Holders of Eagle Point Credit Term Preferred Get a Call

Late today CLO holder Eagle Point Credit Company (ECC) announced the full redemption of the Series A 7.75% Term Preferred (ECCA) issue.

This should really come as no surprise as the company had redeemed 900,000 shares back in May.

The issue closed today at $25.95. With the redemption date being 1/31/2020 holders will receive 2 dividends yet (it is a monthly payer) of around 16 cents (32 cents in total). So holders today will see a capital loss of around 63 cents.

Thanks to Affinity4Investing for being right on top of this call notice.

8 thoughts on “Holders of Eagle Point Credit Term Preferred Get a Call”

  1. It’s going to be interesting to see what they do if there is a further decline in CLO Equity. Even after calling ECCA they will still be above their target range of 25-35% leverage / total assets and have nothing else callable at the present time.

    1. 730Cap–I was just reviewing the report from OFS Credit (not OFS Capital) and they have lost 30% of the portfolio NAV in 1 year—the common shares of these CLO holders have great risk, but yield chasers just keep buying.

  2. I finally played one of these correctly…after the first partial call, I put a limit order in to sell out the rest at $26 and it executed through fidelity on 11/1. Saved myself a steak dinner. 🙂

  3. Merrill won’t even let you liquidate ECCA now. So apparently, anyone who owns it, likely sucks down this loss immediately w/o the ability to bail and save a few bucks. Maybe the case is different at other brokerages.

  4. Tim,
    I was able to move from ECCA to ECCB over the past few months with only about a 30-cent loss on the move. Appreciate your heads up on this so early and so often.
    Jay

  5. Surprisingly ECCA closed up 18 cents on the day. As you point out Tim bringing the capital loss to more than 60 cents.

    1. Gary–yes I thought that was very strange. It has to be ‘yield chasing’ newbies –sometimes there is little logic.

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