Encore Capital Group Inc. priced its private offering of $100 million of 3.25% convertible senior notes due Oct. 1, 2025.
The company granted initial purchasers an option to purchase up to an additional $15.0 million principal to cover overallotments. Encore estimates net proceeds of approximately $97.1 million after deducting the initial purchasers' discounts and commissions and estimated fees and expenses.
Interest payments will be made April 1 and Oct. 1 of each year, with the first payment to be made April 1, 2020. Noteholders can convert their notes to common shares at an initial conversion rate of 25.0000 common shares per $1,000 principal amount of notes, from and after July 1, 2025. The ratio is equal to a conversion price of $40.00 per common share, according to the company.
Encore Capital can redeem the notes, in whole or in part, on or after Oct. 5, 2022. The notes can also be redeemed on or before the 40th trading day before the maturity date if the common share price exceeds 130% of the conversion price for a specified period of time.
The company expects to use a portion of the net proceeds to redeem about $83.1 million of its 3.00% convertible senior notes due 2020 for approximately $85.0 million.
