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Union Acceptance Announces Increase in Commercial Paper

10 March 2000

Union Acceptance Corporation Announces Increase in Commercial Paper Conduit to $375 Million

    INDIANAPOLIS--March 9, 2000--Union Acceptance Corporation ("UAC") today announced that its subsidiary, UAC Securitization Corporation ("UACSC"), has increased its commercial paper conduit to $375 million. The facility is with CIBC World Markets through its Special Purpose Accounts Receivable Cooperative Corp. ("SPARC") conduit. The facility is wrapped by a financial guaranty policy issued by MBIA Insurance Corporation.
    The commercial paper facility with CIBC World Markets is a 364-day, $250 million facility that was closed on August 6, 1999. CIBC World Markets arranged a liquidity agreement with two institutions on March 8, 2000, increasing the facility's capacity to $375 million. The facility allows for the purchase, by SPARC, of amortizing notes backed by one or more pools of prime retail installment sales contracts acquired by UAC. If utilized, SPARC will purchase the notes with proceeds from the issuance of commercial paper.
    "Flexibility in funding sources is important to our business strategy; therefore, we are very pleased with the increase in the commercial paper conduit," commented John Stainbrook, President and Chief Executive Officer. "This increase allows us to evaluate the pricing of a sale into the conduit as a viable alternative to financing through the public asset-backed market."
    In addition to the commercial paper conduit, external financing also includes a revolving warehouse facility, which was increased to $500 million in September 1999. Other sources of liquidity are funds from operations, long-term debt and securitization transactions. To date, UAC has securitized over $7.5 billion in prime automobile receivables.

    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 4,400 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.

    Forward Looking Information

    This news release contains forward-looking statements regarding future availability of funding and other matters. Readers are cautioned that actual results may differ materially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, the future willingness of investors to purchase securities backed by the Company's consumer receivable portfolios, the relative unpredictability of changes in delinquency and credit loss rates, changes in acquisition volume, general economic conditions that affect consumer loan performance and consumer borrowing practices and other important factors detailed in the Company's annual report on Form 10-K for the fiscal year ended June 30, 1999, which was filed with the Securities and Exchange Commission.