Credit Acceptance Corp. has completed a $150.0 million revolving secured warehouse facility with an institutional investor.
Under the facility, the company will contribute loans to a wholly owned special purpose entity, which may borrow up to the lesser of 80% of the net book value of the contributed loans or $150.0 million during the facility's revolving period.
The facility will stop revolving Dec. 1, 2019, and must be repaid by Nov. 30, 2021. Borrowings under the facility will generally bear interest at a rate equal to the commercial paper rate plus 190 basis points to class A lenders and the commercial paper rate plus 220 basis points to class B lenders.
The company will receive a servicing fee of 6.0% of the cash flows related to the underlying consumer loans. Credit Acceptance said the remaining 94.0%, minus amounts due to dealer-partners for payments of dealer holdback, will be used to pay principal and interest on the notes and the ongoing costs of the financing.
