| Item 1.01 | Entry into a Material Definitive Agreement. |
On February 6, 2023, PRA Group, Inc. (the “Company”) completed its previously announced offering of $400 million aggregate principal amount of 8.375% Senior Notes due 2028 (the “Notes”) in a private transaction that was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Notes were issued pursuant to an Indenture, dated February 6, 2023 (the “Indenture”), among the Company, the Guarantors (as defined below) and Regions Bank, as trustee (the “Trustee”). Pursuant to the Indenture, interest on the Notes will accrue at a rate of 8.375% per annum payable semiannually in arrears on February 1 and August 1 of each year, commencing on August 1, 2023. The Notes will mature on February 1, 2028, subject to earlier repurchase or redemption.
Guarantees
The Notes are guaranteed (the “Guarantees”) on a senior unsecured basis by all of the Company’s existing and future domestic restricted subsidiaries that guarantee the Company’s Amended and Restated Credit Agreement (as amended, the “North American Credit Agreement”), subject to certain exceptions (the “Guarantors”).
Ranking
The Notes and the Guarantees are unsecured, senior obligations of the Company and the Guarantors. The Notes and the Guarantees: (i) rank equally with the Company’s and the Guarantors’ unsecured senior indebtedness; (ii) rank senior to all of the Company’s and the Guarantors’ future senior subordinated indebtedness; (iii) are effectively subordinated to all of the Company’s and the Guarantors’ existing and future secured indebtedness (including amounts outstanding under the North American Credit Agreement and the Company’s Multicurrency Revolving Credit Facility) to the extent of the assets securing that secured debt; and (iv) are effectively subordinated to all of the preferred stock and liabilities of the Company’s subsidiaries that are not Guarantors, to the extent of the assets of those subsidiaries.
Optional Redemption
The Company may redeem the Notes, in whole or in part, at any time (i) prior to February 1, 2025, at a price equal to 100% of the aggregate principal amount of the Notes being redeemed, plus the applicable “make whole” premium, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date and (ii) on or after February 1, 2025, at the applicable redemption price (expressed as percentages of principal amount of the Notes to be redeemed) set forth below plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable redemption date, subject to the right of holders of the Notes on the relevant record date to receive interest due on the relevant interest payment date, if redeemed during the 12-month period beginning on February 1 of each of the years indicated below:
| | | | |
| Year | | Percentage | |
2025 | | | 104.188 | % |
2026 | | | 102.094 | % |
2027 and thereafter | | | 100.000 | % |
In addition, at any time on or prior to February 1, 2025, the Company may on any one or more occasions redeem up to an aggregate of 40% of the aggregate principal amount of the Notes (including the principal amount of any additional notes of the same series) at a redemption price of 108.375% of the principal amount of the Notes redeemed, plus accrued and unpaid interest thereon, if any, to, but excluding, the applicable redemption date, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, with the net cash proceeds of a public offering of common stock of the Company; provided, however, that at least 60% in aggregate principal amount of the Notes (including the principal amount of any additional notes of the same series) remains outstanding immediately after the occurrence of such redemption (other than Notes held, directly or indirectly, by the Company or its affiliates) and that such redemption will occur within 90 days of the date of the closing of such public offering.
