Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCB, ECCC, ECCW, ECCX, ECCY) today announced financial results for
the quarter ended June 30, 2021, net asset value (“NAV”) as of June
30, 2021 and certain additional activity through July 31, 2021.
SECOND QUARTER 2021 HIGHLIGHTS
- Net investment income (“NII”) and realized capital gains of
$0.32 per weighted average common share1 for the second
quarter.
- NAV per common share of $12.97 as of June 30, 2021, up 8% from
$12.02 as of March 31, 2021.
- Second quarter GAAP net income (inclusive of unrealized
mark-to-market gains) of $42.0 million, or $1.26 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 14.98% as of June 30,
2021. Weighted average expected yield of the Company’s CLO equity
portfolio (excluding called CLOs), based on fair market value, was
19.02% as of June 30, 20212.
- Deployed $65.7 million in net capital into CLO equity and debt
investments and received $36.4 million in recurring cash
distributions3 from the Company’s investment portfolio.
- 6 of the Company’s CLO equity positions were reset and 2 of the
Company’s CLO equity positions were refinanced.
- Issued 2,092,330 shares of common stock, pursuant to the
Company’s “at-the-market” offering program, for total net proceeds
of approximately $26.7 million.
- Completed full exercise of the underwriters’ overallotment
option of $5.9 million in aggregate principal amount of 6.75% notes
due 2031 (“ECCW”), resulting in net proceeds of approximately $5.7
million.
- Completed an underwritten public offering, including full
exercise of the underwriters’ overallotment option, of 1.2 million
shares of 6.50% Series C Term Preferred Stock due 2031 (“ECCC”),
resulting in net proceeds of approximately $28.8 million.
SUBSEQUENT EVENTS
- NAV per common share is estimated to be between $13.20 and
$13.30 as of July 31, 2021, at the midpoint of the range, this
represents an increase of 2% from June 30.
- Received $35.3 million of recurring cash distributions from the
Company’s investment portfolio during July.
- Deployed $13.2 million in net capital into CLO equity and debt
investments during July.
- Issued 408,217 shares of common stock and 435,612 shares of
Series C Term Preferred Stock, pursuant to the Company’s
“at-the-market” offering program, for total net proceeds of
approximately $16.3 million during July.
- Declared 20% increase in common stock monthly distributions to
$0.12 per share beginning in October 2021.
“We were very pleased with our second quarter performance. Our
portfolio generated strong cash flow, our NAV increased and we were
able to increase our common distribution,” said Thomas Majewski,
Chief Executive Officer. “In the second quarter, we generated NII
and realized capital gains of $0.32 per common share. This was
reduced by $0.03 due to a non-recurring charge related to our ECCC
issuance. Excluding this charge, we would have generated NII and
realized capital gains of $0.35 per common share, 46% in excess of
our common distributions paid during the quarter.”
“We strengthened our liquidity position during the quarter,
completing the offering of our 6.50% Series C Term Preferred Stock
due 2031, which represents our lowest cost of capital to date,”
added Mr. Majewski. “We also took advantage of the attractive
environment and proactively directed 6 resets and 2 refinancings
during the quarter, enabling us to achieve meaningful savings and
increase expected cash flows from these investments. Due to our
proactive portfolio management, we increased the weighted average
remaining investment period of the portfolio by six months during
the quarter.”
“When we look back over the course of the pandemic, our
portfolio has performed very well and our NAV per common share
increased by 22% since the end of 2019 through June. Looking ahead,
we remain well positioned to take advantage of investment
opportunities and generate attractive risk-adjusted returns.
Reflecting this confidence, we were pleased to further increase our
monthly distributions by 20% to $0.12 per common share beginning in
October,” concluded Mr. Majewski.
SECOND QUARTER 2021 RESULTS
The Company’s NII and realized capital gains for the quarter
ended June 30, 2021 was $0.32 per weighted average common share.
This compared to $0.28 of NII and realized capital gains per
weighted average common share for the quarter ended March 31, 2021,
and $0.28 of NII and realized capital losses per weighted average
common share for the quarter ended June 30, 2020.
The Company’s NII and realized capital gains for the quarter
ended June 30, 2021 was reduced by $0.03 per weighted average
common share due to the non-recurring expenses associated with the
ECCC offering.
For the quarter ended June 30, 2021, the Company recorded GAAP
net income of $42.0 million, or $1.26 per weighted average common
share. Net income was comprised of total investment income of $19.9
million, total net unrealized appreciation (or unrealized
mark-to-market gains in the value of the Company’s investments and
certain liabilities at fair value) of $31.2 million and realized
capital gains of $1.1 million, partially offset by expenses of
$10.2 million.
NAV as of June 30, 2021 was $447.3 million, or $12.97 per common
share, which is $0.95 per common share higher than the Company’s
NAV as of March 31, 2021, and $5.52 per common share higher than
the Company’s NAV as of June 30, 2020.
During the quarter ended June 30, 2021, the Company deployed
$65.7 million in net capital into CLO equity and debt investments,
and converted 1 loan accumulation facility into a CLO. 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 17.0% as measured at the time of investment.
During the quarter ended June 30, 2021, the Company received
$36.4 million of recurring cash distributions from its investment
portfolio, or $1.09 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.
During the quarter ended June 30, 2021, 6 of the Company’s CLO
equity investments were reset and 2 of the Company’s CLO equity
investments were refinanced.
As of June 30, 2021, based on amortized cost, the weighted
average effective yield on the Company’s CLO equity portfolio
(excluding called CLOs) was 14.98%, compared to 14.40% as of March
31, 2021 and 12.33% as of June 30, 2020.
Pursuant to the Company’s “at-the-market” offering, the Company
sold 2,092,330 shares of common stock during the second quarter for
total net proceeds to the Company of approximately $26.7
million.
PORTFOLIO STATUS
As of June 30, 2021, 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 1,697 unique corporate
obligors. The largest look-through obligor represented 0.8% of the
Company’s CLO equity and loan accumulation facility portfolio. The
top-ten largest look-through obligors together represented 6.1% of
the Company’s CLO equity and loan accumulation facility
portfolio.
The look-through weighted average spread of the loans underlying
the Company’s CLO equity and related investments was 3.54% as of
June 2021, a modest decrease from 3.56% as of March 2021.
As of June 30, 2021, the Company had debt and preferred
securities outstanding which totaled approximately 33.2% 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 2021 PORTFOLIO ACTIVITY THROUGH JULY 31, 2021
AND OTHER UPDATES
During July, the Company received $35.3 million of recurring
cash distributions from its investment portfolio. As of July 31,
2021, some of the Company’s investments had not yet reached their
payment date for the quarter. During July, the Company deployed
$13.2 million in net capital into CLO debt and equity
investments.
As of July 31, 2021, the Company had approximately $54.7 million
of cash available for investment.
Pursuant to the Company’s “at-the-market” offerings, the Company
issued 408,217 shares of common stock and 435,612 shares of Series
C Term Preferred Stock during July for total net proceeds to the
Company of approximately $16.3 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, 2021 was $13.20 to $13.30.
DISTRIBUTIONS
The Company paid a monthly distribution of $0.10 per common
share on July 30, 2021 to stockholders of record as of July 12,
2021. Additionally, and as previously announced, the Company
declared distributions of $0.10 per share of common stock payable
on August 31, 2021 and September 30, 2021 to stockholders of record
as of August 11, 2021 and September 10, 2021, respectively, and
distributions of $0.12 per share of common stock payable on October
29, 2021, November 30, 2021 and December 31, 2021 to stockholders
of record as of October 12, 2021, November 10, 2021 and December
13, 2021, 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 monthly distribution of $0.161459 per share
of the Company’s Series B Term Preferred Stock due 2026 (NYSE:
ECCB) on July 30, 2021, to stockholders of record as of July 12,
2021. The distribution represented a 7.75% annualized rate, based
on the $25 liquidation preference per share for the Series B Term
Preferred Stock. Additionally, and as previously announced, the
Company declared distributions of $0.161459 per share on its Series
B Term Preferred Stock, payable on each of August 31, 2021,
September 30, 2021, October 29, 2021, November 30, 2021 and
December 31, 2021 to stockholders of record as of August 11, 2021,
September 10, 2021, October 12, 2021, November 10, 2021 and
December 13, 2021, respectively.
The Company paid a distribution of $0.203125 per share of the
Company’s Series C Term Preferred Stock due 2026 (NYSE: ECCC) on
July 31, 2021, to stockholders of record as of July 12, 2021. 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, 2021, September 30,
2021, October 29, 2021, November 30, 2021 and December 31, 2021 to
stockholders of record as of August 11, 2021, September 10, 2021,
October 12, 2021, November 10, 2021 and December 13, 2021,
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 2021
calendar year.
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, 2021, 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 13721432
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 17, 2021. To hear the replay, please
dial (844) 512-2921 (toll-free) or (412) 317-6671 (international).
For the replay, enter Conference ID 13721432.
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, 2021 (which includes the Company’s
unaudited consolidated financial statements as of and for the
period ended June 30, 2021). 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, 2021.
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 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. 3 “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/20210817005139/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
Eagle Point Credit (NYSE:ECCW)
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