May 26, 2018

Credit Acceptance Announces Finance Deal Featured

By Staff Writer March 05, 2018

Credit Acceptance Corp. recently announced the completion of a $500 million asset-backed non-recourse secured finance deal.


Credit Acceptance contributed finance contracts having a net book value of approximately $625.1 million to a wholly-owned special purpose entity which will transfer the contracts to a trust, which will issue three classes of notes.


The financing will have an expected annualized cost of approximately 3.6 percent, including the initial purchaser’s fees and other costs. It will revolve for 24 months after which it will amortize based upon the cash flows on the contributed contract and will be used to repay outstanding indebtedness.


Credit Acceptance will receive 6 percent of the cash flows related to the underlying consumer contracts to cover servicing expenses. The remaining 94 percent, 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 the company’s contractual relationships with its dealers and to preserve the dealers’ rights to future payments of dealer holdback.

Last modified on Tuesday, 06 March 2018 19:48