Encore Capital Group Announces $400 Million Senior Secured Notes Offering

Encore Capital Group plans to offer $400 million in senior secured notes due 2030 to repay debt and fund corporate purposes. The company also intends to redeem its €350 million senior secured notes due 2025 later this year.

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Aqsa Younas Rana
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Encore Capital Group Announces $400 Million Senior Secured Notes Offering

Encore Capital Group Announces $400 Million Senior Secured Notes Offering

Encore Capital Group, Inc. (Nasdaq: ECPG) has announced its intention to offer, place, notes $400 million aggregate principal amount of senior secured notes due 2030 in a private offering to qualified institutional buyers. The notes will be senior secured obligations of the Company, fully and unconditionally guaranteed by substantially all material subsidiaries of the Company.

Why this matters: This announcement highlights the company's efforts to manage its debt obligations and maintain a strong financial position, which can have a ripple effect on the entire financial industry. The successful offering of these notes can also set a precedent for other companies looking to refinance their debt.

The company plans to use the net proceeds from the offering to repay drawings under its revolving credit facility (the "Global Senior Facility"), to pay certain transaction fees and expenses, and for general corporate purposes. The interest rate and terms of the notes will be determined at the pricing of the offering. The obligations of the Company and the guarantors will be secured by substantially all of the assets of the Company and the guarantors.

Encore Capital Group currently intends to use borrowings under the Global Senior Facility or other available sources of financing to redeem its €350.0 million senior secured notes due 2025 on or about October 15, 2024. This move is expected to help the company manage its debt obligations more effectively.

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. The press release announcing the offering includes forward-looking statements regarding the completion, timing, and size of the proposed offering, the intended use of the proceeds, the terms of the notes being offered, and the potential use of borrowings under the Global Senior Facility to redeem its senior secured notes due 2025. These statements 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.

The $400 million senior secured notes offering by Encore Capital Group aims to provide the company with additional financial flexibility by allowing it to repay existing debts, cover offering expenses, and have funds available for general corporate purposes. The planned redemption of its €350.0 million senior secured notes due 2025 later this year is another step in Encore's ongoing efforts to effectively manage its debt obligations and maintain a strong financial position.

Key Takeaways

  • Encore Capital Group to offer $400M senior secured notes due 2030.
  • Proceeds to repay revolving credit facility, fees, and general corporate purposes.
  • Notes secured by substantially all company and guarantor assets.
  • Company plans to redeem €350M senior secured notes due 2025 in 2024.
  • Offering aims to provide financial flexibility and manage debt obligations.