Eagle Point Credit Company Prices Baby Bonds

6:30 am

Specialty finance company Eagle Point Credit Company (NYSE:ECC) has priced their new baby bonds at 6.6875% with a maturity in 2028.

The ticker for this new issue will be ECCX and it should trade later this week or early next week.  No OTC Grey Market trading is expected.

While the coupon on this issue is not too bad we find the 2028 maturity about 3 years too long for us.  We will not be purchasing these baby bonds unless they trade down to $24 or so.

If you review our Medium Duration Income Portfolio you will see that the vast majority of issues mature between 2021 and 2024, although there is 1 issue in 2027.  At this time we don’t want to go longer as the longer we go the higher the interest rate risk and that defeats the purpose of this portfolio.  For the same reason we won’t purchase now for personal holding.

We will write more on ECC in the next couple of days.

The pricing term sheet can be found here.