Credit Acceptance Completes Securitization Featured

By Staff Writer August 28, 2018

Credit Acceptance Corp. completed a $398.3 million asset-backed non-recourse secured financing.

Pursuant to this transaction, Credit Acceptance contributed loans having a net book value of approximately $500.1 million to a wholly owned special purpose entity, which will transfer the loans to a trust and issue three classes of notes.

The financing will have an expected annualized cost of approximately 4 percent, including the initial purchaser’s fees and other costs and will be used to repay outstanding indebtedness.

It will revolve for 24 months after which it will amortize based upon the cash flows on the contributed loans.

Credit Acceptance will receive 6 percent of the cash flows related to the underlying consumer loans 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, 28 August 2018 13:26

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