Credit Acceptance Securitization Deal Hits $300 Million

Southfield, Mich.-based Credit Acceptance Corp. is posting strong earnings for the fourth quarter of 2014 and boasting about a hefty securitization deal.

During the quarter ending Dec 31, 2014, the company reported consolidated net income of $73 million, up from $65.9 million reported during the third quarter of 2013. Income for 2014 totaled $266.2 million, up from $253.1 million in 2013.

While CACC ended 2014 on a positive note, the company started  2015 with $300.6 million in non-prime loans to be securitized.

According to a presale report from Standard and Poor’s, the expected closing date of the deal was January 29. The weighted average Fico score for the pool was 551, a slight increase from 549 reported in CAC’s previous securitization. The average original loan term was 50.6 months for the group. 100% of the pool was comprised of used cars.

The weighted average APR for the loans was 21.6%. The securitization has three tranches; Class A notes valued at $208 million, with a preliminary S&P AAA rating and a final maturity date in July 2022; class B notes worth $62 million are reported as a part of the package with an S&P rating of AA, and a final maturity date in Jan 2023; and finally, class C notes worth $30.6 million with an S&P A rating and a final maturity date in July 2023.