Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCC, ECC PRD, ECCF, ECCV, ECCW, ECCX) today announced financial
results for the quarter ended September 30, 2024 and certain
additional activity through October 31, 2024.
“Our portfolio generated another quarter of strong recurring
cash flows, and we deployed $171.1 million of net capital into
investments with compelling risk-adjusted returns,” said Thomas P.
Majewski, Chief Executive Officer. “We actively managed our
portfolio, completing 14 reset actions in the third quarter alone,
and 23 reset and refinancing actions year-to-date. These actions
are laying the foundation for the portfolio to further enhance its
net investment income over time.”
THIRD QUARTER 2024 RESULTS
- Net asset value (“NAV”) per common share of $8.44 as of
September 30, 2024, compared to $8.75 as of June 30, 2024.
- Net investment income (“NII”) of $0.29 per weighted average
common share.1,2 NII less realized capital losses was $0.23 per
weighted average common share.
- Realized capital losses of $0.08 per weighted average common
share were a result of the writedown of amortized cost to fair
value for three late-in-life collateralized loan obligation (“CLO”)
equity positions. The writedowns were reclassifications of
unrealized depreciation to realized losses and did not have a
meaningful NAV impact. Excluding the reclassifications, the Company
realized capital gains of $0.02 per weighted average common share
from sales of appreciated investments and repayments.
- NII less realized capital losses of $0.23 per weighted average
common share compares to $0.16 of NII less realized capital losses
per weighted average common share for the quarter ended June 30,
2024, and $0.35 of NII and realized capital gains per weighted
average common share for the quarter ended September 30, 2023.
- GAAP net income (inclusive of unrealized mark-to-market
depreciation) of $3.9 million, or $0.04 per weighted average common
share.
- Received $68.2 million in recurring cash distributions3 from
the Company’s investment portfolio, or $0.66 per weighted average
common share, in line with the Company’s aggregate distributions on
its common stock and operating costs for the quarter.
- Deployed $171.1 million in net capital into 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 18.5% as measured at the time of
investment.
- As of September 30, 2024:
- The weighted average effective yield of the Company’s CLO
equity portfolio (excluding called CLOs), based on amortized cost,
was 14.61%. This compares to 15.28% as of June 30, 2024 and 16.29%
as of September 30, 2023.4
- The weighted average expected yield of the Company’s CLO equity
portfolio (excluding called CLOs), based on fair market value, was
21.21%. This compares to 22.36% as of June 30, 2024 and 27.38% as
of September 30, 2023.4
- Issued approximately 7.5 million shares of common stock,
approximately 1.5 million shares of 6.75% Series D Perpetual
Preferred Stock (the “Series D Preferred Stock”) and 228,509 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 $107.1
million. The common stock issuance resulted in $0.08 per share of
NAV accretion during the quarter.
- Issued 422,842 shares of Series AA and 5,900 shares of Series
AB 7.00% Convertible and Perpetual Preferred Stock (the
“Convertible Perpetual Preferred Stock”) for total proceeds of $9.7
million pursuant to the Company’s continuous offering of
Convertible Perpetual Preferred Stock.
- As of September 30, 2024, the Company had debt and preferred
equity securities outstanding which totaled approximately 30.7% of
its total assets (less current liabilities).5
- As of September 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 1,792 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
5.1% 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 3.54%, down 9
basis points from June 2024.
- GAAP net income was comprised of total investment income of
$47.1 million, offset by unrealized appreciation on certain
liabilities held at fair value of $9.8 million, total net
unrealized depreciation on investments of $6.8 million, realized
capital losses of $6.4 million, financing costs and operating
expenses of $17.0 million and distributions and amortization of
offering costs on temporary equity of $3.2 million.
- Recorded other comprehensive income of $4.4 million.
FOURTH QUARTER 2024 PORTFOLIO ACTIVITY THROUGH OCTOBER 31,
2024 AND OTHER UPDATES
- As previously published on the Company’s website, management’s
estimate of the range of the Company’s NAV per common share is
estimated to be between $8.55 and $8.65 as of October 31, 2024. At
the midpoint, this is a 1.9% increase from NAV per common share as
of September 30, 2024.
- Received $73.2 million of recurring cash distributions from the
Company’s investment portfolio. As of October 31, 2024, some of the
Company’s investments had not yet reached their payment date for
the quarter.
- Deployed $25.0 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
$0.14
November 12, 2024,
December 11, 2024
January 13, 2025,
February 10, 2025,
March 11, 2025
November 29, 2024,
December 31, 2024
January 31, 2025,
February 28, 2025,
March 31, 2025
Series C Term Preferred Stock
$0.135417
Series D Preferred Stock
$0.140625
Series F Term Preferred Stock
$0.166667
The Company also declared supplemental monthly distributions on
its common stock of $0.02 per share payable on November 29, 2024
and December 31, 2024 to shareholders of record on November 12,
2024 and December 11, 2024. The Company’s current estimated taxable
income for the 2024 tax year is expected to be fully distributed to
common stockholders for the same tax year; as a result, the Company
will conclude its monthly variable supplemental distribution as of
December 31, 2024.
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
November 12, 2024,
December 11, 2024
January 13, 2025,
February 10, 2025,
March 11, 2025
November 29, 2024,
December 31, 2024
January 31, 2025,
February 28, 2025,
March 31, 2025
Series AB Convertible and
Perpetual Preferred Stock
$0.145834
The distributions on shares of the Convertible Perpetual
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 September 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 13749061 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 December 13, 2024. To hear the replay, please dial
(844) 512-2921 (toll-free) or (412) 317-6671 (international). For
the replay, enter Conference ID 13749061.
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,
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 September 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 does not reflect distributions and amortization of
offering costs on the Series D Preferred Stock and Series AA/AB
Convertible and Perpetual Preferred Stock (collectively with the
Series D Preferred Stock, the “temporary equity”) of $0.03 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241114931300/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
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