By Abigail W. Adams
Portland, Me., July 18 – Encore Capital Europe Finance Ltd., a subsidiary of Encore Capital Group Inc., priced $150 million of five-year exchangeable notes after the market close on Tuesday at the cheap end of talk with a coupon of 4.5% and an initial conversion premium of 25%, according to an FWP filing with the Securities and Exchange Commission.
Price talk was for a coupon of 4% to 4.5% and an initial conversion premium of 25% to 30%, according to a market source.
SunTrust Robinson Humphrey Inc. and Credit Suisse Securities (USA) LLC were joint bookrunners for the registered deal, which carries a $22.5 million greenshoe.
The notes are non-callable.
Holders may require the company to repurchase the notes upon a fundamental change.
The notes are contingently convertible until March 1, 2023.
Conversions may be settled in cash, stock or a combination.
In connection with pricing of the notes, Encore Capital entered into privately negotiated capped call transactions, which cost $15.5 million and were covered with cash on hand, according to the FWP filing. The cap price is $62.475 per share, a premium of 75% over the closing stock price on July 17.
Net proceeds are expected to be $144.7 million, or $166.5 million if the greenshoe is exercised in full.
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.
Encore Capital Group is a San Diego-based international specialty finance company.
| Issuer: | Encore Capital Europe Finance Ltd.
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| Securities: | Exchangeable senior notes
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| Amount: | $150 million
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| Greenshoe: | $22.5 million
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| Maturity: | Sept. 1, 2023
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| Bookrunners: | SunTrust Robinson Humphrey Inc. and Credit Suisse Securities (USA) LLC
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| Co-managers: | ING Financial Markets LLC, Morgan Stanley & Co. LLC, MUFG Securities Americas Inc. (co-lead manager), Citigroup Global Markets Inc., DNB Markets, Inc., Fifth Third Securities, Inc., Regions Securities LLC
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| Coupon: | 4.5%
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| Price: | Par
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| Conversion premium: | 25%
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| Conversion price: | $44.62
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| Conversion rate: | 22.4090
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| Call options: | Non-callable
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| Put options: | Upon a fundamental change
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| Pricing date: | July 17
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| Settlement date: | July 20
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| Talk: | Coupon of 4% to 4.5% and an initial conversion premium of 25% to 30%
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| Stock symbol: | Nasdaq: ECPG
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| Stock price: | $35.70 at market close July 17
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| Market capitalization: | $925.25 million
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