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Eagle Point secures attractive dividend rate on preferreds, CEO says
By Devika Patel
Knoxville, Tenn., Nov. 16 – Eagle Point Credit Co. Inc. was able to issue 10-year preferreds at the same 7.75% dividend rate as the company’s previously issued seven-year preferreds, the company noted in its quarterly earnings report. Management also found the monthly dividend feature appealing, an executive said Wednesday.
“We believe this signals that the company’s standing in the investor market continues to grow and we’re pleased to be able to issue long-term dated preferred stock,” director and chief executive officer Thomas P. Majewski said on the company’s third quarter earnings call on Wednesday.
The previous offering, in May 2015, was for seven-year series A preferreds.
Majewski noted that in its latest transaction, which closed on Oct. 11, Eagle Point sold 1.2 million shares of 7.75% series B term preferred stock due 2026, a 10-year maturity.
Subsequently, the underwriters exercised the greenshoe, bringing the total to 1.38 million shares, or $34.5 million.
Keefe Bruyette & Woods Inc. was the bookrunner. FBR Capital Markets & Co. and Wunderlich Securities Inc. were co-lead managers.
“Similar to our series A term preferred stock, the series B preferreds also pay a monthly dividend, which we believe to be an attractive feature,” Majewski added.
As of Nov. 15, the series B preferreds were trading at $25.70 per share, he said.
Proceeds from the preferreds will be used for investments in accordance with the externally managed, non-diversified closed end management investment company’s objectives and strategy and for general working capital purposes.
Eagle Point Credit is a Greenwich, Conn.-based non-diversified, closed-end management investment company.
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