. Weighted average expected yield of the Company’s CLO
equity portfolio (excluding called CLOs), based on fair market
value, was 25.39% as of September 30, 2022.[3]
- Deployed $60.6 million in net capital into CLO equity, CLO
debt, loan accumulation facility and other investments.
- Received $40.8 million in recurring cash distributions[4] from
the Company’s investment portfolio.
- Issued 4,171,243 shares of common stock and 2,586 shares of
Series C Term Preferred Stock pursuant to the Company’s
“at-the-market” offering program for total net proceeds of
approximately $47.5 million.
SUBSEQUENT EVENTS
- NAV per common share is estimated to be between $9.66 and $9.76
as of October 31, 2022.
- Received $31.2 million of recurring cash distributions from the
Company’s investment portfolio during October 2022.
- Deployed $16.4 million in net capital into CLO equity, CLO
debt, loan accumulation facility and other investments during
October 2022.
- Issued 1,226,083 shares of common stock pursuant to the
Company’s “at-the-market” offering program, for total net proceeds
of approximately $13.0 million during October 2022.
- Paid a special distribution to common stockholders of $0.25 per
share on October 31, 2022 to stockholders of record as of October
11, 2022.
- Declared a special distribution to common stockholders of $0.50
per share, payable in January 2023.
“We were pleased with our third quarter performance in the face
of a challenging environment for many fixed income investments. We
generated strong NII and realized capital gains of $0.47 per share,
exceeding our common distributions for the quarter. Our NAV also
increased during the quarter,” said Thomas Majewski, Chief
Executive Officer. “We opportunistically deployed capital into
discounted investments that we believe will generate attractive
risk-adjusted returns. Our balance sheet remains strong with 100%
fixed-rate financing and no maturities prior to 2028; this provides
us with a measure of protection from today’s rapidly rising rate
environment.”
THIRD QUARTER 2022 RESULTS
The Company’s NII and realized capital gains for the quarter
ended September 30, 2022 was $0.47 per weighted average common
share. This compared to $0.43 of NII and realized capital gains per
weighted average common share for the quarter ended June 30, 2022,
and $0.39 of NII and realized capital gains per weighted average
common share for the quarter ended September 30, 2021.
For the quarter ended September 30, 2022, the Company recorded
GAAP net income of $9.7 million, or $0.21 per weighted average
common share. Net income was comprised of total investment income
of $30.2 million and realized capital gains of $3.4 million,
partially 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 $11.9
million, expenses of $11.5 million and distributions on the Series
D Preferred Stock of $0.5 million.
NAV as of September 30, 2022 was $491.4 million, or $10.23 per
common share, which is $0.15 per common share higher than the
Company’s NAV as of June 30, 2022, and $3.75 per common share lower
than the Company’s NAV as of September 30, 2021.
During the quarter ended September 30, 2022, the Company
deployed $60.6 million in net capital into CLO equity, CLO debt,
loan accumulation facility and other investments, which includes
the conversion of 3 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 16.6% as measured at the time of investment.
During the quarter ended September 30, 2022, the Company
received $40.8 million of recurring cash distributions from its
investment portfolio, or $0.89 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 September 30, 2022, based on amortized cost, the weighted
average effective yield on the Company’s CLO equity portfolio
(excluding called CLOs) was 16.29%, compared to 16.71% as of June
30, 2022 and 16.35% as of September 30, 2021.
Pursuant to the Company’s “at-the-market” offering, the Company
sold 4,171,243 shares of common stock and 2,586 shares of Series C
Term Preferred Stock during the third quarter for total net
proceeds of approximately $47.5 million. The common stock issuance
resulted in $0.06 per share of NAV accretion for the quarter ended
September 30, 2022.
PORTFOLIO STATUS
As of September 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 1,864 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 5.8% of the Company’s
CLO equity portfolio.
The look-through weighted average spread of the loans underlying
the Company’s CLO equity investments was 3.63% as of September
2022, an increase of three basis points from 3.60% as of June
2022.
As of September 30, 2022, the Company had debt and preferred
securities outstanding which totaled approximately 35% 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.
FOURTH QUARTER 2022 PORTFOLIO ACTIVITY THROUGH OCTOBER 31,
2022 AND OTHER UPDATES
During October 2022, the Company received $31.2 million of
recurring cash distributions from its investment portfolio. As of
October 31, 2022, some of the Company’s investments had not yet
reached their payment date for the quarter. During October, the
Company deployed $16.4 million in net capital into CLO equity, CLO
debt, loan accumulation facility and other investments.
As of October 31, 2022, the Company had $23.4 million of cash
available for investment.
Pursuant to the Company’s “at-the-market” offerings, the Company
issued 1,226,083 shares of common stock during October 2022 for
total net proceeds to the Company of approximately $13.0
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
October 31, 2022 was $9.66 to $9.76.
DISTRIBUTIONS
The Company paid a monthly distribution of $0.14 per common
share on October 31, 2022 to stockholders of record as of October
11, 2022. Additionally, and as previously announced, the Company
declared distributions of $0.14 per share of common stock payable
on November 30, 2022, December 30, 2022, January 31, 2023, February
28, 2023 and March 31, 2023 to stockholders of record as of
November 10, 2022, December 12, 2022, January 11, 2023, February 8,
2023 and March 13, 2023, 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 October 31, 2022, to
stockholders of record as of October 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 November 30, 2022, December 30, 2022,
January 31, 2023, February 28, 2023 and March 31, 2023 to
stockholders of record as of November 10, 2022, December 12, 2022,
January 11, 2023, February 8, 2023 and March 13, 2023,
respectively.
The Company paid a distribution of $0.140625 per share of the
Series D Preferred Stock (NYSE: ECC PRD) on October 31, 2022, to
stockholders of record as of October 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 November 30, 2022, December 30, 2022,
January 31, 2023, February 28 2023 and March 31, 2023 to
stockholders of record as of November 10, 2022, December 12, 2022,
January 11, 2023, February 8, 2023 and March 13, 2023,
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
For the Company’s tax year ended November 30, 2022, the Company
estimates taxable income will exceed the aggregate amount
distributed to common stockholders for the same time period. As a
result, the Company paid a special distribution of $0.25 per common
share on October 31, 2022 to stockholders of record as of October
11, 2022. The Company also declared a special distribution of $0.50
per common share on November 14, 2022, payable on January 24, 2023
to stockholders of record as of December 23, 2022. Based on its
preliminary estimate, the Company expects that its final taxable
income will exceed amounts previously distributed in respect of the
2022 tax year. The Company’s final taxable income and the actual
amount required to be distributed in respect of the tax year ended
November 30, 2022 will be finally determined when the Company files
its final tax returns.
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 September 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 13732839
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 December 15, 2022. To hear the replay, please dial
(844) 512-2921 (toll-free) or (412) 317-6671 (international). For
the replay, enter Conference ID 13732839.
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 unaudited consolidated
financial statements as of and for the period ended September 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 September 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” is 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/20221115005696/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
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