Eagle Point Credit Company Inc. Announces First Quarter 2016 Financial Results
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.
ADDITIONAL INFORMATION
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.
DISTRIBUTIONS
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.
CONFERENCE CALL
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).
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 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.
Investor Relations:
Eagle Point Credit Company Inc.
Kenneth P. Onorio, 203-340-8500
Chief Financial Officer
ir@EaglePointCredit.com
www.eaglepointcreditcompany.com
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