Surety provider MBIA has narrowed down its search for a replacement servicer for Union Acceptance Corp.'s retail auto loan portfolio.
Apparently, MBIA is looking at two potential suitors. Meanwhile, Union Acceptance successfully petitioned the U.S. Southern District Bankruptcy Court of Indiana for an extension of the order restraining MBIA from forcing a servicing transfer to Dec. 16, from the initial Dec. 2 deadline, according to a company spokeswoman.
At issue is Union Acceptance's ability to obtain short-term funding and maintain its current level of servicing. So far unable to obtain debtor-in-possession (DIP) financing, the company is weighing a DIP proposal from an undisclosed third party, as well as attempting to sell approximately $500 million of warehoused receivables in the whole loan market.
The deadline for bidding on the portfolio was last Wednesday, and, as of press time, no winner had been announced. UAC hopes the successful sale of the portfolio provides enough liquidity in lieu of securing a DIP loan to continue servicing operations and stave off MBIA's request.