Eagle Point Credit Company Launches 7% Convertible and Perpetual Stock Offering
Eagle Point Credit Company Inc. (NYSE: ECC) began a continuous public offering of up to 4 million shares of its 7% Series AA Convertible and Perpetual Preferred Stock and 7% Series AB Convertible and Perpetual Preferred Stock (collectively “preferred stock”) at a public offering price of $25 per share, which will result in net proceeds to the company of approximately $91 million after payment of estimated commissions and offering expenses if all shares of the preferred stock are sold.
The non-traded offering is being distributed via independent broker-dealers and registered independent advisers. The preferred stock has a 7% annual dividend rate, paid monthly, and is rated ‘BBB’ by Egan-Jones Ratings Company, an independent rating agency. The preferred stock is perpetual and convertible by the holder into shares of the company’s common stock or cash (as determined by the company at its sole discretion), subject to certain conditions.
As stated in the filing, the company may borrow funds to make investments. As a result, it is exposed to the risk of borrowing (also known as leverage) which may be considered a speculative investment technique. Leverage increases the volatility of investments and magnifies the potential for loss on amounts invested thereby increasing the risk associated with investing in the offered preferred stock. Investing in the offered preferred stock involves a high degree of risk, including the risk of a substantial loss of investment.
Eagle Point Securities LLC is the dealer manager for the preferred stock offering. Eagle Point Securities LLC is an affiliate of the company and a member of FINRA and SIPC.
Eagle Point Credit Company is a non-diversified, closed-end management investment company. The Company’s primary investment objective is to generate high current income, with a secondary objective to generate capital appreciation, primarily by investing in equity and junior debt tranches of collateralized loan obligations.
The company is externally managed and advised by Eagle Point Credit Management LLC. Collectively with affiliates, it had approximately $9.3 billion in total assets under management as of Jan. 31, 2024, including capital commitments that were undrawn at the time.
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