Encore Capital Group, Inc. Announces Proposed Senior Secured Notes Offering

Rhea-AI Summary

Encore Capital Group (Nasdaq: ECPG) announced its plan to offer €300,000,000 in senior secured notes due 2025. This private offering is aimed at qualified institutional buyers under Rule 144A and non-U.S. persons. The notes will be secured by substantially all assets and guaranteed by major subsidiaries. Proceeds are intended for repaying existing debts and transaction fees, following an amended senior credit facility agreement. Notably, the offering hasn’t been registered under the Securities Act, limiting its sale in the U.S.

Positive

• Offering €300,000,000 in senior secured notes could improve the financial structure.
• Proceeds from the offering will be used to reduce existing debt and transaction costs.

Negative

• Market conditions could affect the timing and success of the offering.
• The offering has not been registered under the Securities Act, limiting its availability in the U.S.

SAN DIEGO, Sept. 08, 2020 (GLOBE NEWSWIRE) -- Encore Capital Group, Inc. (Nasdaq: ECPG) (the “Company”) today announced its intention to offer, subject to market and other conditions, €300,000,000 aggregate principal amount of senior secured notes due 2025 (the “notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and outside the United States to non-U.S. persons (within the meaning of Regulation S under the Securities Act).

The notes will be senior secured obligations of the Company, and will be fully and unconditionally guaranteed on a senior secured basis by substantially all material subsidiaries of the Company. The obligations of the Company and the guarantors will be secured, together with the Company’s other senior secured indebtedness, by substantially all of the assets of the Company and the guarantors.  The interest rate and other terms of the notes will be determined at the pricing of the offering.

As announced on September 1, 2020, the Company has entered into an amended and restated senior credit facility agreement (the “Senior Facility Agreement”), effectiveness of which is subject to certain conditions, which the Company expects to be met on or prior to the issue date of the notes.  The Company intends to use the proceeds from this offering along with drawings under the Senior Facility Agreement to (a) repay a portion of amounts previously drawn under the Senior Facility Agreement, (b) repay amounts drawn under the Company’s existing senior facilities which will then be terminated, (c) prepay a portion of the Company’s senior secured notes due 2024 and (d) pay certain transaction fees and expenses incurred in connection with the offering of the notes, the completion of the amendment and restatement of the Senior Facility Agreement and other related transactions announced on September 1, 2020.

The offer and sale of the notes have not been, and will not be, registered under the Securities Act, and the notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes nor will there be any sale of the notes in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful. Any offer of the securities will be made only by means of a private offering memorandum.

Forward-Looking Statements

This press release includes forward-looking statements, including statements regarding the completion, timing and size of the proposed offering, the intended use of the proceeds and the terms of the notes being offered. Forward-looking statements represent Encore’s current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Among those risks and uncertainties are market conditions, including market interest rates, the trading price and volatility of Encore’s common stock and risks relating to Encore’s business, including those described in periodic reports that Encore files from time to time with the U.S. Securities and Exchange Commission. Encore may not consummate the proposed offering described in this press release and, if the proposed offering is consummated, cannot provide any assurances regarding the final terms of the notes or its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and Encore does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.

Contact Information

Bruce Thomas, Investor Relations
(858) 309-6442
bruce.thomas@encorecapital.com

FAQ

What is the purpose of Encore Capital Group's €300 million bond offering?

The offering aims to secure funds for repaying existing debts, including amounts drawn under a senior facility, and to cover transaction fees.

What are the terms of the senior secured notes being offered by ECPG?

The notes will be due in 2025, secured by the company's assets, and fully guaranteed by its major subsidiaries.

When was the announcement regarding the senior secured notes made by Encore Capital?

The announcement was made on September 8, 2020.

What risks are associated with the bond offering by Encore Capital Group?

Risks include market conditions affecting the offering's success and the notes not being registered under the Securities Act.

How will Encore Capital use the proceeds from the bond offering?

Proceeds will be used to repay existing debts, including under the senior facility agreement and senior secured notes due 2024.