– Announces New Monthly Distribution Program for Common Stock –
GREENWICH, Conn.--(BUSINESS WIRE)--
Eagle Point Credit Company Inc. (the “Company”)
(NYSE:ECC)(NYSE:ECCA)(NYSE:ECCB)(NYSE:ECCZ) today announced financial
results for the quarter and fiscal year ended December 31, 2016, net
asset value (“NAV”) as of December 31, 2016 and certain portfolio
activity through February 15, 2017.
FOURTH QUARTER AND FULL YEAR 2016 HIGHLIGHTS
Fourth quarter 2016 net investment income (“NII”) and realized capital
gains of $0.54 per weighted average common share1, which
reflects the impact of a $0.04 estimated excise tax charge per
weighted average common share.
NAV per common share of $17.48 as of December 31, 2016.
Fourth quarter 2016 net income (inclusive of unrealized gains) of
$23.4 million, or $1.51 per weighted average common share.
Weighted average effective yield of the Company’s collateralized loan
obligation (“CLO”) equity portfolio was 17.48% as of December 31, 2016.
Deployed $67.0 million in net capital in the fourth quarter of 2016;
received $25.5 million in cash distributions in the fourth quarter of
NAV per common share of $17.78 as of January 31, 2017 based on
management’s unaudited estimate.
Deployed $36.5 million of capital from January 1, 2017 to February 15,
2017; received cash distributions of $24.6 million over the same
In March 2017, converts to monthly distributions of $0.20 per common
share from previous quarterly distributions of $0.60 per common share.
“2016 was a great year for the Company as we more than doubled our CLO
equity assets and the cash flow generated from our portfolio remained
strong,” said Thomas Majewski, Chief Executive Officer. “We are excited
to announce today the shift to a monthly distribution program for our
common stock. As a result of this shift, shareholders will receive cash
distributions sooner than they would have received them under the prior
“In addition, the Company successfully completed several successful
equity and debt capital raises in 2016,” added Mr. Majewski. “In the
fourth quarter alone, we priced two preferred stock offerings and one
common stock offering, delivering net proceeds of $63 million to the
Company after the payment of underwriting discounts and commissions and
offering expenses. This allowed us to deploy the capital into new
investments using our deep experience in the market with the objective
of creating long-term value for our shareholders.”
FOURTH QUARTER 2016 RESULTS
The Company’s NII and realized capital gains for the quarter ended
December 31, 2016 was $0.54 per weighted average common share, which
reflects the impact of an estimated $0.04 per share excise tax charge
related to the Company’s undistributed income for its recently completed
tax year. Excluding the excise tax charge, the Company’s NII and
realized capital gains per weighted average common share for the quarter
was $0.58, compared to $0.54 per weighted average common share for the
quarter ended September 30, 2016, and $0.53 per weighted average common
share for the quarter ended December 31, 2015.
For the quarter ended December 31, 2016, the Company recorded net income
of $23.4 million, or $1.51 per weighted average common share. Net income
was comprised of total investment income of $15.1 million, net
unrealized appreciation (or unrealized mark-to-market gain on
investments) of $14.9 million and realized capital gains on investments
of $1.1 million, partially offset by total expenses of $7.7 million.
NAV as of December 31, 2016 was $288.0 million, or $17.48 per common
share, an increase of $0.82 per common share from the Company’s NAV as
of September 30, 2016, and an increase of $3.76 per common share from
the Company’s NAV as of December 31, 2015.
During the quarter ended December 31, 2016, the Company deployed $125.0
million in capital which included $102.1 million in CLO equity
investments. The weighted average effective yield of new CLO equity
investments made by the Company during the quarter was 16.51% as
measured at the time of investment. The weighted average effective yield
of these CLO equity investments includes a provision for credit losses.
Additionally, during the quarter, the Company received $58.0 million of
proceeds from the liquidation of investments, resulting in $1.1 million
of realized gains.
During the quarter ended December 31, 2016, the Company received $25.5
million of cash distributions from its investment portfolio, or $1.64
per weighted average common share.
As of December 31, 2016, the weighted average effective yield on the
Company’s CLO equity portfolio was 17.48%, compared to 17.27% as of
September 30, 2016 and 16.68% as of December 31, 2015.
FULL YEAR 2016 HIGHLIGHTS AND PORTFOLIO STATUS
For the fiscal year ended December 31, 2016, the Company recorded net
income of $90.6 million. Fiscal year net income was comprised of total
investment income of $55.9 million, net unrealized appreciation (or
unrealized mark-to-market gain on investments) of $57.3 million and
realized capital gains on investments of $1.9 million, partially offset
by total expenses of $24.5 million.
For the fiscal year ended December 31, 2016, the Company received a
total of $92.1 million of cash payments from its portfolio, or $6.25 per
weighted average common share.
As of December 31, 2016 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 1,151 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 6.9% of the Company’s CLO
equity and loan accumulation facility portfolio.
As of December 31, 2016, the Company had debt and preferred securities
outstanding which totaled approximately 35% of its total assets (less
FIRST QUARTER 2017 PORTFOLIO ACTIVITY THROUGH FEBRUARY 15, 2017 AND
From January 1, 2017 through February 15, 2017, the Company received
cash distributions on its investment portfolio totaling $24.6 million,
or $1.49 per weighted average common share. As of February 15, 2017,
some of the Company’s investments had not yet reached their payment date
for the current quarter.
From January 1, 2017 through February 15, 2017, the Company made gross
new investments totaling $36.5 million, which includes investments in
six new CLO equity securities. Additionally, one of the Company’s
existing loan accumulation facilities has priced into a CLO and is
expected to close by March 31, 2017.
As of February 15, 2017, the Company has approximately $27.0 million of
cash available for investment.
As published on the Company’s website yesterday, management’s unaudited
estimate of its NAV per common share as of January 31, 2017 is $17.78.
This estimate was published for information purposes only and is subject
CONVERSION TO MONTHLY COMMON DISTRIBUTION
The Company is pleased to announce that it will begin to pay common
distributions on a monthly basis. The Company intends to make
distributions of $0.20 per common share each month compared to $0.60 per
common share on a quarterly basis, although the Company notes that the
actual components and amount of such distributions are subject to
variation over time.
Today, the Company declared four separate distributions of $0.20 per
common share payable according to the following schedule:
March 6, 2017
March 8, 2017
March 15, 2017
March 13, 2017
March 15, 2017
March 31, 2017
April 12, 2017
April 17, 2017
April 28, 2017
May 11, 2017
May 15, 2017
May 31, 2017
PREVIOUSLY DECLARED DISTRIBUTIONS
On January 31, 2017, the Company paid a distribution of $0.60 per common
share to stockholders of record as of December 30, 2016.
The Company paid distributions of $0.161459 per share of the Company’s
7.75% Series A Term Preferred Stock due 2022 (the “Series A Term
Preferred Stock”) (NYSE: ECCA) and Series B Term Preferred Stock due
2026 (the “Series B Term Preferred Stock”) (NYSE: ECCB) on January 31,
2017, to stockholders of record as of January 17, 2017. The
distributions represented a 7.75% annualized rate, based on both the
Series A and Series B 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 and Series B Term Preferred Stock, payable on each of
February 28, 2017 and March 31, 2017, to stockholders of record as of
February 15, 2017 and March 15, 2017, respectively.
As one of the requirements for the Company to maintain its ability to be
taxed as a “regulated investment company” (which it has elected to be),
the Company is generally required to pay distributions to holders of its
common stock in an amount equal to substantially all of the Company’s
taxable income within one year of the end of its tax year, which is
November 30, 2016.
The Company preliminarily estimates its taxable income for the tax year
ending November 30, 2016 will exceed aggregate quarterly distributions
paid to common stockholders with respect to such year. At present,
management estimates a special distribution of $0.60 to $0.80 per common
share and will be required to meet the distribution requirement
described above. This estimate remains preliminary and is based solely
on information currently available to management with respect to
approximately 90% of the Company’s portfolio. The actual amounts
required to be distributed will not be known until the Company files its
tax returns and such amount may deviate from the above estimated range.
Management expects to target payment of special distributions pertaining
to the Company’s November 30, 2016 tax year in one or more installments
toward the latter part of 2017. The Company will incur a 4% excise tax
in connection with the special distribution. The estimated amount of the
tax, $0.04 per weighted average common share, was recorded as a
liability in the Company’s December 31, 2016 financial results.
The Company will host a conference call at 10:00 a.m. (Eastern Time)
today to discuss the Company’s financial results for the year ended
December 31, 2016, as well as 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 61668057 approximately 10 to 15 minutes prior to
the call. An archived replay of the call will be available shortly
afterwards until March 24, 2017. To hear the replay, please dial (800)
585-8367 (domestic) or (416) 621-4642 (international). For the replay,
enter conference ID 61668057.
The Company has made available on its website, http://eaglepointcreditcompany.com
(in the financial statements and reports section) its 2016 Stockholder
Letter and Annual Report, which includes the Company’s audited
consolidated financial statements as of and for the period ended
December 31, 2016. The Company has also filed this report with the
Securities and Exchange Commission. The Company published on its website
an investor presentation which contains additional information about the
Company and its portfolio as of and for the quarter ended December 31,
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 information includes (1) an estimated range of the Company’s net
investment income (“NII”) and realized capital gains or losses per
weighted average 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 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 capital gains or losses for
the applicable quarter, if available.
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
FURTHER INFORMATION REGARDING ESTIMATED TAX INFORMATION
The estimates of the Company’s taxable income and distributions for
the tax year ended November 30, 2016 reflects management’s judgment as
of the date of this letter of conditions it expects to exist and the
course of action it expects the Company to take with respect to the tax
year ended November 30, 2016. The estimates are based on taxable income
reported to date and assumptions relating to the underlying tax
characteristics of income and other items as reported to the Company by
a portion of its underlying investment portfolio. 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
uncertainties that could cause actual results to differ materially from
those contained in the estimates, including risks and uncertainties
relating to the completeness and accuracy of preliminary information
reported or received by the Company from underlying investments, and
those described in the notes to the Company’s audited consolidated
financial statements for the fiscal year ended December 31, 2016.
Accordingly, there can be no assurance that actual results will not
differ materially from those presented in the estimates.
The estimate of taxable income was prepared on a reasonable basis and
reflects the best currently available estimates and judgment of Company
management. However, this estimate is not fact and readers of this
letter should not rely upon this information or place undue reliance on
Neither the Company’s independent registered public accounting firm
nor any other independent accountants has compiled, examined or
performed any procedures with respect to estimated information contained
herein, or expressed any opinion or assurance with respect to the
estimated information or its achievability, and accordingly each assumes
no responsibility for, and disclaims any association with, the estimates.
1 “Per weighted average common share” data are on a weighted
average basis based on the average daily number of shares outstanding
for the period.
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Source: Eagle Point Credit Company Inc.