ECCV - Eagle Point Credit: Securing An 8% YTM With Its Baby Bonds
2024-07-13 11:40:00 ET
Summary
- Eagle Point Credit Company offers preferred shares and baby bonds with good coverage ratios for dividends and interest payments.
- ECC's balance sheet shows strong financial health with ample common equity to cover potential losses, providing a buffer for senior securities.
- Investors may consider ECC's 2029 baby bonds for a higher yield to maturity of 8% compared to the 2031 term preferred stock's 8.55% yield.
Introduction
I have recently been increasing my exposure to the more senior securities in the capital stack of CLO CEFs. In a recent article I discussed a series of preferred shares issued by Priority Income Fund ( OTC:PRIF ) and as the term preferred shares of that CLO-equity focused CEF yielded 8.75% to maturity , I wanted to have a look at another CLO Equity heavy CEF . Eagle Point Credit Company ( ECC ) is the CLO Equity heavy sibling of Eagle Point Income ( EIC ) which predominantly focuses on CLO debt....
Eagle Point Credit: Securing An 8% YTM With Its Baby Bonds