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PRA Group (PRAA) Refinances Its European Credit Facilities

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PRA Group, Inc. (PRAA - Free Report) recently completed the refinancing of its European credit facilities, which consists of a new $800 million U.K. credit facility and an amended and resized $750 million credit facility covering the rest of Europe excluding the U.K. The new U.K. facility includes new and current lenders that take part in both the North American and European credit facilities.

The financial miscellaneous service provider returns capital to banks and other creditors for enhancing financial services in the Americas, Europe and Australia. It exited 2021 with only $87.5 million of cash and cash equivalents, while its borrowings were $2.6 billion. Borrowings of PRAA reduced by 1.9% from the year-ago quarter's reported figure.

Its times interest earned stands at 3X, lower than the industry's average of 17.2X. Its total debt to capital currently stands at 67.4%, higher than the industry's average of 51%. Last year, the interest expenses of the company were reduced by 12.4% year over year.

Per management, the refinancing of the company’s credit facilities will substantially strengthen its financial flexibility by allowing it to diversify its lending group and reduce overall borrowing expenses.

The Zacks Rank #5 (Strong Sell) player   shares have gained 23.6% in a year’s time, compared with its industry’s growth of 7.7%. It is expected to continue performing well owing to rising receivable income, strategic measures and improved cash collections.

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Stocks to Consider

Some better-ranked stocks in the finance space are MVB Financial Corp. (MVBF - Free Report) , Axos Financial, Inc. (AX - Free Report) and Oaktree Specialty Lending Corporation (OCSL - Free Report) . While MVB Financial flaunts a Zacks Rank #1 (Strong Buy), Axos Financial and Oaktree Specialty Lending carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

MVB Financial has a trailing four-quarter earnings surprise of 73.73%, on average. The Zacks Consensus Estimate for MVBF’s 2022 earnings has moved north by 58.9% in the past 30 days.

The bottom line of Axos Financial outpaced estimates in each of the last four quarters, the average surprise being 9.62%. The Zacks Consensus Estimate for AX’s 2022 earnings suggests an improvement of 8.7%, while the same for revenues indicates growth of 9.8% from the year-ago reported figures.

Oaktree Specialty Lending has witnessed its 2022 earnings estimate move 1.5% north over the past 60 days. OCSL’s earnings outpaced estimates in each of the preceding four quarters, the average surprise being 12.2%.

While AX stock has lost 7.6% in a year's time, shares of OCSL and MVBF have gained 15.2% and 25.1%, respectively, in the same time frame.