Credit Acceptance Corp. is marketing $330 million of notes backed by subprime auto loans.
Credit Acceptance Auto Loan Trust 2016-2 will issue three tranches of notes with preliminary ratings from Standard & Poor’s: $200 million class A notes with a legal final maturity of October 2023 and credit support of 64.2% are rated triple-A; $58.5 million of class B notes maturing in April 2024 with credit support of 55.7% are rated double-A; and $41.88 million of class C notes maturing in October 2024 with credit support of 51% are rated single-A.
Wells Fargo Securities, BMO Capital Markets, and Fifth Third Securities are the initial purchasers.
The deal as a revolving period of 24 months during which Credit Acceptance can add collateral, as needed, to maintain the requisite enhancement levels.
This Credit Acceptance Corp.’s fourteenth stand-alone securitization since 2008.
Among changes from recent deals, the class A subordination has increased to 26.73% from 22.78% as a percentage of the initial net book value of the dealer and purchased loan advances.
The class B subordination increased to 11.15% from 5.11% of the initial NBV of the dealer and purchased loan advances.
S&P expects cumulative net losses for the deal to be in the range of 19.75%-20.75%, in its base case scenario.