Credit Acceptance completes $350M asset-backed financing

Southfield, Mich.-based Credit Acceptance Corp. completed an approximately $350 million asset-backed nonrecourse secured financing.

The company contributed approximately $473.6 million in loans relating to the offering of a wholly owned special purpose entity.

The entity will transfer the loans to a trust, which will issue four classes of notes. The notes will not be registered and might not be offered or sold in the U.S. without registration.

The financing will have an approximate annualized cost of 5.4%, including initial purchasers' fees and other costs. It will revolve for 24 months, before being amortized, based on the cash flows on the contributed loans, and will be used by the company to repay outstanding debt and for general corporate purposes.

The company will receive 4% of the cash flows related to underlying consumer loans to cover servicing expenses. The remaining 96% will be used to pay principal and interest on the notes along with the ongoing financing costs.