DALLAS, April 29, 2022 (GLOBE NEWSWIRE) — Tricolor today announced a $212 million social bond, the first-ever in the United States backed by auto asset-backed securities (ABS), to empower underserved and low-income communities and provide them with better access to traditional finance that ultimately enables them to build a better future. JP Morgan Securities LLC acted as sole lead bookrunner.
This remarkable achievement validates the application of capital markets investments to expand financial opportunities for low-income communities. It also highlights a pathway for other purpose-driven businesses to use for-profit models to solve large-scale social problems. The success of these loans and the bond is rooted in Tricolor’s use of artificial intelligence (AI) to successfully underwrite and disburse affordable loans to unseen customers.
“We are thrilled to be the first in the United States to obtain a Social Bond designation for all automotive consumer loans, which will allow us to facilitate capital markets investments to underserved Hispanic communities.” , said Daniel Chu, founder and CEO of Tricolor. “This landmark issue validates a pathway for capital markets investors to help accelerate our strategy to reverse systemic financial inequality in America, providing deserving people with access to reliable and affordable transportation and bringing them into the mainstream of finance, having been oversubscribed on average by three times across all investment grade bonds
“Congratulations to Tricolor for demonstrating an innovative new way to leverage social connections,” said JPMorgan’s George Wilkins. “This first in the automotive ABS market will help set a new precedent for attracting capital markets investor support for underserved populations.”
The Tricolor Social Bond is secured by loans that provide low-income borrowers without a FICO score affordable access to financing for the purchase of a motor vehicle. Tricolor has obtained a Second Party Opinion (“SPO”) from S&P Global Ratings to provide an opinion on the social benefits of this framework as well as alignment with the International Capital Markets Association (ICMA) Social Bond Principles .
Meeting the Needs of Underserved Hispanics
The more than 59 million Hispanics in the United States would collectively rank as the eighth largest economy in the world. Yet, according to the FDIC’s National Survey of Unbanked and Underbanked Households, 32% of this Hispanic American population has little or no access to mainstream credit.
Tricolor uses artificial intelligence (AI) and nearly 15 years of proprietary customer insights and over 25 million unique non-traditional credit attributes to unlock financially inclusive opportunities for low-income and invisible Hispanics in the world. credit left behind by major financial service providers. To date, Tricolor, a Community Development Financial Institution (CDFI) certified by the United States Department of Treasury, has disbursed more than $2 billion in affordable auto loans as part of its mission to empower underprivileged Hispanics. served and to provide them with a path to a better future through both physical mobility and upward financial mobility.
Tricolor has now completed eight well-received ABS transactions and is the sole issuer of all subprime automotive ABS with loans primarily secured by low-back and low-back borrowers. The company issued its first securitization in July 2013. In September 2021, Tricolor closed a $90 million convertible preferred stock investment from funds managed by BlackRock.
Tricolor has been consistently recognized for its important work on behalf of consumers, including being named winner of the Financial Inclusion Excellence Award at the 2022 LendIt Fintech Industry Awards as well as the Finovate Awards and Auto Finance News.
This press release does not constitute an offer to sell or the solicitation of an offer to buy and there will be no sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration. or qualification under securities laws. of such jurisdiction.
For more information about Tricolor, please visit tricolorholdings.com and tricolor.com.
Tricolor is a U.S. Department of Treasury Certified Community Development Financial Institution (CDFI) and mission-driven company leveraging its AI-powered, direct-to-consumer platform to deliver solutions transportation and upward financial mobility to underserved Hispanics in the United States. . It uses advanced data analytics and technology to advance financial inclusion in a highly underserved market and provide responsible, affordable, credit-generating auto loans to people with no or poor credit history.
Based in Dallas, Texas, Tricolor and its subsidiary Ganas Auto Group operate 50 retail centers in 20 markets in Texas, California, Nevada and Arizona, with a shared service center in Guadalajara, Mexico. Together, Tricolor and Ganas have served over 90,000 customers and disbursed over $2 billion in affordable auto loans using their proprietary model to segment risk.
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