Ad Acceptance of Credit Co – GuruFocus.com

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Southfield, Michigan, June 16, 2022 (GLOBE NEWSWIRE) — Credit acceptance Company (Nasdaq: CACC) (the “Company”, “Credit Acceptance”, “we”, “us” or “our”) today announced the completion of a $350.0 million non-recourse asset-backed secured financing ( funding “). Pursuant to this transaction, we have made loans of approximately $437.6 million to a wholly-owned special purpose entity that will transfer the loans to a trust, which will issue four classes of notes:

Note Class Rising average life Price Interest rate
A $ 184,850,000 2.51 years 99.97752 % 4.60 %
B $ 65,310,000 3.19 years 99.99521 % 4.95 %
VS $ 78,950,000 3.64 years 99.99721 % 5.70 %
D $ 20,890,000 3.83 years 99.99104 % 6.63 %

Funding :

  • have an expected annualized cost of approximately 5.4%, including initial acquisition costs and other costs;
  • runs for 24 months, after which it will be amortized according to the cash flows on the loans contributed; and
  • be used by us to pay off an outstanding debt and for general corporate purposes.

We will receive 4.0% of the underlying consumer loan cash flow to cover servicing costs. The remaining 96.0%, less amounts due to the Dealers for payment of the Dealer Holdback, will be used to pay principal and interest on the Notes as well as ongoing financing costs. The financing is structured so as not to affect our contractual relationships with our dealers and to preserve the dealers’ rights to future dealer 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 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 pursuant to Rule 135c of the Securities Act of 1933.

Additionally, we announced today that we have extended the date on which our $300.0 million revolving secure warehouse facility will stop operating from November 17, 2023 to May 20, 2025. There were no another important change in the conditions of the installation.

As of June 16, 2022, we have no outstanding balance under the Revolving Secure Warehouse.

Description of Credit Acceptance Corporation

Since 1972, Credit Acceptance has provided financing programs that allow automotive dealerships to sell vehicles to consumers regardless of their credit history. Our financing programs are offered through a nationwide network of automotive dealerships who profit from selling vehicles to consumers who otherwise could not obtain financing; repeat and referral sales generated by those same customers; and sales to customers responding to advertisements for our financing programs, but ultimately qualifying for traditional financing.

Without our financing programs, consumers are often unable to purchase vehicles or purchase unreliable ones. Additionally, as we report to the three national credit bureaus, an important co-benefit of our programs is that we offer consumers the opportunity to improve their lives by improving their credit score and switching to sources of more traditional financing. Credit Acceptance is listed on the Nasdaq Stock Exchange under the symbol CACC. For more information, visit creditacceptance.com.

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