Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCB, ECCX, ECCY) today announced financial results for the quarter
ended June 30, 2020, net asset value (“NAV”) as of June 30, 2020
and certain additional activity through August 7, 2020.
SECOND QUARTER HIGHLIGHTS
- Net investment income (“NII”) and realized losses of $0.28 per
weighted average common share1 for the second quarter of 2020.
- NAV per common share of $7.45 as of June 30, 2020.
- Second quarter 2020 GAAP net income (inclusive of unrealized
mark-to-market gains) of $51.7 million, or $1.71 per weighted
average common share.
- Weighted average effective yield of the Company’s
collateralized loan obligation (“CLO”) equity portfolio (excluding
called CLOs) was 12.33% as of June 30, 2020. Weighted average
expected yield of the Company’s CLO equity portfolio (excluding
called CLOs), based on fair market value, was 33.57% as of June 30,
20202.
- Deployed $26.6 million in net capital and received $20.4
million in recurring cash distributions3 from the Company’s
investment portfolio in the second quarter of 2020.
- Issued approximately 1.9 million shares of common stock at a
premium to NAV during the second quarter for total net proceeds to
the Company of approximately $13.1 million pursuant to the
Company’s “at-the-market” offering program.
- Repurchased and retired $0.3 million of the Company’s unsecured
6.6875% Notes due 2028 (“ECCX”).
SUBSEQUENT EVENTS
- NAV per common share estimated to be between $7.82 and $7.92 as
of July 31, 2020.
- Deployed $5.6 million in net capital from July 1, 2020 through
August 7, 2020; received $15.7 million of recurring cash
distributions from the Company’s investment portfolio over the same
period.
- Issued 78,679 shares of common stock at a premium to NAV from
July 1, 2020 through August 7, 2020 for total net proceeds to the
Company of approximately $0.6 million pursuant to the Company’s
“at-the-market” offering program.
“The second quarter saw a strong rebound in the value of our
investment portfolio and our portfolio continues to generate
meaningful cash flow,” said Thomas Majewski, Chief Executive
Officer. “During the quarter, we opportunistically sourced
investments at discounted prices in the secondary market. Our
balance sheet remains strong, with no maturities prior to October
2026 and over $22 million of cash as of August 7, 2020.”
“For the second quarter, our net investment income and realized
losses of $0.28 per share exceeded our common distribution level by
over 10%,” added Mr. Majewski. “We believe the Company is well
positioned going into the second half of the year.”
SECOND QUARTER 2020 RESULTS
The Company’s NII and realized losses for the quarter ended June
30, 2020 was $0.28 per weighted average common share. This compared
to $0.33 of NII and realized losses per weighted average common
share for the quarter ended March 31, 2020, and $0.07 of NII and
realized losses per weighted average common share for the quarter
ended June 30, 2019.
For the quarter ended June 30, 2020, the Company recorded GAAP
net income of $51.7 million, or $1.71 per weighted average common
share. Net income was comprised of total investment income of $15.4
million and total net unrealized appreciation (or unrealized
mark-to-market changes in the value of the Company’s investments
and certain liabilities at fair value) of $43.3 million, partially
offset by net expenses of $7.0 million.
NAV as of June 30, 2020 was $235.9 million, or $7.45 per common
share, which is $1.33 per common share higher than the Company’s
NAV as of March 31, 2020, and $6.00 per common share lower than the
Company’s NAV as of June 30, 2019.
During the quarter ended June 30, 2020, the Company deployed
$26.6 million in net capital, and partially converted two of its
existing 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 22.00% as measured at the time of investment.
During the quarter ended June 30, 2020, the Company received
$20.4 million of recurring cash distributions from its investment
portfolio, or $0.68 per weighted average common share, which was in
excess of the Company’s aggregate quarterly common distribution and
other recurring operating costs. Proceeds received during the
quarter from called investments were minimal.
As of June 30, 2020, based on amortized cost, the weighted
average effective yield on the Company’s CLO equity portfolio
(excluding called CLOs) was 12.33%, compared to 14.77% as of March
31, 2020 and 13.49% as of June 30, 2019.
Pursuant to the Company’s “at-the-market” offering program, the
Company issued 1,860,775 shares of common stock at a premium to NAV
during the second quarter for total net proceeds to the Company of
approximately $13.1 million. This issuance resulted in $0.03 per
share of NAV accretion for the quarter.
PORTFOLIO STATUS
As of June 30, 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 1,513 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 3.55% as of
June 2020, a decrease of 2 basis points from 3.57% as of March
2020.
As of June 30, 2020, the Company had debt and preferred
securities outstanding which totaled approximately 38.2% 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.
THIRD QUARTER 2020 PORTFOLIO ACTIVITY THROUGH AUGUST 7, 2020
AND OTHER UPDATES
From July 1, 2020 through August 7, 2020, the Company received
$15.7 million of recurring cash distributions from its investment
portfolio. As of August 7, 2020, some of the Company’s investments
had not yet reached their payment date for the quarter. Also, from
July 1, 2020 through August 7, 2020, the Company deployed $5.6
million in net capital.
As of August 7, 2020, the Company has approximately $22.6
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 July
31, 2020 was $7.82 to $7.92.
DISTRIBUTIONS
The Company paid a monthly distribution of $0.08 per common
share on July 31, 2020 to stockholders of record as of July 13,
2020. Additionally, and as previously announced, the Company
declared distributions of $0.08 per share of common stock payable
on August 31, 2020, September 30, 2020, October 30, 2020, November
30, 2020 and December 31, 2020 to stockholders of record as of
August 12, 2020, September 11, 2020, October 13, 2020, November 12,
2020 and December 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 July 31, 2020, to stockholders of record as of July 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 August 31, 2020, September
30, 2020, October 30, 2020, November 30, 2020 and December 31, 2020
to stockholders of record as of August 12, 2020, September 11,
2020, October 13, 2020, November 12, 2020 and December 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 June 30, 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 13707135
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 September 17, 2020. To hear the replay, please
dial (844) 512-2921 (toll-free) or (412) 317-6671 (international).
For the replay, enter Conference ID 13707135.
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 semiannual stockholder report
for the period ended June 30, 2020 (which includes the Company’s
unaudited consolidated financial statements as of and for the
period ended June 30, 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
June 30, 2020.
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 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 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 net asset value (“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 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 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. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200817005148/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
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