SAN DIEGO - Encore Capital (NASDAQ:ECPG) Group, Inc. (NASDAQ:ECPG), a specialty finance company, announced today its plans to offer $400 million in senior secured notes due 2030 to qualified institutional buyers. The offering is subject to market conditions and other factors.
The notes will be senior secured obligations of the company, guaranteed by most of Encore's material subsidiaries. The guarantee, along with the company's other senior secured indebtedness, will be backed by the majority of assets from both Encore and the guarantors.
The interest rate and specific terms of the notes will be set at the time of the offering's pricing. Encore intends to use the offering's proceeds to repay its revolving credit facility, cover transaction fees and expenses related to the offering, and for general corporate purposes.
Furthermore, Encore is considering using other financing sources to redeem its €350.0 million senior secured notes due October 15, 2024. The notes being offered will not be registered under the Securities Act of 1933, and as such, cannot be sold in the United States without registration or an exemption from registration requirements.
The information for this article is based on a press release statement from Encore Capital Group, Inc.
InvestingPro Insights
As Encore Capital Group, Inc. (NASDAQ:ECPG) navigates the financial markets with its latest offering of senior secured notes, insights from InvestingPro can provide a deeper understanding of the company's current financial health and future prospects. With a market capitalization of $1.12 billion and a notable return of 8.75% over the past week, investors are keeping a close eye on ECPG's performance.
InvestingPro Tips suggest that while Encore Capital Group has not been profitable over the last twelve months, analysts are optimistic, predicting that the company will be profitable this year. This aligns with the company's strategic financing moves, including the offering of the senior secured notes and potential redemption of existing notes. Moreover, the company's liquid assets currently exceed short-term obligations, providing a cushion for operational and strategic flexibility.
From a valuation perspective, the adjusted P/E ratio for the last twelve months stands at a striking -244.54, reflecting the market's anticipation of future earnings recovery. This is further supported by a PEG ratio of 0.01, indicating potential undervaluation if the company's growth forecasts are realized.
Investors may also find it relevant that Encore does not pay a dividend to shareholders, which could be a consideration for those seeking income-generating investments. However, the company's focus on growth and debt management could potentially lead to capital gains for shareholders in the long term.
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