Eagle Point Credit Unveils $100M Note Offering

In a strategic move to boost its capital and investment capabilities, Eagle Point Credit Company Inc. (NYSE: ECC) has priced a $100 million public offering of notes. This offering, slated to close on December 10, 2024, subject to customary closing conditions, is expected to provide the company with net proceeds of approximately $96.5 million after underwriting discounts and estimated offering expenses.

The 2030 Notes, rated 'BBB+' by Egan-Jones Ratings Company, will mature on June 30, 2030, and may be redeemed by the company starting from June 30, 2027. These notes will bear interest at a rate of 7.75% per year, payable quarterly, with the first interest payment due on March 31, 2025. The offering will be led by Lucid Capital Markets, LLC, with support from B. Riley Securities, Piper Sandler & Co., and Janney Montgomery Scott LLC as joint bookrunners.

Eagle Point Credit, a non-diversified, closed-end management investment company, aims to generate high current income with a secondary objective of capital appreciation. Its primary investment strategy involves investing in equity and junior debt tranches of collateralized loan obligations (CLOs). The additional capital raised through this offering can be allocated to further diversify the company's portfolio and potentially increase its exposure to attractive CLOs, providing a steady stream of high-yielding income.

The BBB+ rating by Egan-Jones Ratings Company indicates a solid, investment-grade creditworthiness for the 2030 Notes. This rating suggests a lower risk profile compared to lower-rated or unrated bonds, potentially attracting more conservative investors. The interest payments and potential redemption of the notes play a crucial role in the company's long-term financial strategy, contributing to its primary objective of generating high current income and offering flexibility in managing its debt portfolio.

The success of this offering, driven by the competitive yield and solid credit rating, bodes well for the company's future access to capital markets. Eagle Point Credit can potentially secure better terms for future debt issuances and tap into broader investor bases, including those with risk aversion. However, the company's overall financial strategy should also consider diversifying funding sources to mitigate reliance on debt financing.

As the offering closes and the notes are listed on the New York Stock Exchange under the symbol "ECCU," investors seeking high current income can consider allocating a portion of their portfolios to these notes. However, it's essential to evaluate the potential impact of interest rate hikes and redemption options on the notes' value and consider the company's broader financial health.




In conclusion, Eagle Point Credit Company Inc.'s $100 million note offering presents an attractive investment opportunity for income-focused investors. The solid credit rating, competitive yield, and the company's strategic investment objectives make this offering an appealing addition to portfolios seeking high current income. As the company continues to diversify its portfolio and manage its debt obligations, investors should monitor its performance and adapt their strategies accordingly to capitalize on potential market growth.