Credit Acceptance Corp plans to issue a $197.8 million dealer floorplan securitization.
The deal, Credit Acceptance Auto Loan Trust 2013-2 is the issuer’s second securitization in 2013. Standard & Poor’s has assigned preliminary rating to the notes.
The class A notes are rated ‘AAA’ and the class B notes are rated ‘AA’. S&P said that the class A subordination in the 2013-2 deal increased to 18.83% from 17.17% and the class B subordination decreased to 0.92% from 5.32%. Total class A enhancement increased to 40.42% from 38.67% and the class B enhancement decreased to 22.51% from 26.82%.
The class A note coupon guidance increased to 2.05% relative to the series 2013-1 class A coupon guidance of 2.00%, and the class B note coupon guidance increased to 3.20% relative to the series 2013-1 Class B coupon guidance of 2.80%.
Credit Acceptance, which was incorporated in 1972, targets auto dealerships throughout the U.S. that write installment sales contracts for the deep subprime auto market.
The company has two lending programs: the portfolio and loan purchase programs. The portfolio program is the older of the two and the central focus of the company's business. It currently makes up approximately 94% of new originations.
Under this program, Credit Acceptance makes loans--called dealer loans or dealer advances--directly to dealers that are members of its dealer network.
The series 2013-2 pool consists of 807 dealer loans from 743 dealers. The highest dealer concentration in the series 2013-2 pool is approximately 1.19%, and the top 10 dealers account for approximately 7.48% of the securitized dealer loans