Encore Capital Group Inc. intends to offer $100 million of convertible senior notes due Oct. 1, 2025, in a private offering to qualified institutional buyers.
The company expects to grant the initial purchasers of the notes a 30-day option to buy up to an additional $15 million of notes solely to cover overallotments.
The notes will be fully and unconditionally guaranteed on a senior unsecured basis by Midland Credit Management Inc., a unit of Encore Capital Group. The securities will be senior, unsecured obligations of the company and will accrue interest payable semiannually in arrears.
Noteholders will have the right to convert their notes in certain circumstances and during specified periods. Encore Capital Group will settle any conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and common shares.
The notes will be redeemable, in whole or in part, for cash at Encore Capital Group's option on or after Oct. 5, 2022, and on or before the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the company's common stock exceeds 130% of the conversion price for a specified period. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the offering.
Encore Capital Group plans to use the net proceeds from the offering for general corporate purposes, which may include working capital, capital expenditures, acquisitions, or repayment or repurchase of outstanding debt, including its revolving credit facility and outstanding existing convertible senior notes and exchangeable senior notes.
