Acceptance of Credit Announces Completion of $ 600.0 Million
Southfield, Michigan, October 22, 2020 (GLOBE NEWSWIRE) – Credit Acceptance Corporation (Nasdaq: CACC) (the “Company”, “the Credit Acceptance”, “we”, “us” or “us”) today announced the completion of an asset-backed non-recourse secured financing of $ 600.0 million. dollars (the “Funding”). As part of this transaction, we made loans worth approximately $ 750.1 million to a wholly owned special purpose entity that will transfer the loans to a trust, which will issue three classes of notes:
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- have an expected annualized cost of approximately 1.8%, including initial purchase charges and other costs;
- run for 24 months after which it will be amortized according to the cash flows on the loans made; and
- be used by us to repay outstanding debt.
We will receive 6.0% of the underlying consumer loan cash flow to cover management fees. The remaining 94.0%, less amounts owed to brokers for brokerage holdback payments, will be used to pay principal and interest on the Notes as well as ongoing financing charges. The Funding is structured so as not to affect our contractual relationships with our dealers and to preserve the rights of dealers to future holdback payments.
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 the registration requirements. This press release does not and will not constitute an offer to sell or the solicitation of an offer to buy the Notes. This press release is issued in accordance with Rule 135c of the Securities Act of 1933.
Description of the credit acceptance company
Since 1972, Credit Acceptance has offered financing programs that allow automobile dealers to sell vehicles to consumers, regardless of their credit history. Our financing programs are offered through a nationwide network of automobile dealerships that benefit from the sale of vehicles to consumers who would otherwise not be able to obtain financing; repeat and referral sales generated by these same customers; and sales to customers who respond to advertisements for our financing programs, but who eventually qualify for traditional financing.
Without our financing programs, consumers are often unable to purchase vehicles or they purchase unreliable vehicles. Additionally, as we report to the three national credit bureaus, an important ancillary benefit of our programs is that we provide consumers with the opportunity to improve their lives by improving their credit rating and switching to sources of credit. more traditional financing. Credit acceptance is listed on the Nasdaq Stock Exchange under the symbol CACC. For more information visit creditacceptation.com.