Credit Acceptance Announces Completion of $200.0 Million Asset-Backed Financing
November 30 2023 - 4:22PM
Credit Acceptance Corporation (Nasdaq: CACC) (the
“Company”, “Credit Acceptance”, “we”, “our”, or “us”) announced
today the completion of a $200.0 million asset-backed non-recourse
secured financing (the “Financing”). Pursuant to this
transaction, we conveyed loans having a value of approximately
$252.0 million to a wholly owned special purpose entity that will
pledge the loans to an institutional lender under a loan and
security agreement. We will issue three classes of notes:
Note Class |
|
Amount |
|
Interest Rate |
|
A |
|
$ |
100,830,000 |
|
|
6.98 % |
|
B |
|
$ |
45,050,000 |
|
|
7.81 % |
|
C |
|
$ |
54,120,000 |
|
|
8.24 % |
The Financing will:
- have an expected average annualized cost of approximately 8.6%
including the initial purchasers’ fees and other costs;
- revolve for 24 months after which it will amortize based upon
the cash flows on the conveyed loans; and
- be used by us to repay outstanding indebtedness and for general
corporate purposes.
We will receive 4.0% of the cash flows related
to the underlying consumer loans to cover servicing expenses.
The remaining 96.0%, less amounts due to dealers for payments of
dealer holdback, will be used to pay principal and interest to the
institutional lender as well as the ongoing costs of the
Financing. The Financing is structured so as not to affect
our contractual relationships with our dealers and to preserve the
dealers’ rights to future payments of dealer holdback.
Description of Credit Acceptance
Corporation
Since 1972, Credit Acceptance has offered
financing programs that enable automobile dealers to sell vehicles
to consumers, regardless of their credit history. Our
financing programs are offered through a nationwide network of
automobile dealers who benefit from sales of vehicles to consumers
who otherwise could not obtain financing; from repeat and referral
sales generated by these same customers; and from sales to
customers responding to advertisements for our financing programs,
but who actually end up qualifying for traditional financing.
Without our financing programs, consumers are
often unable to purchase vehicles or they purchase unreliable
ones. Further, as we report to the three national credit
reporting agencies, an important ancillary benefit of our programs
is that we provide consumers with an opportunity to improve their
lives by improving their credit score and move on to more
traditional sources of financing. Credit Acceptance is
publicly traded on the Nasdaq Stock Market under the symbol
CACC. For more information, visit creditacceptance.com.
Investor Relations: Douglas W. Busk
Chief Treasury Officer
(248) 353-2700 Ext. 4432
IR@creditacceptance.com
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