Eagle Point Credit Company (ECC) Q2 2024 earnings summary

Executive summary

• Recurring cash flows rose to $71.4M ($0.79/share), up from $56.2M ($0.70/share) in Q1, exceeding distributions and expenses by $0.13/share.

• $134.8M in net capital was deployed into new investments, including CLO equity, CLO debt, and loan accumulation facilities.

• Four resets and two refinancings were completed, enhancing value and reducing debt costs.

• The company focuses on CLO equity and junior debt tranches, with a market capitalization of $1.29B as of June 30, 2024.

• Senior investment team alignment is shown by $15.7M invested in company securities.

Financial highlights

• Net investment income (NII) per share was $0.28, down from $0.30 in Q1 2024 and $0.32 in Q2 2023.

• Net asset value (NAV) per share at June 30, 2024 was $8.75, down from $9.16 at March 31, 2024.

• GAAP net loss for Q2 was ~$4M ($0.04/share), compared to GAAP net income of $0.43/share in Q1.

• Total portfolio cash distributions received in Q2 2024 were $72.45M, up from $56.17M in Q1 2024.

• Debt and preferred securities outstanding at quarter-end were 28% of total assets, below the 25%-35% target leverage range.

Outlook and guidance

• Expectation for portfolio cash flows to increase in Q4 as new CLO equity investments begin payments.

• Regular and supplemental monthly distributions of $0.16/share declared through year-end.

• Convertible Preferred Stock distributions reflect a 7.00% annual rate on the $25 liquidation preference.

• Robust pipeline of reset and refinancing opportunities to extend reinvestment periods and lower debt costs.