Encore Capital talks $150 million five-year exchangeable notes to yield 4%-4.5%, up 25%-30%

By Rebecca Melvin

New York, July 17 – Encore Capital Europe Finance Ltd., a subsidiary of Encore Capital Group Inc., plans to price $150 million of exchangeable notes due 2023 to yield 4% to 4.5% with an initial conversion premium of 25% to 30%, according to a market source. Pricing was expected after the market close on Tuesday.

SunTrust Robinson Humphrey Inc. and Credit Suisse Securities (USA) LLC are acting as joint bookrunning managers of the Securities and Exchange Commission-registered deal, which will include a $22.5 million over-allotment option.

In connection with pricing of the notes, Encore Capital plans to enter into privately negotiated capped call transactions with one or more underwriters of the notes.

Proceeds will be used to partially fund the acquisition of the equity interests of Janus Holdings Luxembourg Sarl not currently held by Encore and subsequently to purchase the equity interests of Cabot Holdings Sarl, which are not held by Encore.

A story that appeared in the July 17 edition of the Prospect News Convertibles Daily incorrectly reported the size of the offering.

Encore is a San Diego-based specialty finance company.

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