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Business Wire
Eagle Point Credit Company Inc. Announces Second Quarter 2022 Financial Results and Special Distribution
Tue, August 16, 2022, 8:00 AM
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ECC
+3.18%
ECC-PD
+1.52%
ECCC
+0.35%
ECCV
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ECCW
+0.40%
GREENWICH, Conn., August 16, 2022--(BUSINESS WIRE)--Eagle Point Credit Company Inc. (the "Company") (NYSE: ECC, ECCC, ECC PRD, ECCV, ECCW, ECCX) today announced financial results for the quarter ended June 30, 2022, net asset value ("NAV") as of June 30, 2022 and certain additional activity through July 31, 2022.
SECOND QUARTER 2022 HIGHLIGHTSNet investment income ("NII") and realized capital gains of $0.43 per weighted average common share.1, 2
NAV per common share of $10.08 as of June 30, 2022, compared to $12.64 as of March 31, 2022.GAAP net loss (inclusive of unrealized mark-to-market losses) of $100.9 million, or $2.35 per weighted average common share.
Weighted average effective yield of the Company’s collateralized loan obligation ("CLO") equity portfolio (excluding called CLOs), based on amortized cost, was 16.71% as of June 30, 2022. Weighted average expected yield of the Company’s CLO equity portfolio (excluding called CLOs), based on fair market value, was 22.18% as of June 30, 2022.3
Deployed $82.4 million in net capital into CLO equity and debt investments and received $47.8 million in recurring cash distributions4 from the Company’s investment portfolio.
Issued 2,285,789 shares of common stock, 42,848 shares of Series C Term Preferred Stock, and 1,500 shares of Series D Preferred Stock pursuant to the Company’s "at-the-market" offering program, for total net proceeds of approximately $30.5 million.
SUBSEQUENT EVENTSNAV per common share is estimated to be between $10.79 and $10.89 as of July 31, 2022. At the midpoint of the range, this represents an increase of 7.5% from June 30, 2022.Received $38.8 million of recurring cash distributions from the Company’s investment portfolio during July 2022.
Deployed $11.1 million in net capital into CLO equity and debt investments during July 2022.
Issued 1,041,453 shares of common stock pursuant to the Company’s "at-the-market" offering program, for total net proceeds of approximately $11.9 million during July 2022.
Declared a special distribution to common stockholders of $0.25 per share to be paid on October 31, 2022 to stockholders of record as of October 11, 2022."We generated another quarter of strong NII and realized capital gains. For the second quarter, these totaled $0.43 per share, an amount exceeding our common distributions for the quarter," said Thomas Majewski, Chief Executive Officer. "We also further strengthened our liquidity position in the quarter through our ATM offering program, issuing shares accretive to NAV, and using the proceeds to opportunistically deploy capital into new investments."
"While the reduction in CLO security prices during the quarter impacted our NAV, we have found multiple opportunities to invest in secondary CLO securities at significant discounts," added Mr. Majewski. "We believe the recent sell-off was more technical in nature and the prices of many securities have risen so far in the third quarter. With a strong balance sheet – 100% fixed-rate financing, no debt maturities prior to 2028 and approximately $50.8 million in available cash for investment as of July 31 – we remain well positioned to generate attractive risk-adjusted returns over the long term."
SECOND QUARTER 2022 RESULTSThe Company’s NII and realized capital gains for the quarter ended June 30, 2022 was $0.43 per weighted average common share. This compared to $0.30 of NII and realized capital losses per weighted average common share for the quarter ended March 31, 2022, and $0.32 of NII and realized capital gains per weighted average common share for the quarter ended June 30, 2021.
For the quarter ended June 30, 2022, the Company recorded a GAAP net loss of $100.9 million, or $2.35 per weighted average common share. The net loss was comprised of total investment income of $28.9 million and realized capital gains of $1.0 million, offset by total net unrealized depreciation (or unrealized mark-to-market losses in the value of the Company’s investments and certain liabilities at fair value) of $119.3 million, expenses of $11.0 million and distributions on the Series D Preferred Stock of $0.5 million.
NAV as of June 30, 2022 was $440.2 million, or $10.08 per common share, which is $2.56 per common share lower than the Company’s NAV as of March 31, 2022, and $2.89 per common share lower than the Company’s NAV as of June 30, 2021.During the quarter ended June 30, 2022, the Company deployed $82.4 million in net capital into CLO equity and debt investments, and converted 5 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 17.8% as measured at the time of investment.
During the quarter ended June 30, 2022, the Company received $47.8 million of recurring cash distributions from its investment portfolio, or $1.12 per weighted average common share, which was well in excess of the Company’s aggregate distributions on its common stock and operating costs for the quarter.
As of June 30, 2022, based on amortized cost, the weighted average effective yield on the Company’s CLO equity portfolio (excluding called CLOs) was 16.71%, compared to 16.78% as of March 31, 2022 and 14.98% as of June 30, 2021.
Pursuant to the Company’s "at-the-market" offering, the Company sold 2,285,789 shares of common stock, 42,848 shares of Series C Term Preferred Stock, and 1,500 shares of Series D Preferred Stock during the second quarter for total net proceeds of approximately $30.5 million. The common stock issuance resulted in $0.03 per share of NAV accretion for the quarter ended June 30, 2022.
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