Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCC, ECC PRD, ECCF, ECCV, ECCW, ECCX) today announced financial
results for the quarter ended June 30, 2024 and certain additional
activity through July 31, 2024.
“Cash flow from our portfolio remained robust during the
quarter, with recurring cash flows from our portfolio increasing
both on an absolute and per share basis quarter over quarter,” said
Thomas P. Majewski, Chairman and Chief Executive Officer. “The
Company was active in the quarter and deployed $134.8 million of
net capital into investments with compelling risk-adjusted returns.
We also enhanced the value of certain of our current holdings by
completing four reset and two refinancing actions.”
SECOND QUARTER 2024 RESULTS
- Net asset value (“NAV”) per common share of $8.75 as of June
30, 2024, compared to $9.16 as of March 31, 2024.
- Net investment income (“NII”) of $0.28 per weighted average
common share.1,2 NII less realized capital losses was $0.16 per
weighted average common share.
- Realized capital losses of $0.15 per weighted average common
share were a result of the writedown of amortized cost to fair
value for two late-in-life CLO equity positions. The writedowns
were reclassifications of unrealized depreciation to realized
losses and did not have a NAV impact. Excluding the writedowns, the
Company realized capital gains of $0.03 per weighted average common
share from sales of appreciated investments.
- NII less realized capital losses of $0.16 per weighted average
common share compares to $0.29 of NII and realized capital gains
per weighted average common share for the quarter ended March 31,
2024, and $0.05 of NII less realized capital losses per weighted
average common share for the quarter ended June 30, 2023.
- GAAP net loss (inclusive of unrealized mark-to-market losses)
of $3.6 million, or $0.04 per weighted average common share.
- Received $71.4 million in recurring cash distributions3 from
the Company’s investment portfolio, or $0.79 per weighted average
common share, exceeding the Company’s aggregate distributions on
its common stock and operating costs for the quarter.
- Deployed $134.8 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 19.4% as measured
at the time of investment.
- As of June 30, 2024:
- The weighted average effective yield of the Company’s CLO
equity portfolio (excluding called CLOs), based on amortized cost,
was 15.28%. This compares to 16.43% as of March 31, 2024 and 15.23%
as of June 30, 2023.4
- The weighted average expected yield of the Company’s CLO equity
portfolio (excluding called CLOs), based on fair market value, was
22.36%. This compares to 23.96% as of March 31, 2024 and 27.46% as
of June 30, 2023.4
- Launched continuous offering of Series AA and Series AB 7.00%
Convertible and Perpetual Preferred Stock (the “Convertible
Preferred Stock”). Issued 380,865 shares of Series AA and 2,950
shares of Series AB for total proceeds of $8.7 million.
- Issued approximately 12.0 million shares of common stock,
252,564 shares of 6.75% Series D Preferred Stock (the “Series D
Preferred Stock”) and 60,389 shares of 8.00% Series F Term
Preferred Stock (the “Series F Term Preferred Stock”) pursuant to
the Company’s “at-the-market” offering program for total net
proceeds of approximately $124.9 million. The common stock issuance
resulted in $0.11 per share of NAV accretion for the quarter ended
June 30, 2024.
- As of June 30, 2024, the Company had debt and preferred equity
securities outstanding which totaled approximately 28.4% of its
total assets (less current liabilities).5
- As of June 30, 2024, on a look-through basis, and based on the
most recent CLO trustee reports received by such date:
- The Company, through its investments in CLO equity securities,
had indirect exposure to approximately 1,780 unique corporate
obligors.
- The largest look-through obligor represented 0.6% of the loans
underlying the Company’s CLO equity portfolio.
- The top-ten largest look-through obligors together represented
5.0% 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 3.63% as of June
2024, down 11 basis points from March 2024.
- GAAP net loss was comprised of total investment income of $42.3
million and unrealized depreciation on certain liabilities held at
fair value of $1.1 million, offset by total net unrealized
depreciation on investments of $19.4 million, realized capital
losses of $10.8 million and financing costs and operating expenses
of $16.8 million.
- Recorded other comprehensive loss of $2.8 million.
THIRD QUARTER 2024 PORTFOLIO ACTIVITY THROUGH JULY 31, 2024
AND OTHER UPDATES
- Received $60.4 million of recurring cash distributions from the
Company’s investment portfolio. As of July 31, 2024, some of the
Company’s investments had not yet reached their payment date for
the quarter.
- Deployed $79.3 million of net capital into CLO equity, CLO
debt, loan accumulation facilities and other investments.
DISTRIBUTIONS
As previously announced, the Company has declared the following
monthly distributions on its common stock, 6.50% Series C Term
Preferred Stock due 2031 (the “Series C Term Preferred Stock”),
Series D Preferred Stock and Series F Term Preferred Stock.6
Security
Amount per Share
Record Dates
Payable Dates
Common Stock Regular
$0.14
August 12, 2024,
September 10, 2024,
October 11, 2024,
November 12, 2024,
December 11, 2024
August 30, 2024,
September 30, 2024,
October 31, 2024,
November 29, 2024,
December 31, 2024
Common Stock Supplemental
$0.02
Series C Term Preferred Stock
$0.135417
Series D Preferred Stock
$0.140625
Series F Term Preferred Stock
$0.166667
Additionally, as previously announced, the Company has declared
the following monthly distributions on its Convertible Preferred
Stock.
Security
Amount per Share
Record Dates
Payable Dates
Series AA Convertible and
Perpetual Preferred Stock
$0.145834
August 15, 2024,
September 18, 2024,
October 11, 2024,
November 12, 2024,
December 11, 2024
August 30, 2024,
September 30, 2024,
October 31, 2024,
November 29, 2024,
December 31, 2024
Series AB Convertible and
Perpetual Preferred Stock
$0.145834
The distributions on shares of the Convertible Preferred Stock
reflect an annual distribution rate of 7.00% of the $25 liquidation
preference per share and accumulate from the date of original
issue.
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, 2024, 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). Please reference Conference ID 13747151 when
calling, and the Company recommends dialing in 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 5, 2024. To hear the replay, please dial
(844) 512-2921 (toll-free) or (412) 317-6671 (international). For
the replay, enter Conference ID 13747151.
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, 2024 (which includes the Company’s
unaudited consolidated financial statements as of and for the
period ended June 30, 2024). 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, 2024.
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 CLOs. 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 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
prospectus and the Company’s other filings with the 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 and Convertible 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 quarterly unaudited financial
statements for additional disclosures.
5 Over the long-term, management expects
to generally operate the Company 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 is 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 actual components of the Company’s
distributions for U.S. tax reporting purposes can only be finally
determined as of the end of each fiscal year of the Company and are
thereafter reported on Form 1099-DIV.
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version on businesswire.com: https://www.businesswire.com/news/home/20240806212741/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
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