Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCC, ECC PRD, ECCV, ECCW, ECCX) announced financial results for
the quarter and fiscal year ended December 31, 2022, net asset
value (“NAV”) as of December 31, 2022 and certain additional
activity through February 15, 2023, and declared distributions on
shares of the Company’s common and preferred stock.
FOURTH QUARTER 2022 HIGHLIGHTS
- Net investment income (“NII”) and realized capital losses of
$0.29 per weighted average common share, net of $0.04 per weighted
average common share of non-recurring expenses.[1],[2]
- NAV per common share of $9.07 as of December 31, 2022, compared
to $10.23 as of September 30, 2022.
- GAAP net income (inclusive of unrealized mark-to-market losses)
of $8.8 million, or $0.17 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 16.23% as of December
31, 2022. Weighted average expected yield of the Company’s CLO
equity portfolio (excluding called CLOs), based on fair market
value, was 27.86% as of December 31, 2022.[3]
- Deployed $27.8 million in net capital into CLO debt, loan
accumulation facilities and other investments.
- Received $32.9 million in recurring cash distributions[4] from
the Company’s investment portfolio.
- Issued 6.7 million shares of common stock pursuant to the
Company’s “at-the-market” offering program for total net proceeds
of approximately $71.9 million.
SUBSEQUENT EVENTS
- Paid a special distribution to common stockholders of $0.50 per
share on January 24, 2023 to stockholders of record as of December
23, 2022.
- NAV per common share is estimated to be between $9.62 and $9.72
as of January 31, 2023; at the midpoint, this reflects a 6.6%
increase from the Company’s year-end NAV.
- Received $40.7 million of recurring cash distributions from the
Company’s investment portfolio for the period from January 1, 2023
to February 15, 2023.
- Deployed $43.1 million in net capital into CLO equity, CLO
debt, loan accumulation facilities and other investments for the
period from January 1, 2023 to February 15, 2023.
- Issued 2.6 million shares of common stock and 2,308 shares of
Series D Preferred Stock pursuant to the Company’s “at-the-market”
offering program for total net proceeds of approximately $27.2
million for the period from January 1, 2023 to February 15,
2023.
SECOND QUARTER 2023 COMMON DISTRIBUTION
- The Company is pleased to declare a monthly regular
distribution of $0.14 per share and a variable supplemental
distribution of $0.02 per share on its common stock for an
aggregate common monthly distribution of $0.16 per share for the
second quarter of 2023. The supplemental distribution relates to
2022 taxable income spillover.
“We generated NII before non-recurring expenses of $0.40 per
weighted average common share, closing out a strong 2022 from an
NII perspective,” said Thomas Majewski, Chief Executive Officer.
“We further strengthened our liquidity position in the quarter
through our ATM offering program, raising capital at a premium to
NAV and generating $0.12 per weighted average common share of NAV
accretion.”
“We were also pleased that our solid 2022 performance enabled us
to declare a monthly supplemental common distribution of $0.02 per
share in addition to our regular monthly common stock distribution
for the second quarter of 2023,” added Mr. Majewski. “Entering
2023, we remain well positioned with 100% fixed-rate financing, no
maturities prior to 2028 and $58.8 million in cash as of February
15th to take advantage of the current market environment.”
FOURTH QUARTER 2022 RESULTS
The Company’s NII and realized capital losses for the quarter
ended December 31, 2022 was $0.29 per weighted average common
share. This compared to $0.47 of NII and realized capital gains per
weighted average common share for the quarter ended September 30,
2022, and $0.37 of NII and realized capital losses per weighted
average common share for the quarter ended December 31, 2021.
NII and realized capital losses for the quarter ended December
31, 2022 is net of a non-recurring expense for estimated Federal
excise tax of $0.04 per weighted average common share.
For the quarter ended December 31, 2022, the Company recorded
GAAP net income of $8.8 million, or $0.17 per weighted average
common share. Net income was comprised of total investment income
of $32.5 million and net unrealized depreciation on certain
liabilities held at fair value of $20.7 million, partially offset
by net unrealized depreciation on investments of $26.8 million, net
realized capital losses of $3.6 million, expenses of $13.5 million
and distributions on the Series D Preferred Stock of $0.5
million.
For the quarter ended December 31, 2022, the Company recorded
other comprehensive loss of $15.2 million.[1]
NAV as of December 31, 2022 was $499.3 million, or $9.07 per
common share, which is $1.16 per common share lower than the
Company’s NAV as of September 30, 2022, and $4.32 per common share
lower than the Company’s NAV as of December 31, 2021.
During the quarter ended December 31, 2022, the Company deployed
$27.8 million in net capital into CLO debt, loan accumulation
facilities and other investments.
During the quarter ended December 31, 2022, the Company received
$32.9 million of recurring cash distributions from its investment
portfolio, or $0.65 per weighted average common share.
As of December 31, 2022, based on amortized cost, the weighted
average effective yield on the Company’s CLO equity portfolio
(excluding called CLOs) was 16.23%, compared to 16.29% as of
September 30, 2022 and 17.04% as of December 31, 2021.
Pursuant to the Company’s “at-the-market” offering, the Company
sold 6.7 million shares of common stock during the fourth quarter
for total net proceeds of approximately $71.9 million. The common
stock issuance resulted in $0.12 per weighted average common share
of NAV accretion for the quarter ended December 31, 2022.
FULL YEAR 2022 HIGHLIGHTS AND PORTFOLIO STATUS
For the fiscal year ended December 31, 2022, the Company
recorded a GAAP net loss of $103.6 million. The fiscal year net
loss was comprised of total investment income of $118.4 million,
net unrealized depreciation on certain liabilities held at fair
value of $26.4 million and net realized capital gains on
investments of $1.4 million, offset by net unrealized depreciation
on investments of $196.9 million, net realized losses associated
with the repayment of preferred stock and unsecured notes of $1.5
million, distributions on the Series D Preferred Stock of $1.8
million and net expenses of $49.6 million.
For the fiscal year ended December 31, 2022, the Company
received $162.7 million of recurring cash distributions from its
investment portfolio, or $3.62 per weighted average common
share.
As of December 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 1,868 unique corporate obligors.
The largest look-through obligor represented 0.9% of the Company’s
CLO equity portfolio. The ten largest look-through obligors
together represented 6.2% of the Company’s CLO equity
portfolio.
The look-through weighted average spread of the loans underlying
the Company’s CLO equity investments was 3.63% as of December 2022,
comparable with the weighted average spread as of September
2022.
As of December 31, 2022, the Company had debt and preferred
securities outstanding which totaled approximately 35% 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.
FIRST QUARTER 2023 PORTFOLIO ACTIVITY THROUGH FEBRUARY 15,
2023 AND OTHER UPDATES
The Company received $40.7 million of recurring cash
distributions from its investment portfolio for the period from
January 1, 2023 through February 15, 2023. As of February 15, 2023,
some of the Company’s investments had not yet reached their payment
date for the quarter. For the same period the Company deployed
$43.1 million in net capital into CLO equity, CLO debt, loan
accumulation facility and other investments.
As of February 15, 2023, the Company had $58.8 million of cash
available for investment.
Pursuant to the Company’s “at-the-market” offerings, the Company
issued 2.6 million shares of common stock and 2,308 shares of
Series D Preferred Stock during the period from January 1, 2023 to
February 15, 2023, for total net proceeds to the Company of
approximately $27.2 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
January 31, 2023 was $9.62 to $9.72.
FIRST QUARTER 2023 DISTRIBUTIONS
The Company paid a monthly distribution of $0.14 per common
share on January 31, 2023 to stockholders of record as of January
11, 2023. Additionally, and as previously announced, the Company
declared distributions of $0.14 per share of common stock payable
on February 28, 2023 and March 31, 2023 to stockholders of record
as of February 8, 2023 and March 13, 2023, respectively.
The Company paid a distribution of $0.135417 per share of the
6.50% Series C Term Preferred Stock due 2031 (“Series C Term
Preferred Stock”) (NYSE: ECCC) and a distribution of $0.140625 per
share of the 6.75% Series D Preferred Stock (“Series D Preferred
Stock”) (NYSE: ECC PRD) on January 31, 2023 to stockholders of
record as of January 11, 2023. The distributions represented a
6.50% annualized rate and a 6.75% annualized rate based on the $25
liquidation preference per preferred stock share of Series C Term
Preferred Stock and Series D Preferred Stock, respectively.
Additionally, and as previously announced, the Company declared
distributions of $0.135417 per share on its Series C Term Preferred
Stock and a distribution of $0.140625 per share of its Series D
Preferred Stock, payable on each of February 28, 2023 and March 31,
2023 to stockholders of record as of February 8, 2023 and March 13,
2023, 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.
SECOND QUARTER 2023 DISTRIBUTION
The Company is pleased to declare a monthly regular distribution
of $0.14 per share on its common stock, payable on each of April
28, 2023, May 31, 2023 and June 30, 2023 to stockholders of record
as of April 10, 2023, May 11, 2023 and June 12, 2023, respectively.
Additionally, the Company is pleased to announce the declaration of
a monthly variable supplemental distribution of $0.02 per share,
payable on each of April 28, 2023, May 31, 2023 and June 30, 2023
to stockholders of record as of April 10, 2023, May 11, 2023 and
June 12, 2023, respectively. The following schedule applies to the
distributions:
Distribution
Amount per commonshare
Record Date
Payable Date
Regular
$0.14
April 10, 2023
April 28,2023
Supplemental
$0.02
April 10, 2023
April 28,2023
Regular
$0.14
May 11, 2023
May 31, 2023
Supplemental
$0.02
May 11, 2023
May 31, 2023
Regular
$0.14
June 12, 2023
June 30, 2023
Supplemental
$0.02
June 12, 2023
June 30, 2023
The declared variable supplemental distribution relates to the
excess of the Company’s estimated taxable income for the tax year
ended November 30, 2022 over the aggregate amount distributed to
common stockholders for the same time period. For the remainder of
2023, in addition to a monthly regular distribution and based on
the Company’s current projection, the Company expects to also
declare a monthly variable supplemental distribution, though the
amounts of such distributions may vary.[2]
The Company is also pleased to announce the declaration of
distributions on shares of the Company’s Series C Term Preferred
Stock and the Company’s Series D Preferred Stock as follows:
Preferred Stock Type
Amount per Share of Preferred
Stock
Record Dates
Payable Dates
Series C Term Preferred Stock
$0.135417
April 10, 2023,
May 11, 2023,
June 12, 2023
April 28, 2023,
May 31, 2023,
June 30, 2023
Series D Preferred Stock
$0.140625
April 10, 2023,
May 11, 2023,
June 12, 2023
April 28, 2023,
May 31, 2023,
June 30, 2023
The distributions represent a 6.50% annualized rate and a 6.75%
annualized rate based on the $25 liquidation preference per
preferred stock share of Series C Term Preferred Stock and Series D
Preferred Stock, respectively.
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 and full year ended December 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 13734985
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 March 22, 2023. To hear the replay, please dial
(844) 512-2921 (toll-free) or (412) 317-6671 (international). For
the replay, enter Conference ID 13734985.
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 2022 Annual Report, which
includes the Company’s audited consolidated financial statements as
of and for the period ended December 31, 2022. 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 and
year ended December 31, 2022. The Company has filed these reports
with the Securities and Exchange Commission.
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” 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. 2NII is net of distributions made on the Company’s Series D
Preferred Stock of $0.01 per weighted average common share.
Non-recurring expense of $0.04 per weighted average common share
relates to a Federal excise tax on spillover income. 3Weighted
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 audited financial statements, both of which are
subject to change from period to period. Please refer to the
Company’s audited financial statements for additional disclosures.
4“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. 5For the year ended December 31, 2022,
the Company revised the base market rate to determine the change in
fair value on liabilities attributable to market risk to a US
Treasury Index from a Markit CDX North America Investment Grade
Index. 6The ability of the Company to declare and pay distributions
is subject to a number of factors, including the Company’s results
of operations. All or a portion of any distribution paid by the
Company may consist of a return of capital.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230222005432/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
Eagle Point Credit (NYSE:ECCW)
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