Encore Capital Group Announces $50 Million Private Placement and Enhancements to its Revolving Credit Facility

SAN DIEGO — Encore Capital Group, Inc. (Nasdaq: ECPG), a leading consumer debt buying and recovery company, today announced several strategic improvements to its capital structure.

Private Placement Notes

The Company announced that it has issued $50 million in senior secured notes to Prudential Capital Group through a private placement transaction.  The notes bear an annual interest rate of 7.75% and mature in 2017 with principal amortization beginning in the third year.  The proceeds from the private placement have been used primarily to fund the repayment of the remaining $42.9 million of Convertible Senior Notes that matured yesterday, leaving the Company’s leverage level unchanged. 

"We are pleased to execute our first private placement transaction with Prudential Capital, a market leader with more than $50 billion of assets under management," said Paul Grinberg, Executive Vice President and Chief Financial Officer.  Mr. Grinberg continued, "This transaction affords us access to capital in the private placement market and allows us to extend the average duration of our liabilities at attractive fixed rates."

Amendments to Revolving Credit Facility

The Company also announced that it has amended its Revolving Credit Facility dated as of February 8, 2010.  The amendments allow for the addition of the $50 million in Private Placement Notes and include a feature that would allow the Company to issue up to $25 million of additional notes to Prudential Capital under equivalent terms as the Senior Secured Note Agreement.  The amendments also improve several other terms in the facility.  Among the changes, the accordion feature of the facility was reset to $100 million, increasing the facility maximum from $427.5 million to $460.5 million, and the maturity of the facility was extended from May 3, 2013 to December 31, 2013.

Discussing these changes, Mr. Grinberg said, "We are excited about the recent enhancements to our facility.  We appreciate the cooperation of our bank group in helping us continue to strive towards achieving our strategy.  The additional capital, the extension of the maturity, and the additional flexibility these changes provide will allow us to continue our focus on delivering value to our stockholders."

About Encore Capital Group, Inc.
Encore Capital Group is a leader in consumer debt buying and recovery.  We purchase portfolios of defaulted consumer receivables from banks, credit unions, consumer finance companies, commercial retailers, auto finance companies and telecommunication companies and manage them by partnering with individuals as they repay their obligations and work toward financial recovery.

Headquartered in San Diego, we are a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock in the Russell 2000 and the Wilshire 4500.  Our performance derives from our sophisticated and widespread use of analytics, our investments in data and consumer intelligence, our cost leadership position (based on our enterprise-wide, account-level cost database as well as our India facility), and our commitment to see principled intent drive every consumer interaction.  More information on the Company can be found at www.encorecapitalgroup.com.