Credit Acceptance Announces Completion of $600.0 Million Asset-Backed Financing
Credit Acceptance (Nasdaq: CACC) has completed a $600.0 million asset-backed non-recourse secured financing. The company conveyed loans valued at approximately $750.2 million to a special purpose entity, which will transfer them to a trust issuing three classes of notes. The financing will have an expected average annualized cost of about 5.2%, revolve for 24 months, and then amortize based on cash flows from the conveyed loans.
The funds will be used to repay outstanding indebtedness and for general corporate purposes. Credit Acceptance will receive 4.0% of cash flows to cover servicing expenses, while 96.0% (less dealer holdback payments) will go towards note principal, interest, and ongoing financing costs. This structure preserves dealers' rights to future holdback payments.
Credit Acceptance (Nasdaq: CACC) ha completato un finanziamento garantito non ricorsivo supportato da attivi da $600,0 milioni. L'azienda ha trasferito prestiti del valore di circa $750,2 milioni a un'entità appositamente creata, la quale li trasferirà a un trust che emetterà tre classi di note. Il finanziamento avrà un costo medio annualizzato previsto di circa il 5,2%, si rinnoverà per 24 mesi e poi si ammonterà in base ai flussi di cassa provenienti dai prestiti trasferiti.
I fondi saranno utilizzati per riuntare debiti esistenti e per scopi aziendali generali. Credit Acceptance riceverà il 4,0% dei flussi di cassa per coprire le spese di gestione, mentre il 96,0% (al netto dei pagamenti di trattenuta dei concessionari) sarà destinato al capitale delle note, agli interessi e ai costi di finanziamento in corso. Questa struttura preserva i diritti dei concessionari ai futuri pagamenti di trattenuta.
Credit Acceptance (Nasdaq: CACC) ha completado un financiamiento garantizado no recursivo respaldado por activos de $600,0 millones. La empresa transfirió préstamos por un valor aproximado de $750,2 millones a una entidad de propósito especial, que los transferirá a un fideicomiso que emitirá tres clases de notas. El financiamiento tendrá un costo anualizado promedio esperado de aproximadamente el 5,2%, girará durante 24 meses y luego se amortizará según los flujos de efectivo de los préstamos transferidos.
Los fondos se utilizarán para pagar deudas pendientes y para fines corporativos generales. Credit Acceptance recibirá el 4,0% de los flujos de efectivo para cubrir los gastos de servicio, mientras que el 96,0% (menos los pagos de retención a concesionarios) se destinará al principal de las notas, intereses y costos de financiamiento continuos. Esta estructura preserva los derechos de los concesionarios a futuros pagos de retención.
Credit Acceptance (Nasdaq: CACC)는 6억 달러 규모의 자산 담보 비소구 자금 조달을 완료했습니다. 이 회사는 약 7억 5천만 달러에 해당하는 대출을 특수 목적체에 전달하며, 해당 대출은 세 가지 종류의 채권을 발행하는 신탁으로 이전될 것입니다. 이 자금 조달의 예상 연평균 비용은 약 5.2%이며, 24개월 동안 회전 후 전달된 대출의 현금 흐름에 따라 amortize 됩니다.
자금은 미지급 채무의 상환과 일반 기업 용도에 사용될 것입니다. Credit Acceptance는 서비스 비용을 충당하기 위해 현금 흐름의 4.0%를 받을 것이며, 나머지 96.0% (딜러의 보류금 지급 제외)는 채권의 원금, 이자 및 지속적인 자금 조달 비용에 사용될 것입니다. 이러한 구조는 딜러의 향후 보류금 지급 권리를 보장합니다.
Credit Acceptance (Nasdaq: CACC) a complété un financement garanti sans recours adossé à des actifs de 600 millions de dollars. L'entreprise a transféré des prêts d'une valeur d'environ 750,2 millions de dollars à une entité spéciale, qui les transférera à une fiducie émettant trois classes d'obligations. Le financement aura un coût annualisé moyen attendu d'environ 5,2%, tournera pendant 24 mois, puis sera amorti en fonction des flux de trésorerie des prêts transférés.
Les fonds seront utilisés pour rembourser des dettes en cours et à des fins générales de l'entreprise. Credit Acceptance recevra 4,0% des flux de trésorerie pour couvrir les frais de gestion, tandis que 96,0% (moins les paiements de retenue des concessionnaires) seront affectés au principal des obligations, aux intérêts et aux coûts de financement en cours. Cette structure préserve les droits des concessionnaires aux futurs paiements de retenue.
Credit Acceptance (Nasdaq: CACC) hat eine 600 Millionen Dollar umfassende, besicherte Finanzierung ohne Rückgriff abgeschlossen. Das Unternehmen hat Kredite im Wert von etwa 750,2 Millionen Dollar an eine Zweckgesellschaft übertragen, die diese an einen Trust überträgt, der drei Klassen von Anleihen ausgibt. Die Finanzierung wird einen erwarteten durchschnittlichen jährlichen Kosten von etwa 5,2% haben, wird 24 Monate lang rotieren und sich dann basierend auf den Cashflows aus den übertragenen Krediten amortisieren.
Die Mittel werden verwendet, um ausstehende Schulden zurückzuzahlen und für allgemeine Unternehmenszwecke. Credit Acceptance erhält 4,0% der Cashflows zur Deckung der Servicingkosten, während 96,0% (abzüglich der Einbehalte der Händler) für den Hauptbetrag der Anleihen, Zinsen und laufende Finanzierungskosten verwendet werden. Diese Struktur sichert die Rechte der Händler auf zukünftige Einbehalte.
- Secured $600.0 million in asset-backed financing
- Expected average annualized cost of 5.2%, which may be competitive in current market conditions
- 24-month revolving period before amortization, providing flexibility
- Financing to be used for debt repayment and general corporate purposes, potentially improving financial position
- Conveyed loans valued at $750.2 million to secure $600.0 million financing, potentially indicating a discount
- New debt obligation could increase overall leverage and financial risk
Insights
Credit Acceptance 's completion of a
The expected average annualized cost of
This financing strategy allows Credit Acceptance to repay existing debt and fund general corporate purposes without impacting dealer relationships or holdback rights. For investors, this demonstrates the company's ability to access capital markets and optimize its funding structure, potentially improving liquidity and supporting future growth.
Credit Acceptance's financing move reflects broader trends in the auto lending market. With a focus on subprime and near-prime borrowers, the company's innovative financing solutions fill a important gap in the market. This
The structure of the financing, particularly the preservation of dealer relationships and holdback rights, is strategically important. It maintains Credit Acceptance's unique business model, which has been a key differentiator in the competitive auto lending landscape. The company's approach of enabling dealers to sell to consumers regardless of credit history not only expands the potential customer base but also creates opportunities for repeat business and referrals.
Investors should note the potential for improved credit profiles among borrowers, which could lead to more stable loan performance over time. This aligns with broader financial inclusion trends and could positively impact Credit Acceptance's long-term risk profile and market position.
Southfield, Michigan, Sept. 26, 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 | Average Life | Price | Interest Rate | |||||||||||||
| A | $ | 316,464,000 | 2.45 years | 99.98629 | % | 4.68 | % | ||||||||||
| B | $ | 121,668,000 | 3.08 years | 99.97303 | % | 4.85 | % | ||||||||||
| C | $ | 161,868,000 | 3.53 years | 99.98737 | % | 5.39 | % | ||||||||||
The Financing will:
- have an expected average annualized cost of approximately
5.2% including the initial purchasers’ fees and other costs; - revolve for 24 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
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 news release does not and will not constitute an offer to sell or the solicitation of an offer to buy the notes. This news release is being issued pursuant to and in accordance with Rule 135c under the Securities Act of 1933.
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 is the total value of the asset-backed financing completed by Credit Acceptance (CACC)?
How will Credit Acceptance (CACC) use the proceeds from the $600 million financing?
What is the expected average annualized cost of the financing for Credit Acceptance (CACC)?
How long will the revolving period last for Credit Acceptance's (CACC) new financing?
