Encore Capital Group, Inc., an international specialty finance company, announced that it has completed the implementation of its new global funding structure.

“The completion of our new global funding structure is a pivotal event in the evolution of Encore,” said Ashish Masih, President and Chief Executive Officer. “We successfully combined the balance sheets of our two largest operating units to arrive at a simple, unified funding structure that maximizes our financial flexibility. We have also improved our maturity profile and expect a material reduction in funding costs over time. Now, after having implemented this structure, our balance sheet strength and funding diversity put us in a strong position to capitalize on attractive opportunities that arise from the expected change in credit cycles, particularly in the U.S. and the U.K.”

Prior to today, Encore’s two primary operating units, Midland Credit Management (“MCM”) in the U.S. and Cabot Credit Management (“Cabot”) in the U.K., had legally separate funding structures. Today Encore completed the process to combine the two balance sheets into a unified funding structure. Encore is now the parent of a restricted group consisting of all subsidiaries of Encore against which all covenant performance is measured. Key transactions that closed today in order to implement the new structure include the following (collectively, the “New Financing Transactions”):

• an amended multi-currency revolving credit facility that formerly supported only Cabot that now supports the operations of both MCM and Cabot, with an increased total commitment of $1,050 million, an extension of maturity to 2024 and with Encore and all its material subsidiaries (including Cabot) as guarantors;
• an issuance of €350 million in 4.875% senior secured notes due 2025; and
• an amendment to the terms of the existing Cabot senior secured notes to, among other things, add Encore and its material subsidiaries as guarantors and have Encore become the parent of the restricted group.
• In connection with the New Financing Transactions, Encore has repaid and terminated its domestic revolving credit facility and term loan facility and prepaid a portion of its outstanding senior secured notes due to mature in 2024.

Encore believes the new global funding structure will fully leverage the combined size of MCM and Cabot, maximize financial flexibility by utilizing a global borrowing base, enhance access to capital markets and result in a strengthened credit profile for both existing and prospective Encore group lenders and investors.