Credit Acceptance Announces Completion of $351.7 Million Asset-Backed Financing
November 21 2019 - 4:05PM
Credit Acceptance Corporation (Nasdaq: CACC) (the “Company”,
“Credit Acceptance”, “we”, “our”, or “us”) announced today the
completion of a $351.7 million asset-backed non-recourse secured
financing (the “Financing”). Pursuant to this transaction, we
contributed loans having a value of approximately $439.6 million to
a wholly-owned special purpose entity which will transfer the loans
to a trust, which will issue three classes of notes:
Note Class |
|
Amount |
|
Average Life |
|
Price |
|
Interest Rate |
|
|
A |
|
$ |
237,500,000 |
|
|
2.61 years |
|
|
99.98459 |
% |
|
2.38 |
% |
|
B |
|
$ |
67,900,000 |
|
|
3.51 years |
|
|
99.98063 |
% |
|
2.86 |
% |
|
C |
|
$ |
46,300,000 |
|
|
3.81 years |
|
|
99.97727 |
% |
|
3.06 |
% |
The Financing will:
- have an expected annualized cost of approximately 2.9%
including the initial purchaser’s fees and other costs;
- revolve for 24 months after which it will amortize based upon
the cash flows on the contributed loans; and
- be used by us to repay outstanding indebtedness.
We will receive 6.0% of the cash flows related
to the underlying consumer loans to cover servicing expenses.
The remaining 94.0%, less amounts due to dealers for payments of
dealer holdback, will be used to pay principal and interest on the
notes 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.
The notes have not been and will not be
registered under the Securities Act of 1933 and may not be offered
or sold in the United States absent registration or an applicable
exemption from registration requirements. This news release
does not and will not constitute an offer to sell or the
solicitation of an offer to buy the notes. This news release
is being issued pursuant to and in accordance with Rule 135c under
the Securities Act of 1933.
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
Senior Vice President and Treasurer
(248) 353-2700 Ext. 4432
IR@creditacceptance.com
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