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, 2023 and certain additional activity
through July 31, 2023.
“Our portfolio generated another quarter of strong cash flows,”
said Thomas Majewski, Chief Executive Officer. “We continued to
focus on the more attractive secondary market, deploying $30
million of net capital into investments that we believe will
generate compelling risk-adjusted returns. For the second quarter,
we generated net investment income, less realized capital losses
and excluding the amortized cost writedown of several investments,
of $0.27 per share.”
“We also further strengthened our balance sheet in the quarter
by utilizing our ‘at-the-market’ program to issue approximately $44
million of common stock at a premium to NAV. Looking ahead, our
balance sheet remains well positioned with our 100% fixed-rate
financing, and we expect to further grow our portfolio by deploying
capital into new CLO investments at attractive effective yields,”
concluded Mr. Majewski.
SECOND QUARTER 2023 RESULTS
- Net asset value (“NAV”) per common share of $8.72 as of June
30, 2023, compared to $9.10 as of March 31, 2023.
- Net investment income (“NII”) of $0.32 per weighted average
common share.1,2 NII less realized capital losses of $0.05 per
weighted average common share. This compares to $0.32 of NII less
realized capital losses per weighted average common share for the
quarter ended March 31, 2023, and $0.43 of NII plus realized
capital gains per weighted average common share for the quarter
ended June 30, 2022.
- GAAP net income (inclusive of unrealized mark-to-market gains)
of $6.5 million, or $0.11 per weighted average common share.
- Received $53.7 million in recurring cash distributions3 from
the Company’s investment portfolio, or $0.90 per weighted average
common share, which was in excess of the Company’s aggregate
distributions on its common stock and operating costs for the
quarter.
- Deployed $29.7 million in net capital into collateralized loan
obligation (“CLO”) equity, CLO debt, loan accumulation facilities
and other investments. 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 20.8% as measured
at the time of investment.
- As of June 30, 2023:
- The weighted average effective yield of the
Company’s CLO equity portfolio (excluding called CLOs), based on
amortized cost, was 15.23%. This compares to 15.83% as of March 31,
2023 and 16.71% as of June 30, 2022.4
- The weighted average expected yield of the
Company’s CLO equity portfolio (excluding called CLOs), based on
fair market value, was 27.46%. This compares to 25.96% as of March
31, 2023 and 22.18% as of June 30, 2022.4
- Issued approximately 4.3 million shares of common stock
pursuant to the Company’s “at-the-market” offering program for
total net proceeds of approximately $43.8 million. The common stock
issuance resulted in $0.12 per share of NAV accretion for the
quarter ended June 30, 2023.
- As of June 30, 2023, the Company had debt and preferred equity
securities outstanding which totaled approximately 32.5% of its
total assets (less current liabilities).5
- As of June 30, 2023, 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 1,784 unique corporate obligors.
- The largest look-through obligor
represented 0.8% of the loans underlying the Company’s CLO equity
portfolio.
- The top-ten largest look-through obligors
together represented 5.7% of the loans underlying the Company’s CLO
equity portfolio.
- The look-through weighted average spread of
the loans underlying the Company’s CLO equity portfolio was 3.67%
as of June 2023, unchanged from March 2023.
- GAAP net income was comprised of total investment income of
$31.7 million and net unrealized depreciation on certain
liabilities held at fair value of $4.7 million, offset by total net
unrealized depreciation on investments of $1.3 million, realized
capital losses of $16.1 million, and financing costs and operating
expenses of $12.5 million.
- Recorded an other comprehensive loss of $6.9 million.
THIRD QUARTER 2023 PORTFOLIO ACTIVITY THROUGH JULY 31, 2023
AND OTHER UPDATES
- NAV per common share is estimated to be between $9.08 and $9.18
as of July 31, 2023.
- Received $48.1 million of recurring cash distributions from the
Company’s investment portfolio. As of July 31, 2023, some of the
Company’s investments had not yet reached their payment date for
the quarter.
- Deployed $29.3 million of net capital into CLO equity, CLO debt
and other investments.
- Issued approximately 3.8 million shares of common stock
pursuant to the Company’s “at-the-market” offering program for
total net proceeds of approximately $38.5 million.
DISTRIBUTIONS
As previously announced, the Company has declared the following
monthly distributions to its common stock, 6.50% Series C Term
Preferred Stock due 2031 (the “Series C Term Preferred Stock”) and
6.75% Series D Preferred Stock (the “Series D Preferred
Stock”).6
Security
Amount per Share
Record Dates
Payable Dates
Common Stock Regular
$0.14
August 11, 2023,
September 11, 2023,
October 11, 2023,
November 13, 2023,
December 11, 2023
August 31, 2023
September 29, 2023,
October 31, 2023,
November 30, 2023,
December 29, 2023
Common Stock Supplemental
$0.02
Series C Term Preferred Stock
$0.135417
Series D Preferred Stock
$0.140625
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, 2023, 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 13739402
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 15, 2023. To hear the replay, please
dial (844) 512-2921 (toll-free) or (412) 317-6671 (international).
For the replay, enter Conference ID 13739402.
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, 2023 (which includes the Company’s
unaudited consolidated financial statements as of and for the
period ended June 30, 2023). 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, 2023.
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.
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 “Recurring cash distributions” refers to the quarterly
distributions received by the Company from its CLO equity, CLO debt
and other investments and distributions from loan accumulation
facilities in excess of capital invested and excludes funds
received from CLOs called.
4 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 Semiannual report for additional disclosures.
5 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.
6 The ability of the Company to declare and pay distributions on
stock are subject to a number of factors, including the Company’s
results of operations. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20230815359768/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
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