SquareTwo Financial to sell $300 million seven-year secured notes

By Paul Deckelman

New York, March 23 - SquareTwo Financial Corp. plans to sell $300 million of seven-year senior secured second-lien notes, high yield syndicate sources said Tuesday, with pricing expected to take place around the middle of next week.

The new notes - which will be non-callable for the first four years after issue -- will be secured by a second lien on substantially all of the company's assets and fully and unconditionally guaranteed on a senior secured basis by substantially all of the company's existing and future domestic subsidiaries that guarantee debt under its anticipated new $150 million revolving credit facility.

The bonds will be sold under Rule 144A with registration rights.

The deal will come to market via bookrunners Banc of America Merrill Lynch and BMO Capital Markets Corp., along with co-managers Fifth Third Bancorp and US Bancorp Investments Inc.

Denver-based SquareTwo, a leading purchaser of charged-off accounts receivable in the United States, plans to use the new deal proceeds, together with the revolving credit facility proceeds, to repay debt under the existing credit facility and its existing senior subordinated notes, as well as for general corporate purposes, including to fund the purchase of charged-off accounts receivables.

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