PRA Group (PRAA) Expands North American Credit Facility

PRA Group, Inc. PRAA announced that it amended and expanded its North American credit facility on Oct 4, 2018. The company expanded its North American credit facility, increasing the U.S. revolving portion by $363 million for a total North American revolving credit facility of $1.118 billion.  However, the term loan portion of the facility, along with rates and maturity, remains the same.

The amended facility also improves the accordion feature from $45 million to $500 million. Moreover, the revolving portion of the European credit facility was decreased by $100 million. It now stands at $800 million.

With the deal, the company will be able to carry on with its global funding objectives and investment opportunities. Rise in the North American and European facilities balance the excess capacity in Europe and is sufficient to invest in the United States. PRA Group is still witnessing high volume of non-performing loans at great returns in the United States.

The company is enjoying strong liquidity position that allows it to deploy cash for several investments. Its cash and cash equivalents have been rising since 2013, boosting the total current assets.

In the last year, the company also amended and restated its North American credit facility. With a five-year term, the deal consisted of total facility size of $1.2 billion, which included $450 million term loan facility and $755 million revolving loan facility.

These investments make the company well poised for growth.

Shares of this Zacks Rank #3 (Hold) company have rallied nearly 18.4% against its industry’s decline of 10.5% in a year's time.

 

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