Published on 3/14/2024 in the Prospect News High Yield Daily.
New Issue: Encore Capital prices upsized $500 million 9¼% five-year secured notes at par
By Paul A. Harris
Portland, Ore., March 14 – Encore Capital Group, Inc. priced an upsized $500 million issue of five-year senior secured notes (Ba2/BB+) at par to yield 9¼% on Thursday, according to market sources.
The issue size increased from $400 million.
The yield printed at the tight end of the 9¼% to 9½% yield talk. Early guidance was in the mid-9% area.
Demand was heard to come to three-times deal size, according to a bond trader, who had the new Encore Capital 9¼% secured notes due 2029 trading par ½ bid, 101 offered on Thursday afternoon.
Bookrunners were Morgan Stanley & Co. LLC, BofA Securities Inc., Citizens Capital Markets Inc., Truist Securities Inc., DNB Markets Inc., Fifth Third Securities Inc., HSBC Securities (USA) Inc., ING Financial Markets LLC, MUFG Securities Americas Inc., UBS Securities LLC, Wells Fargo Securities LLC and Zions First National Bank.
The San Diego-based financial services company plans to use the proceeds, including the incremental proceeds resulting from the $100 million upsize, to repay amounts drawn on its revolving credit facility.
| Issuer: | Encore Capital Group, Inc.
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| Amount: | $500 million, increased from $400 million
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| Issue: | Senior secured notes
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| Maturity: | April 1, 2029
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| Bookrunners: | Morgan Stanley & Co. LLC, BofA Securities Inc., Citizens Capital Markets Inc., Truist Securities Inc., DNB Markets Inc., Fifth Third Securities Inc., HSBC Securities (USA) Inc., ING Financial Markets LLC, MUFG Securities Americas Inc., UBS Securities LLC, Wells Fargo Securities LLC and Zions First National Bank
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| Coupon: | 9¼%
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| Price: | Par
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| Yield: | 9¼%
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| Spread: | 495 bps
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| First call: | April 1, 2026 at 104.625
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| Trade date: | March 14
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| Settlement date: | March 20
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| Ratings: | Moody’s: Ba2
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| S&P: BB+
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| Distribution: | Rule 144A for life and Regulation S
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| Price talk: | 9¼% to 9½%
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| Marketing: | Roadshow
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