- Fourth quarter 2016 net investment income ("NII") and realized capital gains of $0.54 per weighted average common share 1, 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.
- 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.
"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|
|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|
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.