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Credit Acceptance Announces Completion Of $100.5 Million Asset-Backed Financing

SOUTHFIELD, Mich., Nov. 4, 2010 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (Nasdaq:CACC) (the "Company") announced today the completion of a $100.5 million asset-backed non-recourse secured financing (the "Financing"). Pursuant to this transaction, the Company contributed loans having a net book value of approximately $126.8 million to a wholly-owned special purpose entity which will transfer the loans to a trust, which will issue three classes of notes:

Note Class   Amount   Average Life   Price   Interest Rate
A   $81,000,000   2.36   99.98832   2.06%
B   $19,500,000   2.89   99.97737   3.63%
C   $900,442   2.94    --     -- 

The Class A Notes are rated "AAA (sf)" by Standard & Poor's Rating Services and DBRS, Inc.  The Class B Notes are rated "AA (sf)" by Standard & Poor's Rating Services.  The Class C Note does not bear interest, is not rated and is being retained by the Company.

The Financing will:

  • Have an expected annualized cost of approximately 3.0% including the initial purchaser's fees and other costs;  
  • Revolve for 24 months after which it will amortize based upon the cash flows on the contributed loans; and 
  • Be used by the Company to repay outstanding indebtedness.

The Company will receive 6.0% of the cash flows related to the underlying consumer loans to cover servicing expenses.  The remaining 94.0%, less amounts due to dealer-partners for payments of dealer holdback, will be used to pay principal and interest on the notes as well as the ongoing costs of the Financing. The Financing is structured so as not to affect the Company's contracted relationship with its dealer-partners and to preserve the dealer-partners' rights to future payments of dealer holdback.

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