CACC - Credit Acceptance completes another $400M in asset-backed financing

2023-05-25 16:21:09 ET

Credit Acceptance ( NASDAQ: CACC ), which offers vehicle financing programs to auto dealers, completed on Thursday a $400.0M asset-backed non-recourse secured financing.

The company contributed loans having a value of ~$500.1M to a wholly-owned special purpose entity that will transfer the loans to a trust, which will issue three classes of notes.

The financial will have an average annualized cost of ~6.8% including the initial purchasers' fees and other costs; revolve for 24 months after which it will amortize based on the cash flows on the contributed loans; and will be used by Credit Acceptance ( CACC ) to repay outstanding debt and for general corporate purposes.

CACC 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 on the notes as well as the ongoing costs of the financing.

The financing is made up of $210.6M of A notes with aveage life of 2.44 years, priced at 99.99254% and interest rate of 5.92%; $86.1M of class B notes with average life of 3.06 years, priced at 99.98878% and interest rate of 6.61%; and $103.3M of class C notes with average life of 3.47 years, priced at 99.99551% and interest rate of 7.15%.

Credit Acceptance ( CACC ) stock rose 0.4% in after-hours trading.

Last month, Credit Acceptance extended maturity on $400M revolving facility by two years , and in March it completed a $400M asset-backed financing.

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