DENVER, April 27, 2016 /PRNewswire/ -- SquareTwo Financial Corporation ("SquareTwo" or "the Company") today announced that it has commenced an offer to exchange up to $188.5 million of new term loans due 2019 (the "Term Loans") and up to $101.5 million of a new series of preferred stock (the "Preferred Stock") for any and all of its outstanding 11.625% senior second lien notes due 2017 (the "2017 Notes") (the "Exchange Offer"). SquareTwo is also soliciting consents for the removal of certain covenants and events of default from the indenture governing the 2017 Notes.
Holders who elect to exchange their 2017 Notes will receive, for each $1,000 principal amount of 2017 Notes, $650 principal amount of Term Loans, including $30 principal amount relating to the delivery of consents, and $350 initial liquidation preference of the Preferred Stock. Holders who validly tender 2017 Notes and provide consents no later than 11:59 p.m., New York City time on May 10, 2016 (unless extended by SquareTwo), will receive the additional $30 principal amount of the Term Loans. Holders who validly tender 2017 Notes and provide consents after such time will not receive the additional $30 principal amount of the Term Loans.
The Exchange Offer is scheduled to expire at 11:59 p.m., New York City time on May 24, 2016, unless extended by SquareTwo. The complete terms and conditions of the Exchange Offer are set forth in the offering memorandum and consent solicitation statement (the "Offering Memorandum") and related letter of transmittal that are being sent to holders of the 2017 Notes.
The completion of the Exchange Offer is subject to the conditions described in the Offering Memorandum, including there being validly tendered at least 70% of the aggregate principal amount of outstanding 2017 Notes. Holders of more than 75% in aggregate principal amount of the 2017 Notes have entered into an agreement with the Company that outlines certain obligations and commitments related to a proposed recapitalization of the Company, including participation in the Exchange Offer. Subject to applicable law and as agreed with certain of such holders, SquareTwo may waive the conditions applicable to the Exchange Offer or extend, terminate or otherwise amend the Exchange Offer.
Copies of the Offering Memorandum and letter of transmittal may be obtained from D.F. King & Co., Inc., the exchange and information agent for the Exchange Offer, toll free at (866) 406-2287, (212) 269-5550 (banks and brokerage firms) or e-mail at email@example.com.
This press release is neither an offer to purchase nor a solicitation to buy any securities, nor is it a solicitation for acceptance of the Exchange Offer or the consents. The Company is making the Exchange Offer only by, and pursuant to the terms of, the Offering Memorandum and related letter of transmittal. The Exchange Offer is not being made in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. This press release is neither an offer to sell nor a solicitation of an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The exchange offer is being made pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act") contained in Section 3(a)(9) of the Securities Act. The Company has not filed, and does not expect to file, a registration statement under the Securities Act or any other federal or state securities laws with respect to the Preferred Stock.
About SquareTwo Financial
SquareTwo Financial is a leader in the distressed asset purchasing industry. SquareTwo's primary business is the acquisition, management and collection of charged-off consumer and commercial accounts receivable that are purchased from financial institutions, finance and leasing companies, and other issuers in the United States (U.S.) and Canada. Our business model leverages our analytic expertise, technology platform, and in the U.S., a unique combination of SquareTwo-owned call centers operating under the d/b/a name Fresh View Solutions ("Fresh View") and a network of regional law offices, also referred to as "branch offices," exclusively dedicated to SquareTwo.
This press release contains forward-looking statements within the meaning of the federal securities laws, including the anticipated expiration and settlement of the Exchange Offer for the 2017 Notes and other information and statements that are not historical fact. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include the satisfaction or waiver of the conditions to the Exchange Offer, as well as other factors detailed in the Offering Memorandum and in SquareTwo's most recently filed Annual Report on Form 10-K. These forward-looking statements speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in SquareTwo's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except to the extent required by the federal securities laws.
SOURCE SquareTwo Financial Corporation