Encore Capital Group Announces Closing of $90 Million 3.375% Convertible Senior Note Offering

Encore Capital Group, Inc., a leading consumer accounts receivable management firm, today announced the closing of the offering of its $90 million 3.375% convertible senior notes due 2010. JPMorgan Chase and Morgan Stanley served as joint book runners of the offering.

"Through this offering, we believe we have taken steps to effectively manage our interest expense by locking in longer-term fixed rate financing on attractive terms during a period of rising interest rates," said Brandon Black, President and COO of Encore Capital Group. "In addition, after paying down some of the debt outstanding on our senior credit facility, we currently have approximately $134 million available to continue pursuing portfolio purchases and strategic acquisitions."

"We believe the current market environment for convertible debt provided a window of opportunity to take advantage of attractive terms for these securities," said Paul Grinberg, Chief Financial Officer of Encore Capital Group. "Due to our confidence in the future outlook of the Company, we have simultaneously entered into a hedge that will reduce the potential dilution from the future conversion of the notes. This hedge has the economic effect to the Company of increasing the conversion price of the notes to approximately $29.04 per share, representing a 62.5% conversion premium to the per share closing price on September 13, 2005. In aggregate, we believe the convertible senior notes and related hedge transactions will yield positive benefits to the Company by reducing our average interest rate, expanding the capital available to continue pursuing our growth initiatives, and minimizing the dilution to stockholders."