Eagle Point Credit Co Inc. (NYSE:ECC), a Connecticut-based investment company, announced today the successful closure of a $100 million offering of 7.75% notes due 2030, according to a recent 8-K filing with the U.S. Securities and Exchange Commission. The notes, trading under the symbol "ECCU", are unsecured and rank equally with the company’s existing and future unsecured indebtedness.
The offering, which closed on Tuesday, involved the issuance of notes with an aggregate principal amount of $100,000,000. The underwriters have a 30-day option, starting from December 4, 2024, to purchase up to an additional $15 million in notes.
The notes are scheduled to mature on June 30, 2030, with interest payable quarterly starting March 31, 2025. The company's strong financial position is evidenced by its current ratio of 2.27, indicating ample liquidity to meet short-term obligations.
Eagle Point Credit's new notes will be listed on the New York Stock Exchange and are expected to rank senior to the company's common and preferred stock upon liquidation. They will be on par with the company's other unsecured debts and effectively subordinated to any secured obligations and to the debts of the company's subsidiaries.
The company has the option to redeem the notes in whole or in part at any time on or after June 30, 2027, at a redemption price of 100% of the principal amount plus accrued interest. The notes are not subject to a sinking fund, and holders do not have the option to have the notes repaid prior to the stated maturity date.
Eagle Point Credit has also retained the ability to issue additional notes with the same terms as the current offering. These additional notes, if issued, would be considered part of the same series under the indenture. With revenue growth of 28.3% in the last twelve months and total debt of $272 million, InvestingPro analysis reveals several additional key metrics and insights available to subscribers, including detailed valuation metrics and growth prospects.
The offering was made under the company’s shelf registration statement previously filed with the SEC. This information is based on a press release statement and the transaction details are outlined in the 8-K filing, which includes the full terms of the indenture and the notes.
In other recent news, Eagle Point Credit Company (NYSE:ECC) reported a decrease in recurring cash flows to $68.2 million per share, down from $71.4 million in the previous quarter. However, the company's Net Asset Value (NAV) per share saw an increase, rising from $8.44 to $8.60. Eagle Point Credit also declared monthly distributions for Q1 2025 at $0.14 per share, adding a variable distribution of $0.02 per share in Q3.
The company has also entered into an agreement to issue $100 million of 7.75% notes due in 2030, underwritten by Lucid (NASDAQ:LCID) Capital Markets and other underwriters. This strategic decision aims to raise capital by selling these fixed-income securities. Underwriters have the option to purchase up to an additional $15 million of these notes over the next 30 days.
In terms of analyst coverage, Lucid Capital Markets initiated a Buy rating on Eagle Point Credit shares, citing the management team's expertise and the company's unique investment strategy. They set a price target of $9.50, which implies a potential for price-to-NAV multiple expansion in the short to medium term. Credit Suisse (SIX:CSGN) analysts noted the strong performance of the Leveraged Loan Index, suggesting a favorable investment environment for Collateralized Loan Obligations.
Looking ahead, Eagle Point Credit plans to enhance net investment income through proactive investments and refinancing opportunities. Despite challenges from loan spread compression, the company remains committed to consistent cash flow generation and prudent portfolio management.
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