Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCA, ECCB, ECCX, ECCY) today announced financial results for the
quarter ended September 30, 2018, net asset value (“NAV”) as of
September 30, 2018 and certain portfolio activity through November
6, 2018.
THIRD QUARTER 2018 HIGHLIGHTS
- Net investment income (“NII”) and
realized capital gains of $0.41 per weighted average common
share1.
- NAV per common share of $16.55 as of
September 30, 2018.
- Third quarter 2018 GAAP net income
(inclusive of unrealized mark-to-market gains) of $11.2 million, or
$0.50 per weighted average common share.
- Weighted average effective yield of the
Company’s collateralized loan obligation (“CLO”) equity portfolio
was 13.99% as of September 30, 2018.
- Deployed $42.3 million in gross
capital, received $33.0 million in proceeds from the sale of
investments and received $25.7 million in cash distributions from
the Company’s investment portfolio in the third quarter of
2018.
- 5 of the Company’s CLO investments were
reset and 1 of the Company’s CLO investments was refinanced during
the third quarter of 2018.
- Issued 1,407,451 shares of common stock
at a premium to NAV during the third quarter for total net proceeds
to the Company of approximately $25.0 million pursuant to the
Company’s “at-the-market” offering program.
SUBSEQUENT EVENTS
- NAV per common share estimated to be
between $16.35 and $16.45 as of October 31, 2018.
- Deployed $37.5 million in gross capital
and received $14.7 million in proceeds from the sale of investments
from October 1, 2018 through November 6, 2018; received cash
distributions from the Company’s investment portfolio of $22.4
million over the same period.
“The third quarter was another active quarter for the Company,
both from a portfolio management standpoint and in terms of our
balance sheet,” said Thomas Majewski, Chief Executive Officer. “We
continued to focus on CLO resets to take advantage of our Adviser’s
deep investing experience, completing another five resets and thus
further lengthening the reinvestment period in each transaction and
in certain circumstances, locking in a lower cost of CLO debt. This
brings the total number of such CLO equity positions that were
reset or refinanced since January 1, 2017 to 23 and 28,
respectively. The majority of the Company’s current portfolio has
been reset, refinanced or both. In addition, we deployed $42.3
million in gross capital into new investments, while
opportunistically selling certain investments to create value for
the Company. We also utilized our at-the-market program in the
quarter, raising $25.0 million of additional capital at a premium
to NAV, and we have already deployed much of that new capital into
investments.
“During the third quarter, we recorded NII and realized capital
gains per share of $0.41, as we did have approximately $0.02 per
common share of cash drag associated with the issuance of shares of
common stock under the at-the-market program during the quarter, as
well as the continued modest spread compression,” noted Mr.
Majewski. “We remain dedicated to actively managing the portfolio,
focusing selectively on new investments and sales. In addition,
when appropriate, we plan to pursue additional CLO resets in an
effort to lock in longer and lower cost liabilities.”
THIRD QUARTER 2018 RESULTS
The Company’s NII and realized capital gains for the quarter
ended September 30, 2018 was $0.41 per weighted average common
share. This compared to $0.34 per weighted average common share for
the quarter ended June 30, 2018, and $0.45 per weighted average
common share for the quarter ended September 30, 2017.
For the quarter ended September 30, 2018, the Company recorded
GAAP net income of $11.2 million, or $0.50 per weighted average
common share. Net income was comprised of total investment income
of $17.5 million, net unrealized appreciation (or unrealized
mark-to-market gains on investments) of $2.2 million and net
realized capital gains on investments of $0.1 million, offset by
total expenses of $8.6 million.
NAV as of September 30, 2018 was $382.7 million, or $16.55 per
common share, which is $0.04 per common share higher than the
Company’s NAV as of June 30, 2018, and $0.12 per common share lower
than the Company’s NAV as of September 30, 2017.
During the quarter ended September 30, 2018, the Company
deployed $42.3 million in gross capital and $9.3 million in net
capital. 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 15.63% as measured at the time
of investment. Additionally, during the quarter, the Company
received $33.0 million of proceeds from the sale of
investments.
During the quarter ended September 30, 2018, the Company
received $25.7 million of cash distributions from its investment
portfolio, or $1.15 per weighted average common share, including
amounts received from called investments. Excluding proceeds from
called investments, the Company received cash distributions of
$1.00 per weighted average common share during the quarter, which
was in excess of the Company’s aggregate quarterly common
distribution and other recurring operating costs.
During the quarter ended September 30, 2018, 5 of the Company’s
CLO investments were reset and 1 of the Company’s CLO investments
was refinanced.
As of September 30, 2018, the weighted average effective yield
on the Company’s CLO equity portfolio was 13.99%, a slight decrease
from 14.08% as of June 30, 2018. As of September 30, 2017, that
measure stood at 15.29%.
Pursuant to the Company’s “at-the-market” offering under which
the Company may issue shares of common stock, the Company sold
1,407,451 shares of common stock at a premium to NAV during the
third quarter for total net proceeds to the Company of
approximately $25.0 million.
PORTFOLIO STATUS
As of September 30, 2018, 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 1,454 unique
corporate obligors. The largest look-through obligor represented
0.97% of the Company’s CLO equity and loan accumulation facility
portfolio. The top-ten largest look-through obligors together
represented 6.7% 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
September 2018. This compares to 3.56% as of June 2018.
As of September 30, 2018, the Company had debt and preferred
securities outstanding which totaled approximately 33.6% of its
total assets (less current liabilities). Over the long term,
management expects the Company to operate under current market
conditions generally with leverage within a range of 25% to 35% of
total assets. 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.
FOURTH QUARTER 2018 PORTFOLIO ACTIVITY THROUGH NOVEMBER 6,
2018 AND OTHER UPDATES
From October 1, 2018 through November 6, 2018, the Company
received $22.4 million of cash distributions from its investment
portfolio, or $0.97 per weighted average common share, including
amounts received from called investments. Excluding proceeds from
called investments, the Company received cash distributions of
$0.90 per weighted average common share for the same period. As of
November 6, 2018, some of the Company’s investments had not yet
reached their payment date for the quarter. Also from October 1,
2018 through November 6, 2018, the Company deployed $22.8 million
in net capital.
From October 1, 2018 through November 6, 2018, 3 of the
Company’s CLO investments were reset.
As of November 6, 2018, the Company has approximately $17.6
million of cash available for investment.
As previously published on the Company’s website, management’s
estimate of the Company’s range of NAV per common share as of
October 31, 2018 was $16.35 to $16.45.
PREVIOUSLY DECLARED DISTRIBUTIONS AND ADDITIONAL
UPDATES
The Company paid a monthly distribution of $0.20 per common
share on October 31, 2018 to stockholders of record as of October
12, 2018. Additionally, and as previously announced, the Company
declared distributions of $0.20 per share of common stock payable
on November 30, 2018 and December 31, 2018, to stockholders of
record as of November 13, 2018 and December 13, 2018,
respectively.
The Company paid distributions of $0.161459 per share of the
Company’s 7.75% Series A Term Preferred Stock due 2022 (NYSE: ECCA)
and 7.75% Series B Term Preferred Stock due 2026 (NYSE: ECCB) on
October 31, 2018, to stockholders of record as of October 12, 2018.
The distributions represented a 7.75% annualized rate, based on the
$25 liquidation preference per share for each series of preferred
stock. Additionally, and as previously announced, the Company
declared distributions of $0.161459 per share on each series of
preferred stock, payable on each of November 30, 2018 and December
31, 2018, to stockholders of record as of November 13, 2018 and
December 13, 2018, 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 ended September 30, 2018, as well as a portfolio
update.
All interested parties may participate in the conference call by
dialing (833) 231-8253 (domestic) or (647) 689-4099
(international), and entering Conference ID 7057357 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, 2018. To hear the replay, please dial
(800) 585-8367 (domestic) or (416) 621-4642 (international). For
the replay, enter conference ID 7057357.
ADDITIONAL INFORMATION
The Company has made available on 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, 2018. The Company has
also filed this report with the Securities and Exchange Commission.
The Company also published on its website (in the investor
presentations and portfolio information section) an investor
presentation which contains additional information about the
Company and its portfolio as of and for the quarter ended September
30, 2018.
ABOUT EAGLE POINT CREDIT COMPANY
The Company is a non-diversified, closed-end management
investment company. The Company’s investment objectives are to
generate high current income and capital appreciation primarily
through investment 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 weighted average 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 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.
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Relations:ICR203-340-8510IR@EaglePointCredit.comwww.eaglepointcreditcompany.com
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