Moody's rates Asset Acceptance loans B1

Moody's Investors Service said it assigned a B1 corporate family rating to Asset Acceptance Capital Corp. and B1 ratings to its $100 million senior secured revolving credit facility and $150 million senior secured term loan B facility.

The outlook is stable.

The ratings were assigned in conjunction with Asset Acceptance's planned recapitalization program, through which it will use the proceeds of the term loan to repurchase up to $75 million of stock and to pay a special dividend to shareholders.

The agency said the credit facilities carry the same ratings as the corporate family rating because these facilities represent Asset Acceptance's only debt and that the company' rating benefit from generally favorable charged off consumer debt management industry characteristics, including a growing pool of consumer debt outstanding, an increasing number of credit card charge-offs and increasing volumes of charged-off debt sales.

That said, the purchased accounts receivable business has become increasingly competitive and demand has outweighed supply, Moody's said, adding that credit challenges facing Asset Acceptance include its monoline nature, its management of rapid growth and the speculative nature of its assets.

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