Encore Capital Group, Inc. (Nasdaq: ECPG), a leading global specialty finance company, has announced its intention to offer €100.0 million aggregate principal amount of senior secured floating rate notes due in 2028 (the “notes”). The offering is subject to market conditions and other factors. The notes will be offered privately to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended, and to non-U.S. persons outside the United States under Regulation S.
These notes will be issued as “additional notes” under Encore Capital Group’s existing notes indenture, dated December 21, 2020, and will have the same terms as the Company’s currently outstanding senior secured floating rate notes due 2028. The interest rate on the notes will be based on three-month EURIBOR, subject to a 0% floor, plus 4.250% per annum, reset quarterly. Interest payments will be made quarterly on January 15, April 15, July 15, and October 15 of each year, starting from January 15, 2024. The notes will reach maturity on January 15, 2028.
Importantly, these notes will be senior secured obligations of Encore Capital Group, Inc., and they will be fully and unconditionally guaranteed on a senior secured basis by substantially all material subsidiaries of the Company. These obligations, including those of the guarantors, will be secured by substantially all of the assets held by the Company and the guarantors. The issue price of the notes will be determined at the time of the offering.
The intended use of the proceeds from this offering includes repaying outstanding balances under the Company’s revolving credit facility, as well as covering certain transaction fees and expenses associated with the issuance of the notes.
It’s essential to note that the offer and sale of these notes have not been registered under the Securities Act, and they cannot be offered or sold in the United States without proper registration or an applicable exemption. This press release does not constitute an offer to sell, or a solicitation of an offer to buy, the notes, nor will there be any sale of the notes in any state or jurisdiction where such an offer, sale, or solicitation would violate applicable laws. Any offering of these securities will be conducted solely through a private offering memorandum.
As of August 31, 2023, Encore Capital Group, Inc. reported that its global cash collections performance for the year-to-date period compared to its December 31, 2022 ERC forecast was generally in line with the first half of the year. The Company also reported a leverage ratio of 2.8x as of August 31, 2023.
The announcement contains forward-looking statements regarding the completion, timing, and size of the proposed offering, the use of proceeds, and the terms of the notes. These statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from those implied by the forward-looking statements. Factors that may affect these forward-looking statements include market conditions, interest rates, and business risks. Encore Capital Group, Inc. cannot guarantee the consummation of the proposed offering or the final terms of the notes, and it does not undertake to update the statements in this press release for subsequent developments unless required by law.