SOUTHFIELD, Michigan, December 15, 2022 (GLOBE NEWSWIRE) — credit acceptance Corporation (Nasdaq: CACC) (the “Company”, “Credit Acceptance”, “we”, “our” or “us”) today announced it has closed $200.0 million of asset-backed, non-recourse, secured financing (the “Financing”) known. Pursuant to this transaction, we raised approximately $250.1 million in loans to a wholly owned special purpose vehicle, which will pledge the loans to an institutional lender under a loan and security arrangement.

Funding will:

• Interest at the Secured Overnight Financing Rate (SOFR) plus 2.35%;
• revolve for 36 months, after which it will be amortized based on the cash flows of the loans brought in; and
• used by us to repay outstanding debt and for general corporate purposes.

We receive 4.0% of the cash flows related to the underlying consumer loans to cover maintenance costs. The remaining 96.0%, less amounts owed to dealers for dealer retention payments, will be used to pay principal and interest to the institutional lender and the ongoing cost of the financing. The financing is structured in such a way that it does not affect our contractual relationships with our dealers and protects the dealers’ rights to future dealer retention payments.

Description of the Credit Acceptance Corporation

Since 1972, Credit Acceptance has offered financing programs that allow auto dealers to sell vehicles to consumers regardless of their credit rating. Our financing programs are offered through a nationwide network of auto dealers who benefit from selling vehicles to consumers who otherwise would not be able to obtain financing; from repeat and referral sales generated by the same customers; and from sales to customers who respond to ads for our financing programs but ultimately qualify for traditional financing.

Without our financing programs, consumers are often unable to buy vehicles, or they buy unreliable ones. In addition, we report to the three national…