Credit Acceptance Corp Enters Material Financial Agreement

TL;DR

**CACC just took on a new material financial obligation, watch for details!**

AI Summary

Credit Acceptance Corp (CACC) filed an 8-K on February 29, 2024, reporting an event on February 27, 2024, concerning the entry into a material definitive agreement and the creation of a direct financial obligation. The filing indicates a significant financial development for the company, which operates as a personal credit institution based in Southfield, Michigan.

Why It Matters

This filing signals a new financial commitment or agreement for Credit Acceptance Corp, which could impact its balance sheet, future operations, and overall financial health.

Risk Assessment

Risk Level: medium — The filing indicates a new material definitive agreement and financial obligation, the specifics of which are not detailed, creating uncertainty about its impact.

Key Players & Entities

• CREDIT ACCEPTANCE CORP (company) — Registrant
• Michigan (company) — State of incorporation
• Southfield, Michigan (company) — Principal executive offices
• February 27, 2024 (date) — Date of earliest event reported
• February 29, 2024 (date) — Filing date

FAQ

Key Financial Figures

• $200.0 million — ", "we", "our", or "us") entered into a $200.0 million asset-backed non-recourse secured finan
• $250.1 million — r loans having a value of approximately $250.1 million to a wholly owned special purpose entit

Filing Documents

• cacc-20240227.htm (8-K) — 45KB
• cacc_8k20240227ssa.htm (EX-4.133) — 942KB
• cacc_8k20240227bsa.htm (EX-4.134) — 178KB
• cacc_8k20240227aria.htm (EX-4.135) — 236KB
• cacc_8k20240227sca.htm (EX-4.136) — 158KB
• cacc_8k20240227arta.htm (EX-4.137) — 468KB
• cacc_8k20240227ia.htm (EX-4.138) — 762KB
• cacc_8k20240227pr.htm (EX-99.1) — 17KB
• 0000885550-24-000037.txt ( ) — 3378KB
• cacc-20240227.xsd (EX-101.SCH) — 2KB
• cacc-20240227_lab.xml (EX-101.LAB) — 23KB
• cacc-20240227_pre.xml (EX-101.PRE) — 12KB
• cacc-20240227_htm.xml (XML) — 3KB

01 Entry Into a Material Definitive Agreement

Item 1.01 Entry Into a Material Definitive Agreement. The information set forth below under Item 2.03 is hereby incorporated by reference into this Item 1.01.

03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. On February 27, 2024, Credit Acceptance Corporation (the "Company", "Credit Acceptance", "we", "our", or "us") entered into a $200.0 million asset-backed non-recourse secured financing (the "Financing"). Pursuant to this transaction, we conveyed consumer loans having a value of approximately $250.1 million to a wholly owned special purpose entity, Credit Acceptance Funding LLC 2024-A ("Funding 2024-A"), which transferred those consumer loans to a trust, which issued three classes of notes: Note Class Amount Interest Rate A $ 106,094,000 6.95 % B $ 43,893,000 7.68 % C $ 50,013,000 8.30 % The Financing will: have an expected average annualized cost of approximately 7.8% including placement agent fees and other costs; revolve for 36 months after which it will amortize based upon the cash flows on the conveyed loans; and be used by us to repay outstanding indebtedness and for general corporate purposes. We will receive 4.0% of the cash flows related to the underlying consumer loans to cover servicing expenses. The remaining 96.0%, less amounts due to dealers for payments of dealer holdback, will be used to pay principal and interest on the notes as well as the ongoing costs of the Financing. The Financing is structured so as not to affect our contractual relationships with dealers and to preserve the dealers' rights to future payments of dealer holdback. The Financing provides for certain events, referred to as "Termination Events", including nonpayment, misrepresentation, breach of covenants, bankruptcy and failure to maintain certain financial ratios and results, including in respect of the performance of the pledged loans. It is also a Termination Event (i) if an event with a material adverse effect occurs, (ii) if we fail to make any required payment on debt for borrowed money having a principal amount in excess of a

01 Other Events

Item 8.01 Other Events. On February 27, 2024, we issued a press release regarding this transaction. The press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit No . Description 4.133 Sales and Service Agreement, dated as of February 27, 2024 among the Company, Credit Acceptance Auto Loan Trust 2024-A, Credit Acceptance Funding LLC 2024-A, and Computershare Trust Company, N.A. 4.134 Backup Servicing Agreement dated as of February 27, 2024 among the Company, Credit Acceptance Auto Loan Trust 2024-A, Credit Acceptance Funding LLC 2024-A, and Computershare Trust Company, N.A. 4.135 Amended and Restated Intercreditor Agreement dated February 27, 2024 among the Company, CAC Warehouse Funding LLC II, CAC Warehouse Funding LLC IV, CAC Warehouse Funding LLC V, CAC Warehouse Funding LLC VI, CAC Warehouse Funding LLC VIII, Credit Acceptance Funding LLC 2024-A, Credit Acceptance Funding LLC 2023-5, Credit Acceptance Funding LLC 2023-A, Credit Acceptance Funding LLC 2023-3, Credit Acceptance Funding LLC 2023-2, Credit Acceptance Funding LLC 2023-1, Credit Acceptance Funding LLC 2022-3, Credit Acceptance Funding LLC 2022-2, Credit Acceptance Funding LLC 2022-1, Credit Acceptance Funding LLC 2021-4, Credit Acceptance Funding LLC 2021-3, Credit Acceptance Funding LLC 2021-2, Credit Acceptance Funding LLC 2021-1, Credit Acceptance Funding LLC 2019-2, Credit Acceptance Auto Loan Trust 2024-A, Credit Acceptance Auto Loan Trust 2023-5, Credit Acceptance Auto Loan Trust 2023-3, Credit Acceptance Auto Loan Trust 2023-2,Credit Acceptance Auto Loan Trust 2023-1, Credit Acceptance Auto Loan Trust 2022-3, Credit Acceptance Auto Loan Trust 2022-1, Credit Acceptance Auto Loan Trust 2021-4, Credit Acceptance Auto Loan Trust 2021-3, Credit Acceptance Auto Loan Trust 2021-2, Computershare Trust Company, N.A., as trustee and agent, Fifth Third Bank, National Association, Bank of Montreal, Flagstar Bank, National Association, as agent, Citizens Bank, N.A., as agent and Comerica Bank, as agent. 4.136 Sale and Contribution Agreement dated as of February 27, 2024, between the C

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CREDIT ACCEPTANCE CORPORATION Date: February 29, 2024 By: /s/ Douglas W. Busk Douglas W. Busk Chief Treasury Officer