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PRA Announces Pricing Of $250 Million Offering Of Convertible Senior Notes Due 2020

Stocks in this article: PRAA

NORFOLK, Va., Aug. 7, 2013 (GLOBE NEWSWIRE) -- Portfolio Recovery Associates, Inc. (PRA) (Nasdaq:PRAA), a business and financial services company operating in the U.S. and U.K., today announced the pricing of an offering of $250 million aggregate principal amount of 3.00% convertible senior notes due 2020 (the "notes") in a private placement to qualified, institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Act"). The sale of the notes is expected to close on August 13, 2013, subject to customary closing conditions.

PRA also granted the initial purchasers of the notes an option to purchase up to an additional $37.5 million aggregate principal amount of the notes to cover overallotments, if any.

The notes will be senior unsecured obligations of PRA and will pay interest semiannually at a rate of 3.00%. The notes will mature on August 1, 2020, unless converted in accordance with their terms prior to such date. Prior to February 1, 2020, the notes will be convertible only upon the occurrence of specified events; thereafter, until maturity, the notes will be convertible at any time.

The conversion rate for the notes will initially be 15.2172 shares per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $65.72 per share of common stock, and is subject to adjustment in certain circumstances. The initial conversion price represents a premium of approximately 30% to the $50.55 per share closing price of PRA's common stock on August 7, 2013. Upon conversion, the notes may be settled in cash, shares of PRA's common stock or any combination thereof.  PRA will not have the right to redeem the notes prior to maturity.

PRA intends to use an amount estimated to be approximately $190 million of the net proceeds from the offering of the notes to temporarily repay debt outstanding under its $400 million revolving credit facility. PRA also intends to use up to $50 million of the net proceeds from the offering of the notes to repurchase shares of its common stock in negotiated transactions with institutional investors through one of the initial purchasers or its affiliate.

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