Encore Capital (NASDAQ: ECPG) calls $230M of 4% convertible notes for cash
Rhea-AI Filing Summary
Encore Capital Group, Inc. plans to redeem all $230.0 million aggregate principal amount of its 4.00% Convertible Senior Notes due 2029 on September 24, 2026. The Redemption Price will be paid in cash and equals 100% of principal plus accrued and unpaid interest, or approximately $1,001 per $1,000 principal, after which interest will cease to accrue.
Holders may convert their Notes in $1,000 increments until 5:00 p.m. (New York City time) on September 22, 2026, with all conversions settled in cash. The conversion rate is 15.1763 shares per $1,000 (conversion price about $65.89), increased during the Make-Whole Conversion Period to 16.2056 shares per $1,000 (about $61.71). If all Notes called for redemption were converted at the July 21, 2026 share price, the Company would expect to pay approximately $332.5 million in cash. Related capped call transactions are expected to be unwound, and the Company notes that option counterparties’ hedging activity may decrease, or reduce the size of any increase in, the market price of its common stock.
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Filing Explained
July 22's notice starts, but does not complete, the September 24 redemption; capped-call value remains unsettled and may reach the company in cash or shares.
The July 22 notice starts the redemption process, but the Notes remain outstanding until conversion or the
The company says its redemption right was triggered after its common-stock price exceeded
The capped-call transactions are expected to unwind in full, with the company potentially receiving their then-current value in cash or, if agreed, shares rather than the unwind being a settled amount today.
The unresolved line item is that termination value: bilateral agreements are expected as of or shortly after the Redemption Date, based on a valuation period expected to end shortly beforehand, with payment shortly afterward and subject to extension.
8-K Event Classification
3 items: 7.01, 8.01, 9.01
3 items
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Notes Principal Amount: $230.0 million
Coupon Rate: 4.00%
Redemption Date: September 24, 2026
+5 more
8 metrics
Notes Principal Amount
$230.0 million
Aggregate principal amount of 4.00% Convertible Senior Notes due 2029 called for redemption
Coupon Rate
4.00%
Interest rate on the Convertible Senior Notes due 2029
Redemption Date
September 24, 2026
Scheduled date on which all outstanding Notes will be redeemed for cash
Redemption Price per $1,000
approximately $1,001
Cash redemption price per $1,000 principal amount including accrued and unpaid interest to but excluding Redemption Date
Current Conversion Rate
15.1763 shares per $1,000
Conversion rate for the Notes as of the Redemption Notice Date
Make-Whole Conversion Rate
16.2056 shares per $1,000
Conversion rate during the Make-Whole Conversion Period for Notes surrendered for conversion
Equivalent Conversion Price (standard)
approximately $65.89 per share
Implied share price at 15.1763 shares per $1,000 conversion rate
Estimated Cash to Settle Conversions
approximately $332.5 million
Aggregate cash payment expected if all Notes called for redemption were converted at the July 21, 2026 closing price
Key Terms
Convertible Senior Notes, Redemption Price, Make-Whole Fundamental Change, capped call transactions
4 terms
Convertible Senior Notes financial
"4.00% Convertible Senior Notes due 2029 (the “Notes”), calling all $230.0 million"
Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.
Redemption Price financial
"repurchased for cash at a price equal to the principal amount plus accrued interest"
The redemption price is the amount of money a person receives when they sell or redeem a bond or investment before it matures. It’s important because it determines how much you get back and can affect your overall profit or loss on the investment. Think of it like the price you get when returning a gift card early—it's the value you receive at that time.
Make-Whole Fundamental Change financial
"sending of the Redemption Notice to the holders of the Notes constitutes a “Make-Whole Fundamental Change”"
A make-whole fundamental change is a contract clause that requires a company to compensate holders of certain securities (often convertible bonds or preferred shares) if a big event—like a merger, acquisition, or restructuring—removes or reduces the holders’ expected future benefits. Think of it as a shortcut payment that aims to leave investors financially ‘whole’ for lost upside or income, and it matters because it affects how much those investors get paid and how much such an event will cost the company.
capped call transactions financial
"entered into privately negotiated capped call transactions with certain financial institutions"
Capped call transactions are agreements where investors buy options that give them the chance to benefit if a stock's price goes up, but with a limit on how much they can gain. This helps protect them from paying too much if the stock's price rises a lot, similar to having a maximum limit on a reward. They matter because they help investors manage risk while still allowing some upside potential.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What did Encore Capital Group (ECPG) announce regarding its convertible notes?
Encore Capital Group announced it will redeem all $230.0 million of its 4.00% Convertible Senior Notes due 2029 on September 24, 2026, paying cash equal to 100% of principal plus accrued and unpaid interest as the Redemption Price.
What are the key terms of the Encore Capital (ECPG) redemption and conversion window?
Holders can convert their Notes in $1,000 principal increments until 5:00 p.m. (New York City time) on September 22, 2026. Notes not converted by this deadline will be redeemed for the cash Redemption Price on September 24, 2026 and then canceled.
What conversion rates apply to Encore Capital (ECPG) notes during the make-whole period?
As of the Redemption Notice Date, the conversion rate is 15.1763 shares per $1,000 principal (about $65.89 per share). During the Make-Whole Conversion Period, it increases by 1.0293 to 16.2056 shares per $1,000 (about $61.71 per share).
How much cash could Encore Capital (ECPG) pay if all notes are converted?
If all Notes called for redemption were converted and the stock price matched the July 21, 2026 closing price throughout the observation period, Encore Capital would expect to make an aggregate cash payment of approximately $332.5 million to settle such conversions.
How will Encore Capital (ECPG) settle conversions of the 4.00% Convertible Senior Notes?
Any Notes called for redemption and then converted will be settled in cash. Upon conversion, holders will not receive a separate cash payment for accrued interest; the settlement fully satisfies Encore’s obligation to pay principal and accrued interest to the conversion date.
What happens to Encore Capital’s (ECPG) capped call transactions tied to these notes?
Encore expects the capped call transactions entered in February 2023 to unwind and terminate in full. It expects to receive cash or shares reflecting the option value, while option counterparties may unwind derivatives or sell ECPG securities, which may affect the stock’s market price.
Who is the trustee for Encore Capital’s (ECPG) 4.00% Convertible Senior Notes due 2029?
Truist Bank acts as Trustee, paying agent and conversion agent under the Indenture for the Notes. Its listed address is 2713 Forest Hills Road, Building 2 - Floor 2, Wilson, North Carolina 27893, Attention: Encore Capital Group – Client Manager – Patrick Giordano.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported)
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(877 ) 345-3002
(Registrant’s telephone number, including area code)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01. Regulation FD Disclosure.
On July 22, 2026, Encore Capital Group, Inc. (the “Company”) issued a press release regarding the Redemption (described below), a copy of which is attached as Exhibit 99.1 hereto.
The information in this Item 7.01 (including Exhibit 99.1 hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 8.01. Other Events.
On July 22, 2026, the Company issued a notice (the “Redemption Notice”) to holders of the Company’s 4.00% Convertible Senior Notes due 2029 (the “Notes”) calling for redemption (the “Redemption”) of all outstanding Notes.
On September 24, 2026 (the “Redemption Date”), all then-outstanding Notes that are called for Redemption and have not been submitted for conversion will be repurchased for cash at a price (the “Redemption Price”) equal to the principal amount of such Notes plus accrued and unpaid interest on such Notes to, but excluding, the Redemption Date.
Notes that are called for Redemption may be submitted for conversion at any time before 5:00 p.m. (New York City time) on the second scheduled trading day before the Redemption Date. The Company currently expects that holders of Notes called for Redemption will convert such Notes before the Redemption Date. However, those holders are not obligated to convert their Notes, and the Company will be required to pay the Redemption Price for all Notes called for Redemption that have not been converted. Notes that are converted after they are called for Redemption will be settled in cash. As of the date of the Redemption Notice, the conversion rate of the Notes is 15.1763 shares of the Company’s common stock per $1,000 principal amount of Notes. However, in accordance with the Indenture governing the Notes, the Conversion Rate applicable to Notes called for Redemption that are converted during the period beginning on, and including, July 22, 2026 and ending on, and including, September 22, 2026 will be increased to 16.2056 shares of the Company’s common stock per $1,000 principal amount of Notes. If all of the Notes called for redemption were converted in connection with the Redemption and the price for the Company’s common stock on each day during the observation period over which the conversion consideration is determined remained equal to the closing price of the Company’s common stock on July 21, 2026, the Company would expect to make an aggregate cash payment of approximately $332.5 million to settle such conversions.
In connection with the pricing of the Notes in February 2023, the Company entered into privately negotiated capped call transactions with certain financial institutions (the “option counterparties”). In connection with the Redemption, the Company expects that the capped call transactions will unwind and terminate in full. In connection with any such unwind and termination, the Company would receive from each option counterparty an amount of cash (or shares of the Company’s common stock if agreed with the applicable option counterparty) reflecting the then-current option value of such capped call transaction, as determined pursuant to the terms of such transaction or as otherwise agreed with the Company. The Company expects to enter into bilateral unwind agreements with each option counterparty to unwind and terminate its respective capped call transaction as of or shortly following the Redemption Date, with a termination value determined based on the market price of the Company’s common stock over a valuation period expected to end shortly prior to the Redemption Date and payable to the Company on or shortly following the Redemption Date, in each case, subject to extension.
In connection with unwinding and terminating the capped call transactions, the option counterparties and/or their respective affiliates are expected to unwind various derivative transactions with respect to the Company’s common stock and/or sell shares of the Company’s common stock or other securities of the
Company in secondary market transactions. This activity may have the effect of decreasing (or reducing the size of any increase in) the market price of the Company’s common stock.
Forward Looking Statements
This Current Report on Form 8-K contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”), the Securities Exchange Act of 1934 (the “Exchange Act”) and the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “project,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the planned Redemption, including the Company’s expectations regarding conversions by holders of Notes called for Redemption, and its expected impacts and other statements that are not historical facts. These statements are based on current expectations and beliefs concerning future developments and their potential effects on us and should not be relied upon as representing the Company’s assessment as of any date subsequent to the date of this Current Report on Form 8-K. There can be no assurance that future developments affecting us will be those that we have anticipated. Many actual events and circumstances are beyond our control. These forward-looking statements are subject to a number of risks and uncertainties, including those factors discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as such factors may be updated from time to time, including without limitation its Quarterly Reports on Form 10-Q and other documents filed with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from those projected by these forward-looking statements. There may be additional risks that we presently do not know or that we currently believe are immaterial which could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect our expectations, plans or forecasts of future events and views as of the date of this Current Report on Form 8-K. We anticipate that subsequent events and developments will cause our assessments to change. However, we specifically disclaim any obligation to do so, except as may be required by law. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Item 9.01. Financial Statements and Exhibits.
| Exhibit Number | Description | ||||
99.1 | Press Release, dated July 22, 2026 | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ENCORE CAPITAL GROUP, INC. | ||||||||
Date: | July 22, 2026 | /s/ Tomas Hernanz | ||||||
Tomas Hernanz | ||||||||
Executive Vice President, Chief Financial Officer and Treasurer | ||||||||
Exhibit 99.1
Encore Capital Group Announces Redemption of All Outstanding 4.00% Convertible Senior Notes Due 2029
SAN DIEGO, July 22, 2026 -- Encore Capital Group, Inc. (Nasdaq: ECPG) (“Encore” or the “Company”), an international specialty finance company, announced today that on July 22, 2026 (the “Redemption Notice Date”), it has issued a notice (the “Redemption Notice”) to holders of the Company’s 4.00% Convertible Senior Notes due 2029 (CUSIP No. 292554 AP7) (the “Notes”), calling all $230.0 million aggregate principal amount of the Notes for redemption on September 24, 2026 (the “Redemption Date”). The Company’s redemption right in respect of the Notes arises pursuant to Section 14.07 of the Indenture, dated as of March 3, 2023 (the “Indenture”), between the Company and Truist Bank, as trustee (the “Trustee”), as a result of the last reported sale price per share of the Company’s common stock having exceeded 130% of the conversion price on each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the trading day immediately before the Redemption Notice Date.
Redemption Process
The redemption price will be payable on the Redemption Date in cash and equal to 100% of the principal amount of the Notes outstanding on the Redemption Date, plus accrued and unpaid interest on such Notes to, but excluding, the Redemption Date (the “Redemption Price”). For each $1,000 principal amount of Notes, the Redemption Price will be equal to approximately $1,001. Unless the Company defaults in making payment of the Redemption Price, interest on the Notes will cease to accrue on and after the Redemption Date.
For all Notes surrendered in book-entry form, payment of the Redemption Price will be made through the facilities of The Depository Trust Company (“DTC”), and all redeemed Notes in book-entry form will be surrendered for payment of the Redemption Price in accordance with the applicable rules and procedures of DTC.
Right to Convert the Notes
Holders of the Notes may surrender their Notes (or any portion thereof having a principal amount that is an integral multiple of $1,000) for conversion at any time prior to 5:00 p.m. (New York City time) on September 22, 2026 or, if the Company fails to pay the Redemption Price on the Redemption Date, such later date on which the Redemption Price is paid. To convert any Note, the holder must comply with the applicable rules and procedures of DTC. Upon conversion, a holder will not receive any separate cash payment for accrued and unpaid interest, and the Company’s settlement of the conversion obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the Note and accrued and unpaid interest to, but excluding, the relevant conversion date. Any Notes submitted for conversion after they are called for redemption will be settled in cash. Any Notes not converted prior to the applicable deadline will be redeemed for the Redemption Price on the Redemption Date and will thereafter be canceled and cease to be outstanding.
As of the Redemption Notice Date, the conversion rate of the Notes is 15.1763 shares of common stock per $1,000 principal amount of Notes, which is equivalent to a conversion price of approximately $65.89 per share.
The sending of the Redemption Notice to the holders of the Notes constitutes a “Make-Whole Fundamental Change” under the Indenture, and therefore the conversion rate is required to be increased in accordance with Section 13.03 of the Indenture for Notes surrendered for conversion during the period beginning on, and including, the Redemption Notice Date, and ending at 5:00 p.m. (New York City time) on September 22, 2026 (the “Make-Whole Conversion Period”). The conversion rate applicable to such conversions will be increased by 1.0293 additional shares to 16.2056 shares of common stock per $1,000 principal amount of Notes, which is equivalent to a conversion price of approximately $61.71 per share. The conversion rate will remain subject to adjustment in accordance with the Indenture from time to time upon the occurrence of certain events.
Truist Bank is acting as Trustee, paying agent and conversion agent under the Indenture, and its address is 2713 Forest Hills Road, Building 2 - Floor 2, Wilson, North Carolina 27893, Attention: Encore Capital Group – Client Manager – Patrick Giordano.
Holders who have questions or who wish to discuss the redemption may contact the Company’s Investor Relations representative by email at Bruce.Thomas@encorecapital.com.
This press release does not constitute a notice of redemption under the Indenture. The Redemption Notice is being delivered to holders separately in accordance with the terms of the Indenture. This press release is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful. No representation is made as to the correctness or accuracy of the CUSIP number either as printed on the notes or as contained in this press release.
Capped Call Transactions
In connection with the pricing of the Notes in February 2023, the Company entered into privately negotiated capped call transactions with certain financial institutions (the “option counterparties”). In connection with the redemption, the Company expects that the capped call transactions will unwind and terminate in full. In connection with any such unwind and termination, the Company would receive from each option counterparty an amount of cash (or shares of the Company’s common stock if agreed with the applicable option counterparty) reflecting the then-current option value of such capped call transaction, as determined pursuant to the terms of such transaction or as otherwise agreed with the Company. The Company expects to enter into bilateral unwind agreements with each option counterparty to unwind and terminate its respective capped call transaction as of or shortly following the Redemption Date, with a termination value determined based on the market price of the Company’s common stock over a valuation period expected to end shortly prior to the Redemption Date and payable to the Company on or shortly following the Redemption Date, in each case, subject to extension.
In connection with unwinding and terminating the capped call transactions, the option counterparties and/or their respective affiliates are expected to unwind various derivative transactions with respect to the Company’s common stock and/or sell shares of the Company’s common stock or other securities of the Company in secondary market transactions. This activity may have the effect of decreasing (or reducing the size of any increase in) the market price of the Company’s common stock.
About Encore Capital Group, Inc.
Encore Capital Group is an international specialty finance company that provides debt recovery solutions and other related services for consumers across a broad range of financial assets. Through its subsidiaries around the globe, Encore purchases portfolios of consumer receivables from major banks, credit unions, and utility providers.
Encore partners with individuals as they repay their debt obligations, helping them on the road to financial recovery and ultimately improving their economic well-being. Encore is the first and only company of its kind to operate with a Consumer Bill of Rights that provides industry-leading commitments to consumers. Headquartered in San Diego, Encore is a publicly traded NASDAQ Global Select company (ticker symbol: ECPG) and a component stock of the Russell 2000, the S&P Small Cap 600 and the Wilshire 4500. More information about the company can be found at www.encorecapital.com.
Cautionary Note Regarding Forward-Looking Statements
The statements in this press release that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “will,” “may,” “believe,” “projects,” “expects,” “anticipates” or the negation thereof, or similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). These statements may include, but are not limited to, statements regarding our future operating results, performance, liquidity, ability to access capital markets, business plans or prospects. For all “forward-looking statements,” the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors are discussed in the reports filed by the Company with the Securities and Exchange Commission, including the most recent reports on Forms 10-K and 10-Q, each as it may be amended from time to time. The Company disclaims any intent or obligation to update these forward-looking statements.
Contacts
Bruce Thomas
Encore Capital Group, Inc.
bruce.thomas@encorecapital.com