Eagle Point Credit Company Inc. (NYSE:ECCA) Q3 2018 Earnings Conference Call Transcript

Nov 14, 2018 • 10:00 am ET


Eagle Point Credit Company Inc. (NYSE:ECCA) Q3 2018 Earnings Conference Call Transcript


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Good morning. My name is Lindsay, and I will be your conference operator today. At this time, I would like to welcome everyone to the Eagle Point Credit Company Third Quarter 2018 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.

Mr. Garrett Edson, SVP, ICR, you may begin your conference.

Garrett Edson

Thank you, Lindsay, and good morning. By now, everyone should have access to our earnings announcement and investor presentation, which was released prior to this call and which may also be found on our website at eaglepointcreditcompany.com.

(Forward-Looking Cautionary Statements)

Earlier today, we filed our Form N-Q, third quarter 2018 financial statements and third quarter investor presentation with the Securities and Exchange Commission. Financial statements and our third quarter investor presentation are also available on the company's website. The financial statements can be found by following the Financial Statements and Reports quick link on our website. The investor presentation can be found by following the Investor Presentation and Portfolio Information quick link on our website.

I would now like to introduce Tom Majewski, CEO of Eagle Point Credit Company.

Tom Majewski

Thank you, Garrett, and welcome, everyone, to Eagle Point Credit Company's third quarter earnings call. If you haven't done so already, we invite you to download our investor presentation from our website, which provides additional information about the company, including information about our portfolio and our CLOs' underlying corporate loan obligors.

As we've done previously, I'll provide some high-level commentary on the third quarter, then will turn the call over to Ken, who will walk us through the third quarter financials in more detail. I'll then return to talk about the macro environment, our portfolio and investment strategy and provide some updates on our recent activity. At the end, of course, we'll open the call to participant questions.

The third quarter saw us hard at work at Eagle Point across the board in terms of deploying capital, opportunistically selling certain holdings, resetting CLOs in our portfolio and directing capital markets activities on behalf of the company. During the quarter, we deployed approximately $42.3 million in gross capital into new investments, and similar to recent quarters, the new CLO equity that we purchased during the quarter had a higher weighted average effective yield than the weighted average of our overall portfolio. Additionally, where we saw opportunities and appropriate pricing, we sold certain CLO equity and debt investments, locking in a net $0.01 per share of realized gains on investments during the period. We also continued to leverage our adviser's competitive strength and priced five resets and one refinancing of existing holdings during the third quarter.

For the third quarter, we generated net investment income and realized capital gains of $0.41 per common share, a $0.07 increase from the prior quarter, but still below our common distribution rate of $0.60 per quarter. We are mindful that we have been generating NII and