Credit Acceptance Corporation announced the completion of a $500.0 million asset-backed non-recourse secured financing.
The financing involved conveying loans valued at approximately $625.2 million to a special purpose entity.
Three classes of notes were issued, with varying amounts, average life, and interest rates.
Financing Details
The expected average annualized cost of the financing is around 5.1%, including upfront fees and other costs.
Loan Repayment
The financing will revolve for 24 months and then amortize based on the cash flows from the conveyed loans.
Purpose of Financing
The funds will be used to repay higher cost outstanding debts and for general corporate purposes.
Servicing Expenses
Credit Acceptance will receive 4.0% of cash flows to cover servicing expenses, with the remaining 96.0% allocated for note principal, interest, and ongoing financing costs.
Unused Borrowing Capacity
Following the financing, Credit Acceptance maintained approximately $2.0 billion in unused and available borrowing capacity.
- The completion of this financing marks the Company's 60th term securitization since 1998 and the lowest-cost ABS transaction since late 2021.
- Credit Acceptance's history of timely interest and principal payments in previous securitization trusts underscores the strength and stability of their financing structures.
With the successful completion of the asset-backed financing, Credit Acceptance strengthens its financial position and secures funding for future operations and debt repayment.