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Credit Acceptance Announces Proposed $100 Million Senior Secured Notes Offering

Stocks in this article: CACC

SOUTHFIELD, Mich., Feb. 28, 2011 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (Nasdaq:CACC) (referred to as the "Company," "we," "our," or "us") announced today that it plans to offer $100 million of its 9.125% first priority senior secured notes due 2017 (the "notes"). The notes will constitute additional securities under an existing indenture (the "indenture") pursuant to which the Company issued $250 million of its 9.125% first priority senior secured notes due 2017 (the "existing notes") on February 1, 2010. The notes will have the same terms as the existing notes, other than issue price and issue date, and, together with the existing notes and any further 9.125% senior secured notes due 2017 that may be issued under the indenture, will be treated as a single class under the indenture. The notes will be guaranteed by certain of the Company's subsidiaries on a first priority senior secured basis.

We intend to use the net proceeds from the offering to fund, in part, the purchase of shares of our common stock in the tender offer announced February 9, 2011 and the payment of fees and expenses relating to the tender offer. The closing of the offering will not be conditioned on consummation of the tender offer. In the event that the net proceeds from the offering of the notes exceed the amount required to purchase shares of our common stock in the tender offer and to pay related fees and expenses, which could occur if the tender offer is not consummated for any reason or if the number of shares properly tendered and not properly withdrawn in the tender offer is sufficiently small, we intend to use that excess for general corporate purposes, which may include repayment of debt, expansion of our operations, share repurchases or other uses. In accordance with the terms of our revolving credit facility, we will initially apply the net proceeds from the offering, pending their application as described above, to repay borrowings (without reducing the lenders' commitments thereunder) under our revolving credit facility with a commercial bank syndicate, to the extent of such borrowings.

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