Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCB, ECCX, ECCY) today announced financial results for the quarter
ended March 31, 2020, net asset value (“NAV”) as of March 31, 2020
and certain additional activity through May 14, 2020.
FIRST QUARTER HIGHLIGHTS
- Net investment income (“NII”) and realized capital losses of
$0.33 per weighted average common share1 for the first quarter of
2020.
- NAV per common share of $6.12 as of March 31, 2020.
- First quarter 2020 GAAP net loss (inclusive of unrealized
mark-to-market losses) of $130.6 million, or $4.42 per weighted
average common share.
- Weighted average effective yield of the Company’s
collateralized loan obligation (“CLO”) equity portfolio (excluding
called CLOs) was 14.77% as of March 31, 2020. Weighted average
expected yield of the CLO equity portfolio (based on fair market
value) was 31.88% as of March 31, 20202.
- Deployed $26.2 million in gross capital, received $14.6 million
in proceeds from the sale of investments and received $26.7 million
in recurring cash distributions3 from the Company’s investment
portfolio in the first quarter of 2020. Including proceeds from
called investments, the Company received cash distributions of
$29.6 million over the same period.
- Issued approximately 1.1 million shares of common stock at a
premium to NAV during the first quarter for total net proceeds to
the Company of approximately $16.3 million pursuant to the
Company’s “at-the-market” offering program.
- Repurchased and retired $2.7 million of the Company’s unsecured
6.75% Notes due 2027 (“ECCY”) and $2.1 million of the Company’s
unsecured 6.6875% Notes due 2028 (“ECCX”) at a total cost of $3.4
million.
SUBSEQUENT EVENTS
- NAV per common share estimated to be between $6.23 and $6.33 as
of April 30, 2020.
- Deployed $7.2 million in gross capital from April 1, 2020
through May 14, 2020; received $20.1 million of recurring cash
distributions from the Company’s investment portfolio over the same
period.
- Issued 61,126 shares of common stock at a premium to NAV from
April 1, 2020 through May 14, 2020 for total net proceeds to the
Company of approximately $0.4 million pursuant to the Company’s
“at-the-market” offering program.
“We believe the Company was positioned well as the scope of the
COVID-19 pandemic became clearer in the first quarter,” said Thomas
Majewski, Chief Executive Officer. “As of May 14, 2020, we had over
$35 million of cash on our balance sheet and no financing
maturities prior to October 2026. This strong liquidity position
has allowed us to seek to capitalize on the market dislocation,
deploying capital at times when others were selling. We were also
able to repurchase some of our outstanding debt at an average price
of approximately 72 cents on the dollar.”
“In this unprecedented market, rating agencies took swift action
and downgraded, or put on watch, a significant number of corporate
loans,” added Mr. Majewski. “Despite the rating actions,
approximately 92% of our CLO equity positions that were scheduled
to make payments in April did so4. We’ve also seen billions of
dollars in loan repayments in recent weeks, which provides
liquidity for our CLOs to reinvest in the secondary loan market at
today’s discounted prices. Moving forward, we will continue to
closely manage our investment portfolio and seek to use our dry
powder opportunistically where we see attractive values.”
FIRST QUARTER 2020 RESULTS
The Company’s NII and realized capital losses for the quarter
ended March 31, 2020 was $0.33 per weighted average common share.
This compared to $0.23 of NII and realized capital losses per
weighted average common share for the quarter ended December 31,
2019, and $0.36 of NII and realized capital gains per weighted
average common share for the quarter ended March 31, 2019.
For the quarter ended March 31, 2020, the Company recorded a
GAAP net loss of $130.6 million, or $4.42 per weighted average
common share. The net loss was comprised of total investment income
of $17.7 million, which was more than offset by total net
unrealized depreciation (or unrealized mark-to-market losses on
investments and liabilities at fair value) of $140.2 million,
realized capital losses of $1.0 million, and net expenses of $7.1
million.
NAV as of March 31, 2020 was $182.5 million, or $6.12 per common
share, which is $4.47 per common share lower than the Company’s NAV
as of December 31, 2019, and $7.58 per common share lower than the
Company’s NAV as of March 31, 2019.
During the quarter ended March 31, 2020, the Company deployed
$26.2 million in gross capital and $11.6 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 47.42% as measured at the time of
investment. Additionally, during the quarter, the Company received
$14.6 million of proceeds from the sale of CLO equity and debt
investments.
During the quarter ended March 31, 2020, the Company received
$26.7 million of recurring cash distributions from its investment
portfolio, or $0.90 per weighted average common share, which was in
excess of the Company’s aggregate quarterly common distribution and
other recurring operating costs. When including proceeds from
called investments, the Company received cash distributions of
$1.00 per weighted average common share during the quarter.
As of March 31, 2020, the weighted average effective yield on
the Company’s CLO equity portfolio (excluding called CLOs) was
14.77%, compared to 10.36% as of December 31, 2019 and 13.58% as of
March 31, 2019.
Pursuant to the Company’s “at-the-market” offering program, the
Company issued 1,107,612 shares of common stock at a premium to NAV
during the first quarter for total net proceeds to the Company of
approximately $16.3 million. This issuance resulted in $0.15 per
share of NAV accretion for the quarter ended March 31, 2020.
PORTFOLIO STATUS
As of March 31, 2020, 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 1,523 unique corporate
obligors. The largest look-through obligor represented 0.9% of the
Company’s CLO equity and loan accumulation facility portfolio. The
top-ten largest look-through obligors together represented 5.8% 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 3.57% as of
March 2020, a decrease of 4 basis points from 3.61% as of December
2019.
As of March 31, 2020, the Company had debt and preferred
securities outstanding which totaled approximately 45.5% of its
total assets (less current liabilities). As of April 30, 2020, that
percentage had been reduced to 44.6%. 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 2020 PORTFOLIO ACTIVITY THROUGH MAY 14, 2020
AND OTHER UPDATES
From April 1, 2020 through May 14, 2020, the Company received
$20.1 million of recurring cash distributions from its investment
portfolio. As of May 14, 2020, some of the Company’s investments
had not yet reached their payment date for the quarter. Also, from
April 1, 2020 through May 14, 2020, the Company deployed $7.2
million in gross capital.
As of May 14, 2020, the Company has approximately $35.2 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 April
30, 2020 was $6.23 to $6.33.
DISTRIBUTIONS
The Company paid a monthly distribution of $0.08 per common
share on May 4, 2020 to stockholders of record as of April 27,
2020. Additionally, and as previously announced, the Company
declared distributions of $0.08 per share of common stock payable
on May 29, 2020, June 30, 2020, July 31, 2020, August 31, 2020 and
September 30, 2020 to stockholders of record as of May 12, 2020,
June 12, 2020, July 13, 2020, August 12, 2020 and September 11,
2020, 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 April 30, 2020, to stockholders of record as of April 13,
2020. 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 Series B
Term Preferred Stock, payable on each of May 29, 2020, June 30,
2020, July 31, 2020, August 31, 2020 and September 30, 2020, to
stockholders of record as of May 12, 2020, June 12, 2020, July 13,
2020, August 12, 2020 and September 11, 2020, 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 March 31, 2020, as well as a portfolio update.
All interested parties may participate in the conference call by
dialing (877) 407-0789 (domestic) or (201) 689-8562
(international), and referencing Conference ID 13703427
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 22, 2020. To hear the replay, please dial
(844) 512-2921 (toll-free) or (412) 317-6671 (international). For
the replay, enter Conference ID 13703427.
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, 2020.
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, 2020.
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. 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. 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. 4 Based on investment fair market values
as of March 31, 2020.
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version on businesswire.com: https://www.businesswire.com/news/home/20200521005188/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
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