Cabot Financial (Luxembourg) S.A. (the “Issuer”), an indirect subsidiary of Encore Capital Group, Inc.(NASDAQ:ECPG), sold £350 million aggregate principal amount of 7.50% Senior Secured Notes due 2023 (the “Notes”). The Notes were issued at a price equal to 100% of their face value. The proceeds from the sale of the Notes were £343.3 million. The Notes were sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to certain non-U.S. persons pursuant to Regulation S under the Securities Act.
The Notes have not been and will not be registered under the Securities Act. The Notes are guaranteed on a senior secured basis by Cabot Credit Management Limited, Cabot Financial Limited and all material subsidiaries of Cabot Financial Limited (other than the Issuer and Marlin Intermediate Holdings plc) (each a subsidiary of Encore and collectively, the “Guarantors”). The Notes were issued pursuant to an Indenture, dated October 6, 2016 (the “Indenture”), between, among others, the Issuer, the Guarantors and Citibank, N.A., London Branch, as trustee. The Notes are secured by a first-ranking security interest in all the outstanding shares of the Issuer and the Guarantors (other than Cabot Credit Management Limited and Marlin Midway Limited) and substantially all the assets of the Issuer and the Guarantors (other than Cabot Credit Management Limited).
The Notes will bear interest at a fixed rate equal to 7.50% per annum. The Issuer will pay interest on the Notes semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2017. The Notes will mature on October 1, 2023.
The proceeds from the offering were used to (1) redeem in full the Issuer’s £265 million in Senior Secured Notes due 2019, (2) partially repay amounts outstanding under senior facilities, (3) pay accrued interest on the Issuer’s £265 million in Senior Secured Notes due 2019, and (4) pay fees and expenses in relation to the offering of the Notes.