Portfolio Recovery Associates Inc. (PRAA), a leading financial services company recently increased its lenders’ domestic revolving credit commitments by $35.5 million to $633 million. On Dec 19, 2012, Portfolio Recovery entered into a $597.5 million Credit Agreement with a group of banks.
As per the amendment, three new lenders viz. Bank of Hampton Roads, Heritage Bank and Union First Market were added. Moreover, three other lenders associated with the agreement, made adjustments to their credit commitments.
The aggregate credit facility with a principal amount of $633 million now consists of a fully-funded term loan, a domestic revolving credit facility and a multi-currency revolving credit facility. The term loan is worth $197.5 million while domestic revolving credit facility is of $415.5 million, which can be fully drawn. The amount of multi-currency credit facility is $20 million, all of which is available for withdrawal. All the three components of the credit facility under the Credit Agreement are expected to mature on Dec 19, 2017.
Additionally last week Portfolio Recovery sold its $287.5 million convertible senior notes that were scheduled to mature in 2020. We believe that this amendment in the credit facility coupled with closing of the senior notes will strengthen the financial position of Portfolio Recovery and assist it to grasp any forthcoming opportunity for growth.
Portfolio Recovery seems promising with a Zacks Rank #2 (Buy). Other business services outsourcing companies like Barrett Business Services Inc. (BBSI), Cap Gemini S.A. (CGEMY) and R.R. Donnelley & Sons Company (RRD) carry a favorable Zacks Rank #1 (Strong Buy) and appear impressive.
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