8-K
PRA GROUP INC (PRAA)
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): | July 29, 2021 |
|---|
PRA Group, Inc.
_________________________________________
(Exact name of registrant as specified in its charter)
| Delaware | 000-50058 | 75-3078675 | |||||
|---|---|---|---|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||
| 120 Corporate Boulevard | |||||||
| Norfolk, | Virginia | 23502 | |||||
| (Address of principal executive offices) | (Zip Code) | Registrant’s telephone number, including area code: | (888) | 772-7326 | |||
| --- | --- | --- |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
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:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 par value per share | PRAA | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Item 1.01 Entry into a Material Definitive Agreement
On July 30, 2021, PRA Group, Inc. (the “Company”), PRA Group Canada Inc., as a Canadian borrower, and certain domestic subsidiaries of the Company, as guarantors, entered into the Fourth Amendment (the “Fourth Amendment”) to the Amended and Restated Credit Agreement, originally dated as of May 5, 2017 (the “North American Credit Agreement”), with the Lenders party thereto, Bank of America, N.A., as Administrative Agent, and Bank of America, N.A., acting through its Canada branch, as Canadian Administrative Agent.
The following sets forth a description of the material terms of the Fourth Amendment:
•The London Interbank Offered Rate (“LIBOR”), Canadian Dollar Offered Rate (“CDOR”) Loans and Eurodollar base rate floors were decreased from 0.75% to 0.0% for revolving loans.
•Certain negative covenants were amended, including that (i) the limit on stock repurchases and the redemption of convertible notes was increased to the sum of (a) $150.0 million per year and (b) 50% of Consolidated Net Income for the previous fiscal year and (ii) foreign subsidiaries of the Company were excluded from the limitations on incurring liens and entering into burdensome agreements.
•For Eurodollar Rate Loans, CDOR loans and Letter of Credit Fees, the Applicable Rate was reduced from 2.50% to 2.25% or, if the Consolidated Senior Secured Leverage Ratio is less than or equal to 1.60 to 1.0, from 2.25% to 2.00%.
•The Unused Fee was reduced from 0.375% to 0.35% or, if the Consolidated Senior Secured Leverage Ratio is less than or equal to 1.60 to 1.0, from 0.375% to 0.30%.
•The maturity date was extended from May 5, 2024 to July 30, 2026.
•The LIBOR replacement provisions were updated to reflect the current market approach.
Bank of America, N.A., certain of the Lenders 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 Fourth Amendment does not purport to be complete and is qualified in its entirety by reference to the complete text of the Fourth Amendment, a copy of which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2021.
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 herein by reference.
Item 7.01 Regulation FD Disclosure.
On August 2, 2021, the Company issued a press release announcing its entry into the Fourth Amendment. Also, on July 29, 2021, the Company issued a press release announcing the approval of the Repurchase Program (as defined below in Item 8.01). A copy of each press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and 99.2, respectively, and incorporated by reference.
Item 8.01 Other Events
On July 29, 2021, the Board of Directors of the Company (the “Board of Directors”) approved a share repurchase program under which the Company is authorized to repurchase of up to $150 million of its outstanding common stock (the “Repurchase Program”). Repurchases may be made from time-to-time in open market transactions, through privately negotiated transactions, in block transactions, through purchases made in accordance with trading plans adopted under Rule 10b5-1 of the Securities Exchange Act of 1934 or other methods, subject to market and/or other conditions and applicable regulatory requirements. The Repurchase Program does not obligate the Company to repurchase any specified amount of shares, remains subject to the discretion of the Board of Directors and may be modified, suspended or discontinued at any time.
Item 9.01 Financial Statements and Exhibits
| (d) | Exhibits | |
|---|---|---|
| 99.1 | Press Release datedAugust 2, 2021 | |
| 99.2 | Press Release dated July 29, 2021 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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: August 2, 2021 | By: | /s/ Peter M. Graham |
| Peter M. Graham | ||
| Executive Vice President and Chief Financial Officer |
Document
Exhibit 99.1
PRA Group Announces Amendment and Extension
of North American Credit Agreement
NORFOLK, Va., August 2, 2021 — PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, announced today that it amended and extended its North American Credit Agreement on July 30, 2021. The amendment includes the following changes, among other items:
•Certain negative covenants were amended, including (i) the limit on stock repurchases and the redemption of convertible notes was increased to the sum of (a) $150.0 million per year and (b) 50% of Consolidated Net Income for the previous fiscal year and (ii) PRA’s foreign subsidiaries were excluded from the limitations on incurring liens and entering into burdensome agreements.
•The London Interbank Offered Rate (LIBOR), Canadian Dollar Offered Rate (CDOR) Loans and Eurodollar base rate floors were decreased from 0.75% to 0.00% for revolving loans.
•For Eurodollar Rate Loans, CDOR Rate Loans and Letter of Credit Fees, the Applicable Rate was reduced from 2.50% to 2.25% or, if the Consolidated Senior Secured Leverage Ratio is less than or equal to 1.60 to 1.0, from 2.25% to 2.00%.
•The Unused Fee was reduced from 0.375% to 0.35% or, if the Consolidated Senior Secured Leverage Ratio is less than or equal to 1.60 to 1.0, from 0.375% to 0.30%.
•The LIBOR replacement provisions were updated to reflect the current market approach.
In addition, the maturity date of the agreement has been extended from May 5, 2024 to July 30, 2026.
"The current market conditions provided us the opportunity to amend and extend our North American Credit Agreement on favorable terms. This amendment provides PRA with additional flexibility, further diversifies our maturity profile and decreases overall costs on the facility. We appreciate the continued partnership from our lenders and their ongoing support of PRA,” 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: Darby Schoenfeld, CPA
Vice President, Investor Relations
(757) 431-7913
Darby.Schoenfeld@PRAGroup.com
Document
Exhibit 99.2
PRA Group Announces New $150 Million Share
Repurchase Program
NORFOLK, Va., July 29, 2021 - PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today announced that its Board of Directors has authorized a new share repurchase program in which the Company can repurchase up to $150 million of outstanding shares of its common stock.
“We believe that our strong and conservative capital position not only puts us in a good competitive position, but also allows us to provide additional value to investors. We evaluated various capital allocation options and determined that a share repurchase program was the most effective way for us to return capital to investors at this time. We believe that we can manage this program together with our current portfolio investment pipeline and business plan while maintaining our targeted leverage and growth targets. Our capital position also gives us the flexibility to continue to explore other capital allocation possibilities in the future,” said Pete Graham, executive vice president and chief financial officer of PRA Group, Inc.
The share repurchase program has no stated expiration date and repurchases may be made through open market purchases or other available means at the Company’s discretion, subject to applicable regulatory requirements. Repurchases are subject to market conditions and other factors, and the share repurchase program remains subject to the discretion of the Company’s Board of Directors.
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 that 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 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 more 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.