Vroom an innovative ecommerce platform that offers a better way to buy and sell used vehicles, announced that United Auto Credit Corporation (UACC), an indirect wholly-owned subsidiary of the company, priced an auto loan securitization of $255.080 million in aggregate principal amount of automobile receivable backed notes (the “Notes”) on July 14, 2022.
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The Q3 2022 securitization is a private offering under Rule 144A in which UACC offered approximately $242.325 million of the Notes. The transaction represents UACC’s 14th securitization overall and second since its acquisition by Vroom on February 1, 2022. The transaction features five classes of sequential-pay securities with expected ratings of AAA/AAA through BB/BB by S&P Global Ratings and DBRS Morningstar, respectively.
UACC expects to sell approximately $285.000 million in principal balance of auto loans to a special purpose trust and receive proceeds from the issuance and sale of the rated Notes. UACC will retain a 5% vertical risk retention interest in each class of Notes in order to satisfy the U.S. credit risk retention regulations.
“Completion of UACC’s second securitization under Vroom ownership demonstrates UACC’s ability to leverage its substantial capital markets experience to opportunistically deploy securitization transactions and maintain capital flexibility” said Tom Shortt, Chief Executive Officer at Vroom. “As we develop the UACC business into a full captive financing operation, we look forward to delivering enhanced unit economics for Vroom and a seamless experience for our customers.”
Transaction settlement for the Notes is expected to be on or about July 20, 2022. J.P. Morgan Securities, LLC, Capital One Securities, Inc, and Wells Fargo Securities, LLC acted as joint lead managers of the transaction. UACC is represented in this transaction by Katten Muchin Rosenman LLP as issuer’s counsel.
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The Notes and certificates will not be registered under the Securities Act of 1933, as amended (the “Securities Act“), or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from, or a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes and certificates were offered and are only being sold to qualified institutional buyers and accredited investors under Rule 144A under the Securities Act.
This press release is not an offer to sell, nor a solicitation of an offer to buy, any securities, nor shall there be any sale of these securities in any state or jurisdiction in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
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