Pra Group Inc 8-K, filed Apr 4, 2022
Pra Group Inc (PRAA)
8-K
2022-04-04
For: 2022-03-29
View Original
Added on
April 07, 2026
About this 8-K
Pra Group Inc filed this 8-K on April 4, 2022, reporting on events of March 29, 2022.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 29, 2022
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(Exact name of registrant as specified in its charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Item 1.01 Entry into a Material Definitive Agreement.
Eighth Amendment and Restatement Agreement to the Multicurrency Revolving Credit Facility Agreement
On March 29, 2022, PRA Group Europe Holding S.a r.l., a wholly owned subsidiary of PRA Group, Inc. (the “Company”), and its Swiss Branch, PRA Group Europe Holding S.a r.l., Luxembourg, Zug Branch (together, the “Borrowers”), along with certain of their affiliates as guarantors, and the lenders party thereto, entered into the Eighth Amendment and Restatement Agreement (the “Eighth Amendment”) to the Multicurrency Revolving Credit Facility Agreement originally dated October 23, 2014 (as previously amended, the “Facility”). The Eighth Amendment was executed in connection with the UK Credit Agreement described below.
The following sets forth a description of the material terms of the Eighth Amendment:
•removing PRA Group (UK) Limited (“PRA UK”) as a guarantor under the Facility;
•removing the United Kingdom as a permitted jurisdiction (as defined by the Facility);
•releasing the shares of PRA UK from all security created under the Facility;
•reducing the total commitments of the Facility from $1.35 billion to $750 million; and
•extending the term of the Facility by one year to February 19, 2024.
DNB Bank ASA, Nordea Bank Abp and Swedbank AB (publ) and their respective affiliates have engaged in, and may in the future engage in, banking and other commercial dealings in the ordinary course of business with the Company, the Borrowers or their affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
The foregoing description of the Eighth Amendment does not purport to be complete and is qualified in its entirety by reference to the complete text of the Eighth Amendment, a copy of which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022.
UK Credit Agreement (as defined below)
On April 1, 2022, PRA Group Europe Holding I S.a r.l (“PRA Europe”), a wholly owned subsidiary of the Company, entered into a credit agreement (the “UK Credit Agreement”) with PRA UK and the Company, as guarantors, the lenders party thereto and MUFG Bank, Ltd., London Branch, as the administrative agent (the “Administrative Agent”).
The UK Credit Agreement consists of an $800.0 million revolving credit facility (subject to a borrowing base), and an accordion feature for up to $200.0 million in additional commitments, subject to certain conditions. Borrowings, which will be available in U.S. dollars, euro and pounds sterling, will accrue interest, for the applicable term at the risk free rate applicable to U.S. dollars (SOFR) or sterling (SONIA) or, in the case of euro borrowings, Euribor plus an applicable margin of 2.50% per annum plus a credit adjustment spread of 0.10%. If the consolidated senior secured leverage ratio is greater than 1.60 to 1.0, the applicable margin will increase to 2.75%. The UK Credit Agreement also has a commitment fee of 0.30% per annum, payable quarterly in arrears. If the consolidated senior secured leverage ratio is greater than 1.60 to 1.0, the commitment fee increases to 0.35% per annum. The UK Credit Agreement matures on July 30, 2026.
PRA Europe intends to use borrowings under the UK Credit Agreement to satisfy conditions necessary to complete the transactions contemplated by the Eighth Amendment to the Facility; refinance certain intercompany indebtedness; finance working capital, capital expenditures, certain permitted acquisitions and the purchase of debt portfolios; and for other general corporate purposes.
The UK Credit Agreement is secured by a first perfected security interest in (i) substantially all of the assets of PRA UK, (ii) all of the equity interests in PRA UK and PRA Europe, (iii) certain bank accounts of PRA Europe, and (iv) certain intercompany loans extended by PRA Europe to PRA UK.
The UK Agreement contains representations, warranties, terms and conditions customary for transactions of this type, including limitations on liens; incurrence of debt, investments, mergers, asset dispositions and restricted payments; covenants to preserve corporate existence and comply with laws; and covenants on the use of borrowings under the UK Credit Agreement. The UK Credit Agreement also contains a borrowing base and the financial covenants (tested by reference to the Company) described below:
•the borrowing base equals the sum of up to: (i) 35% of the estimated remaining collections of PRA UK’s eligible asset pools; plus (ii) 55% of PRA UK’s insolvency eligible asset pools; minus (iii) certain reserves to be established by the Administrative Agent;
•a consolidated total leverage ratio not to exceed 3.50 to 1.0 as of the end of any fiscal quarter;
•a consolidated senior secured leverage ratio of not to exceed 2.25 to 1.0 as of the end of any fiscal quarter; and
•a requirement to maintain positive consolidated income from operations at the end of any fiscal quarter.
The UK Credit Agreement also provides for events of default, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants, and cross-defaults. The occurrence of an event of default under the UK Credit Agreement could result in all borrowings under the UK Credit Agreement becoming immediately due and payable and the UK Credit Agreement being terminated.
The Administrative Agent, certain lenders under the UK Credit Agreement and their respective affiliates have engaged in, and may in the future engage in, banking and other commercial dealings in the ordinary course of business with the Company, its subsidiaries or their affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
The foregoing description of the UK Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the UK Credit Agreement, a copy of which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ending June 30, 2022.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
Item 7.01 Regulation FD Disclosure.
On April 4, 2022, the Company issued a press release announcing its entry into the Eighth Amendment and the UK Credit Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits | |||||||
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PRA Group, Inc. | ||||||||
| Date: April 4, 2022 | By: | /s/ Peter M. Graham | ||||||
| Peter M. Graham | ||||||||
| Executive Vice President and Chief Financial Officer | ||||||||
Exhibit 99.1
PRA Group Announces Refinancing of European Credit Facilities
NORFOLK, Va., April 4, 2022 — PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, announced today that on April 1, 2022, it completed the refinancing of its European credit facilities. This refinancing includes a new $800 million UK credit facility and an amended and resized $750 million credit facility covering the rest of Europe, excluding the UK. The new UK facility includes a diverse group of both new and existing lenders that participate in both the North American and European credit facilities.
"Our global bank group has been extremely supportive through the entire process. We are appreciative of the significant commitments from our long-time banking partners and pleased to welcome new members to the bank group. This refinancing provides us with additional flexibility, further diversifies our lending group, and decreases overall borrowing costs. We appreciate the continued partnership and ongoing support from our lenders,” said Pete Graham, executive vice president and chief financial officer for PRA Group, Inc.
About PRA Group, Inc.
As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers in the Americas, Europe and Australia. With thousands of employees worldwide, PRA Group, Inc. companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.
About Forward-Looking Statements
Statements made herein which are not historical in nature, including PRA Group, Inc.’s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group, Inc.’s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that our expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group, Inc.’s filings with the Securities and Exchange Commission including but not limited to PRA Group, Inc.’s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group, Inc.'s website and contain a detailed discussion of PRA Group, Inc.'s business, including risks and uncertainties that may affect future results.
Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA Group, Inc. assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group, Inc.’s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.
Investor Contact:
Pete Graham
Executive Vice President and Chief Financial Officer
(757) 431-7913
IR@PRAGroup.com
News Media Contact:
Elizabeth Kersey
Senior Vice President, Communications and Public Policy
(757) 431-3398
Elizabeth.Kersey@PRAGroup.com