Credit Acceptance gets $150 million revolving warehouse facility

By Marisa Wong

Morgantown, W.V., Dec. 7 – Credit Acceptance Corp. entered into a $150 million revolving secured warehouse facility with an institutional investor on Dec. 1, according to an 8-K filed Thursday with the Securities and Exchange Commission.

Credit Acceptance is the originator, servicer and custodian, CAC Warehouse Funding LLC VII is borrower, Credit Suisse AG, New York Branch is deal agent and Wells Fargo Bank, NA is collateral agent and backup servicer.

Under the facility, Credit Acceptance will contribute loans to a wholly owned special purpose entity, and the special purpose entity can borrow up to the lesser of 80% of the net book value of the contributed loans or $150 million during the facility’s revolving period.

The facility will cease to revolve on Dec. 1, 2019 and must be repaid by Nov. 30, 2021. No initial borrowings have been made on the facility, according to the 8-K.

Borrowings 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 bps to class B lenders.

The company will receive a servicing fee of 6% of the cash flows related to the underlying consumer loans. The remaining 94%, less amounts due to dealers for payments of dealer holdback, will be used to pay principal and interest on asset-backed notes as well as the ongoing costs of the financing.

Southfield, Mich.-based Credit Acceptance provides consumer auto loans.

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