PRA Group Announces Proposed Offering of $400.0 Million of Senior Notes due 2030
PRA Group (Nasdaq: PRAA) announced a proposed offering of $400 million of senior notes due 2030 in a private transaction exempt from Securities Act registration. The notes will be guaranteed by the Company's existing and future domestic subsidiaries under its North American Credit Agreement.
The proceeds, estimated at $396 million, will be used to repay borrowings under the North American revolving credit facility. Additionally, around September 1, 2024, the Company plans to use the revolver borrowings to redeem $298 million of 7.375% Senior Notes due 2025 and pay accrued interest.
The offering targets qualified institutional buyers and certain international persons under Rule 144A and Regulation S of the Securities Act. This announcement does not constitute an offer to sell nor a solicitation to buy these securities.
- PRA Group proposes a $400 million offering of senior notes due 2030.
- Net proceeds of $396 million will repay existing borrowings, enhancing financial flexibility.
- Redemption of $298 million of 7.375% Senior Notes due 2025 will occur around September 1, 2024.
- Notes will be guaranteed by existing and future domestic subsidiaries, securing the offering.
- Offering targets qualified institutional buyers and international investors, indicating strategic placement.
- Offering is subject to market conditions, introducing uncertainty.
- Private transaction exempt from Securities Act registration may limit transparency.
- Use of revolving credit facility indicates reliance on borrowing for financial management.
- Redemption of 2025 senior notes and accrued interest increases near-term financial obligations.
Insights
The proposed offering of
From an investor's perspective, this indicates that PRA Group is taking proactive steps to manage its financial obligations and reduce reliance on higher-cost debt instruments. However, the issuance of new senior notes will increase the company's long-term liabilities, which needs to be monitored for any impact on future cash flows and profitability. The financial health of PRA Group will heavily depend on its ability to generate sufficient earnings to service these new debts.
The strategic issuance of senior notes and the redemption plan reflect the company's effort to enhance its financial stability in the competitive landscape of nonperforming loan acquisitions. By opting for a private transaction exempt from the registration requirements of the Securities Act, PRA Group can expedite the process and likely secure more favorable terms. This move is also a signal to the market that the company has confidence in its future cash flows and operational stability.
For retail investors, this development may be seen as a sign of robust financial management practices. However, it is essential to consider the broader economic context and potential risks associated with new debt issuance, such as changes in interest rates and market demand for nonperforming loans. Investors should weigh these factors when assessing the long-term impact of this financial strategy on PRA Group's market position and growth potential.
The notes will be guaranteed on a senior unsecured basis by each of the Company's existing and future domestic subsidiaries that is a borrower or guarantor under the Company's North American Credit Agreement.
PRA Group intends to use the net proceeds from the offering to repay approximately
The notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to certain persons outside of
This announcement is neither an offer to sell, nor a solicitation of an offer to buy, any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. Any offer of these securities will be made only by means of a private offering memorandum. The offer and sale of the notes have not been and will not be registered under the Securities Act or any state securities laws, and unless so registered, the notes may not be offered or sold in
About PRA Group, Inc.
As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers in the
About Forward-Looking Statements
Statements made herein that are not historical in nature, including PRA Group, Inc.'s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group, Inc.'s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that the Company's expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group, Inc.'s filings with the Securities and Exchange Commission, including PRA Group, Inc.'s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group, Inc.'s website and contain a detailed discussion of PRA Group, Inc.'s business, including risks and uncertainties that may affect future results.
Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA Group, Inc. assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group, Inc.'s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.
Investor Contact:
Najim Mostamand, CFA
Vice President, Investor Relations
(757) 431-7913
IR@PRAGroup.com
News Media Contact:
Elizabeth Kersey
Senior Vice President, Communications and Public Policy
(757) 641-0558
Elizabeth.Kersey@PRAGroup.com
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SOURCE PRA Group, Inc.
FAQ
What is PRA Group's proposed offering of senior notes due 2030?
What will PRA Group use the proceeds from the offering for?
When does PRA Group plan to redeem its 7.375% Senior Notes due 2025?
Who are the target investors for PRA Group's notes offering?
Will the notes issued by PRA Group be registered under the Securities Act?
