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N-2 - USD ($)

3 Months Ended

12 Months Ended

Feb. 15, 2023

Jan. 31, 2023

Dec. 31, 2022

Sep. 30, 2022

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Jun. 30, 2022

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Mar. 31, 2022

Dec. 31, 2021

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Sep. 30, 2021

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Jun. 30, 2021

^[10]

Mar. 31, 2021

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Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2015

Cover [Abstract]

Entity Central Index Key

0001604174

Amendment Flag

true

Amendment Description

EXPLANATORY NOTE The Registrant is filing this amendment to its Form N-CSR (the “Amendment”) for the period ended December 31, 2022, originally filed with the Securities and Exchange Commission on February 22, 2023 (Accession Number 0001104659-23-024029) (the “Original Filing”). This Amendment is filed solely for the purpose of (i) including a modified Report of Independent Registered Public Accounting Firm and (ii) including a Consent of Independent Registered Public Accounting Firm. Except as set forth above (and the dates included on the signature page and the certifications required by Rule 30a-2(a) and Rule 30a-2(b)), the Amendment does not amend, update or change any other information or disclosures contained in the Original Filing.

Document Type

N-CSR/A

Entity Registrant Name

Eagle Point Credit Company Inc.

Fee Table [Abstract]

Shareholder Transaction Expenses [Table Text Block]

Stockholder Transaction Expenses (as a percentage of the offering price):
Sales load	—%⁽¹⁾
Offering expenses borne by the Company	—%⁽²⁾
Dividend reinvestment plan expenses	Up to $15⁽³⁾
Total stockholder transaction expenses	—%

	(1)	In the event that the Company sells its securities publicly through underwriters or agents (including each underwritten offering by selling stockholders), the related prospectus supplement will disclose the applicable sales load.
	(2)	In the event that the Company sells its securities publicly through underwriters or agents (including each underwritten offering by selling stockholders), the related prospectus supplement will disclose the estimated amount of total offering expenses (which may include offering expenses borne by third parties on the Company’s behalf), the offering price and the offering expenses borne by the Company as a percentage of the offering price.
	(3)	The expenses associated with the dividend reinvestment plan are included in “Other expenses.” If a participant elects by written notice to the plan administrator prior to termination of his or her account to have the plan administrator sell part or all of the shares held by the plan administrator in the participant’s account and remit the proceeds to the participant, the plan administrator is authorized to deduct a $15.00 transaction fee plus a $0.07 per share brokerage commission from the proceeds. See the section “*Dividend Reinvestment Plan*,” below.

Sales Load [Percent]

^[1]

0.00%

Dividend Reinvestment and Cash Purchase Fees

^[2]

$ 15

Underwriters Compensation [Percent]

^[3]

0.00%

Other Transaction Expenses [Abstract]

Annual Expenses [Table Text Block]

Annual Expenses (as a percentage of net assets attributable to common stock):
Base management fee	2.03%⁽⁴⁾
Incentive fee payable under the Investment Advisory Agreement (20%)	3.96%⁽⁵⁾
Interest payments on borrowed funds	2.94%⁽⁶⁾
Other expenses	0.80%⁽⁷⁾
Total annual expenses	9.73%

as a percentage of the Company’s total assets (as adjusted for the assumptions described above), the Company’s base management fee would be approximately 1.41% of total assets.

(5)

The incentive fee referenced in the table is based on the Company’s pre-incentive fee net investment income for the three months ended December 31, 2022, annualized for a full year, and adjusted as described below. The incentive fee referenced in the table above assumes pro forma effect of (i) the issuance in the Company’s “at-the-market” offering of 2.6 million shares of our common stock and 2,308 shares of our Series D Preferred Stock from January 1, 2023 through February 15, 2023, yielding net proceeds to the Company of approximately $27.2 million; and (ii) the $0.50 per share special distribution paid on January 24, 2023 to shareholders of record as of December 23, 2022. Such actions were assumed to have taken place at the start of such period. In addition, the incentive fee also assumes that such pro forma assets representing common stock and preferred stock earn net investment income at the same rate as that earned in respect of the Company’s total deployed assets during the three months ended December 31, 2022, annualized for a full fiscal year, and is based on the total assets assumed for such period. The Company has agreed to pay the Adviser as compensation under the Investment Advisory Agreement a quarterly incentive fee equal to 20% of the Company’s Pre-Incentive Fee Net Investment Income for the immediately preceding quarter, subject to a hurdle of 2.00% of the Company’s NAV and a catch-up feature. Pre-Incentive Fee Net Investment Income includes accrued income that the Company has not yet received in cash. However, the portion of the incentive fee that is attributable to deferred interest (such as payment-in-kind, or “PIK,” interest or original issue discount, or “OID”) will be paid to the Adviser, without interest, only if and to the extent the Company actually receives such interest in cash, and any accrual will be reversed if and to the extent such interest is reversed in connection with any write-off or similar treatment of the investment giving rise to any deferred interest accrual. No incentive fees are payable to the Adviser in respect of any capital gains.

The incentive fee in each calendar quarter is paid to the Adviser as follows:

no incentive fee in any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income does not exceed the hurdle of 2.00% of the Company’s NAV;

100% of the Company’s Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle but is less than 2.50% of the Company’s NAV in any calendar quarter. This portion of the Company’s Pre-Incentive Fee Net Investment Income (which exceeds the hurdle but is less than 2.50% of the Company’s NAV) is referred to as the “catch-up.” The “catch-up” is meant to provide the Adviser with 20% of the Company’s Pre-Incentive Fee Net Investment Income as if a hurdle did not apply if this net investment income meets or exceeds 2.50% of the Company’s NAV in any calendar quarter; and

20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.50% of the Company’s NAV in any calendar quarter is payable to the Adviser (that is, once the hurdle is reached and the catch-up is achieved, 20% of all Pre-Incentive Fee Net Investment Income thereafter is paid to the Adviser). For a more detailed discussion of the calculation of this fee, see “The Adviser and the Administrator — Investment Advisory Agreement — Management Fee and Incentive Fee” in the Company’s prospectus.

(6)

“Interest payments on borrowed funds” represents the Company’s annualized interest expense and includes dividends payable on the Preferred Stock and interest payable on the Notes, each as outstanding on December 31, 2022, and includes the pro forma effect of the issuances described above, which, in the aggregate, have a weighted average interest rate of 6.18% per annum. The Company may issue additional shares of preferred stock or debt securities. In the event that the Company were to issue additional shares of preferred stock or debt securities, the Company’s borrowing costs, and correspondingly its total annual expenses, including, in the case of such preferred stock, the base management fee as a percentage of the Company’s net assets attributable to common stock, would increase.

(7)

“Other expenses” includes the Company’s overhead expenses, including payments under the Administration Agreement based on the Company’s allocable portion of overhead and other expenses incurred by Eagle Point Administration LLC (“Eagle Point Administration”), the administrator to the Company and an affiliate of the Adviser, and payment of fees in connection with outsourced administrative functions, and are based on estimated amounts for the current fiscal year. See “Related Party Transactions — Administrator” in the Notes to Consolidated Financial Statements. “Other expenses” also includes the ongoing administrative expenses to the independent accountants and legal counsel of the Company, compensation of independent directors, and cost and expenses relating to rating agencies.

Management Fees [Percent]

^[4]

2.03%

Interest Expenses on Borrowings [Percent]

^[5]

2.94%

Incentive Fees [Percent]

^[6]

3.96%

Other Annual Expenses [Abstract]

Other Annual Expenses [Percent]

^[7]

0.80%

Total Annual Expenses [Percent]

9.73%

Expense Example [Table Text Block]

Example

The following example is furnished in response to the requirements of the SEC and illustrates the various costs and expenses that you would pay, directly or indirectly, on a $1,000 investment in shares of the Company’s common stock for the time periods indicated, assuming (1) total annual expenses of 5.77% of net assets attributable to the Company’s common stock and (2) a 5% annual return*:

		1 year			3 years			5 years			10 years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return		$58			$ 172			$ 284			$ 557

* The example should not be considered a representation of future returns or expenses, and actual returns and expenses may be greater or less than those shown. The example assumes that the estimated “other expenses” set forth in the Annual Expenses table are accurate, and that all dividends and distributions are reinvested at NAV. In addition, because the example assumes a 5% annual return, the example does not reflect the payment of the incentive fee. The Company’s actual rate of return may be greater or less than the hypothetical 5% return shown in the example.

Expense Example, Year 01

$ 58

Expense Example, Years 1 to 3

172

Expense Example, Years 1 to 5

284

Expense Example, Years 1 to 10

$ 557

Purpose of Fee Table , Note [Text Block]

The following table is intended to assist you in understanding the costs and expenses that an investor in shares of the Company’s common stock will bear directly or indirectly. The expenses shown in the table under “Annual Expenses” are estimated based on historical fees and expenses incurred by the Company, as appropriate. In addition, such amounts are based on the Company’s pro forma total assets as of December 31, 2022, which have been adjusted to reflect (i) the issuance in the Company’s “at-the-market” offering of 2.6 million shares of our common stock and 2,308 shares of our Series D Preferred Stock from January 1, 2023 through February 15, 2023, yielding net proceeds to the Company of approximately $27.2 million; and (ii) a $0.50 per share special distribution paid on January 24, 2023 to shareholders of record as of December 23, 2022, which would mean that the Company’s adjusted total assets are assumed to equal approximately $759.9 million. As of December 31, 2022, and pro forma for the issuances described above (excluding any regular monthly distributions paid after December 31, 2022), the Company’s leverage, including the outstanding Notes and Preferred Stock, represented approximately 33.7% of the Company’s total assets (less current liabilities). Such expenses, and actual leverage incurred by the Company, may vary in the future. Whenever this report (or other Company disclosures, including the Company’s prospectus) contain a reference to fees or expenses paid by the Company, the Company’s common stockholders will indirectly bear such fees or expenses.

Basis of Transaction Fees, Note [Text Block]

as a percentage of the offering price

Other Expenses, Note [Text Block]

Management Fee not based on Net Assets, Note [Text Block]

The Company’s base management fee is calculated and payable quarterly in arrears at an annual rate equal to 1.75% of the Company’s “Total Equity Base,” or the NAV attributable to the common stock and the paid-in or stated capital of the Company’s preferred stock. See the section “The Adviser and the Administrator — Investment Advisory Agreement — Management Fee and Incentive Fee” in the Company’s prospectus for additional information regarding the calculation of the base management fee. The base management fee referenced in the table above is based on actual amounts incurred during the three months ended December 31, 2022, annualized for a full year, and reflects the pro forma effect of the issuance of 2.6 million shares of our common stock and 2,308 shares of our Series D Preferred Stock from January 1, 2023 through February 15, 2023, yielding net proceeds to the Company of approximately $27.2 million, as if such shares were issued at the start of such period. In addition, such amount reflects the $81.6 million of the Company’s Preferred Stock outstanding as of December 31, 2022, the Company’s NAV for such period (as adjusted to account for the actions described above), and the $170.5 million aggregate principal amount of the Company’s Notes outstanding as of December 31, 2022 on which management fees are not payable. For purposes of this table, the SEC requires that the “Base management fee” percentage be calculated as a percentage of net assets attributable to common stockholders, rather than total assets, including assets that have been funded with borrowed monies because common stockholders bear all of this cost. If the management fee were calculated instead

Financial Highlights [Abstract]

Senior Securities [Table Text Block]

Class	Total Amount Outstanding Exclusive of Treasury Securities	Asset Coverage Per Unit ⁽¹⁾	Involuntary Liquidating Preference Per Unit ⁽²⁾	Average Market Value Per Unit ⁽³⁾

For the year ended December 31, 2022
Preferred Stock	$ 81,587,250	$ 71.47	$ 25	$ 23.25

Unsecured Notes	$ 170,523,800	$ 4,226.70	N/A	$23.67

For the year ended December 31, 2021
Preferred Stock	$ 98,130,500	$ 78.16	$ 25	$ 25.48

Unsecured Notes	$ 138,584,775	$ 5,339.86	N/A	$ 25.58

For the year ended December 31, 2020
Preferred Stock	$ 47,862,425	$ 88.39	$ 25	$ 24.25

Unsecured Notes	$ 93,734,775	$ 5,340.98	N/A	$ 23.93

For the year ended December 31, 2019

Preferred Stock	$ 69,843,150	$ 69.71	$ 25	$ 26.04

Unsecured Notes	$ 98,902,675	$ 4,757.42	N/A	$ 25.47

For the year ended December 31, 2018
Preferred Stock	$ 92,568,150	$ 61.55	$ 25	$ 25.78

Unsecured Notes	$ 98,902,675	$ 4,766.23	N/A	$ 25.08

For the year ended December 31, 2017
Preferred Stock	$ 92,139,600	$ 66.97	$ 25	$ 25.75

Unsecured Notes	$ 91,623,750	$ 5,372.28	N/A	$ 25.96

For the year ended December 31, 2016
Preferred Stock	$ 91,450,000	$ 71.53	$ 25	$ 25.41

Series 2020 Notes	$ 59,998,750	$ 7,221.89	N/A	$ 25.29

For the year ended December 31, 2015
Series A Term Preferred Stock	$ 45,450,000	$ 91.16	$ 25	$ 25.43

Series 2020 Notes	$ 25,000,000	$ 10,275.46	N/A	$ 24.52

(1)

The asset coverage per unit figure is the ratio of the Company's total consolidated assets, less all liabilities and indebtedness not represented by senior securities, to the aggregate dollar amount of outstanding applicable senior securities, as calculated separately for each of the Preferred Stock and the Unsecured Notes in accordance with section 18(h) of the 1940 Act. With respect to the Preferred Stock, the asset coverage per unit figure is expressed in terms of dollar amounts per share of outstanding preferred stock (based on a per share liquidation preference of $25.) With respect to the Unsecured Notes, the asset coverage per unit figure is expressed in terms of dollar amounts per $1,000 principal amount of such notes.

(2)

The involuntary liquidating preference per unit is the amount to which a share of Preferred Stock would be entitled in preference to any security junior to it upon our involuntary liquidation.

(3)

The average market value per unit is calculated by taking the average of the closing price of each of (a) a share of the Preferred Stock (NYSE: ECCA, ECCB, ECCC, ECC PRD) and(b) $25 principal amount of the Unsecured Notes (NYSE: ECCV, ECCW, ECCX, ECCY, ECCZ) for each day during the years for which each applicable security was listed on the NYSE.

Senior Securities, Note [Text Block]

Senior Securities Table

Information about the Company’s senior securities shown in the following table has been derived from the Company’s consolidated financial statements as of and for the dates noted.

Class	Total Amount Outstanding Exclusive of Treasury Securities	Asset Coverage Per Unit ⁽¹⁾	Involuntary Liquidating Preference Per Unit ⁽²⁾	Average Market Value Per Unit ⁽³⁾

For the year ended December 31, 2022
Preferred Stock	$ 81,587,250	$ 71.47	$ 25	$ 23.25

Unsecured Notes	$ 170,523,800	$ 4,226.70	N/A	$23.67

For the year ended December 31, 2021
Preferred Stock	$ 98,130,500	$ 78.16	$ 25	$ 25.48

Unsecured Notes	$ 138,584,775	$ 5,339.86	N/A	$ 25.58

For the year ended December 31, 2020
Preferred Stock	$ 47,862,425	$ 88.39	$ 25	$ 24.25

Unsecured Notes	$ 93,734,775	$ 5,340.98	N/A	$ 23.93

For the year ended December 31, 2019

Preferred Stock	$ 69,843,150	$ 69.71	$ 25	$ 26.04

Unsecured Notes	$ 98,902,675	$ 4,757.42	N/A	$ 25.47

For the year ended December 31, 2018
Preferred Stock	$ 92,568,150	$ 61.55	$ 25	$ 25.78

Unsecured Notes	$ 98,902,675	$ 4,766.23	N/A	$ 25.08

For the year ended December 31, 2017
Preferred Stock	$ 92,139,600	$ 66.97	$ 25	$ 25.75

Unsecured Notes	$ 91,623,750	$ 5,372.28	N/A	$ 25.96

For the year ended December 31, 2016
Preferred Stock	$ 91,450,000	$ 71.53	$ 25	$ 25.41

Series 2020 Notes	$ 59,998,750	$ 7,221.89	N/A	$ 25.29

For the year ended December 31, 2015
Series A Term Preferred Stock	$ 45,450,000	$ 91.16	$ 25	$ 25.43

Series 2020 Notes	$ 25,000,000	$ 10,275.46	N/A	$ 24.52

(1)

(2)

The involuntary liquidating preference per unit is the amount to which a share of Preferred Stock would be entitled in preference to any security junior to it upon our involuntary liquidation.

(3)

General Description of Registrant [Abstract]

Investment Objectives and Practices [Text Block]

Investment Objectives and Strategies

We are an externally managed, non-diversified closed-end management investment company that has registered as an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). We have elected to be treated,

Please see footnote disclosures on page 23.

and intend to qualify annually, as a regulated investment company, or “RIC,” under Subchapter M of the Internal Revenue Code of 1986, as amended, or the “Code,” commencing with our tax year ended November 30, 2014.

Our primary investment objective is to generate high current income, with a secondary objective to generate capital appreciation. We seek to achieve our investment objectives by investing primarily in equity and junior debt tranches of CLOs, that are collateralized by a portfolio consisting primarily of below investment grade U.S. senior secured loans with a large number of distinct underlying borrowers across various industry sectors. We may also invest in other related securities and instruments or other securities and instruments that the Adviser believes are consistent with our investment objectives, including senior debt tranches of CLOs, loan accumulation facilities and securities issued by other securitization vehicles. The amount that we invest in other securities and instruments, which may include investments in debt and other securities issued by CLOs collateralized by non-U.S. loans, securities of other collective investment vehicles and corporate issuers (among other instruments), will vary from time to time and, as such, may constitute a material part of our portfolio on any given date, all as based on the Adviser’s assessment of prevailing market conditions. Loan accumulation facilities are short- to medium-term facilities often provided by the bank that will serve as the placement agent or arranger on a CLO transaction. Loan accumulation facilities typically incur leverage between four and six times prior to a CLO’s pricing.

The CLO securities in which we primarily seek to invest are unrated or rated below investment grade and are considered speculative with respect to timely payment of interest and repayment of principal. Unrated and below investment grade securities are also sometimes referred to as “junk” securities. In addition, the CLO equity and junior debt securities in which we invest are highly leveraged (with CLO equity securities typically being leveraged ten times), which magnifies our risk of loss on such investments.

These investment objectives are not fundamental policies of ours and may be changed by our board of directors without prior approval of our stockholders.

“Names Rule” Policy

In accordance with the requirements of the 1940 Act, we have adopted a policy to invest at least 80% of our assets in the particular type of investments suggested by our name. Accordingly, under normal circumstances, we invest at least 80% of the aggregate of our net assets and borrowings for investment purposes in credit and credit-related instruments. For purposes of this policy, we consider credit and credit-related instruments to include, without limitation: (i) equity and debt tranches of CLOs, loan accumulation facilities and securities issued by other securitization vehicles, such as credit-linked notes and CBOs; (ii) secured and unsecured floating rate and fixed rate loans; (iii) investments in corporate debt obligations, including bonds, notes, debentures, commercial paper and other obligations of corporations to pay interest and repay principal; (iv) debt issued by governments, their agencies, instrumentalities, and central banks; (v) commercial paper and short-term notes; (vi) preferred stock; (vii) convertible debt securities; (viii) certificates of deposit, bankers’ acceptances and time deposits; and (ix) other credit-related instruments. Our investments in derivatives, other investment companies, and other instruments designed to obtain indirect exposure to credit and credit-related instruments are counted towards our 80% investment policy to the extent such instruments have similar economic characteristics to the investments included within that policy.

Our 80% policy with respect to investments in credit and credit-related instruments is not fundamental and may be changed by our board of directors without stockholder approval. Stockholders will be provided with sixty (60) days’ notice in the manner prescribed by the SEC before making any change to this policy.

Investment Restrictions

Our investment objectives and our investment policies and strategies, except for the eight investment restrictions designated as fundamental policies under this caption, are not fundamental and may be changed by the board of directors without stockholder approval.

The following eight investment restrictions are designated as fundamental policies and, as such, cannot be changed without the approval of the holders of a majority of our outstanding voting securities:

Please see footnote disclosures on page 23.

	1.	We may not borrow money, except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority with appropriate jurisdiction;
	2.	We may not engage in the business of underwriting securities issued by others, except to the extent that we may be deemed to be an underwriter in connection with the disposition of portfolio securities;
	3.	We may not purchase or sell physical commodities or contracts for the purchase or sale of physical commodities. Physical commodities do not include futures contracts with respect to securities, securities indices, currency or other financial instruments;
	4.	We may not purchase or sell real estate, which term does not include securities of companies which deal in real estate or mortgages or investments secured by real estate or interests therein, except that we reserve freedom of action to hold and to sell real estate acquired as a result of our ownership of securities;
	5.	We may not make loans, except to the extent permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority with appropriate jurisdiction. For purposes of this investment restriction, the purchase of debt obligations (including acquisitions of loans, loan participations or other forms of debt instruments) shall not constitute loans by us;
	6.	We may not issue senior securities, except to the extent permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, the SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority with appropriate jurisdiction;
	7.	We may not invest in any security if as a result of such investment, 25% or more of the value of our total assets, taken at market value at the time of each investment, are in the securities of issuers in any particular industry except (a) securities issued or guaranteed by the U.S. government and its agencies and instrumentalities or tax-exempt securities of state and municipal governments or their political subdivisions (however, not including private purpose industrial development bonds issued on behalf of non-government issuers), or (b) as otherwise provided by the 1940 Act, as amended from time to time, and as modified or supplemented from time to time by (i) the rules and regulations promulgated by the SEC under the 1940 Act, as amended from time to time, and (ii) any exemption or other relief applicable to us from the provisions of the 1940 Act, as amended from time to time. For purposes of this restriction, in the case of investments in loan participations between us and a bank or other lending institution participating out the loan, we will treat both the lending bank or other lending institution and the borrower as “issuers.” For purposes of this restriction, an investment in a CLO, collateralized bond obligation, collateralized debt obligation or a swap or other derivative will be considered to be an investment in the industry (if any) of the underlying or reference security, instrument or asset; and
	8.	We may not engage in short sales, purchases on margin, or the writing of put or call options, except as permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, SEC staff or other authority with appropriate jurisdiction or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority with appropriate jurisdiction.

The latter part of certain of our fundamental investment restrictions (i.e., the references to “except to the extent permitted by (i) the 1940 Act, or interpretations or modifications by the SEC, the SEC staff or other authority with appropriate jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority with appropriate jurisdiction”) provides us with flexibility to change our limitations in connection with changes in applicable law, rules, regulations or exemptive relief. The language used in these restrictions provides the necessary flexibility to allow our board of directors to respond efficiently to these kinds of developments without the delay and expense of a stockholder meeting.

Whenever an investment policy or investment restriction set forth in this report or in our prospectus states a maximum percentage of assets that may be invested in any security or other asset or describes a policy regarding quality standards, such percentage limitation or standard shall be determined immediately after and as a result of our acquisition of such security or asset. Accordingly, any later increase or decrease resulting from a change in values, assets or other circumstances or any subsequent rating change made by a rating agency (or as determined by the Adviser if the security is not rated by a rating

Please see footnote disclosures on page 23.

agency) will not compel us to dispose of such security or other asset. Notwithstanding the foregoing, we must always be in compliance with the borrowing policies set forth above.

Risk Factors [Table Text Block]

Investment Risk Factors and Concentration of Investments

The following list is not intended to be a comprehensive list of all of the potential risks associated with the Company. The Company’s prospectus provides a detailed discussion of the Company’s risks and considerations. The risks described in the prospectus are not the only risks the Company faces. Additional risks and uncertainties not currently known to the Company or that are currently deemed to be immaterial also may materially and adversely affect its business, financial condition and/or operating results.

Risks of Investing in CLOs and Other Structured Debt Securities

CLOs and other structured finance securities are generally backed by a pool of credit-related assets that serve as collateral. Accordingly, CLO and structured finance securities present risks similar to those of other types of credit investments, including default (credit), interest rate and prepayment risks. In addition, CLOs and other structured finance securities are often governed by a complex series of legal documents and contracts, which increases the risk of dispute over the interpretation and enforceability of such documents relative to other types of investments.

Subordinated Securities Risk

CLO equity and junior debt securities that the Company may acquire are subordinated to more senior tranches of CLO debt. CLO equity and junior debt securities are subject to increased risks of default relative to the holders of superior priority interests in the same CLO. In addition, at the time of issuance, CLO equity securities are under-collateralized in that the face amount of the CLO debt and CLO equity of a CLO at inception exceed its total assets. The Company will typically be in a subordinated or first loss position with respect to realized losses on the underlying assets held by the CLOs in which the Company is invested.

High Yield Investment Risk

The CLO equity and junior debt securities that the Company acquires are typically rated below investment grade, or in the case of CLO equity securities unrated, and are therefore considered “higher yield” or “junk” securities and are considered speculative with respect to timely payment of interest and repayment of principal. The senior secured loans and other credit-related assets underlying CLOs are also typically higher yield investments. Investing in CLO equity and junior debt securities and other high yield investments involves greater credit and liquidity risk than investment grade obligations, which may adversely impact the Company’s performance.

Leverage Risk

The use of leverage, whether directly or indirectly through investments such as CLO equity or junior debt securities that inherently involve leverage, may magnify the Company’s risk of loss. CLO equity or junior debt securities are very highly leveraged (with CLO equity securities typically being leveraged ten times), and therefore the CLO securities in which the Company invests are subject to a higher degree of loss since the use of leverage magnifies losses.

Credit Risk

If (1) a CLO in which the Company invests, (2) an underlying asset of any such CLO or (3) any other type of credit investment in the Company’s portfolio declines in price or fails to pay interest or principal when due because the issuer or debtor, as the case may be, experiences a decline in its financial status, the Company’s income, net asset value (“NAV”) and/or market price would be adversely impacted.

Key Personnel Risk

The Company is dependent upon the key personnel of the Adviser for its future success.

Conflicts of Interest Risk

The Company’s executive officers and directors, and the Adviser and certain of its affiliates and their officers and employees, including the Senior Investment Team, have several conflicts of interest as a result of the other activities in which they engage.

Prepayment Risk

The assets underlying the CLO securities in which the Company invests are subject to prepayment by the underlying corporate borrowers. As such, the CLO securities and related investments in which the Company invests are subject to prepayment risk. If the Company or a CLO collateral manager are unable to reinvest prepaid amounts in a new investment with an expected rate of return at least equal to that of the investment repaid, the Company’s investment performance will be adversely impacted.

LIBOR Risk

Certain CLO equity and debt securities in which the Company invests earn interest at, and CLOs in which the Company invests typically obtain financing at, a floating rate based on LIBOR. After the global financial crisis, regulators globally determined that existing interest rate benchmarks should be reformed based on concerns that LIBOR was susceptible to manipulation. Replacement rates that have been identified include the Secured Overnight Financing Rate (SOFR, which is intended to replace U.S. dollar LIBOR and measures the cost of overnight borrowings through repurchase agreement transactions collateralized with U.S. Treasury securities) and the Sterling Overnight Index Average Rate (SONIA, which is intended to replace pound sterling LIBOR and measures the overnight interest rate paid by banks for unsecured transactions in the sterling market). To the extent

Certain underlying loans held by CLOs do not include a “fall back” provision that addresses how interest rates will be determined once LIBOR stops being published, or otherwise leave certain aspects of the replacement rate to be negotiated between the loan issuer and the lender group. For example, certain loans held by CLOs in which the Company invests provide for a negotiated “credit spread adjustment” (i.e., a marginal increase in the applicable replacement rate to compensate lenders for the tendency of SOFR and other alternative rates to price lower than LIBOR). If a CLO’s collateral manager and other members of the lending group agree to (or fail to reject) an amendment to an underlying loan that provides for a below-market spread adjustment, then the equity investors in such CLO (such as the Company) would be disadvantaged if the debt securities issued by the CLO have a larger spread adjustment.

Liquidity Risk

Generally, there is no public market for the CLO investments in which the Company invests. As such, the Company may not be able to sell such investments quickly, or at all. If the Company is able to sell such investments, the prices the Company receives may not reflect the Adviser’s assessment of their fair value or the amount paid for such investments by the Company.

Incentive Fee Risk

The Company’s incentive fee structure and the formula for calculating the fee payable to the Adviser may incentivize the Adviser to pursue speculative investments and use leverage in a manner that adversely impacts the Company’s performance.

Fair Valuation of The Company’s Portfolio Investments

Generally, there is no public market for the CLO investments in which the Company invests. The Adviser values these securities at least quarterly, or more frequently as may be required from time to time, at fair value. The Adviser’s determinations of the fair value of the Company’s investments have a material impact on the Company’s net earnings through the recording of unrealized appreciation or depreciation of investments and may cause the Company’s NAV on a given date to understate or overstate, possibly materially, the value that the Company ultimately realizes on one or more of the Company’s investments.

Limited Investment Opportunities Risk

The market for CLO securities is more limited than the market for other credit related investments. The Company can offer no assurances that sufficient investment opportunities for the Company’s capital will be available.

Non-Diversification Risk

The Company is a non-diversified investment company under the 1940 Act and expect to hold a narrower range of investments than a diversified fund under the 1940 Act.

Market Risk

Political, regulatory, economic and social developments, and developments that impact specific economic sectors, industries or segments of the market, can affect the value of the Company’s investments. A disruption or downturn in the capital markets and the credit markets could impair the Company’s ability to raise capital, reduce the availability of suitable investment opportunities for us, or adversely and materially affect the value of the Company’s investments, any of which would negatively affect the Company’s business. These risks may be magnified if certain events or developments adversely interrupt the global supply chain, and could affect companies worldwide.

Loan Accumulation Facilities Risk

The Company may invest in LAFs, which are short to medium term facilities often provided by the bank that will serve as placement agent or arranger on a CLO transaction and which acquire loans on an interim basis which are expected to form part of the portfolio of a future CLO. Investments in LAFs have risks similar to those applicable to investments in CLOs. Leverage is typically utilized in such a facility and as such the potential risk of loss will be increased for such facilities employing leverage. In the event a planned CLO is not consummated, or the loans are not eligible for purchase by the CLO, the Company may be responsible for either holding or disposing of the loans. This could expose the Company to credit and/or mark-to-market losses, and other risks.

Synthetic Investments Risk

The Company may invest in synthetic investments, such as significant risk transfer securities and credit risk transfer securities issued by banks or other financial institutions, or acquire interests in lease agreements that have the general characteristics of loans and are treated as loans for withholding tax purposes. In addition to the credit risks associated with the applicable reference assets, the Company will usually have a contractual relationship only with the counterparty of such synthetic investment, and not with the reference obligor of the reference asset. Accordingly, the Company generally will have no right to directly enforce compliance by the reference obligor with the terms of the reference asset nor will it have any rights of setoff against the reference obligor or rights with respect to the reference asset. The Company will not directly benefit from the collateral supporting the reference asset and will not have the benefit of the remedies that would normally be available to a holder of such reference asset. In addition, in the event of the insolvency of the counterparty, the Company may be treated as a general creditor of such counterparty, and will not have any claim with respect to the reference asset.

Currency Risk

Although the Company primarily makes investments denominated in U.S. dollars, the Company may make investments denominated in other currencies. The Company’s investments denominated in currencies other than U.S. dollars will be subject to the risk that the value of such currency will decrease in relation to the U.S. dollar. The Company may or may not hedge currency risk.

Hedging Risk

Hedging transactions seeking to reduce risks may result in poorer overall performance than if the Company had not engaged in such hedging transactions. Additionally, such transactions may not fully hedge the Company’s risks.

Reinvestment Risk

CLOs will typically generate cash from asset repayments and sales that may be reinvested in substitute assets, subject to compliance with applicable investment tests. If the CLO collateral manager causes the CLO to purchase substitute assets at a lower yield than those initially acquired or sale proceeds are maintained temporarily in cash, it would reduce the excess interest-related cash flow, thereby having a negative effect on the fair value of the Company’s assets and the market value of the Company’s securities. In addition, the reinvestment period for a CLO may terminate early, which would cause the holders of the CLO’s securities to receive principal payments earlier than anticipated. There can be no assurance that the Company will be able to reinvest such amounts in an alternative investment that provides a comparable return relative to the credit risk assumed.

Interest Rate Risk

The price of certain of the Company’s investments may be significantly affected by changes in interest rates, including recent increases in interest rates.

Refinancing Risk

If the Company incurs debt financing and subsequently refinance such debt, the replacement debt may be at a higher cost and on less favorable terms and conditions. If the Company fails to extend, refinance or replace such debt financings prior to their maturity on commercially reasonable terms, the Company’s liquidity will be lower than it would have been with the benefit of such financings, which would limit the Company’s ability to grow, and holders of the Company’s common stock would not benefit from the potential for increased returns on equity

that incurring leverage creates.

Tax Risk

If the Company fails to qualify for tax treatment as a RIC under Subchapter M of the Code for any reason, or otherwise becomes subject to corporate income tax, the resulting corporate taxes (and any related penalties) could substantially reduce the Company’s net assets, the amount of income available for distributions to the Company’s stockholders, and the amount of income available for payment of the Company’s other liabilities.

Derivatives Risk

Derivative instruments in which the Company may invest may be volatile and involve various risks different from, and in certain cases greater than, the risks presented by other instruments. The primary risks related to derivative transactions include counterparty, correlation, liquidity, leverage, volatility, over-the-counter trading, operational and legal risks. In addition, a small investment in derivatives could have a large potential impact on the Company’s performance, effecting a form of investment leverage on the Company’s portfolio. In certain types of derivative transactions, the Company could lose the entire amount of the Company’s investment; in other types of derivative transactions the potential loss is theoretically unlimited.

Counterparty Risk

The Company may be exposed to counterparty risk, which could make it difficult for us or the CLOs in which the Company invests to collect on obligations, thereby resulting in potentially significant losses.

Global Economy Risk

Global economies and financial markets are highly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market.

Price Risk

Investors who buy shares at different times will likely pay different prices.

Russia Risk

Russia’s military incursion into Ukraine, the response of the United States and other countries, and the potential for wider conflict, has increased volatility and uncertainty in the financial markets and may adversely affect the Company.

Effects of Leverage [Table Text Block]

The following table is intended to illustrate the effect of the use of direct leverage on returns from an investment in our common stock assuming various annual returns, net of expenses. The calculations in the table below are hypothetical and actual returns may be higher or lower than those appearing in the table below.

Assumed Return on Our Portfolio (Net of Expenses)			-10%				-5%				0%				5%				10%
Corresponding return to common stockholder⁽¹⁾			-17.40	%			-10.18	%			-2.96	%			4.26	%			11.47	%

(1)

Assumes (i) $759.9 million in pro forma total assets as of December 31, 2022; (ii) adjusted to reflect the issuance in the Company’s “at-the-market” offering of 2.6 million shares of our common stock and 2,308 shares of our Series D Preferred Stock from January 1, 2023 through February 15, 2023, yielding net proceeds to the Company of approximately $27.2 million; (iii) adjusted to reflect a $0.50 per share special distribution paid on January 24, 2023 to shareholders of record as of December 23, 2022; (v) $526.4 million in pro forma net assets as of December 31, 2022 (adjusted to reflect the issuances described above); and (vi) an annualized average interest rate on our indebtedness and preferred equity, as of December 31, 2022 (adjusted to reflect the issuances described above), of 6.18%.

Based on our assumed leverage described above, our investment portfolio would have been required to experience an annual return of at least 2.05% to cover annual interest and dividend payments on our outstanding indebtedness and preferred equity.

Return at Minus Ten [Percent]

^[8]

(17.40%)

Return at Minus Five [Percent]

^[8]

(10.18%)

Return at Zero [Percent]

^[8]

(2.96%)

Return at Plus Five [Percent]

^[8]

4.26%

Return at Plus Ten [Percent]

^[8]

11.47%

Share Price [Table Text Block]

		Closing Sales Price		Premium (Discount)	Premium (Discount)
Period	NAV⁽¹⁾	High	Low	of High Sales Price to NAV⁽²⁾	of Low Sales Price to NAV⁽²⁾	Distributions Declared⁽³⁾
Fiscal year ending December 31, 2021⁽⁴⁾
First quarter	$12.02	$11.98	$10.12	(0.3)%	(15.8)%	$0.24
Second quarter	$12.97	$14.40	$12.15	11.0%	(6.3)%	$0.30
Third quarter	$13.98	$14.40	$12.73	3.0%	(8.9)%	$0.36
Fourth quarter	$13.39	$15.49	$13.70	15.7%	2.3%	$0.86
Fiscal year ending December 31, 2022⁽⁵⁾
First quarter	$12.64	$14.27	$12.98	12.9%	2.7%	$0.42
Second quarter	$10.08	$13.30	$11.41	31.9%	13.2%	$0.42
Third quarter	$10.23	$12.22	$10.60	19.5%	3.6%	$0.67
Fourth quarter	$9.07	$11.69	$10.08	28.9%	11.1%	$0.92

	(1)	NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the NAV per share on the date of the high and low sales prices. The NAVs shown are based on outstanding shares at the end of each period.
	(2)	Calculated as of the respective high or low closing sales price divided by the quarter end NAV.
	(3)	Represents the cash distributions (including dividends, dividends reinvested and returns of capital, if any) per share that we have declared on our common stock in the specified quarter. Tax characteristics of distributions will vary.
	(4)	For the fiscal year ending December 31, 2021, as reported on the Company’s 2021 Form 1099-DIV, distributions made by the Company did not comprise of a return of capital.
	(5)	For the fiscal year ending December 31, 2022, as reported on the Company’s 2022 Form 1099-DIV, distributions made by the Company did not comprise of a return of capital.

Lowest Price or Bid

$ 10.08

^[9]

$ 10.6

$ 11.41

$ 12.98

^[9]

$ 13.7

$ 12.73

$ 12.15

$ 10.12

Highest Price or Bid

$ 11.69

^[9]

$ 12.22

$ 13.3

$ 14.27

^[9]

$ 15.49

$ 14.4

$ 11.98

Lowest Price or Bid, NAV

$ 9.62

Highest Price or Bid, NAV

$ 9.72

Highest Price or Bid, Premium (Discount) to NAV [Percent]

^[11]

28.90%

^[10]

19.50%

31.90%

(12.90%)

^[9]

(15.70%)

3.00%

11.00%

0.30%

Lowest Price or Bid, Premium (Discount) to NAV [Percent]

^[11]

11.10%

^[9]

3.60%

13.20%

2.70%

^[10]

2.30%

(8.90%)

(6.30%)

(15.80%)

Latest Share Price

$ 10.91

$ 10.12

Latest Premium (Discount) to NAV [Percent]

12.82%

11.58%

Latest NAV

$ 9.07

^[9],[12]

$ 10.23

^[12]

$ 10.08

^[12]

$ 12.64

^[9],[12]

$ 13.39

^[12]

$ 13.98

^[12]

$ 12.97

^[12]

$ 12.02

^[12]

Capital Stock, Long-Term Debt, and Other Securities [Abstract]

Other Securities [Table Text Block]

Other Securities

In addition to our common stock, the Company has five other securities which trade on the NYSE, which are summarized below:

Security	NYSE Symbol	Par Amount Outstanding	Rate	Payment Frequency	Callable	Maturity
6.50% Series C Term Preferred Stock due 2031	ECCC	$54.3 million	6.50%	Monthly	June 2024	June 2031
6.75% Series D Preferred Stock	ECC PRD	$27.3 million	6.75%	Monthly	November 2026	None
6.6875% Notes due 2028	ECCX	$32.4 million	6.6875%	Quarterly	Callable	April 2028
6.75% Notes due 2031	ECCW	$44.9 million	6.75%	Quarterly	March 2024	March 2031
5.375% Notes due 2029	ECCV	$93.3 million	5.375%	Quarterly	January 2025	January 2029

Pursuant to our at-the-market offering program, the Company sold 325,715 shares of its Series C Term Preferred Stock and 90,937 shares of its Series D Preferred Stock during the year ended December 31, 2022 for total net proceeds to the Company of approximately $10.2 million.

The weighted average maturity on our outstanding notes and preferred stock as of December 31, 2022 was approximately 7.2 years, compared to 7.6 years at the end of 2021. In addition, all of our financing is fixed rate, providing us with added certainty in a rising rate environment.

As of December 31, 2022, we had debt and preferred securities outstanding which totaled approximately 35% of our total assets (less current liabilities). Over the long term, management expects to operate the Company generally with leverage within a range of 25% to 35% of total assets under normal market conditions. As market conditions evolve, or should significant opportunities present themselves, the Company may incur leverage outside of this range, subject to applicable regulatory and contractual limits.

Monthly Common Distributions

The Company paid three monthly distributions of $0.12 per share of common stock from January 2022 through March 2022, and paid nine monthly distributions of $0.14 per share of common stock from April 2022 through December 2022. In the aggregate, we paid cumulative monthly distributions of $1.62 per share to common stockholders in 2022. We intend to continue

Outstanding Security, Title [Text Block]

common stock

Outstanding Security, Held [Shares]

55,045,981

Risks Of Investing In Clos And Other Structured Debt Securities [Member]