Business Context and Reporting Period
Company: Credit Acceptance Corporation (CACC)
Filing Type: Form 8-K (Current Report)
Date of Report: August 20, 2026
Event: Entry into a material definitive agreement and creation of a direct financial obligation via a new asset-backed financing facility.
Key Financial Metrics and Transaction Details
The Company entered into a $600.0 million asset-backed non-recourse secured financing. The transaction involves the conveyance of consumer loans with a value of approximately $750.2 million to a special purpose entity.
| Note Class | Amount | Average Life | Price | Interest Rate |
|---|---|---|---|---|
| Class A | $319,880,000 | 2.54 years | 99.99218% | 5.01% |
| Class B | $117,300,000 | 3.23 years | 99.97598% | 5.29% |
| Class C | $162,820,000 | 3.69 years | 99.98270% | 5.51% |
Cost of Financing: Expected average annualized cost of approximately 5.5% (including upfront fees).
Structure: Revolving for 24 months, followed by amortization based on loan cash flows.
Servicing Fee: The Company retains 4.0% of cash flows as a servicing fee.
Material Changes and Strategic Intent
This filing represents a new capital market transaction rather than a change in historical operating performance. The proceeds from the Financing are designated for:
- Repayment of higher-cost outstanding indebtedness.
- General corporate purposes.
The transaction is structured as non-recourse to the Company, except for customary limited recourse obligations (repurchase or indemnification for representation violations). The Company consolidates the Trust and Funding entity for financial reporting purposes.
Outlook, Risks, and Contingencies
Management Commentary: The financing is designed to preserve dealer relationships and rights to future dealer holdback payments. The Company retains a limited "clean-up call" option to purchase loans under specified circumstances.
Risks and Events of Default: The Financing may be accelerated upon an "indenture event of default," including:
- Default on interest or principal payments.
- Material breach of covenants or representations.
- Bankruptcy or insolvency of the Trust or Funding entity.
- Cumulative collections falling below a threshold percentage of projected collections for three consecutive periods.
- Failure to maintain a valid first-priority security interest in the Trust's property.
Investor Verification Checklist
- Verify the impact of the 5.5% cost of financing on the Company's overall weighted average cost of debt.
- Confirm the specific "higher cost" indebtedness being retired to assess immediate interest expense savings.
- Review the "clean-up call" option terms to understand potential future balance sheet impacts.
- Monitor the 24-month revolving period to determine the timing of future amortization obligations.
- Check subsequent filings for any amendments to the intercreditor agreements listed in Exhibit 4.150.