Encore Capital Group, Inc. Announces Private Placement of Convertible Senior Notes

 Encore Capital Group, Inc. Announces Private Placement of Convertible Senior
                                    Notes

PR Newswire

SAN DIEGO, Nov. 19, 2012

SAN DIEGO, Nov. 19, 2012 /PRNewswire/ -- Encore Capital Group, Inc. (NASDAQ:
ECPG) (the "Company") today announced that it has commenced a private
offering, subject to market and other conditions, of $100,000,000 aggregate
principal amount of convertible senior notes due 2017 (the "notes"). In
connection with the offering, the Company expects to grant the initial
purchasers an option to purchase up to an additional $15,000,000 aggregate
principal amount of such notes to cover sales in excess thereof. The notes
will be convertible, if certain conditions are met, into cash and, in certain
circumstances, shares of the Company's common stock, based on a
volume-weighted average price of the common stock on each day of an
observation period. 

The Company intends to use:

  oa portion of the net proceeds from this offering to pay the cost of
    certain convertible note hedge transactions (described below), taking into
    account the proceeds to the Company of certain warrant transactions
    (described below);
  oup to $25 million of the net proceeds from this offering to repurchase
    shares of the Company's common stock from purchasers of notes in this
    offering in privately negotiated transactions concurrently with this
    offering;
  oapproximately $61.5 million of the net proceeds from this offering to
    repay borrowings under the Company's revolving credit facility; and
  othe remainder of the net proceedsfrom this offering, if any,for general
    corporate purposes.

If the initial purchasers exercise their option to purchase additional notes,
the Company may sell additional warrants. The Company intends to use the
resulting additional proceeds of the sale of the additional notes and any
additional warrants:

  oto pay the cost of entering into additional convertible note hedge
    transactions; and
  ofor general corporate purposes.

In connection with the pricing of the notes, the Company expects to enter into
convertible note hedge transactions with one or more of the initial purchasers
(or their affiliates) and one or more other financial institutions (the
"option counterparties"). The convertible note hedge transactions are
expected generally to reduce the potential dilution and/or offset the cash
payments the Company is required to make in excess of the principal amount
upon conversion of the notes in the event that the market price of the
Company's common stock is greater than the strike price of the convertible
note hedge transactions. The Company also expects to enter into warrant
transactions with the option counterparties. The warrant transactions could
separately have a dilutive effect if the market price of the Company's common
stock exceeds the strike price of the warrant transactions, unless the Company
elects, subject to certain conditions, to settle the warrant transactions in
cash. If the initial purchasers exercise their option to purchase additional
notes, the Company expects to enter into additional convertible note hedge
transactions and additional warrant transactions with the option
counterparties.

The Company has been advised by the option counterparties that in connection
with establishing their initial hedge of the convertible note hedge
transactions and warrant transactions, the option counterparties or their
respective affiliates expect to enter into various derivative transactions
with respect to the Company's common stock and/or purchase shares of the
Company's common stock in privately negotiated transactions and/or open market
transactions concurrently with or shortly after the pricing of the notes. This
activity could increase (or reduce the size of any decrease in) the market
price of the Company's common stock or the notes at that time. In addition,
any repurchases by the Company of its common stock from purchasers of the
notes could affect the market price of the common stock concurrently with, or
shortly after, the pricing of the notes.

In addition, the Company has been advised by the option counterparties that
the option counterparties or their respective affiliates may modify their
hedge positions by entering into or unwinding various derivative transactions
with respect to the Company's common stock and/or purchasing or selling the
Company's common stock in secondary market transactions following the pricing
of the notes and prior to the maturity of the notes (and are likely to do so
during any observation period related to a conversion of the notes). This
activity could also cause or avoid an increase or a decrease in the market
price of the Company's common stock or the notes, which could affect the
ability of noteholders to convert the notes and, to the extent the activity
occurs during any observation period related to a conversion of the notes, it
could affect the amount and value of the consideration that noteholders will
receive upon conversion of the notes.

The notes, the shares of the Company's common stock issuable upon conversion
of the notes, if any, the convertible note hedge transactions and the warrant
transactions have not been and will not be registered under the Securities Act
of 1933, as amended (the "Securities Act") or the securities laws of any other
jurisdiction and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.

This press release is being issued pursuant to Rule 135c under the Securities
Act and does not constitute an offer to sell or the solicitation of an offer
to buy securities. Any offer of the securities will be made only by means of a
private offering memorandum.

Forward-Looking Statements

The statements in this press release that are not historical facts, including,
most importantly, those statements preceded by, or that include, the words
"may," "believe," "projects," "expects," "anticipates" or the negation
thereof, or similar expressions, constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995
(the "Reform Act"). These statements may include, but are not limited to,
statements regarding the actual terms of the notes, the completion, timing and
size of the proposed private offering, the anticipated use of proceeds from
the offering and whether the convertible note hedge and warrant transactions
will become effective. For all "forward-looking statements," the Company
claims the protection of the safe harbor for forward-looking statements
contained in the Reform Act. Such forward-looking statements involve risks,
uncertainties and other factors which may cause actual results, performance or
achievements of the Company and its subsidiaries to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. These risks, uncertainties and other factors
are discussed in the reports filed by the Company with the Securities and
Exchange Commission, including the most recent reports on Forms 10-K, 10-Q and
8-K each as it may be amended from time to time. The Company disclaims any
intent or obligation to update these forward-looking statements.

Contact:

Encore Capital Group, Inc.
Paul Grinberg (858) 309-6904
paul.grinberg@encorecapital.com

or

Adam Sragovicz (858) 309-9509
adam.sragovicz@encorecapital.com

Information found on the Company's website is not incorporated by reference.

SOURCE Encore Capital Group, Inc.

Website: http://www.encorecapital.com
 
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