Eagle Point Credit (ECC) Tops Q4 EPS by 6c

Eagle Point Credit (NYSE: ECC) reported Q4 EPS of $0.50, $0.06 better than the analyst estimate of $0.44.

“We continued to actively manage the Company’s portfolio, prudently deploying capital while also opportunistically selling certain investments and realizing gains,” said Thomas Majewski, Chief Executive Officer. “During the quarter, we deployed $91.6 million into new investments and reset 4 of the Company’s CLO investments, lengthening the reinvestment periods in each transaction. Our focus remains on the long term and seeking to lock in lower cost CLO debt for a longer duration.”

“Our NII and realized capital gains per share increased slightly from the prior quarter to $0.50 per common share and our CLO equity portfolio’s weighted average effective yield increased versus the prior quarter,” noted Mr. Majewski. “We have also been active in managing the Company’s balance sheet. In January, we completed a common stock offering with net proceeds of $38.8 million. That stock was sold at a premium to NAV, which increases NAV for all shareholders, and much of that capital has already been deployed into new investments.”

“Subsequent to quarter end, we took advantage of strong market conditions and looked to effectively refinance our 7% ECCZ unsecured notes by completing a new notes offering,” added Mr. Majewski. “The new unsecured notes (ECCX) have a fixed coupon of 6.6875%, 31.25 basis points lower than the ECCZ notes they are replacing and represent our lowest cost of debt at the Company to date. Importantly, the ECCX notes have a ten-year maturity compared to the less than three years remaining on the life of the ECCZ notes. As a result of the issuance and announced redemption of the ECCZ notes, the pro-forma weighted average maturity on the Company’s outstanding notes and preferred stock is now just over eight years, with the nearest maturity being a little over four years away. Importantly, all of the Company’s financing is fixed rate, providing us added certainty in a rising rate environment.”

FIRST QUARTER 2018 RESULTS

• The Company’s NII and realized capital gains for the quarter ended March 31, 2018 was $0.50 per weighted average common share. This compared to $0.49 per weighted average common share for the quarter ended December 31, 2017, and $0.60 per weighted average common share for the quarter ended March 31, 2017.
• For the quarter ended March 31, 2018, the Company recorded GAAP net income of $8.1 million, or $0.39 per weighted average common share. Net income was comprised of total investment income of $17.0 million and net realized capital gains on investments of $1.8 million, offset by total expenses of $8.5 million and net unrealized depreciation (or unrealized mark-to-market loss on investments) of $2.2 million.
• NAV as of March 31, 2018 was $355.2 million, or $16.65 per common share, which is $0.12 per common share lower than the Company’s NAV as of December 31, 2017, and $0.48 per common share lower than the Company’s NAV as of March 31, 2017.
• During the quarter ended March 31, 2018, the Company deployed $91.6 million in gross capital and $41.1 million in net capital. 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 17.37% as measured at the time of investment. Additionally, during the quarter, the Company received $50.5 million of proceeds from the sale of investments and converted 1 of its existing loan accumulation facilities into a new CLO.
• During the quarter ended March 31, 2018, the Company received $22.7 million of cash distributions from its investment portfolio, or $1.10 per weighted average common share, including amounts received from called investments. Excluding proceeds from called investments, the Company received cash distributions of $1.04 per weighted average common share during the quarter.

For earnings history and earnings-related data on Eagle Point Credit (ECC) click here.

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