– Announces New Monthly Distribution Program
for Common Stock –
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 2016.
SUBSEQUENT EVENTS
- 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 period.
- 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 quarterly
program.”
“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 current liabilities).
FIRST QUARTER 2017 PORTFOLIO ACTIVITY THROUGH FEBRUARY 15,
2017 AND OTHER UPDATES
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 to revision.
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:
Ex-Dividend Date Record Date
Payable Date Amount per
common share March 6, 2017
March 8, 2017 March 15, 2017
$0.20 March 13, 2017 March 15, 2017
March 31, 2017 $0.20 April 12, 2017
April 17, 2017 April 28, 2017
$0.20 May 11, 2017 May 15, 2017 May 31,
2017 $0.20
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.
SPECIAL DISTRIBUTION
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.
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 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.
ADDITIONAL INFORMATION
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, 2016.
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.
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.
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 such estimate.
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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version on businesswire.com: http://www.businesswire.com/news/home/20170224005150/en/
Investor and Media Relations:Eagle Point Credit Company Inc.Kyle
McGrady,
203-340-8500IR@EaglePointCredit.comwww.eaglepointcreditcompany.com
Eagle Point Credit Company Inc. 7.00% Notes Due 2020 (delisted) (NYSE:ECCZ)
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