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Borrowings
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Borrowings
Note 6: Borrowings
The Company is in compliance in all material respects with all covenants under its financing arrangements as of December 31, 2023. The components of the Company’s consolidated borrowings were as follows (in thousands):
December 31,
2023		December 31,
2022
Global senior secured revolving credit facility$816,880 $661,738 
Encore private placement notes29,310 68,390 
Senior secured notes1,654,989 1,485,888 
Convertible notes and exchangeable notes330,000 272,500 
Cabot securitisation senior facility324,646 423,522 
U.S. facility
175,000 — 
Other24,904 23,512 
Finance lease liabilities2,818 5,675 
3,358,547 2,941,225 
Less: debt discount and issuance costs, net of amortization(40,516)(42,404)
Total$3,318,031 $2,898,821 
Encore is the parent of the restricted group for the Global Senior Facility, the Senior Secured Notes and the Encore Private Placement Notes, each of which is guaranteed by the same group of material Encore subsidiaries and secured by the same collateral, which represents substantially all of the assets of those subsidiaries.
Global Senior Secured Revolving Credit Facility
In September 2020, the Company entered into a multi-currency senior secured revolving credit facility agreement (as amended and restated, the “Global Senior Facility”). In May 2023, the Company amended the Global Senior Facility to extend the termination date of the facility from September 2026 to September 2027. In addition, the size of the facility was increased by $40.0 million to $1,180.0 million. On October 30, 2023, pursuant to the terms of the Global Senior Facility the Company further increased the size of the Company’s Global Senior Facility by $23.0 million to $1,203.0 million. As of December 31, 2023, the Global Senior Facility provided for a total committed facility of $1,203.0 million that matures in September 2027 and includes the following key provisions:
•Interest at Term SOFR (or EURIBOR for any loan drawn in Euro or a rate based on SONIA for any loan drawn in British Pound), with a Term SOFR (or EURIBOR or SONIA) floor of 0.00%, plus a margin of 2.50%, plus in the case of Term SOFR borrowings, a credit adjustment spread of 0.10%;
•An unused commitment fee of 0.40% per annum, payable quarterly in arrears;
•A restrictive covenant that limits the LTV Ratio (defined in the Global Senior Facility) to 0.75 in the event that the Global Senior Facility is more than 20% utilized;
•A restrictive covenant that limits the SSRCF LTV Ratio (defined in the Global Senior Facility) to 0.275;
•A restrictive covenant that requires the Company to maintain a Fixed Charge Coverage Ratio (as defined in the Global Senior Facility) of at least 2.0;
•Additional restrictions and covenants which limit, among other things, the payment of dividends and the incurrence of additional indebtedness and liens; and
•Standard events of default which, upon occurrence, may permit the lenders to terminate the Global Senior Facility and declare all amounts outstanding to be immediately due and payable.
The Global Senior Facility is secured by substantially all of the assets of the Company and the guarantors. Pursuant to the terms of an intercreditor agreement entered into with respect to the relative positions of (1) the Global Senior Facility, any super priority hedging liabilities and the Encore Private Placement Notes (collectively, “Super Senior Liabilities”) and (2) the Senior Secured Notes, Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets.
As of December 31, 2023, the outstanding borrowings under the Global Senior Facility were $816.9 million. The weighted average interest rate of the Global Senior Facility was 7.58% and 4.42% for the years ended December 31, 2023 and December 31, 2022, respectively. Available capacity under the Global Senior Facility, after taking into account applicable debt covenants, was approximately $363.8 million as of December 31, 2023.
Encore Private Placement Notes
In August 2017, Encore entered into $325.0 million in senior secured notes with a group of insurance companies (the “Encore Private Placement Notes”). As of December 31, 2023, $29.3 million of the Encore Private Placement Notes remained outstanding. The Encore Private Placement Notes bear an annual interest rate of 5.625%, mature in August 2024 and require quarterly principal payments of $9.8 million. The covenants and material terms for the Encore Private Placement Notes are substantially similar to those for the Global Senior Facility.
Senior Secured Notes
The following table provides a summary of the Company’s senior secured notes (the “Senior Secured Notes”) ($ in thousands):
December 31, 2023December 31, 2022Issue CurrencyMaturity DateInterest Payment DatesInterest Rate
Encore 2025 Notes$386,324 $375,325 EUROct 15, 2025Apr 15, Oct 154.875 %
Encore 2026 Notes381,937 363,019 GBPFeb 15, 2026Feb 15, Aug 155.375 %
Encore 2028 Notes318,280 302,516 GBPJun 1, 2028Jun 1, Dec 14.250 %
Encore 2028 Floating Rate Notes568,448 445,028 EURJan 15, 2028Jan 15, Apr 15, Jul 15, Oct 15
EURIBOR +4.250%(1)
$1,654,989 $1,485,888 
______________________
(1) Interest rate is based on three-month EURIBOR (subject to a 0% floor) plus 4.250% per annum, resets quarterly.

The Senior Secured Notes are secured by the same collateral as the Global Senior Facility and the Encore Private Placement Notes. The guarantees provided in respect of the Senior Secured Notes are pari passu with each such guarantee given in respect of the Global Senior Facility and Encore Private Placement Notes. Subject to the intercreditor agreement described above under the section “Global Senior Secured Revolving Credit Facility,” Super Senior Liabilities that are secured by assets that also secure the Senior Secured Notes will receive priority with respect to any proceeds received upon any enforcement action over any such assets.
On October 16, 2023, the Company issued an additional €100.0 million (approximately $110.4 million based on an exchange rate of $1.00 to €0.91, the exchange rate as of December 31, 2023) aggregate principal amount of Encore 2028 Floating Rate Notes at an issue price of 99.01%. The Company used the proceeds from this offering to repay drawings under its Global Senior Facility and to pay certain transaction fees and expenses incurred in connection with the offering of the notes. The weighted average interest rate of the 2028 Floating Rate Notes was 7.44% and 4.54% for the years ended December 31, 2023 and 2022, respectively. As discussed in “Note 3: Derivatives and Hedging Instruments,” the Company uses interest rate derivative contracts to manage its risk related to the interest rate fluctuation in its variable interest rate bearing debt. The weighted average interest rate of the 2028 Floating Rate Notes including the effect of the hedging instruments was 4.52% and 4.26% for the years ended December 31, 2023 and 2022, respectively.
Convertible Notes and Exchangeable Notes
The following table provides a summary of the principal balance, maturity date and interest rate for the Company’s convertible and exchangeable senior notes (the “Convertible Notes” or “Exchangeable Notes,” as applicable) ($ in thousands):
December 31, 2023December 31, 2022Maturity Date
Interest Payment Dates
Interest Rate
2023 Exchangeable Notes$— $172,500 Sep 1, 2023Mar 1, Sep 14.500 %
2025 Convertible Notes100,000 100,000 Oct 1, 2025Apr 1, Oct 13.250 %
2029 Convertible Notes
230,000 — Mar 15, 2029Mar 15, Sep 154.000 %
$330,000 $272,500 
In March 2023, Encore issued $230.0 million aggregate principal amount of 4.00% convertible senior notes that mature on March 15, 2029 in a private placement transaction (the “2029 Convertible Notes”). Interest on the 2029 Convertible Notes is payable semi-annually.
The Company used a portion of the net proceeds from the issuance of the 2029 Convertible Notes to repurchase, in separate privately negotiated transactions, approximately $154.8 million aggregate principal amount of its 2023 Exchangeable Notes for approximately $192.5 million. The repurchase met the criteria for an induced conversion and accordingly, the Company recognized expense of $2.7 million, representing the fair value of the consideration paid to certain holders of the 2023 Exchangeable Notes in excess of the fair value which they were otherwise entitled to receive pursuant to the existing conversion terms on the respective settlement dates. The amount is included in Other income (expense), net, in the Company’s condensed consolidated statements of operations during the year ended December 31, 2023. The remaining excess above the principal amount of the repurchased 2023 Exchangeable Notes was recognized in the Company’s stockholder’s equity.
Additionally, in March 2023, the Company received proceeds of approximately $28.5 million from the unwind of the capped call options associated with the repurchased portion of the 2023 Exchangeable Notes. Since the capped call options were determined to be equity instruments, the partial unwind of the capped call options was recorded as an increase in stockholder’s equity in the consolidated statements of financial condition as of December 31, 2023.
On September 1, 2023, the remaining $17.7 million principal amount of the 2023 Exchangeable Notes matured. The Company settled in cash for approximately $20.1 million both the outstanding 2023 Exchangeable Notes and the $2.4 million excess above the principal amount. The excess above the principal amount represents the conversion spread and was recognized as a reduction in stockholder's equity. Concurrent with the settlement, the Company received $2.4 million from its capped call options associated with the conversion of the remaining 2023 Exchangeable Notes. The proceeds from the exercise of the capped call options were recorded as an increase in stockholder's equity in the Company’s consolidated statement of financial condition as of December 31, 2023. As a result, no gain or loss was recognized as a result of the final settlement of the 2023 Exchangeable Notes in the Company's consolidated statement of operations for the year ended December 31, 2023.
In order to reduce the risk related to the potential dilution and/or the potential cash payments the Company may be required to make in the event that the market price of the Company’s common stock becomes greater than the conversion prices of the Convertible Notes, the Company may enter into hedge programs that increase the effective conversion price for the Convertible Notes. In connection with the issuance of the 2029 Convertible Notes, the Company entered into privately negotiated capped call transactions that effectively raised the conversion price of the 2029 Convertible Notes from $65.89 to $82.69. The cost of the capped call transactions was approximately $18.5 million. These hedging instruments have been determined to be indexed to the Company’s own stock and meet the criteria for equity classification and therefore the cost was included as a reduction to stockholder’s equity in the consolidated statement of financial condition as of December 31, 2023. Subsequent changes in fair value of these financial instruments are not recognized in the Company’s consolidated financial statements. The Company did not hedge the 2025 Convertible Notes.
Certain key terms related to the convertible features as of December 31, 2023 are listed below ($ in thousands, except conversion or exchange price):
2025 Convertible Notes2029 Convertible Notes
Initial conversion price
$40.00 $65.89 
Closing stock price at date of issuance$32.00 $51.68 
Closing stock price dateSep 4, 2019Feb 28, 2023
Initial conversion rate (shares per $1,000 principal amount)
25.0000 15.1763 
Adjusted conversion rate (shares per $1,000 principal amount)
25.1310 15.1763 
Adjusted conversion price(1)
$39.79 $65.89 
Adjusted effective conversion price(2)
$39.79 $82.69 
Excess of if-converted value compared to principal(3)
$27,540 $— 
Conversion date
Jul 1, 2025Dec 15, 2028
______________________
(1)Pursuant to the indenture for the Company’s 2025 Convertible Notes, the conversion rate for the 2025 Convertible Notes was adjusted upon the completion of the Company’s tender offer in December 2021.
(2)As discussed above, the Company maintains a hedge program that increases the effective conversion price for the 2029 Convertible Notes to $82.69.
(3)Represents the premium the Company would have to pay assuming the Convertible Notes were converted on December 31, 2023 using a hypothetical share price based on the closing stock price on December 31, 2023.
Prior to the close of business on the business day immediately preceding their respective free conversion date (listed above), holders may convert their Convertible Notes under certain circumstances set forth in the applicable indentures. On or after their respective free conversion dates until the close of business on the second scheduled trading day immediately preceding their respective maturity date, holders may convert their notes at any time.
In the event of conversion, the Convertible Notes are convertible into cash up to the aggregate principal amount of the notes and the excess conversion premium, if any, may be settled in cash or shares of the Company’s common stock at the Company’s election and subject to certain restrictions contained in each of the indentures governing the Convertible Notes.
The Company’s convertible and exchangeable notes are carried as a single liability, which reflects the principal amount of the convertible and exchangeable notes. Interest expense related to the Convertible Notes and Exchangeable Notes was approximately $12.6 million, $12.0 million, and $16.8 million for the years ended December 31, 2023, 2022, and 2021, respectively.
Cabot Securitisation Senior Facility
Prior to November 20, 2023, Cabot Securitisation UK Ltd (“Cabot Securitisation”), an indirect subsidiary of Encore, had a senior facility for a committed amount of £350.0 million (as amended, the “Cabot Securitisation Senior Facility”), which would mature in September 2026. Prior to November 20, 2023, funds drawn under the Cabot Securitisation Senior Facility beared interest at a rate per annum equal to SONIA plus a margin of 3.00% plus, for periods after September 18, 2024, a step-up margin ranging from zero to 1.00%. The Company amended its Cabot Securitisation Senior Facility, effective November 20, 2023, to extend the maturity date from September 2026 to September 2028 and reduce the committed amount from £350.0 million to £255.0 million. Effective November 20, 2023, funds drawn under the Cabot Securitisation Senior Facility bear interest at a rate per annum equal to SONIA plus a margin of 3.20% plus, for periods after September 18, 2026, a step up margin ranging from zero to 1.00%.
As of December 31, 2023, the outstanding borrowings under the Cabot Securitisation Senior Facility were £255.0 million (approximately $324.6 million based on an exchange rate of $1.00 to £0.79, the exchange rate as of December 31, 2023). The obligations of Cabot Securitisation under the Cabot Securitisation Senior Facility are secured by first ranking security interests over all of Cabot Securitisation’s property, assets and rights (including receivables purchased from Cabot Financial UK from time to time), the book value of which was approximately £324.6 million (approximately $413.2 million based on an exchange rate of $1.00 to £0.79, the exchange rate as of December 31, 2023) as of December 31, 2023. The weighted average interest rate of the Cabot Securitisation Senior Facility was 7.68% and 4.49% for the years ended December 31, 2023 and 2022, respectively. As discussed in “Note 3: Derivatives and Hedging Instruments,” the Company uses interest rate derivative contracts to manage its risk related to the interest rate fluctuation in its variable interest rate bearing debt. The weighted average interest rate of the Cabot Securitisation Senior Facility including the effect of the hedging instruments was 5.41% and 4.33% for the years ended December 31, 2023 and 2022, respectively.
Cabot Securitisation is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 7: Variable Interest Entities” for further details.
U.S. Facility
In October 2023, an indirect subsidiary of Encore (“U.S. Financing Subsidiary”), entered into a facility for a committed amount of $175.0 million (the “U.S. Facility”). The U.S. Facility matures in October 2026. Funds drawn under the U.S. Facility bear interest at a rate per annum equal to Term SOFR plus a margin of 3.5%.
As of December 31, 2023, the outstanding borrowings under the U.S. Facility were $175.0 million. The obligations under the U.S. Facility are secured by first ranking security interests over all of U.S. Financing Subsidiary’s assets and rights. As of December 31, 2023, this included receivables acquired from MCM, the book value of which was approximately $302.8 million. The weighted average interest rate of the U.S. Facility was 8.84% for the year ended December 31, 2023. As discussed in “Note 3: Derivatives and Hedging Instruments,” the Company uses interest rate derivative contracts to manage its risk related to the interest rate fluctuation in its variable interest rate bearing debt. The weighted average interest rate of the U.S. Facility including the effect of the hedging instruments was 8.25% for the year ended December 31, 2023.
The U.S. Facility is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 7: Variable Interest Entities” for further details.
Finance Lease Liabilities
The Company has finance lease liabilities primarily for computer equipment. As of December 31, 2023, the Company’s finance lease liabilities were approximately $2.8 million. Refer to “Note 12: Leases” for further details.
Maturity Schedule
The aggregate amounts of the Company’s borrowings, including finance lease liabilities, maturing in each of the next five years and thereafter are as follows (in thousands):
2024$41,363 
2025494,333 
2026560,887 
2027819,319 
20281,211,374 
Thereafter231,271 
Total$3,358,547