The Canadian non-prime auto finance space is getting a jolt from a finance company that has grown its portfolio in that credit segment exponentially within the United States.
Westlake Financial Services and Nowcom Corp. recently announced a strategic partnership with Axis Auto Finance, which enables Westlake to access the large and growing Canadian non-prime automotive finance market.
Under the terms of the partnership, Westlake and Nowcom will invest, on a private placement basis, into Axis by way of convertible unsecured subordinated debentures. Axis will originate and service loans to near-prime customers in Canada on behalf of Westlake. The loans will be originated under the Axis brand and profits will be shared between the parties. Nowcom will provide its leading-edge technology, DealerCenter and Carzing, to the Canadian markets to enhance communication and improve origination efficiency in auto dealers working with Axis.
“This partnership greatly enhances our leading position in the Canadian non-prime automotive finance sector and provides Westlake and Axis the opportunity to symbiotically grow our respective businesses,” Axis chief executive officer Todd Hudson said. “We look forward to a long, ever expanding and mutually prosperous relationship between our two companies.”
Westlake is bringing plenty of financial momentum to the relationship. Back in July, Westlake finalized another securitization above $1 billion, setting a new company record in the process.
At the summer’s midpoint, Westlake announced the closing of its 19th asset-backed securitization (WLAKE 19-2) at $1.2 billion. This latest securitization is the largest ever in Westlake history and the fifth consecutive issuance of more than $1 billion.
When that securitization closed, Westlake’s portfolio of $8.3 billion included originated auto loans and leases, direct-to-consumer loans, portfolio purchases and servicing and dealer floorplan lines of credit.
And now Westlake is getting involved in Canada.
“We are very excited about our expansion into Canada and partnership with Axis,” said Ian Anderson, group president of Westlake Technology Holdings. “The Canadian auto finance market is very similar to the United States and offers tremendous opportunities for Westlake and Axis to help auto dealers finance more customers. We look forward to growing the business together.”
In the news release, the companies added the private placement is subject to standard and customary closing conditions including the receipt of regulatory approval.
INFOR Financial Inc. acted as the exclusive financial advisor to Axis in connection with the private placement.