Credit Acceptance Completes $300M Asset-Backed Financing

By Tamara Parker • Tuesday, December 24 06:01 • Permanent Link

Credit Acceptance Corporation (CACC) has announced the completion of a $300.0 million asset-backed non-recourse secured financing. The company conveyed loans valued at approximately $375.1 million to a wholly owned special purpose entity and will issue three classes of notes: A, B, and C. The notes carry interest rates of 5.79%, 6.03%, and 6.67% respectively.

The financing is expected to have an average annualized cost of approximately 6.3% including upfront fees and other costs. It will revolve for 36 months and then amortize based on the cash flows from the conveyed loans. The purpose of this financing is to repay outstanding indebtedness and for general corporate purposes.

Credit Acceptance will receive 4.0% of the cash flows related to the underlying consumer loans to cover servicing expenses, while the remaining 96.0% will be used to pay principal and interest to the institutional lenders as well as the ongoing costs of the financing.

Following these announcements, the company's shares moved 0.0%, and are now trading at a price of $461.36. If you want to know more, read the company's complete 8-K report here.

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