Credit Acceptance Corp. (CAC) announced on Thursday that it extended the revolving period and the maturity date of its warehouse facility, according to a company press release.
CAC’s $100 million revolving secured warehouse facility revolving period was extended to August 2021. The last time the warehouse revolving period was extended was in August 2017 to expire in August 2019.
The maturity of the warehouse facility was also extended to August 2023 from August 2021. Additionally, the interest rate of the facility decreased 35 basis points to 1.9% from 2.25%.
The announcement of the extended maturity dates follows CAC’s third issuance of auto loan asset-backed securities. CAC issued $398 million of asset-backed notes backed by $500 million of loans across three tranches on August 8. That brings CAC’s total year-to-date issuance to around $1.3 billion, according to S&P Global Ratings.
S&P expects losses on the loans in the securitizations to reach 22%. Meanwhile, Moody’s Investor Service also rated CAC’s third securitization and reported expected losses to reach 27%, representing the “highest expected loss for the auto loan-backed securitizations we rate,” Moody’s presale report noted.
The pool of loans backing the deal has a weighted average FICO score of 549, but despite the weak credit quality of the collateral, Moody’s listed CAC’s credit strengths, including its risk-mitigating loan origination program, its track record of accurately forecasting collections, and its “full turbo amortization structure.”
CAC did not respond to requests for comment.
