An encoder generates quantized signal words based on a difference signal. The encoder includes an adaptive quantizer. A step size applied by the adaptive quantizer is generated in a feedback loop and based on a loading factor and quantized signal words generated by the adaptive quantizer. The encoder includes coding circuitry which generates code words based on quantized signal words generated by the adaptive quantizer. The coding circuitry generates an escape code in response to a quantized signal word not being associated with a corresponding coding code word.