Credit Acceptance Corporation announced the completion of a $400.0 million asset-backed non-recourse secured financing on March 27, 2025. This transaction involved the conveyance of loans with an approximate value of $500.2 million to a wholly owned special purpose entity. The entity will transfer these loans to a trust, which will issue three classes of notes.
The financing structure ensures that Credit Acceptance will receive 4.0% of the cash flows from the underlying consumer loans to cover servicing expenses. The remaining 96.0% of cash flows, after dealer holdback payments, will be used to pay principal and interest on the notes and cover ongoing financing costs. This arrangement supports the company's operational funding.
This financing event further enhances Credit Acceptance's capital resources, providing additional funds for its lending programs. The non-recourse nature of the financing helps manage risk exposure. The transaction is structured to maintain existing contractual relationships with dealers and preserve their rights to future holdback payments.
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