PRA Group talks $300 million six-year convertibles at 3.25%-3.75%, up 32.5%-37.5%

By Stephanie N. Rotondo

Seattle, May 22 – PRA Group Inc. announced a $300 million Rule 144A offering of convertible senior notes due 2023 on Monday, with price talk for a 3.25% to 3.75% yield and an initial conversion premium of 32.5% to 37.5%.

BofA Merrill Lynch and SunTrust are the joint bookrunners.

The deal will include a $45 million over-allotment option.

Conversions will be settled in cash, common stock, or a combination, at the company’s option.

The convertible notes are contingently convertible prior to March 1, 2023. After that date, the issue can be converted at any time.

The company can redeem the issue on or after June 1, 2021 a par plus accrued interest but only if the stock hits a 130% price hurdle.

A portion of the proceeds will be used to repurchase between $30 million and $45 million of common stock concurrently with the pricing in privately negotiated transactions. Funds raised will also be used to repay debt outstanding under a North American revolving credit facility.

PRA Group is a Norfolk, Va.-based acquirer and collector of nonperforming loans.

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