Credit Acceptance Announces Extension of Revolving Secured Warehouse Facility

Rhea-AI Summary

Credit Acceptance Corporation (Nasdaq: CACC) has announced the extension of its $75.0 million revolving secured warehouse facility by two years, from September 30, 2026, to September 30, 2028. The company secured improved terms, including a reduction in the interest rate from SOFR plus 210 basis points to SOFR plus 185 basis points, and a decrease in the servicing fee from 6.0% to 4.0% of collections on underlying consumer loans.

The facility currently has no outstanding balance as of July 11, 2025. Credit Acceptance specializes in providing vehicle financing solutions through a nationwide network of automobile dealers, particularly serving consumers who might not qualify for traditional financing options.

Positive

• Secured 2-year extension of $75.0 million revolving facility to 2028
• Reduced interest rate by 25 basis points to SOFR + 185bps
• Decreased servicing fee from 6.0% to 4.0%, improving operational efficiency
• Zero outstanding balance on the facility indicates strong liquidity position

Negative

• None.

Insights

Financial Analyst

CACC improved terms on $75M warehouse facility, extending maturity and lowering costs, enhancing financial flexibility.

Credit Acceptance's extension of its $75 million revolving secured warehouse facility represents a meaningful improvement in the company's debt profile. The two-year extension (from September 2026 to September 2028) provides enhanced financial flexibility and reflects lender confidence in CACC's business model.

The company secured multiple financial advantages through this amendment:

• Interest rate reduction from SOFR plus 210% to SOFR plus 185% - a 25% basis point decrease that directly improves borrowing costs
• Servicing fee reduction from 6.0% to 4.0% of collections - a substantial 33% decrease that should positively impact margins
• Maturity extension by two full years, providing longer-term funding stability

While the facility currently has no outstanding balance, these improved terms strengthen CACC's liquidity position and borrowing capacity for supporting its auto financing operations. The more favorable terms suggest lenders view Credit Acceptance's credit risk favorably despite its focus on subprime auto lending - particularly notable given current economic conditions.

The reduced servicing fee is especially significant as it directly affects the economics of CACC's loan servicing operations, potentially increasing the profitability of each dollar collected from consumers. This improvement in operating economics comes without any other material changes to the facility terms, representing a net positive for the company's financial structure.

Southfield, Michigan, July 11, 2025 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (Nasdaq: CACC) (referred to as the “Company”, “Credit Acceptance”, “we”, “our”, or “us”) announced today that we extended the date on which our $75.0 million revolving secured warehouse facility will cease to revolve from September 30, 2026, to September 30, 2028. The interest rate on borrowings under the facility has decreased from the Secured Overnight Financing Rate (“SOFR”) plus 210 basis points to SOFR plus 185 basis points. The amendment has also decreased the servicing fee from 6.0% to 4.0% of collections on the underlying consumer loans. There were no other material changes to the terms of the facility.

As of July 11, 2025, we did not have a balance outstanding under the facility.

Description of Credit Acceptance Corporation

We make vehicle ownership possible by providing innovative financing solutions that enable automobile dealers to sell vehicles to consumers regardless of their credit history. Our financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our financing programs, but who actually end up qualifying for traditional financing.

Without our financing programs, consumers are often unable to purchase vehicles or they purchase unreliable ones. Further, as we report to the three national credit reporting agencies, an important ancillary benefit of our programs is that we provide consumers with an opportunity to improve their lives by improving their credit score and move on to more traditional sources of financing. Credit Acceptance is publicly traded on the Nasdaq Stock Market under the symbol CACC. For more information, visit creditacceptance.com.

Investor Relations: Jay Brinkley
Senior Vice President & Treasurer
(248) 353-2700 Ext. 6739
IR@creditacceptance.com

FAQ

What changes did Credit Acceptance (CACC) make to its revolving secured warehouse facility?

Credit Acceptance extended the facility by 2 years to September 30, 2028, reduced the interest rate to SOFR plus 185 basis points, and decreased the servicing fee to 4.0% from 6.0%.

What is the current balance of CACC's revolving secured warehouse facility?

As of July 11, 2025, Credit Acceptance had no outstanding balance under the $75.0 million facility.

How much did Credit Acceptance reduce its interest rate on the warehouse facility?

Credit Acceptance reduced its interest rate by 25 basis points, from SOFR plus 210 basis points to SOFR plus 185 basis points.

What is the new maturity date for Credit Acceptance's revolving warehouse facility?

The facility will cease to revolve on September 30, 2028, extended from the previous date of September 30, 2026.

How did the servicing fee change in CACC's warehouse facility amendment?

The servicing fee was reduced by 2 percentage points, decreasing from 6.0% to 4.0% of collections on the underlying consumer loans.