v3.26.1
Borrowings
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Borrowings Borrowings
The Company is in compliance in all material respects with all covenants under its financing arrangements as of June 30, 2026. The components of the Company’s consolidated borrowings were as follows (in thousands):
June 30,
2026		December 31,
2025
Global senior secured revolving credit facility$691,648 $631,998 
Senior secured notes2,452,757 2,324,335 
Convertible senior notes
230,000 230,000 
Cabot securitisation senior facility338,157 343,539 
U.S. facility
450,000 450,000 
Other50,369 52,926 
Finance lease liabilities448 596 
4,213,379 4,033,394 
Less: debt discount and issuance costs, net of amortization(33,864)(32,101)
Total$4,179,515 $4,001,293 
Encore is the parent of the restricted group for the Global Senior Facility and the Senior Secured Notes, both of which are 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”). As of June 30, 2026, the Global Senior Facility provided for a total committed facility of $1,485.0 million that matures in September 2029, except for a $69.5 million tranche that terminates in September 2028, and included 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 Pounds), with a Term SOFR (or EURIBOR or SONIA) floor of 0.00%, plus a margin of 2.25%, 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 and any super priority hedging liabilities (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 June 30, 2026, the outstanding borrowings under the Global Senior Facility were $691.6 million. The weighted average interest rate of the Global Senior Facility was 5.59% and 6.49% for the three months ended June 30, 2026 and 2025, respectively, and 5.56% and 6.52% for the six months ended June 30, 2026 and 2025, respectively. Available capacity under the Global Senior Facility, after taking into account applicable debt covenants, was approximately $793.4 million as of June 30, 2026.
Senior Secured Notes
The following table provides a summary of the Company’s senior secured notes (the “Senior Secured Notes”) ($ in thousands):
June 30,
2026		December 31,
2025		Issue
Currency		Maturity DateInterest Payment DatesInterest Rate
Encore 2028 Notes
$331,526 $336,803 GBPJun 1, 2028Jun 1, Dec 14.250 %
Encore 2028 Floating Rate Notes
— 487,532 EURJan 15, 2028Jan 15, Apr 15, Jul 15, Oct 15
EURIBOR +4.250%(1)
Encore 2029 Notes
— 500,000 
USD
Apr 1, 2029
Apr 1, Oct 1
9.250 %
Encore 2030 Notes
500,000 500,000 USDMay 15, 2030
May 15, Nov 15
8.500 %
Encore 2031 Notes
500,000 500,000 USDApr 15, 2031Apr 15, Oct 156.625 %
Encore 2032 Notes750,000 — USDJun 1, 2032Jun 1, Dec 16.625 %
Encore 2033 Floating Rate Notes371,231 — EURJul 15, 2033Jan 15, Apr 15, Jul 15, Oct 15
EURIBOR +3.250%(2)
$2,452,757 $2,324,335 
_______________________
(1)Interest rate was based on three-month EURIBOR (subject to a 0% floor) plus 4.250% per annum, that reset quarterly.
(2)Interest rate is based on three-month EURIBOR (subject to a 0% floor) plus 3.250% per annum, resets quarterly.
The Senior Secured Notes are secured by the same collateral as the Global Senior Facility. The guarantees provided in respect of the Senior Secured Notes are pari passu with the guarantee given in respect of the Global Senior Facility. 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 May 22, 2026, the Company issued $750.0 million in aggregate principal amount of 6.625% Senior Secured Notes due June 2032 at an issue price of 100.000% (the “Encore 2032 Notes”). Interest on the Encore 2032 Notes is payable semi-annually, in arrears, on June 1 and December 1 of each year, commencing on December 1, 2026. The Company used a portion of the proceeds from this offering to redeem in full the $500.0 million principal outstanding under the Encore 2029 Notes, and to pay certain transaction fees and expenses incurred in connection with the offering of the Encore 2032 Notes. In connection with the redemption of the Encore 2029 Notes, the Company recognized a total loss on extinguishment of debt of $28.0 million, which included a $23.1 million make-whole premium for the early redemption and the write-off of the related unamortized issuance costs, during the three and six months ended June 30, 2026.
On May 28, 2026, the Company issued €325.0 million (approximately $371.2 million based on an exchange rate of $1.00 to €0.88, the exchange rate as of June 30, 2026) in aggregate principal amount of senior secured floating rate Notes due July 2033 at an issue price of 100.000% (the “Encore 2033 Floating Rate Notes”). The Encore 2033 Floating Rate Notes bear interest at a rate equal to the sum of (i) three-month EURIBOR (subject to a 0% floor) plus (ii) 3.250% per annum, reset quarterly. Interest on the Encore 2033 Floating Rate Notes is payable quarterly, in arrears, on January 15, April 15, July 15, and October 15 of each year, commencing on July 15, 2026. The Company used the proceeds from this offering, together with
drawings under its Global Senior Facility, to redeem in full the €415.0 million (approximately $474.0 million based on an exchange rate of $1.00 to €0.88, the exchange rate as of June 30, 2026) principal outstanding under the Encore 2028 Floating Rate Notes, and to pay certain transaction fees and expenses incurred in connection with the offering of the Encore 2033 Floating Rate Notes. In connection with the redemption of the Encore 2028 Floating Rate Notes, the Company recognized a loss on extinguishment of debt of $2.5 million, which consisted of the write-off of the related unamortized debt discount and issuance costs, during the three and six months ended June 30, 2026.
The Encore 2028 Floating Rate Notes had a weighted average interest rate, through redemption on May 28, 2026, of 6.41% and 6.61% for the three months ended June 30, 2026 and 2025, respectively, and 6.32% and 6.85% for the six months ended June 30, 2026 and 2025, respectively.
The Encore 2033 Floating Rate Notes had a weighted average interest rate of 5.44% from issuance on May 28, 2026 through June 30, 2026.
Convertible Notes
The following table provides a summary of the principal balance, maturity date and interest rate for the Company’s convertible senior notes (the “Convertible Notes”) ($ in thousands):
June 30,
2026		December 31,
2025		Maturity DateInterest Payment DatesInterest Rate
2029 Convertible Notes$230,000 $230,000 Mar 15, 2029Mar 15, Sep 154.000 %
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 $82.69. These hedging instruments have been determined to be indexed to the Company’s own stock and meet the criteria for equity classification. The Company recorded the cost of the hedge instruments as a reduction in additional paid-in capital, and does not recognize subsequent changes in fair value of these financial instruments in its condensed consolidated financial statements.
Certain key terms related to the convertible features as of June 30, 2026 are listed below ($ in thousands, except conversion price):
2029 Convertible Notes
Initial conversion price
$65.89 
Closing stock price at date of issuance$51.68 
Closing stock price dateFeb 28, 2023
Initial conversion rate (shares per $1,000 principal amount)
15.1763 
Effective conversion price(1)
$82.69 
Excess of if-converted value compared to principal(2)
$95,633 
Free conversion date
Dec 15, 2028
_______________________
(1)As discussed above, the Company maintains a hedge program that increases the effective conversion price for the 2029 Convertible Notes to $82.69.
(2)Represents the premium the Company would have to pay assuming the Convertible Notes were converted on June 30, 2026 using a hypothetical share price based on the closing stock price on June 30, 2026.
Prior to the close of business on the business day immediately preceding the free conversion date (listed above), holders may convert their Convertible Notes only under certain circumstances set forth in the indenture. On or after the free conversion date until the close of business on the second scheduled trading day immediately preceding the 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.
On July 22, 2026, in accordance with the redemption rights set forth in the indenture of the 2029 Convertible Notes, the Company called all $230.0 million aggregate principal amount of its outstanding 2029 Convertible Notes for redemption (the “Redemption”) on September 24, 2026 (the “Redemption Date”).
The redemption price will be paid in cash and equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest to, but excluding, the Redemption Date, which equates to a redemption price of $1,001 per $1,000 principal amount of any 2029 Convertible Notes called for Redemption.
The issuance of the redemption notice constitutes a “Make-Whole Fundamental Change” under the indenture. As a result, the conversion rate for notes surrendered for conversion during the applicable make-whole conversion period will increase from 15.1763 shares to 16.2056 shares of common stock per $1,000 principal amount of notes, subject to further adjustment in accordance with the terms of the indenture.
The Company elected to settle all conversions of the 2029 Convertible Notes in cash. In connection with the Redemption, the Company expects the capped call transactions entered into in connection with the issuance of the 2029 Convertible Notes to unwind and terminate in full. In connection with any such unwind and termination, the Company expects to receive from each option counterparty an amount of cash (or shares of the Company’s common stock if agreed with the applicable option counterparty) reflecting the then-current option value of such capped call transaction. The Company expects to enter into bilateral unwind agreements with each option counterparty to unwind and terminate its respective capped call transaction as of or shortly following the Redemption Date.
The Company’s convertible notes are carried as a single liability, which reflects the principal amount of the convertible notes. Interest expense related to the Convertible Notes was $2.3 million and $3.1 million during the three months ended June 30, 2026 and 2025, respectively, and $4.6 million and $6.2 million for the six months ended June 30, 2026 and 2025, respectively.
Cabot Securitisation Senior Facility
Cabot Securitisation UK Ltd (“Cabot Securitisation”), an indirect subsidiary of Encore, has a senior facility for a committed amount of £255.0 million (as amended, the “Cabot Securitisation Senior Facility”). Funds drawn under the Cabot Securitisation Senior Facility bear interest at a rate per annum equal to SONIA plus a margin of 3.00% plus, for periods after January 18, 2029, a step up margin ranging from zero to 1.00%. The Cabot Securitisation Senior Facility matures in January 2031.
As of June 30, 2026, the outstanding borrowings under the Cabot Securitisation Senior Facility were £255.0 million (approximately $338.2 million based on an exchange rate of $1.00 to £0.75, the exchange rate as of June 30, 2026). 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 £275.1 million (approximately $364.8 million based on an exchange rate of $1.00 to £0.75, the exchange rate as of June 30, 2026) as of June 30, 2026. The weighted average interest rate of the Cabot Securitisation Senior Facility was 6.74% and 7.54% for the three months ended June 30, 2026 and 2025, respectively, and 6.82% and 7.66% for the six months ended June 30, 2026 and 2025, respectively.
Cabot Securitisation is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 8: Variable Interest Entities” for further details.
U.S. Facility
An indirect subsidiary of Encore (“U.S. Financing Subsidiary”) has a facility for a committed amount of $450.0 million (as amended, the “U.S. Facility”) that matures in October 2028. Funds drawn under the U.S. Facility bear interest at a rate per annum equal to Term SOFR plus a margin of 3.50%.
As of June 30, 2026, the outstanding borrowings under the U.S. Facility were $450.0 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 June 30, 2026, this included receivables acquired from MCM, the book value of which was $852.5 million. The weighted average interest rate of the U.S. Facility was 7.15% and 7.82% for the three months ended June 30, 2026 and 2025, respectively, and 7.17% and 7.82% for the six months ended June 30, 2026 and 2025, respectively.
The U.S. Facility is a securitized financing vehicle and is a VIE for consolidation purposes. Refer to “Note 8: Variable Interest Entities” for further details.