Credit Acceptance Announces Completion of $300.0 Million Asset-Backed Financing
Credit Acceptance (CACC) has completed a $300.0 million asset-backed non-recourse secured financing. The company conveyed loans valued at approximately $375.1 million to a special purpose entity, issuing three classes of notes with interest rates ranging from 5.79% to 6.67%. The financing will have an expected average annualized cost of about 6.3%, including fees.
The financing structure includes a 36-month revolving period followed by amortization based on conveyed loan cash flows. CACC will retain 4.0% of cash flows for servicing expenses, while 96.0% will be used for principal and interest payments to lenders and ongoing financing costs, after dealer holdback payments. The arrangement preserves dealer relationships and holdback payment rights.
Credit Acceptance (CACC) ha completato un finanziamento garantito non ricorsivo di 300,0 milioni di dollari supportato da attivi. L'azienda ha trasferito prestiti per un valore di circa 375,1 milioni di dollari a un'entità creata per l'occasione, emettendo tre classi di obbligazioni con tassi d'interesse che variano dal 5,79% al 6,67%. Il finanziamento avrà un costo medio annualizzato atteso di circa il 6,3%, comprese le commissioni.
La struttura di finanziamento prevede un periodo di rotazione di 36 mesi seguito dall'ammortamento basato sui flussi di cassa dei prestiti trasferiti. CACC tratterrà il 4,0% dei flussi di cassa per le spese di gestione, mentre il 96,0% sarà destinato ai pagamenti di capitale e interessi ai finanziatori e ai costi di finanziamento in corso, dopo i pagamenti di ritenuta dei concessionari. L'accordo preserva le relazioni con i concessionari e i diritti di pagamento di ritenuta.
Credit Acceptance (CACC) ha completado un financiamiento asegurado no recurrible respaldado por activos de 300,0 millones de dólares. La empresa transfirió préstamos por un valor aproximado de 375,1 millones de dólares a una entidad de propósito especial, emitiendo tres clases de notas con tasas de interés que varían del 5,79% al 6,67%. Se espera que el costo promedio anualizado del financiamiento sea de alrededor del 6,3%, incluyendo tarifas.
La estructura de financiamiento incluye un período de rotación de 36 meses, seguido de una amortización basada en los flujos de efectivo de los préstamos transferidos. CACC retendrá el 4,0% de los flujos de efectivo para gastos de servicio, mientras que el 96,0% se utilizará para pagos de capital e interés a los prestamistas y costos de financiamiento en curso, después de los pagos de retención a los concesionarios. El acuerdo preserva las relaciones con los concesionarios y los derechos de pago de retención.
Credit Acceptance (CACC)는 3억 달러 규모의 비상환 자산 담보 대출을 완료했습니다. 회사는 약 3억 7천5백만 달러의 대출을 특별 목적 실체에 양도하며, 이자율이 5.79%에서 6.67%까지 다양한 세 종류의 채권을 발행했습니다. 이 금융의 예상 연간 평균 비용은 수수료를 포함해 약 6.3%가 될 것으로 예상됩니다.
이 금융 구조는 36개월의 회전 기간 이후에 양도된 대출의 현금 흐름에 따라 상환이 이루어지도록 되어 있습니다. CACC는 관리 비용을 위해 4.0%의 현금 흐름을 보유하고, 나머지 96.0%는 대출자의 원금 및 이자 지급과 계속되는 금융 비용에 사용됩니다. 이는 딜러 유지 보수 비용을 차감한 이후입니다. 이 arrangement은 딜러와의 관계와 유지 보수 비용 지급 권리를 유지합니다.
Credit Acceptance (CACC) a finalisé un financement sécurisé non recouvrable de 300,0 millions de dollars soutenu par des actifs. L'entreprise a transféré des prêts d'une valeur d'environ 375,1 millions de dollars à une entité à but spécial, émettant trois classes de notes avec des taux d'intérêt allant de 5,79 % à 6,67 %. Le financement devrait avoir un coût annualisé moyen d'environ 6,3 %, y compris les frais.
La structure de financement comprend une période de rotation de 36 mois suivie d'un amortissement basé sur les flux de trésorerie des prêts transférés. CACC conservera 4,0 % des flux de trésorerie pour les frais de service, tandis que 96,0 % seront utilisés pour les paiements de capital et d'intérêts aux prêteurs ainsi que pour les coûts de financement continus, après les paiements de retenue des concessionnaires. L'accord préserve les relations avec les concessionnaires et les droits de paiement de retenue.
Credit Acceptance (CACC) hat eine nicht rückzahlbare, durch Vermögenswerte abgesicherte Finanzierung über 300,0 Millionen Dollar abgeschlossen. Das Unternehmen hat Kredite im Wert von etwa 375,1 Millionen Dollar an eine spezielle Zweckgesellschaft übertragen und drei Klassen von Anleihen mit Zinssätzen von 5,79 % bis 6,67 % ausgegeben. Die Finanzierung wird voraussichtlich einen durchschnittlichen jährlichen Kostenaufwand von etwa 6,3 % einschließlich Gebühren haben.
Der Finanzierungsaufbau umfasst einen 36-monatigen Revolving-Zeitraum, gefolgt von der Amortisation basierend auf den Cashflows der übertragenen Kredite. CACC behält 4,0 % der Cashflows für Verwaltungsaufwendungen, während 96,0 % für die Rückzahlungen von Kapital und Zinsen an die Kreditgeber sowie laufende Finanzierungskosten verwendet werden, nachdem die Rückbehalte der Händler abgezogen wurden. Die Vereinbarung sichert die Beziehungen zu den Händlern und die Rechte an Rückbehaltszahlungen.
- Secured $300 million in new financing
- Maintains 4% servicing fee revenue stream
- 36-month revolving period provides operational flexibility
- Preserves existing dealer relationships and payment structures
- 6.3% average cost of financing indicates relatively high borrowing costs
- Company required to pledge $375.1M in loans to secure $300M financing
Insights
The
The 36-month revolving period followed by amortization based on cash flows demonstrates a well-structured approach to liability management. The company's retention of
For retail investors: Think of this like a homeowner taking out a mortgage, but instead of a house, CACC is using its auto loans as collateral. The company is essentially packaging these loans and selling them to investors while keeping the right to service them - a common practice in financial institutions that helps them free up capital to make more loans.
The structured financing demonstrates CACC's continued access to institutional capital markets despite challenging macro conditions. The three-tiered note structure (A, B and C classes) reflects sophisticated risk tranching, with the A-class notes carrying the lowest rate at
Most notably, the preservation of dealer holdback rights in the structure maintains CACC's unique business model integrity. This detail is important as it allows the company to continue its dealer-centric approach while accessing institutional funding. The non-recourse nature of the financing also provides balance sheet protection, effectively isolating the risk to the specific pool of conveyed loans.
Southfield, Michigan, Dec. 20, 2024 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (Nasdaq: CACC) (the “Company”, “Credit Acceptance”, “we”, “our”, or “us”) announced today the completion of a
| Note Class | Amount | Interest Rate | ||||||
| A | $ | 139,220,000 | 5.79 | % | ||||
| B | $ | 62,180,000 | 6.03 | % | ||||
| C | $ | 98,600,000 | 6.67 | % | ||||
The Financing will:
- have an expected average annualized cost of approximately
6.3% including upfront fees and other costs; - revolve for 36 months after which it will amortize based upon the cash flows on the conveyed loans; and
- be used by us to repay outstanding indebtedness and for general corporate purposes.
We will receive
Description of Credit Acceptance Corporation
We make vehicle ownership possible by providing innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history. Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our financing programs, but who actually end up qualifying for traditional financing.
Without our financing programs, consumers are often unable to purchase vehicles or they purchase unreliable ones. Further, as we report to the three national credit reporting agencies, an important ancillary benefit of our programs is that we provide consumers with an opportunity to improve their lives by improving their credit score and move on to more traditional sources of financing. Credit Acceptance is publicly traded on the Nasdaq Stock Market under the symbol CACC. For more information, visit creditacceptance.com.
FAQ
What are the interest rates for CACC's new $300M asset-backed financing?
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