Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC,
ECCB, ECCX, ECCY) today announced financial results for the quarter
ended September 30, 2020, net asset value (“NAV”) as of September
30, 2020 and certain additional activity through October 31,
2020.
THIRD QUARTER HIGHLIGHTS
- Net investment income (“NII”) and realized losses of $0.23 per
weighted average common share1 for the third quarter of 2020.
- NAV per common share of $8.45 as of September 30, 2020.
- Third quarter 2020 GAAP net income (inclusive of unrealized
mark-to-market gains) of $44.5 million, or $1.40 per weighted
average common share.
- Weighted average effective yield of the Company’s
collateralized loan obligation (“CLO”) equity portfolio (excluding
called CLOs) was 11.48% as of September 30, 2020. Weighted average
expected yield of the Company’s CLO equity portfolio (excluding
called CLOs), based on fair market value, was 27.81% as of
September 30, 20202.
- Deployed $27.2 million in net capital and received $16.7
million in recurring cash distributions3 from the Company’s
investment portfolio in the third quarter of 2020. Including
proceeds from called investments, the Company received cash
distributions of $19.7 million over the same period.
SUBSEQUENT EVENTS
- NAV per common share estimated to be between $8.53 and $8.63 as
of October 31, 2020.
- Received $25.5 million of recurring cash distributions from the
Company’s investment portfolio during October 2020, an increase of
over 50% from the third quarter.
- Deployed $6.9 million in net capital during October 2020.
“We saw our investment portfolio’s value continue to rebound in
the third quarter, with our NAV increasing 13% from the end of the
second quarter,” said Thomas Majewski, Chief Executive Officer.
“Our NII was $0.29 per share, above our current distribution rate,
though we did also realize a few losses.”
“As we moved into October, recurring cash flows on our portfolio
increased by over 50% as LIBOR mismatches from the second and third
quarter turned in the Company’s favor,” added Mr. Majewski. “Our
overall liquidity position remains strong, with no maturities prior
to October 2026 and over $12 million of cash on our balance sheet
at the end of October.”
THIRD QUARTER 2020 RESULTS
The Company’s NII and realized losses for the quarter ended
September 30, 2020 was $0.23 per weighted average common share.
This compared to $0.28 of NII and realized losses per weighted
average common share for the quarter ended June 30, 2020, and $0.37
of NII and realized gains per weighted average common share for the
quarter ended September 30, 2019.
For the quarter ended September 30, 2020, the Company recorded
GAAP net income of $44.5 million, or $1.40 per weighted average
common share. Net income was comprised of total investment income
of $16.0 million and total net unrealized appreciation (or
unrealized mark-to-market gains in the value of the Company’s
investments and certain liabilities at fair value) of $37.3
million, partially offset by expenses of $7.0 million and realized
losses of $1.8 million.
NAV as of September 30, 2020 was $268.2 million, or $8.45 per
common share, which is $1.00 per common share higher than the
Company’s NAV as of June 30, 2020, and $3.00 per common share lower
than the Company’s NAV as of September 30, 2019.
During the quarter ended September 30, 2020, the Company
deployed $27.2 million in net capital, and converted 3 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 15.22% as measured at the time of investment.
During the quarter ended September 30, 2020, the Company
received $16.7 million of recurring cash distributions from its
investment portfolio, or $0.53 per weighted average common share,
which was in excess of the Company’s aggregate distributions on its
common stock and recurring operating costs for the quarter. When
including proceeds from called investments, the Company received
cash distributions of $0.62 per weighted average common share
during the quarter.
As of September 30, 2020, based on amortized cost, the weighted
average effective yield on the Company’s CLO equity portfolio
(excluding called CLOs) was 11.48%, compared to 12.33% as of June
30, 2020 and 13.38% as of September 30, 2019.
Pursuant to the Company’s “at-the-market” offering program, the
Company issued 81,581 shares of common stock at a premium to NAV
during the third quarter for total net proceeds to the Company of
approximately $0.6 million.
PORTFOLIO STATUS
As of September 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 1,484 unique
corporate obligors. The largest look-through obligor represented
1.0% of the Company’s CLO equity and loan accumulation facility
portfolio. The top-ten largest look-through obligors together
represented 5.9% 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 3.59% as of
September 2020, up from 3.55% as of June 2020.
As of September 30, 2020, the Company had debt and preferred
securities outstanding which totaled approximately 34.7% 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.
FOURTH QUARTER 2020 PORTFOLIO ACTIVITY THROUGH OCTOBER 31,
2020 AND OTHER UPDATES
From October 1, 2020 through October 31, 2020, the Company
received $25.5 million of recurring cash distributions from its
investment portfolio. As of October 31, 2020, some of the Company’s
investments had not yet reached their payment date for the quarter.
Also, from October 1, 2020 through October 31, 2020, the Company
deployed $6.9 million in net capital.
As of October 31, 2020, the Company had approximately $12.9
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, 2020 was $8.53 to $8.63.
DISTRIBUTIONS
The Company paid a monthly distribution of $0.08 per common
share on October 30, 2020 to stockholders of record as of October
13, 2020. Additionally, and as previously announced, the Company
declared distributions of $0.08 per share of common stock payable
on November 30, 2020, December 31, 2020, January 29, 2021, February
26, 2021 and March 31, 2021 to stockholders of record as of
November 12, 2020, December 11, 2020, January 12, 2021, February
12, 2021 and March 12, 2021, 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 October 31, 2020, to stockholders of record as of October
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 November 30, 2020,
December 31, 2020, January 29, 2021, February 26, 2021 and March
31, 2021 to stockholders of record as of November 12, 2020,
December 11, 2020, January 12, 2021, February 12, 2021 and March
12, 2021, 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, 2020, 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 13712484
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 17, 2020. To hear the replay, please dial
(844) 512-2921 (toll-free) or (412) 317-6671 (international). For
the replay, enter Conference ID 13712484.
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 September 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 September 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/20201117005310/en/
Investor and Media Relations: ICR 203-340-8510
IR@EaglePointCredit.com www.eaglepointcreditcompany.com
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