Fitch rates Encore BB+

Fitch Ratings said it assigned Encore Capital Group, Inc. a long-term issuer default rating of BB+ with a stable outlook. Fitch also assigned the senior secured notes issued by subsidiaries Cabot Financial (Luxembourg) SA and Cabot Financial (Luxembourg) II SA an expected rating of BB+.

“The change to the senior secured notes’ terms forms part of Encore’s implementation of a new global funding structure, under which the presently legally separate funding structures of Encore’s two primary operating subsidiaries, Midland Credit Management, Inc. in the U.S. and Cabot in the U.K., will be combined.

“Their guarantors will subsequently comprise substantially all material Encore subsidiaries. Cabot financing group covenants will on completion of the planned changes, apply to the new financing group. Certain other debt, principally a revolving credit facility and a $300 million committed bank stretch facility will rank super-senior to the senior secured notes. The change of terms is subject to receipt of majority consent from the senior secured noteholders,” Fitch said in a press release.

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