Union Acceptanc Announces Renewal and Increase in Credit Facility

14 September 1999

Union Acceptance Corporation Announces Renewal and Increase in Credit Facility to $500 Million and Closing of $250 Million Commercial Paper Conduit

    INDIANAPOLIS--Sept. 14, 1999--Union Acceptance Corporation ("UAC") today announced that its subsidiary, Union Acceptance Funding Corporation ("UAFC"), has renewed its credit facility with Bank of America through the Enterprise Funding Corporation conduit and increased its borrowing capacity through the facility to $500 million. In addition, UAC Securitization Corporation ("UACSC"), a subsidiary of UAC, has closed a $250 million commercial paper conduit with CIBC World Markets through its Special Purpose Accounts Receivable Cooperative Corp. ("SPARC") conduit. Both facilities are wrapped by a financial guaranty policy issued by MBIA Corporation.
    The $500 million warehouse facility with Bank of America was established in September 1998, but continues a four year relationship between UAC and Bank of America (formerly NationsBank) in supplying UAC's short-term funding. UAC utilizes the warehouse facility to fund its receivable purchases on a daily basis prior to long-term funding in the securitization market.
    The commercial paper conduit with CIBC World Markets is a 364-day facility that was closed on August 6, 1999. It allows for the purchase, by SPARC, of up to $250 million of amortizing notes backed by one or more pools of prime retail motor vehicle installment sales contracts acquired by UAC. SPARC will purchase the notes with proceeds from the issuance of commercial paper. The commercial paper conduit will provide an alternative to UAC's current long-term funding options.
    "We are pleased with the renewal and increase in our existing warehouse facility. It reinforces the long standing relationships that we have with Bank of America and MBIA Corporation," commented John Stainbrook, President and Chief Executive Officer. "We are also excited about the commercial paper conduit with CIBC World Markets and the diversity and flexibility it provides us in our long-term financing."

    Corporate Description

    UAC is one of the nation's largest independent, indirect automobile finance companies. The Company's primary business is acquiring, securitizing and servicing prime retail installment sales contracts. These contracts are originated by dealerships affiliated with major domestic and foreign automobile manufacturers. The Company is focused on the upper-end of the credit quality spectrum. Union Acceptance Corporation commenced business in 1986 and currently acquires receivables from over 4,200 manufacturer-franchised dealerships in 35 states. By using state-of-the-art technology in a highly centralized underwriting and servicing environment, Union Acceptance Corporation enjoys one of the lowest cost operating structures in the independent prime automobile finance industry.