Encore Cap Group Inc Stock Price, News & Analysis

Encore Capital Group (ECPG) will release its Q3 2020 financial results on November 2, 2020, after market close. A conference call featuring CEO Ashish Masih, CFO Jonathan Clark, and VP Bruce Thomas will discuss these results at 2:00 PM Pacific Time. Investors can access a live webcast on the Investor Relations page of Encore's website. A telephonic replay will be available for seven days post-call. Encore Capital specializes in debt recovery solutions and operates globally, purchasing and servicing receivables from major financial institutions.

Encore Capital Group (NASDAQ: ECPG) has completed a new global funding structure, consolidating the balance sheets of its primary units, Midland Credit Management and Cabot Credit Management. This move aims to enhance financial flexibility, improve the maturity profile, and reduce funding costs over time. Key components include a revised multi-currency revolving credit facility totaling $1,050 million, a €350 million issuance of senior secured notes due 2025, and repayment of existing domestic credit facilities. The company expects this structure will strengthen its credit profile and capitalize on changing credit cycles.

Encore Capital Group (ECPG) has priced an offering of €350 million in senior secured notes, up from €300 million. The notes, maturing in 2025 with a 4.875% interest rate, are secured by the company’s assets and guaranteed by its significant subsidiaries. Proceeds will be used to repay existing debts and cover transaction expenses. This follows an amended senior credit facility announced earlier this month. The offering is not registered under the Securities Act and can only be sold to qualified institutional buyers and non-U.S. persons.

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Encore Capital Group (NASDAQ: ECPG) and its subsidiaries, alleging non-compliance with a 2015 consent order. Despite the lawsuit, Encore executives emphasize their commitment to consumer rights and compliance. They claim to have resolved the issues cited in the suit and express confidence in their systems. The company believes there will be no material operational impact from the lawsuit, as they assert that the underlying issues were corrected years ago.

Encore Capital Group (Nasdaq: ECPG) announced its plan to offer €300,000,000 in senior secured notes due 2025. This private offering is aimed at qualified institutional buyers under Rule 144A and non-U.S. persons. The notes will be secured by substantially all assets and guaranteed by major subsidiaries. Proceeds are intended for repaying existing debts and transaction fees, following an amended senior credit facility agreement. Notably, the offering hasn’t been registered under the Securities Act, limiting its sale in the U.S.

Encore Capital Group (NASDAQ: ECPG) has announced a strategic shift towards operational simplification and funding optimization. The firm plans to combine its two primary operating units—Midland Credit Management in the U.S. and Cabot Credit Management in the U.K.—into a unified funding structure. Key transactions include a $1.05 billion multi-currency credit facility, a new $300 million stretch facility, and amendments to Cabot’s senior secured notes. Encore reports cash collections at 100% of the forecast, with U.S. performance at 107%. The company expects to incur charges of approximately $18 million after tax in Q3 2020.

Encore Capital Group reported record financial results for Q2 2020, with GAAP net income of $130 million ($4.13 per share) and non-GAAP adjusted net income of $137 million ($4.34 per share). Global revenues surged 23% to $426 million, driven by higher-than-expected collections. Operating expenses dropped 11% to $206 million, while interest expenses fell 21% to $50 million. The company ended the quarter with a strong liquidity position, including $273 million in non-client cash and a total available capacity of $618 million under credit facilities.

Encore Capital Group (ECPG) reported a GAAP loss of $(0.33) per share and a non-GAAP economic loss of $(0.19) per share for Q1 2020, impacted by a $2.77 per share charge from COVID-19-related collection forecast revisions. Despite these losses, the company achieved record global cash collections of $527 million and total revenues of $289 million, after a non-cash charge of $109 million. The company maintains a strong liquidity position with available capital of $356 million under its U.S. revolving credit facility, positioning it well for future growth.