NORFOLK, Va. - PRA Group, Inc. (NASDAQ:PRAA), a global company specializing in acquiring and collecting nonperforming loans, has priced an offering of $400 million in senior notes with an 8.875% yield, maturing in 2030. The private offering, exempt from the Securities Act of 1933 registration requirements, is set to close around May 20, 2024, contingent on standard closing conditions.
The notes will be backed on a senior unsecured basis by PRA Group's current and future domestic subsidiaries engaged with the company's North American Credit Agreement. The proceeds from the note offering are earmarked for repaying approximately $396 million of the company's existing debts under its North American revolving credit facility.
Following this repayment, PRA Group plans to use the credit facility again to redeem $298 million of its 7.375% senior notes due in 2025, along with any accrued interest, around September 1, 2024.
This offering was made available solely to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to certain non-U.S. persons in offshore transactions under Regulation S of the same act.
The company has clarified that this announcement does not constitute an offer to sell or a solicitation of an offer to buy the securities, nor will any sale occur in jurisdictions where such an offer, solicitation, or sale would be unlawful.
Moreover, the offering and sale of the notes have not been and will not be registered under the Securities Act or state securities laws, and the notes may not be offered or sold in the United States absent registration or an exemption from registration requirements.
PRA Group's operations focus on returning capital to banks and other creditors, thereby aiding the expansion of financial services for consumers in the Americas, Europe, and Australia. The company's workforce collaborates globally to assist customers in resolving their debts.
The information provided in this article is based on a press release statement from PRA Group, Inc. and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Statements in the press release that are not historical facts, including statements about management's expectations for future operations or financial performance, are forward-looking and involve risks and uncertainties.
The company's actual future results may differ significantly from those anticipated in these forward-looking statements.
InvestingPro Insights
As PRA Group, Inc. (NASDAQ:PRAA) maneuvers through its strategic financial restructuring with the recent pricing of its senior notes offering, the company's financial health and future prospects remain a focal point for investors.
According to InvestingPro data, PRA Group's market capitalization stands at approximately $1 billion USD. Despite a negative P/E ratio of -46.5 indicating past challenges in profitability, the adjusted P/E ratio for the last twelve months as of Q1 2024 has improved to 11.82, suggesting a brighter outlook for earnings.
Delving deeper into the company's performance, PRAA's revenue growth for the last twelve months as of Q1 2024 was a modest 2.41%, yet the quarterly revenue growth for Q1 2024 showed a significant spike at 64.4%.
This could signal a turning point for the company's operational efficiency and market position. It's also noteworthy that the company's gross profit margin for the same period stands at 100%, highlighting its strong ability to manage costs relative to revenue.
Investors may find encouragement in a couple of key InvestingPro Tips. Firstly, net income for PRA Group is expected to grow this year, which aligns with the positive shift in the P/E ratio. Secondly, the fact that 2 analysts have revised their earnings upwards for the upcoming period further supports the notion of an improving financial trajectory for PRAA. It's also reassuring to note that the company's liquid assets exceed short-term obligations, providing a cushion for near-term financial commitments.
While the company has not been profitable over the last twelve months, analysts predict PRA Group will shift into profitability this year. This is a critical factor for investors considering the company's ability to service and repay its debt, including the newly offered senior notes.
Moreover, the company's share price has experienced a large uptick over the last six months, with a 40.89% total return, reflecting growing investor confidence.
For those seeking more detailed analysis and additional insights, InvestingPro offers a comprehensive list of tips, including information on dividend policies and price trends. Currently, there are 6 additional tips available for PRA Group on InvestingPro. Interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a deeper dive into PRA Group's financials and future prospects.
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