ECCW Eagle Point Credit Company Inc

Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC, ECCC, ECC PRD, ECCF, ECCV, ECCW, ECCX) today announced financial results for the quarter ended March 31, 2024 and certain additional activity through April 30, 2024.

“The Company had a solid start to the year, deploying $131.1 million in net capital into new investments that we expect to generate attractive risk-adjusted returns and enhance our net investment income moving forward,” said Thomas P. Majewski, Chief Executive Officer. “For the first quarter, we generated net investment income and realized capital gains, excluding non-recurring expenses, of $0.31 per share. In addition, we strengthened our balance sheet by issuing common stock at a premium to NAV as well as through issuing our new 8.00% Series F Term Preferred Stock. Looking ahead, we expect to further grow our portfolio through attractive CLO equity investments in both the new issue and secondary markets and improve our portfolio’s expected yield with an increase in refinancing and reset activity.”

FIRST QUARTER 2024 RESULTS

• Net asset value (“NAV”) per common share of $9.16 as of March 31, 2024, compared to $9.21 as of December 31, 2023.
• Net investment income (“NII”) and realized capital gains of $0.29 per weighted average common share, which is net of a non-recurring expense of $0.02 per share related to the issuance of the Company’s 8.00% Series F Term Preferred Stock due 2029 (the “Series F Term Preferred Stock”).1,2 This compares to $0.33 of NII and realized capital gains per weighted average common share for the quarter ended December 31, 2023, and $0.32 of NII less realized capital losses per weighted average common share for the quarter ended March 31, 2023.
• GAAP net income (inclusive of unrealized mark-to-market gains) of $34.7 million, or $0.43 per weighted average common share.
• Received $56.2 million in recurring cash distributions3 from the Company’s investment portfolio, or $0.70 per weighted average common share, which was in line with the Company’s aggregate distributions on its common stock and operating costs for the quarter.
• Deployed $131.1 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 March 31, 2024:
  • The weighted average effective yield of the Company’s CLO equity portfolio (excluding called CLOs), based on amortized cost, was 16.43%. This compares to 16.70% as of December 31, 2023 and 15.83% as of March 31, 2023.4
  • The weighted average expected yield of the Company’s CLO equity portfolio (excluding called CLOs), based on fair market value, was 23.96%. This compares to 27.10% as of December 31, 2023 and 25.96% as of March 31, 2023.4
• Completed an underwritten public offering of $49.0 million in aggregate principal amount of Series F Term Preferred Stock, resulting in net proceeds to the Company of approximately $47.1 million.
• Issued approximately 7.9 million shares of common stock, 317,387 shares of 6.75% Series D Preferred Stock (the “Series D Preferred Stock”) and 96,772 shares of Series F Term Preferred Stock pursuant to the Company’s “at-the-market” offering program for total net proceeds of approximately $86.3 million. The common stock issuance resulted in $0.06 per share of NAV accretion for the quarter ended March 31, 2024.
• As of March 31, 2024, the Company had debt and preferred equity securities outstanding which totaled approximately 29.2% of its total assets (less current liabilities).5
• As of March 31, 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 1,793 unique corporate obligors.
  • The largest look-through obligor represented 0.7% of the loans underlying the Company’s CLO equity portfolio.
  • The top-ten largest look-through obligors together represented 5.2% 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 3.74% as of March 2024, down 5 basis points from December 2023.
• GAAP net income was comprised of total investment income of $40.8 million, total net unrealized appreciation on investments of $7.8 million, net unrealized depreciation on certain liabilities held at fair value of $2.9 million and realized capital gains of $1.1 million, partially offset by financing costs and operating expenses of $17.9 million.
• Recorded other comprehensive loss of $4.6 million.

SECOND QUARTER 2024 PORTFOLIO ACTIVITY THROUGH APRIL 30, 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 $8.94 and $9.04 as of April 30, 2024.
• Received $65.7 million of recurring cash distributions from the Company’s investment portfolio. As of April 30, 2024, some of the Company’s investments had not yet reached their payment date for the quarter.
• Deployed $20.8 million of net capital into CLO equity, CLO debt, loan accumulation facilities and other investments.
• Began issuing Series AA and Series AB 7.00% Convertible and Perpetual Preferred Stock.

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

May 13, 2024,

June 10, 2024,

July 11, 2024,

August 12, 2024,

September 10, 2024

May 31, 2024,

June 28, 2024,

July 31, 2024,

August 30, 2024,

September 30, 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

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, 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 13745709 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 June 21, 2024. To hear the replay, please dial (844) 512-2921 (toll-free) or (412) 317-6671 (international). For the replay, enter Conference ID 13745709.

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, 2024. The Company has also filed this report with the U.S. Securities and Exchange Commission (“SEC”). 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, 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 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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Investor and Media Relations: ICR 203-340-8510 IR@EaglePointCredit.com www.eaglepointcreditcompany.com