Eagle Point Credit Company Inc. (the “Company”)
(NYSE: ECC, ECCC, ECC PRD, ECCV, ECCW, ECCX) today announced
financial results for the quarter ended March 31, 2022, net asset
value (“NAV”) as of March 31, 2022 and certain additional activity
through April 30, 2022.
FIRST QUARTER 2022 HIGHLIGHTS
- Net investment income (“NII”) and realized capital losses of
$0.30 per weighted average common share1 for the first quarter, net
of $0.10 per share of non-recurring expenses and losses.2
- NAV per common share of $12.64 as of March 31, 2022, compared
to $13.39 as of December 31, 2021.
- First quarter GAAP net loss (inclusive of unrealized
mark-to-market losses) of $21.2 million, or $0.53 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 16.78% as of March 31,
2022. Weighted average expected yield of the Company’s CLO equity
portfolio (excluding called CLOs), based on fair market value, was
20.06% as of March 31, 2022.3
- Deployed $66.3 million in net capital into CLO equity and debt
investments and received $41.1 million in recurring cash
distributions4 from the Company’s investment portfolio.
- 3 of the Company’s CLO equity positions were reset.
- Issued 3,539,972 shares of common stock, 280,281 shares of
Series C Term Preferred Stock, and 89,437 shares of Series D
Preferred Stock pursuant to the Company’s “at-the-market” offering
program, for total net proceeds of approximately $57.3
million.
- Completed an underwritten public offering, including partial
exercise of the underwriters’ overallotment option, of $93.3
million in aggregate principal amount of 5.375% notes due 2029
(“ECCV”), resulting in net proceeds to the Company of approximately
$90.0 million.
- Fully redeemed Series B Term Preferred Stock (“ECCB”) and 6.75%
notes due 2027 (“ECCY”), and redeemed 50% of 6.6875% notes due 2028
(“ECCX”).
- Paid a special distribution to common stockholders of $0.50 per
share on January 24, 2022 to stockholders of record as of December
23, 2021.
- On February 14, declared a 17% increase in common stock monthly
distributions to $0.14 per share beginning with the distribution
paid on April 29, 2022.
SUBSEQUENT EVENTS
- NAV per common share is estimated to be between $12.44 and
$12.54 as of April 30, 2022. At the midpoint of the range, this
represents a decrease of 1.2% from March 31, 2022.
- Received $43.5 million of recurring cash distributions from the
Company’s investment portfolio during April 2022.
- Deployed $50.2 million in net capital into CLO equity and debt
investments during April.
- Issued 1,330,322 shares of common stock, 42,848 shares of
Series C Term Preferred Stock, and 1,500 shares of Series D
Preferred Stock pursuant to the Company’s “at-the-market” offering
program, for total net proceeds of approximately $18.3 million
during April 2022.
“We started 2022 strong, recording NII and realized gains before
non-recurring items of $0.40 per share, an amount exceeding our
aggregate regular common distribution for the quarter.
Additionally, the Company generated another quarter of strong
recurring cash flows from our investment portfolio,” said Thomas
Majewski, Chief Executive Officer. “Our solid performance and
continued confidence in our portfolio’s future prospects enabled us
to increase our monthly common distribution by 17% beginning in
April.”
“In addition, we considerably strengthened our balance sheet by
completing the offering of our 5.375% ECCV notes at our lowest cost
of capital to date. The proceeds were used to retire our higher
cost ECCB preferred stock, ECCY notes and half of our ECCX notes,
substantially lowering the Company’s overall financing costs on a
prospective basis,” added Mr. Majewski. “Despite the challenging
market environment, with 100% fixed-rate financing, no debt
maturities prior to 2028, and approximately $30.3 million in
available cash for investment as of April 30, we remain well
positioned to add opportunistically to our portfolio and generate
attractive risk-adjusted returns.”
FIRST QUARTER 2022 RESULTS
The Company’s NII and realized capital losses for the quarter
ended March 31, 2022 was $0.30 per weighted average common share.
This compared to $0.37 of NII and realized capital losses per
weighted average common share for the quarter ended December 31,
2021, and $0.28 of NII and realized capital gains per weighted
average common share for the quarter ended March 31, 2021.
NII and realized capital losses for the quarter ended March 31,
2022 is net of non-recurring expenses and losses of $0.10 per share
related to the issuance of the Company’s 5.375% notes due 2029 and
acceleration of unamortized deferred issuance costs associated with
the redemption of the Company’s 7.75% Series B Term Preferred Stock
due 2026 and 6.75% notes due 2027.
For the quarter ended March 31, 2022, the Company recorded a
GAAP net loss of $21.2 million, or $0.53 per weighted average
common share. The net loss was comprised of total investment income
of $26.8 million, 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 $33.2
million, realized capital losses of $0.9 million, expenses of $13.5
million and distributions on the Series D Preferred Stock of $0.4
million.
NAV as of March 31, 2022 was $521.8 million, or $12.64 per
common share, which is $0.75 per common share lower than the
Company’s NAV as of December 31, 2021, and $0.62 per common share
higher than the Company’s NAV as of March 31, 2021.
During the quarter ended March 31, 2022, the Company deployed
$66.3 million in net capital into CLO equity and debt investments,
and converted 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 17.6% as measured at the time of investment.
During the quarter ended March 31, 2022, the Company received
$41.1 million of recurring cash distributions from its investment
portfolio, or $1.03 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.
During the quarter ended March 31, 2022, 3 of the Company’s CLO
equity investments were reset.
As of March 31, 2022, based on amortized cost, the weighted
average effective yield on the Company’s CLO equity portfolio
(excluding called CLOs) was 16.78%, compared to 17.04% as of
December 31, 2021 and 14.40% as of March 31, 2021.
Pursuant to the Company’s “at-the-market” offering, the Company
sold 3,539,972 shares of common stock, 280,281 shares of Series C
Term Preferred Stock, and 89,437 shares of Series D Preferred Stock
during the first quarter for total net proceeds of approximately
$57.3 million. The common stock issuance resulted in $0.04 per
share of NAV accretion for the quarter ended March 31, 2022.
PORTFOLIO STATUS
As of March 31, 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 1,852 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 5.6% of the Company’s CLO equity
portfolio.
The look-through weighted average spread of the loans underlying
the Company’s CLO equity investments was 3.58% as of March 2022, an
increase of three basis points from 3.55% as of December 2021.
As of March 31, 2022, the Company had debt and preferred
securities outstanding which totaled approximately 33% 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.
SECOND QUARTER 2022 PORTFOLIO ACTIVITY THROUGH APRIL 30, 2022
AND OTHER UPDATES
During April 2022, the Company received $43.5 million of
recurring cash distributions from its investment portfolio. As of
April 30, 2022, some of the Company’s investments had not yet
reached their payment date for the quarter. During April, the
Company deployed $50.2 million in net capital into CLO debt and
equity investments.
As of April 30, 2022, the Company had approximately $30.3
million of cash available for investment.
Pursuant to the Company’s “at-the-market” offerings, the Company
issued 1,330,322 shares of common stock, 42,848 shares of Series C
Term Preferred Stock and 1,500 shares of Series D Preferred Stock
during April 2022 for total net proceeds to the Company of
approximately $18.3 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
April 30, 2022 was $12.44 to $12.54.
DISTRIBUTIONS
The Company paid a monthly distribution of $0.14 per common
share on April 29, 2022 to stockholders of record as of April 11,
2022. Additionally, and as previously announced, the Company
declared distributions of $0.14 per share of common stock payable
on May 31, 2022, June 30, 2022, July 29, 2022, August 31, 2022 and
September 30, 2022 to stockholders of record as of May 11, 2022,
June 10, 2022, July 11, 2022, August 11, 2022 and September 12,
2022, 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 April 29, 2022, to
stockholders of record as of April 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 May 31, 2022, June 30, 2022, July 29,
2022, August 31, 2022 and September 30, 2022 to stockholders of
record as of May 11, 2022, June 10, 2022, July 11, 2022, August 11,
2022 and September 12, 2022, respectively.
The Company paid a distribution of $0.140625 per share of the
Series D Preferred Stock (NYSE: ECC PRD) on April 29, 2022, to
stockholders of record as of April 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 May 31, 2022, June 30, 2022, July 29,
2022, August 31, 2022 and September 30, 2022 to stockholders of
record as of May 11, 2022, June 10, 2022, July 11, 2022, August 11,
2022 and September 12, 2022, 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, 2021, 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 $0.50 per common
share on January 24, 2022 to stockholders of record as of December
23, 2021. The Company’s final taxable income and the actual amount
required to be distributed in respect of the tax year ended
November 30, 2021 will be finally determined when the Company files
its final tax returns and the Company expects that its final
taxable income will exceed amounts already distributed in respect
of the 2021 tax 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 March 31, 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 13728802
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 June 24, 2022. To hear the replay, please dial
(844) 512-2921 (toll-free) or (412) 317-6671 (international). For
the replay, enter Conference ID 13728802.
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 March 31, 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 March 31, 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” 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 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/20220524005520/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
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