As the subprime auto finance company collected another workplace award, Credit Acceptance Corp. also announced an update this week involving its latest securitization.
Credit Acceptance completed a $500.0 million asset-backed non-recourse secured financing. Pursuant to this transaction, the company contributed approximately $625.1 million of loans to a wholly-owned special purpose entity that will pledge the loans to an institutional lender under a loan and security agreement.
The company said the financing has three characteristics, including:
— Bear interest at 3.13%
— Revolve for 36 months after which it will amortize based upon the cash flows on the contributed loans
— Be used by Credit Acceptance to repay outstanding indebtedness and for general corporate purposes.
Credit Acceptance explained it will receive 6.0% of the cash flows related to the underlying consumer loans to cover servicing expenses. The remaining 94.0%, less amounts due to dealers for payments of dealer holdback, will be used to pay principal and interest to the institutional lender as well as the ongoing costs of the financing.
“The financing is structured so as not to affect our contractual relationships with our dealers and to preserve the dealers’ rights to future payments of dealer holdback,” the company said.
Another workplace honor
In other company news, Credit Acceptance said it has been selected once again as one of Metropolitan Detroit’s Best and Brightest Companies to Work For. The announcement marks the eighth straight year that the company has received this honor.
Furthermore, this is the sixth workplace award that Credit Acceptance has received this year with the others being:
— FORTUNE 100 Best Companies to Work For (last six years in a row)
— Best Workplaces in Financial Services & Insurance (last five years in a row)
— Forbes Global 2000 List
— Best Workplaces for Millennials (four out of last five years)
— Crain’s Fast 50 (last six years in a row)
To see the complete 2019 List of Metropolitan Detroit’s Best and Brightest Companies to Work For, visit thebestandbrightest.com.