ENCORE CAPITAL GROUP, INC. (NASDAQ:ECPG) Files An 8-K Entry into a Material Definitive Agreement

Item1.01.

On February27, 2017, Encore Capital Group, Inc. (the Company) and
Midland Credit Management, Inc., a wholly owned subsidiary of the
Company (the Guarantor), entered into a purchase agreement with
certain initial purchasers relating to an offering of
$150.0million aggregate principal amount of the Companys 3.25%
Convertible Senior Notes due 2022 (the Notes) for cash in a
private placement that closed on March3, 2017. to the purchase
agreement, the Company granted the initial purchasers an option
to purchase up to an additional $22.5million aggregate principal
amount of Notes from the Company.

The Notes are the Companys senior unsecured obligations, and will
be fully and unconditionally guaranteed, on a senior unsecured
basis, by the Guarantor, until such time as the Guarantor is no
longer a guarantor under any of the Companys other convertible
senior notes and has no convertible senior notes outstanding of
its own (at which time, the Guarantors guarantee of the Notes
will be automatically released). The Notes and the guarantee were
issued to an Indenture, dated March3, 2017 (the Indenture), among
the Company, the Guarantor and MUFG Union Bank, N.A., as trustee.
The Indenture includes customary terms and covenants, including
certain events of default after which the Notes may become due
and payable immediately.

The Notes will mature on March15, 2022, unless earlier
repurchased or converted. The Notes will bear interest at a rate
of 3.25% per year, payable semi-annually in arrears on March15
and September15 of each year, beginning on September15, 2017. The
Notes will be convertible at the option of the noteholders prior
to the close of business on the business day immediately
preceding September15, 2021 only upon satisfaction of certain
conditions and during certain periods, and, on or after
September15, 2021, at any time until the close of business on the
second scheduled trading day immediately prior to the maturity
date, regardless of these conditions. The Company may satisfy its
conversion obligation by paying or delivering, as the case may
be, cash, shares of the Companys common stock or a combination of
cash and shares of the Companys common stock, at the Companys
election. The initial conversion rate for the Notes is 21.9467
shares per $1,000 principal amount of Notes, which is equivalent
to an initial conversion price of approximately $45.57 per share
of common stock. The initial conversion price of the Notes
represents a premium of approximately 30% to the $35.05 closing
price per share of the Companys common stock on February27, 2017.
The conversion rate is subject to customary adjustments.

Upon the occurrence of a fundamental change (as defined in the
Indenture), noteholders may require the Company to repurchase
their Notes for cash in an amount equal to the principal amount
of the Notes to be repurchased, plus accrued and unpaid interest.

A copy of the Indenture (including the form of the Note) is
attached as an exhibit to this report and is incorporated herein
by reference (and this description is qualified in its entirety
by reference to such document).

The net proceeds from the sale of the $150.0million aggregate
principal amount of Notes were approximately $145.3million, after
deducting the initial purchasers discounts and the estimated
offering expenses payable by the Company. The Company used
approximately $60.4million of the net proceeds from the offering
to repurchase, in separate transactions, $50million aggregate
principal amount of its 3.0% Convertible Senior Notes due 2017
(the 2017 Convertible Notes). Such repurchases could affect the
market price of the Companys common stock. The Company also
expects that holders of the 2017 Convertible Notes that sell
their 2017 Convertible Notes to the Company may purchase or sell
shares of common stock in the market to hedge their exposure in
connection with such repurchase.

In connection with the 2017 Convertible Notes, the Company
entered into convertible note hedge transactions and warrant
transactions with certain financial institutions (the existing
option counterparties). Together with the repurchase of
$50million aggregate principal amount of the 2017 Convertible
Notes, the Company entered into agreements with the existing
option counterparties to terminate a portion of such convertible
note hedge transactions in a notional amount corresponding to the
amount of the 2017 Convertible Notes repurchased. In connection
with the termination of such convertible note hedge transactions
and the expected unwinding of the existing hedge position of the
existing option counterparties with respect to such transactions,
such existing option counterparties and/or their respective
affiliates may sell shares of the Companys common stock in
secondary market transactions, and/or unwind various derivative
transactions with respect to the Companys common stock. This
activity could decrease (or reduce the size of any increase in)
the market price of the Companys common stock at that time and it
could decrease (or reduce the size of any increase in) the market
value of the notes. In connection with these transactions, the
Company may make or receive payments in amounts that depend on
the market price of its common stock during the unwind period.

The Company intends to use the remainder of the net proceeds for
general corporate purposes, which may include working capital,
capital expenditures, acquisitions or repayment or repurchase of
outstanding debt, including the Companys revolving credit
facility and other existing convertible notes.

The information set forth under Item 1.01 of this Current Report
on Form 8-K is incorporated herein by reference.

The information set forth under Item 1.01 of this Current Report
on Form 8-K is incorporated herein by reference.

The Company offered and sold the Notes to the initial purchasers
in reliance on the exemption from registration provided by
Section 4(a)(2) of the Securities Act of 1933, as amended (the
Securities Act), and for resale by the initial purchasers to
qualified institutional buyers to the exemption from registration
provided by Rule 144A under the Securities Act. The Company
relied on these exemptions from registration based in part on
representations made by the initial purchasers in the purchase
agreement.

To the extent that any shares of common stock are issued upon
conversion of the Notes, they will be issued in transactions
anticipated to be exempt from registration under the Securities
Act by virtue of Section 3(a)(9) thereof, because no commission
or other remuneration is expected to be paid in connection with
conversion of the Notes and any resulting issuance of shares of
common stock. Assuming the initial purchasers fully exercise
their right to purchase additional Notes from the Company, a
maximum of 4,921,529 shares of common stock may be issued upon
conversion of the Notes, subject to adjustment.

(d)Exhibits.

About ENCORE CAPITAL GROUP, INC. (NASDAQ:ECPG)

Encore Capital Group, Inc., through its subsidiaries, is a specialty finance company providing debt recovery solutions for consumers and property owners across a range of financial assets. The Company operates through two segments: Portfolio Purchasing and Recovery, and Tax Lien Business. Its portfolio purchasing and recovery segment purchases portfolios of defaulted consumer receivables at discounts and manages them by partnering with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial commitments to credit originators, including banks, credit unions, consumer finance companies, commercial retailers, and telecommunication companies. Defaulted receivables also include receivables subject to bankruptcy proceedings. In addition, the Company assists property owners delinquenting on their property taxes by structuring monthly payment plans and purchases delinquent tax liens directly from taxing authorities.

ENCORE CAPITAL GROUP, INC. (NASDAQ:ECPG) Recent Trading Information

ENCORE CAPITAL GROUP, INC. (NASDAQ:ECPG) closed its last trading session down -0.30 at 32.10 with 482,576 shares trading hands.