Encore Moves to Redeem Convertible Notes
The debt-collection company plans to retire $230.0 million of convertible debt.
Encore Capital Group (ECPG) will redeem its outstanding convertible senior notes due 2029 on Sept. 24, accelerating the retirement of the debt.
The company plans to redeem the entire issue at 100% of principal plus accrued and unpaid interest. The notes carry a 4.00% interest rate.
The redemption triggered a make-whole adjustment that raised the conversion rate to 16.2056 shares for each $1,000 of principal, from 15.1763 shares.
That adjustment lowered the implied conversion price to about $61.71 from $65.89 during the make-whole conversion period.
Encore also expects to fully unwind and terminate the capped-call transactions established when the notes were issued in 2023. The company will receive cash or, if agreed, common shares based on the options’ termination value.
Interest on notes that remain unconverted will cease after the redemption, and those notes will be canceled.