GREENWICH, Conn.--(BUSINESS WIRE)--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.
The Company filed Form N-Q, which contains additional information about the Company’s portfolio as of March 31, 2016, with the Securities and Exchange Commission (“SEC”). In addition, the Company filed a copy of its unaudited consolidated financial statements as of and for the quarter ended March 31, 2016 with the SEC. These filings are available on the Company’s website (www.eaglepointcreditcompany.com).
The Company published an investor presentation which contains additional information about the Company and its portfolio as of and for the quarter ended March 31, 2016. In addition, the Company makes a monthly estimate of NAV and certain additional financial information available to investors on its website. This information includes (1) an estimated range of the Company’s NII 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 NAV per share of common stock for the prior month end, generally made available within the first fifteen days after the applicable calendar month end and (3) during the latter part of each month, certain additional portfolio-level information, an updated estimate of NAV, if applicable, and, with respect to each calendar quarter end, an updated estimate of the Company’s NII for the applicable quarter.
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.
As previously disclosed, the Company will host a conference call at 11:00 a.m. (Eastern Time) on Thursday, May 19, 2016 to discuss the Company’s financial results for the quarter ended March 31, 2016, and a portfolio update. All interested parties may participate in the conference call by dialing (877) 201-0168 (domestic) or (647) 788-4901 (international), and entering Conference ID 93944935 approximately 10 to 15 minutes prior to the call. An archived replay of the call will be available shortly afterwards until June 17, 2016. To hear the replay, please dial (855) 859-2056 (domestic) or (404) 537-3406 (international). For the replay, enter conference ID 93944935.
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. 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 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 prospectus and other filings with the 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.
FURTHER INFORMATION REGARDING PROSPECTIVE FINANCIAL INFORMATION
The projection of the Company’s taxable income and distributions for the anticipated tax year ending November 30, 2016 reflects management’s judgment as of the date of this press release of conditions it expects to exist and the course of action it expects the Company to take during the anticipated tax year ending November 30, 2016. The projected result is based on taxable income reported to date and assumes that current market conditions continue and that the CLO investments held by the Company comply with their distribution waterfall requirements for the current period. Although the Company considers its assumptions to be reasonable as of the date of this press release, such assumptions are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projection, including risks and uncertainties described in the Company’s prospectus and other filings with the SEC, such as the risks described as under the heading “Risk Factors – Risks Related to Our Investments” in the Company’s prospectus and under the heading “Investment Risk Factors and Concentration of Investments” in the notes to the Company’s consolidated financial statements included in the Company’s Annual Report to Stockholders for the fiscal year ended December 31, 2015 and in the notes to the Company’s consolidated financial statements for the fiscal period ended March 31, 2016. Accordingly, there can be no assurance that the projection is indicative of the Company’s future results or that actual results will not differ materially from those presented in the projection.
The projection of taxable income was not prepared with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants and Financial Accounting Standards Board, as modified by Regulation S-X under the Securities Act of 1933, as amended, with respect to prospective financial information, but, in the Company’s view, was prepared on a reasonable basis and reflects the best currently available estimates and judgment of Company management. However, this prospective financial information is not fact and readers of this press release should not rely upon this information as being necessarily indicative of future results or to place undue reliance on such financial information. Inclusion of the prospective financial information in this press release should not be regarded as a representation by any person that the results contained in such financial information will be achieved.
Neither the Company’s independent registered public accounting firm nor any other independent accountants has compiled, examined or performed any procedures with respect to the prospective financial information contained herein, or expressed any opinion or assurance with respect to the prospective financial information or its achievability, and accordingly each assumes no responsibility for, and disclaims any association with, the prospective financial information.
Source: Eagle Point Credit Company Inc.