We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
PRA Group (PRAA) Declares Pricing of Senior Notes Offering
Read MoreHide Full Article
PRA Group, Inc. (PRAA - Free Report) announced the pricing of its public offering of senior notes. The company upsized the notes from the previously announced amount of $300 million to $350 million. Subject to certain closing conditions, the offering is expected to be complete on or about Sep 22, 2021.
Inside the Headlines
The notes carry an interest rate of 5% and are due 2029. The same will be guaranteed on a senior unsecured basis by the company’s present and forthcoming domestic units, which are guarantors or borrowers under its North American Credit Agreement.
The company intends to use the funds raised from the above-mentioned notes to pay back $345.5 million of its outstanding revolving borrowings under the aforesaid agreement.
However, the prepayment will not decrease the revolving borrowing commitment and the prepaid amount can be availed of for re-borrowing, pending certain approvals.
In the last several quarters, higher borrowing costs and an increased leverage shot up interest expenses. Consequently, the company’s total debt to total capital of 63.3% is higher than the industry’s figure of 41.8%. Its times interest earned stands at 2.98X, lower than the industry's average of 14.14X. Thus, its lack of financial flexibility remains a concern.
However, repurchase of notes will be a relief. At the end of the second quarter of 2021, borrowings dropped 9.5% to $2.4 billion from the number at 2020 end. On the last earnings call, management said that it expanded the company’s European credit facility and even extended the maturity of both its credit capacities.
Some better-ranked stocks in the same space are Credit Acceptance Corporation (CACC - Free Report) , CIT Group Inc. and HoulihanLokey, Inc. (HLI - Free Report) , earnings of which managed to deliver a trailing four-quarter surprise of 65.4%, 224.59% and 38.33%, respectively, on average. All the companies presently hold a Zacks Rank #2 (Buy).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
PRA Group (PRAA) Declares Pricing of Senior Notes Offering
PRA Group, Inc. (PRAA - Free Report) announced the pricing of its public offering of senior notes. The company upsized the notes from the previously announced amount of $300 million to $350 million. Subject to certain closing conditions, the offering is expected to be complete on or about Sep 22, 2021.
Inside the Headlines
The notes carry an interest rate of 5% and are due 2029. The same will be guaranteed on a senior unsecured basis by the company’s present and forthcoming domestic units, which are guarantors or borrowers under its North American Credit Agreement.
The company intends to use the funds raised from the above-mentioned notes to pay back $345.5 million of its outstanding revolving borrowings under the aforesaid agreement.
However, the prepayment will not decrease the revolving borrowing commitment and the prepaid amount can be availed of for re-borrowing, pending certain approvals.
In the last several quarters, higher borrowing costs and an increased leverage shot up interest expenses. Consequently, the company’s total debt to total capital of 63.3% is higher than the industry’s figure of 41.8%. Its times interest earned stands at 2.98X, lower than the industry's average of 14.14X. Thus, its lack of financial flexibility remains a concern.
However, repurchase of notes will be a relief. At the end of the second quarter of 2021, borrowings dropped 9.5% to $2.4 billion from the number at 2020 end. On the last earnings call, management said that it expanded the company’s European credit facility and even extended the maturity of both its credit capacities.
Zacks Rank and Price Performance
With a market capitalization of $1.868 billion, shares of this currently Zacks Rank #3 (Hold) company have gained 14.8% in six months’ time, outperforming its industry’s growth of 11.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the same space are Credit Acceptance Corporation (CACC - Free Report) , CIT Group Inc. and HoulihanLokey, Inc. (HLI - Free Report) , earnings of which managed to deliver a trailing four-quarter surprise of 65.4%, 224.59% and 38.33%, respectively, on average. All the companies presently hold a Zacks Rank #2 (Buy).