NORFOLK, Va. - PRA Group, Inc. (NASDAQ:PRAA), a company specializing in the acquisition and collection of nonperforming loans, has announced its intention to offer an additional $100 million in senior notes due in 2030. This offering is contingent on market conditions and other factors and is exempt from the registration requirements of the Securities Act of 1933.
The proposed notes are a continuation of the company's existing 8.875% senior notes due in 2030, under the same terms and conditions as the $400 million aggregate principal amount previously issued on May 20, 2024. The only distinctions between the new issuance and the existing notes are the date of issuance and the issue price.
These notes will be guaranteed by PRA Group's domestic subsidiaries that are also parties to the company's North American Credit Agreement. The company aims to use the net proceeds from this offering to repay approximately $100 million of its outstanding borrowings under its North American revolving credit facility.
The offering targets qualified institutional buyers in accordance with Rule 144A under the Securities Act and certain non-U.S. persons in line with Regulation S under the same act. It is important to note that the sale of these securities will not be registered under the Securities Act or any state securities laws and will not be available for sale in the United States except through specific exemptions.
This announcement does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor will there be any sale of the notes in any jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
PRA Group, Inc. is a global entity that acquires and collects nonperforming loans, returning capital to banks and other creditors, and operates with a workforce spread across the Americas, Europe, and Australia.
The information in this article is based on a press release statement from PRA Group, Inc.
In other recent news, PRA Group, Inc. has reported a strong financial performance in its third-quarter earnings call for 2024. The company recorded a 30% increase in revenue, reaching $281 million, and a net income of $27 million or $0.69 per diluted share. Portfolio acquisitions for the quarter were reported at a high of $350 million, contributing to a year-to-date total of $975 million. Cash collections increased by 12% to total $1.4 billion year-to-date. The company's Estimated Remaining Collections (ERC) reached a record $7.3 billion, up 22% from the previous year. In a bid to enhance financial flexibility, PRA Group has extended its credit facility maturities to October 2029 and aims to reduce its debt-to-adjusted EBITDA ratio to 3x. These are among the latest developments in the company's ongoing efforts to improve cost efficiency and support its growth trajectory.
InvestingPro Insights
PRA Group's decision to offer additional senior notes aligns with its current financial position and market performance. According to InvestingPro data, the company has a market capitalization of $880 million and a P/E ratio of 20.33, suggesting a moderate valuation relative to its earnings.
An InvestingPro Tip indicates that PRA Group is trading at a low P/E ratio relative to its near-term earnings growth, which could make this offering attractive to investors seeking potential value. This is further supported by the company's strong revenue growth, with a 29.69% increase in the last twelve months as of Q3 2023.
Another relevant InvestingPro Tip highlights that PRA Group's liquid assets exceed its short-term obligations. This financial stability may provide reassurance to potential investors in the new senior notes offering. The company's ability to manage its debt is crucial, especially considering its intention to use the proceeds to repay existing borrowings.
It's worth noting that PRA Group's stock price movements are quite volatile, according to another InvestingPro Tip. This volatility could influence investor perception of the new notes offering and the company's overall financial strategy.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable in assessing PRA Group's financial health and future prospects.
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