PRA Group revises covenants of North American credit facility

By Wendy Van Sickle

Columbus, Ohio, May 6 – PRA Group, Inc. amended its North American credit facility to make some covenant changes and increase the Libor floor to 1% from 0% for revolving loans, according to a news release on Wednesday.

Specifically, the consolidated total leverage ratio limit will increase to 3.25x from 2.75x effective after June 30 and through Dec. 31, 2020, after which it will decrease to 3x until maturity.

The consolidated senior secured leverage ratio limit will increase to 2.75x from 2.25x until March 31, 2021, after which it will decrease to 2.25x until maturity.

The estimated remaining collections (ERC) borrowing base on all domestic core eligible pools will increase to 40% from 35% effective July 31 until Jan. 31, 2021. If the ERC advance rate drops to 35% or below during this period, the ERC borrowing base will return to 35%.

“We appreciate the continued support and commitment of our banking partners in both the United States and Europe. This amendment brings some of our covenants in line with others in the industry while providing some short term flexibility that, when combined with the recent increase to our European credit facility, gives us the capability to manage our maturing convertible notes with cash on hand and committed credit lines, should that be our decision,” Pete Graham, executive vice president and chief financial officer for PRA Group, said in the release.

PRA Group is a debt buyer based in Norfolk, Va.

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