Eagle Point Credit Company Inc. Announces First Quarter 2016 Financial Results
OREANDA-NEWS. Eagle Point Credit Company Inc. (the “Company”) (NYSE:ECC, NYSE:ECCA, NYSE:ECCZ) today announced financial results for the fiscal quarter ended March 31, 2016 and net asset value (“NAV”) as of March 31, 2016 in addition to certain portfolio activity through May 18, 2016.
FIRST QUARTER HIGHLIGHTS
The Company’s net investment income (“NII”) for the quarter ended March 31, 2016 was $0.61 per share of common stock. This compares to NII per share of $0.53 for the quarter ended December 31, 2015, and $0.39 per share for the quarter ended March 31, 2015.
For the quarter ended March 31, 2016, the Company recorded a net loss of $1.4 million, or $0.10 per share of common stock. The net loss was comprised of total investment income of $13.7 million, offset by total expenses of $5.3 million and net unrealized depreciation, or unrealized mark-to-market loss on investments, of $9.8 million. Expenses include, among other items, interest expense and amortization of deferred debt issuance costs related to the Company’s 7.75% Series A Term Preferred Stock due 2022 (the “Series A Term Preferred Stock”) and the Company’s 7.00% Unsecured Notes due 2020.
During the quarter ended March 31, 2016, the Company received $20.7 million of cash flow from its investment portfolio, or $1.50 per share of common stock.
The NAV of the Company as of March 31, 2016 was $180.0 million, or $13.02 per share of common stock. This was a decrease of $9.6 million or $0.70 per share from the quarter ended December 31, 2015 and a decrease of $79.1 million or $5.74 per share from the quarter ended March 31, 2015.
During the quarter ended March 31, 2016, the Company made net new investments totaling $31.0 million.
As of March 31, 2016, the weighted average effective yield on the Company’s collateralized loan obligation (“CLO”) equity portfolio was 16.77%, slightly up from 16.68% as of December 31, 2015 and up from 15.42% as of March 31, 2015. The weighted average effective yield of these CLO equity investments includes a provision for credit losses.
The closing price per share of the Company’s common stock on March 31, 2016 was $16.40, representing a 26% premium to NAV as of such date.
As of March 31, 2016 on a look-through basis, and based on the most recent CLO trustee reports received by such date, the Company had exposure to approximately 1,063 unique corporate obligors. The largest look-through obligor represented 0.91% of the Company’s CLO equity and loan accumulation facility portfolio. The top-ten largest look-through obligors represented 7.5% of the Company’s CLO equity and loan accumulation facility portfolio.
As of March 31, 2016, the Company had debt and preferred securities outstanding which totaled approximately 26% of its total assets.
SECOND QUARTER 2016 PORTFOLIO ACTIVITY THROUGH MAY 18, 2016 AND OTHER UPDATES
Since March 31, 2016 and through May 18, 2016, the Company has received cash distributions on its investment portfolio totaling $18.2 million, or $1.31 per share of common stock (not all of which represents NII). In addition, as published on the Company’s website this week, Company management’s unaudited estimate of the NAV per share of its common stock as of April 30, 2016 is $14.33. This estimate was published for information purposes only and is subject to revision.
During the second quarter of 2016 through May 18, 2016, the Company has made net new investments totaling $3.4 million, which includes four new CLO equity investments. One of these investments was the result of the pricing of a new CLO using loans from one of the loan accumulation facilities held by the Company.
On April 29, 2016, the Company paid a distribution of $0.60 per share of common stock to stockholders of record as of March 31, 2016. This is consistent with prior distributions paid by the Company. The Company intends to pay a quarterly distribution on its shares of common stock for the second quarter of 2016, which the Company expects to declare within the next few weeks. The Company expects the upcoming quarterly distribution to be in line with its prior distributions.
The Company paid a distribution of $0.161459 per share of the Series A Term Preferred Stock (NYSE: ECCA) on April 29, 2016, to stockholders of record as of April 15, 2016. The distribution represented a 7.75% annualized rate, based on the Series A Term Preferred Stock’s $25 liquidation preference per share. Additionally, and as previously announced, the Company declared distributions of $0.161459 per share on its Series A Term Preferred Stock, payable on each of May 31, 2016 and June 30, 2016, to stockholders of record as of May 16, 2016 and June 15, 2016, respectively.
In addition, management currently estimates that its taxable income for the anticipated tax year ending November 30, 2016 will exceed the aggregate quarterly distributions expected to be paid to common stockholders with respect to such tax year. If the Company’s taxable income exceeds its aggregate distributions paid to stockholders as of the anticipated tax year ending November 30, 2016, the Company will generally be required to make one or more special distributions to common stockholders during the twelve-month period following November 30, 2016 of an aggregate amount at least equal to such excess. This information is based solely on management’s initial and preliminary estimates as of May 18, 2016, is published for information purposes only and is subject to revision. Management will provide a further update on its estimates and analysis of the Company’s taxable income and any related special distributions on its call discussing third quarter 2016 results.
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 principals of Eagle Point Credit Management LLC are Thomas P. Majewski, Daniel W. Ko and Daniel M. Spinner. T