Axis Auto Finance, a Canadian used-vehicle lender, grew 2017 yearend lease receivables to $25.4 million, up $4.8 million year over year, the company announced in earnings yesterday.
The annualized loss rate for the company’s fiscal year second quarter ended Dec. 31, 2017, was 6.17%, “well within the management expectation,” according to the report. The loss rate can fluctuate between 5% and 10%. The annualized loss rate during the same period the year prior was 81-basis-points higher at 6.98%. Ilja Troitschanski, president of Axis Auto Finance, attributes this to improvements in the company’s underwriting through data analysis. “Data analysis allows us to better utilize predictive indicators and refine the decision-making process,” Troitschanski said.
Previously, during the nine-month period ending March 31, 2017, Axis attributed the company’s growth to assets acquired through the finalization of an acquisition of Verdant Financial Partners I Inc. in July 2016. The deal allowed the company to go public without issuing a traditional initial public offering. The company also sought an expansion of its credit facility to accommodate this growth. In February 2017, Axis renegotiated the maximum principal amount of the credit facility to $20 million, up from the $7.5 million it agreed on in October 2016.
More recently, Axis acquired Cars On Credit Financial Inc. for approximately $11 million in cash. Cars on Credit is a Canadian independent, nonprime auto finance company founded in 2006, and since inception has originated more than $120 million in loans and leases, with more than 400 active used-car dealers in its network, according to a press release. The acquisition is expected to double Axis Auto Finance’s portfolio to nearly $60 million, which will begin to be seen in the next quarter, Troitschanski said.
“Between the existing term debt facility and the two securitization facilities with Canadian Schedule 1 banks we inherited through the Cars on Credit Acquisition we have lots of runway to grow,” Troitschanski said, adding that they can “accommodate a fairly rapid expansion.”
