Eagle Point Credit Company Inc. Reports Q4 and Full-Year 2024 Financial Results
Eagle Point Credit Company Inc. (the “Company”) (NYSE: ECC, ECCC, ECC PRD, ECCF, ECCU, ECCV, ECCW, ECCX) has announced its financial results for the fourth quarter and full fiscal year ending December 31, 2024. Additionally, the Company provided updates on portfolio activity through January 31, 2025.
Thomas P. Majewski, Chief Executive Officer of Eagle Point Credit Company, expressed confidence in the Company’s strategic moves. “We remain proactive in managing our portfolio and balance sheet,” he said. “During the fourth quarter, we reset 16 and refinanced 2 of our CLO investments, which extended Credit Company the weighted average remaining reinvestment periods of the reset CLOs and reduced the cost of debt financing across all 18 CLOs. By leveraging our majority rights, we have laid the groundwork to further enhance net investment income in 2025 and beyond.”
Majewski also highlighted the Company’s strategic balance sheet management. “Through our ‘at-the-market’ program, we selectively issued common stock at a Credit Company premium to net asset value (NAV), generating $0.05 per share in NAV accretion,” he explained. “Additionally, the continued issuance of our Series D and Series AA/AB perpetual preferred stock remains a distinct competitive advantage over other publicly traded CLO funds.”
Fourth Quarter 2024 Financial Highlights
- The NAV per common share stood at $8.38 as of December 31, 2024, compared to $8.44 on September 30, 2024.
- Net investment income (NII) was $0.24 per weighted average common share, factoring in a one-time expense of $0.03 per share related to the issuance of the Company’s 7.75% Notes due 2030 (the “ECCU Notes”).
- NII, less realized capital losses, was $0.12 per weighted average common share.
- The Company incurred realized capital losses of $0.14 per share due to the write-down of eight late-stage CLO equity positions, transitioning unrealized depreciation into Credit Company realized losses. However, these adjustments had minimal impact on NAV. Excluding these reclassifications, the Company realized capital gains of $0.02 per weighted average common share from the sale of appreciated investments and repayments.
- GAAP net income for the quarter was $45.3 million, translating to $0.41 per weighted average common share.
- The Company received $82.0 million in recurring cash distributions, equating to $0.74 per weighted average common share, which exceeded its common Credit Company stock distributions and operating expenses.
- Investment deployment totaled $223.5 million, spread across CLO equity, CLO debt, loan accumulation facilities, and other investments.
- The weighted average effective yield of newly acquired CLO equity investments was 17.8% at the time of investment, reflecting the Company’s strong focus on maximizing returns.
Portfolio Composition and Performance as of December 31, 2024
- The weighted average effective yield of the CLO equity portfolio (excluding called CLOs), based on amortized cost, was 14.61%—consistent with the September 30, 2024 level but lower than the 16.70% recorded on December 31, 2023.
- The weighted average expected yield of the CLO equity portfolio, based on fair market value, stood at 19.31%, compared to 21.21% as of September 30, 2024, and 27.10% as of December 31, 2023.
- The Company successfully completed an underwritten public offering, raising $115.0 million through the issuance of ECCU Notes, with net proceeds of approximately $111.0 million.
- The Company issued approximately 5.2 million shares of common stock, 1.0 million shares of 6.75% Series D Perpetual Preferred Stock, and 140,574 shares of 8.00% Series F Term Preferred Stock through its “at-the-market” offering program, generating Credit Company approximately $71.5 million in net proceeds. The issuance of common stock contributed $0.05 per share of NAV accretion.
- Additional issuances included 794,892 shares of Series AA and 100,586 shares of Series AB 7.00% Convertible and Perpetual Preferred Stock, yielding $20.3 million in proceeds.
- Debt and preferred equity securities outstanding represented 38.0% of the Company’s total assets (less current liabilities).
- The Company’s look-through portfolio exposure included 1,895 unique corporate obligors within its CLO equity holdings.
- The largest single obligor accounted for 0.5% of underlying loans, while the top 10 obligors represented 4.8% of the portfolio.
- The weighted average spread of loans underlying the Company’s CLO equity portfolio was 3.49%, a slight decline from the 3.54% recorded in September 2024.
Full-Year 2024 Financial Highlights
- GAAP net income for the full year was $80.3 million.
- Total investment income amounted to $179.8 million.
- Net unrealized appreciation on investments was $3.4 million, while unrealized depreciation on certain liabilities held at fair value was $5.4 million.
- Realized capital losses were $29.8 million, primarily due to the aforementioned CLO write-downs.
- Operating expenses and financing costs totaled $73.3 million.
- Recurring cash distributions received from the investment portfolio were $277.8 million, equating to $2.88 per weighted average common share.
- The Company recorded an other comprehensive loss of $7.4 million for the fiscal year.
First Quarter 2025 Portfolio Activity and Additional Updates
As of January 31, 2025, management estimated the Company’s NAV per common share to be between $8.28 and $8.38.
- The Company received $71.5 million in recurring cash distributions from its investment portfolio, though some investments had yet to reach their quarterly payment date.
- $59.2 million in net capital was deployed into CLO equity, CLO debt, loan accumulation facilities, and other investments.
ABOUT EAGLE POINT CREDIT COMPANY
The Company is a non-diversified, closed-end management investment company. The Company’s primary investment objective is to generate high current income, with a secondary objective to generate capital appreciation, primarily by investing Credit Company in equity and junior debt tranches of CLOs. The Company is externally managed and advised by Eagle Point Credit Management LLC.
