Credit Acceptance Corp. on Aug. 28 completed a $500.0 million asset-backed non-recourse secured financing.
The company contributed roughly $625.1 million of loans to a wholly owned special purpose entity, which will then pledge the loans to an institutional lender under a loan and security agreement. Credit Acceptance is serving as the originator, servicer and custodian, Credit Acceptance Funding LLC 2019-2 is the borrower, Wells Fargo Bank NA is the deal agent, lender, backup servicer and collateral agent in the transaction.
Borrowings will bear interest at 3.13% and the financing will revolve for 36 months, after which it will amortize based on the cash flows of the contributed loans. Credit Acceptance plans to use proceeds to repay debt and for general corporate purposes.
