Document
false0000885550 0000885550 2020-06-25 2020-06-25


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported):   June 25, 2020

CREDIT ACCEPTANCE CORPORATION
(Exact name of registrant as specified in its charter)

Michigan
 
000-20202
 
38-1999511
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
 
 
 
  25505 West Twelve Mile Road
 
 
 
 
Southfield,
Michigan
 
 
 
48034-8339
  (Address of principal executive offices)
 
 
 
(Zip Code)

Registrant’s telephone number, including area code:   (248) 353-2700
 
Not Applicable
 
(Former name or former address, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading symbol(s)
 
Name of each exchange on which registered
Common Stock, $.01 par value
 
CACC
 
The Nasdaq Stock Market

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o






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.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On June 25, 2020, Credit Acceptance Corporation (referred to as the “Company”, “Credit Acceptance”, “we”, “our”, or “us”) entered into Amendment No. 4 to the Sixth Amended and Restated Loan and Security Agreement, dated as of June 25, 2020, among the Company, CAC Warehouse Funding Corporation II and Wells Fargo Bank, National Association, which modified the terms of our $400.0 million revolving secured warehouse facility.

On June 26, 2020, we entered into the Fourth Amendment to the Loan and Security Agreement, dated as of June 26, 2020, among the Company, CAC Warehouse Funding LLC VII, and Credit Suisse AG, New York Branch, which modified the terms of our $150.0 million revolving secured warehouse facility.

On June 30, 2020, we entered into the Sixth Amendment to the Sixth Amended and Restated Credit Agreement, dated as of June 30, 2020, among the Company, Comerica Bank and the other banks signatory thereto (collectively, the “Banks”) and Comerica Bank as administrative agent for the Banks, which modified the terms of our $340.0 million revolving secured line of credit facility.

The purpose of each of the three amendments was to modify the basis for calculating our compliance with the minimum net income and fixed charge coverage covenants from our current method of accounting to the basis of accounting that was used prior to January 1, 2020. There were no other material changes to the terms of the facilities.

As of July 1, 2020, we had $201.0 million outstanding under our $400.0 million revolving secured warehouse facility, $125.0 million outstanding under our $150.0 million revolving secured warehouse facility and $163.3 million outstanding under our $340.0 million revolving secured line of credit facility.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.
Exhibit No.
 
Description
 
Amendment No. 4 to the Sixth Amended and Restated Loan and Security Agreement dated as of June 25, 2020 among the Company, CAC Warehouse Funding Corporation II and Wells Fargo Bank, National Association.
 
Fourth Amendment to Loan and Security Agreement, dated as of June 26, 2020 among the Company, CAC Warehouse Funding LLC VII, and Credit Suisse AG, New York Branch.
 
Sixth Amendment to Sixth Amended and Restated Credit Agreement dated as of June 30, 2020 among the Company, Comerica Bank and the other banks signatory thereto and Comerica Bank, as administrative agent for the banks.
104
 
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.






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: July 1, 2020
By:
/s/ Douglas W. Busk
 
 
 
Douglas W. Busk
 
 
 
Senior Vice President and Treasurer
 






Exhibit


AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT
This AMENDMENT NO. 4 TO THE SIXTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”) is made as of June 25, 2020, by and among CAC WAREHOUSE FUNDING CORPORATION II, as the borrower (the “Borrower”), CREDIT ACCEPTANCE CORPORATION, as the servicer (in such capacity, the “Servicer”) and as the custodian (in such capacity, the “Custodian”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as a lender (the “WF Lender”), the LENDERS FROM TIME TO TIME PARTY THERETO, as lenders (together with WF Lender, the “Lenders”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as the deal agent (in such capacity, together with its successors and assigns, the “Deal Agent”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as the backup servicer (in such capacity, together with its successors and assigns, the “Backup Servicer”) and as the collateral agent (in such capacity, together with its successors and assigns, the “Collateral Agent”). Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in the Agreement (as defined below).
R E C I T A L S
WHEREAS, the Borrower, the Servicer, the Lenders, the Deal Agent, the Backup Servicer and the Collateral Agent entered into that certain Sixth Amended and Restated Loan and Security Agreement, dated as of June 23, 2016, as amended by Amendment No.1 to the Sixth Amended and Restated Loan and Security Agreement, dated as of December 20, 2017, as further amended by Amendment No. 2 to the Sixth Amended and Restated Loan and Security Agreement, dated as of July 12, 2019, and as further amended by Amendment No. 3 to the Sixth Amended and Restated Loan and Security Agreement, dated as of August 16, 2019 (as so amended and as further amended from time to time, the “Agreement”); and
WHEREAS, the parties hereto desire to amend the Agreement pursuant to Section 14.1 thereof in certain respects as provided herein;
NOW, THEREFORE, based upon the above Recitals, the mutual premises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1.Amendments.
(a)    The following amendments shall be effective as of January 1, 2020:
(i)    Section 5.4 of the Agreement is hereby amended by deleting clause (p) thereof in its entirety and replacing it with the following:




“(p)    Minimum Net Income. The Servicer shall, on a consolidated basis, maintain as of the end of each fiscal quarter calculated for the two fiscal quarters then ending, Consolidated Net Income of not less than $1.00; provided, that, when calculating the Consolidated Net Income for any date of determination, (x) each component of such calculation relating to a fiscal quarter ending on or prior to December 31, 2020 shall be calculated based on the GAAP accounting methodology used by the Company during the fiscal year ending December 31, 2019, without application of the CECL Methodology (whether or not the Servicer has adopted the CECL Methodology prior to such date) and (y) each component of such calculation relating to a fiscal quarter ending on or after March 31, 2021 shall be calculated based on the CECL Methodology.”
(ii)    Section 5.4 of the Agreement is hereby amended by deleting clause (q) thereof in its entirety and replacing it with the following:
“(q)    Fixed Charge Coverage Ratio. The Servicer shall, on a consolidated basis, maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio of not less than 2.0 to 1.0; provided, that, when calculating the Fixed Charge Coverage Ratio for any date of determination,  (x) each component of such calculation relating to a fiscal quarter ending on or prior to December 31, 2020 shall be calculated based on the GAAP accounting methodology used by the Company during the fiscal year ending December 31, 2019, without application of the CECL Methodology (whether or not the Servicer has adopted the CECL Methodology prior to such date) and (y) each component of such calculation relating to a fiscal quarter ending on or after March 31, 2021 shall be calculated based on the CECL Methodology.”
SECTION 2.    Agreement in Full Force and Effect as Amended.
Except as specifically amended hereby, all provisions of the Agreement shall remain in full force and effect. After this Amendment becomes effective, all references to the Agreement, the “Loan and Security Agreement,” “hereof,” “herein,” or words of similar effect referring to the Agreement shall be deemed to mean the Agreement as amended hereby. This Amendment shall not constitute a novation of the Agreement, but shall constitute an amendment thereof. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as expressly set forth herein.
SECTION 3.    Representations.
Each of the Borrower and the Servicer represent and warrant as of the date of this Amendment as follows:

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(a)    it is duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization;
(b)    the execution, delivery and performance by it of this Amendment are within its powers, have been duly authorized, and do not contravene (A) its charter, by-laws, or other organizational documents, or (B) any Applicable Law;
(c)    no consent, license, permit, approval or authorization of, or registration, filing or declaration with, any governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment by or against it;
(d)    this Amendment has been duly executed and delivered by it;
(e)    this Amendment constitutes its legal, valid and binding obligation enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity;
(f)    each of the representations and warranties set forth in Sections 4.1, 4.2 and 4.3 of the Agreement made by it is true and correct; and
(g)    no Amortization Event or Termination Event has occurred and is continuing and no event or condition exists that, with the giving of notice and/or passage of time, would constitute an Amortization Event or a Termination Event.
SECTION 4.    Conditions to Effectiveness.
This Amendment shall become effective on the date on which each party hereto shall have delivered an executed signature page hereto to the Deal Agent.
SECTION 5.    Miscellaneous.
(a)    This Amendment may be executed in any number of counterparts (including by facsimile), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement.
(b)    The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

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(c)    This Amendment may not be amended or otherwise modified except as provided in the Agreement.
(d)    The failure or unenforceability of any provision hereof shall not affect the other provisions of this Amendment.
(e)    Whenever the context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine.
(f)    This Amendment represents the final agreement between the parties only with respect to the subject matter expressly covered hereby and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties. There are no unwritten oral agreements between the parties.
(g)    THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[Remainder of Page Intentionally Left Blank]


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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.
THE BORROWER:
CAC WAREHOUSE FUNDING CORPORATION II


 
By:  /s/ Douglas W. Busk             
 
   Name: Douglas W. Busk
 
   Title: Treasurer
 
 
THE SERVICER AND CUSTODIAN:
CREDIT ACCEPTANCE CORPORATION


 
By:  /s/ Douglas W. Busk             
 
   Name: Douglas W. Busk
 
   Title: Senior Vice President and Treasurer
 
 
 
 
THE COLLATERAL AGENT AND BACKUP SERVICER:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Agent and Backup Servicer


 
By:  /s/ Kristen L. Puttin             
 
   Name: Kristen L. Puttin
 
   Title: Vice President
 
 
 
 
THE DEAL AGENT AND SOLE LENDER:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Deal Agent and Lender


 
By:  /s/ James B. Brinkley II             
 
   Name: James B. Brinkley II
 
   Title: Managing Director
 
 





[Wells Fargo/CAC Warehouse (CAC II) — Amendment No. 4 to Sixth A&R Loan and Security
Agreement]
 

Exhibit


FOURTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of June 26, 2020, to the Loan and Security Agreement, dated as of December 1, 2017 (the “Original Loan Agreement”), as amended by the First Amendment to Loan and Security Agreement, dated as of December 17, 2018 (the “First Amendment”), as further amended by the Second Amendment to Loan and Security Agreement, dated as of July 18, 2019 (the “Second Amendment”), as further amended by the Third Amendment to Loan and Security Agreement, dated as of December 19, 2019 (the “Third Amendment” and, together with the Original Loan Agreement, as amended by the First Amendment, the Second Amendment and the Third Amendment, the “Loan Agreement”), among CAC WAREHOUSE FUNDING LLC VII, a Delaware limited liability company (the “Borrower”), CREDIT ACCEPTANCE CORPORATION, a Michigan corporation (“Credit Acceptance”, the “Originator”, the “Servicer”, or the “Custodian”), the persons from time to time party thereto as LENDERS, the persons from time to time party thereto as MANAGING AGENTS, and CREDIT SUISSE AG, NEW YORK BRANCH, as deal agent (in such capacity, together with its successors and assigns, the “Deal Agent”). Unless defined elsewhere herein, capitalized terms used in this Amendment shall have the meanings assigned to such terms in the Loan Agreement.
RECITALS
WHEREAS, the Borrower, the Servicer, the Custodian, the Lenders, the Managing Agents, the Deal Agent, and Wells Fargo Bank, National Association, as Collateral Agent and Backup Servicer are parties to the Loan Agreement; and
WHEREAS, the Borrower and the Servicer have requested that the Deal Agent, the Managing Agents and the Lenders amend the Loan Agreement as specified herein and, subject to the terms and conditions hereof, the Deal Agent, the Managing Agents and the Lenders are willing to amend the Loan Agreement as specified herein.
NOW THEREFORE, in consideration of the mutual execution hereof and other good and valuable consideration, the parties hereto agree as follows:
1.
Amendments to the Loan Agreement.
(a)The definition of “GAAP” appearing in Section 1.1 of the Loan Agreement is hereby deleted and replaced with the following:

-1-


“GAAP”: Except as otherwise expressly provided in this Agreement, generally accepted accounting principles as in effect from time to time in the United States.
(b)Clauses (p) and (q) of Section 5.4 of the Loan Agreement are hereby deleted in their entirety and replaced with the following:
“(p)    Minimum Net Income. Effective commencing with the quarter ended March 31, 2020 and each quarter ended thereafter, the Servicer shall, on a Consolidated basis, maintain as of the end of each fiscal quarter (i) ended on or prior to December 31, 2020, for the two (2) consecutive quarters then ended, Consolidated Net Income of not less than $1.00 calculated in accordance with GAAP without giving effect to the adoption of the CECL Methodology and (ii) ended after December 31, 2020, for the two (2) consecutive quarters then ended, Consolidated Net Income of not less than $1.00 calculated in accordance with GAAP as then in effect.”
“(q)    Fixed Charge Coverage Ratio. The Servicer shall, on a Consolidated basis, maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio of not less than 2.0 to 1.0, it being understood that the Fixed Charge Ratio shall be calculated (i) for each fiscal quarter ended on or prior to December 31, 2020 in accordance with GAAP without giving effect to the adoption of the CECL Methodology and (ii) for each fiscal quarter ended after December 31, 2020 in accordance with GAAP as then in effect.”
2.Condition Precedent to Effectiveness. The effectiveness of this Amendment (the “Effective Date”) is subject to the condition precedent that the Deal Agent and each Managing Agent shall have received counterparts of this Amendment duly executed by each of the respective parties hereto.
3.Representations and Warranties. In order to induce the Deal Agent and each of the Managing Agents to execute, deliver and perform this Amendment, each of Borrower and Servicer hereby represents and warrants that before and after giving effect to this Amendment:
(a)     each of its representations and warranties set forth in Article IV of the Loan Agreement is true and correct in all material respects on and as of the date hereof (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date); provided, that the preceding materiality standard shall not apply to those representations and warranties which themselves contain materiality standards; and

-2-


(b)     on the date hereof, no Amortization Event, Unmatured Termination Event, Termination Event, Servicer Termination Event, or Potential Servicer Termination Event has occurred and is continuing (either before or after giving effect to this Amendment).
4.Loan Agreement in Full Force and Effect, as Amended. All the terms and conditions of the Loan Agreement shall remain in full force and effect, as amended by this Amendment. All references to the Loan Agreement in any other document or instrument shall be deemed to mean the Loan Agreement, as amended by this Amendment. This Amendment shall not constitute a novation of the Loan Agreement, but shall constitute an amendment thereto. The parties hereto agree to be bound by the terms and obligations of the Loan Agreement, as amended by this Amendment.
5.Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
6.Execution in Counterparts; Severability; Integration. This Amendment may be executed in any number of counterparts (including by way of facsimile or electronic transmission) and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. In case any provision in or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. The Loan Agreement, as amended by this Amendment, and any agreements or letters (including fee letters) executed in connection herewith contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.
7.Fees and Expenses. The Borrower hereby confirms its agreement to pay on demand all reasonable, properly documented costs and expenses of the Deal Agent in connection with the preparation, execution and delivery of this Amendment and any of the other instruments, documents

-3-


and agreements to be executed and/or delivered in connection herewith, including, without limitation, the reasonable fees and expenses of outside legal counsel to the Deal Agent with respect thereto.
8.No Petition; Limited Recourse. Sections 13.06 (as it relates to Sections 13.10 and 13.11), 13.10(b) and 13.11 of the Loan Agreement are hereby incorporated by reference as if set forth at length herein.
[Signature pages follow]


-4-


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date hereof.


CAC WAREHOUSE FUNDING LLC VII, as Borrower
By: /s/ Douglas W. Busk
Name: Douglas W. Busk
Title: Treasurer
CREDIT ACCEPTANCE CORPORATION, as Servicer
By: /s/ Douglas W. Busk
Name: Douglas W. Busk
Title: Senior Vice President and Treasurer
 
 

[Signature Page to Fourth Amendment to CAC Loan and Security Agreement]



CREDIT SUISSE AG, NEW YORK BRANCH,
as a Managing Agent



By: /s/ Enrique Flores Ruiz
Name: Enrique Flores Ruiz
Title: Vice President



By: /s/ Jason Ruchelsman
Name: Jason Ruchelsman
Title: Director


GIFS CAPITAL COMPANY, LLC,
as a Conduit Lender



By: /s/ Carey D. Fear
Name: Carey D. Fear
Title: Manager


CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Committed Lender



By: /s/ Enrique Flores Ruiz
Name: Enrique Flores Ruiz
Title: Authorized Signatory



By: /s/ Jason Ruchelsman
Name: Jason Ruchelsman
Title: Authorized Signatory


[Signature Page to Fourth Amendment to CAC Loan and Security Agreement]



CREDIT SUISSE AG, NEW YORK BRANCH,
as Deal Agent



By: /s/ Enrique Flores Ruiz
Name: Enrique Flores Ruiz
Title: Vice President



By: /s/ Jason Ruchelsman
Name: Jason Ruchelsman
Title: Director


 


[Signature Page to Fourth Amendment to CAC Loan and Security Agreement]

Exhibit


SIXTH AMENDMENT TO SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
This Sixth Amendment to Sixth Amended and Restated Credit Agreement (this “Sixth Amendment”) is made as of June 30, 2020 by and among Credit Acceptance Corporation, a Michigan corporation (the “Company”), Comerica Bank and the other banks signatory hereto (individually, a “Bank” and collectively, the “Banks”) and Comerica Bank, as administrative agent for the Banks (in such capacity, “Agent”).
RECITALS
A.
The Company, Agent and the banks party thereto entered into that certain Sixth Amended and Restated Credit Acceptance Corporation Credit Agreement, dated as of June 23, 2014 (as amended by that certain First Amendment to Sixth Amended and Restated Credit Agreement, dated as of June 11, 2015, that certain Second Amendment to Sixth Amended and Restated Credit Agreement, dated as of June 15, 2016, that certain Third Amendment to Sixth Amended and Restated Credit Agreement and Extension Agreement, dated as of June 28, 2017, that certain Fourth Amendment to Sixth Amended and Restated Credit Agreement dated as of June 27, 2018, and that certain Fifth Amendment to Sixth Amended and Restated Credit Agreement dated as of June 24, 2019, and as further amended, amended and restated or otherwise modified from time to time, the “Credit Agreement”) under which the banks party thereto renewed and extended (or committed to extend) credit to the Company, as set forth therein.
B.
The Company has requested that Agent and the Banks agree to the additional amendments to the Credit Agreement contained herein and Agent and the undersigned Banks (which constitute Majority Banks (as defined in the Credit Agreement)) are willing to do so, but only on the terms and conditions set forth in this Sixth Amendment.
NOW, THEREFORE, Company, Agent and the Banks party hereto agree:
1.Section 7.6 of the Credit Agreement is amended and restated as follows:
“Section 7.6     Maintain Minimum Net Income. On a Consolidated basis, maintain as of the end of each fiscal quarter calculated for the two fiscal quarters then ending, Consolidated Net Income of not less than $1.00, provided that for each of the testing periods ending June 30, 2020, September 30, 2020 and December 31, 2020 (the “Relevant Testing Dates”), Consolidated Net Income (and each of the components thereof) shall be calculated based on the GAAP accounting methodology used by the Company during the fiscal year ending December 31, 2019, without application of the CECL Methodology (whether or not the Company has adopted the CECL Methodology prior to the Relevant Testing Dates).”

2.    Section 7.7 of the Credit Agreement is amended and restated as follows:




“Section 7.7   Maintain Fixed Charge Coverage Ratio. On a Consolidated basis, maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio of not less than 2.0 to 1.0, provided that for each of the testing periods ending June 30, 2020, September 30, 2020 and December 31, 2020, the Fixed Charge Coverage Ratio (and each of the components thereof)  shall be calculated based on the GAAP accounting methodology used during the fiscal year ending December 31, 2019, without application of the CECL Methodology (whether or not the Company has adopted the CECL Methodology prior to the Relevant Testing Dates).”

3.    This Sixth Amendment shall become effective (the “Sixth Amendment Effective Date”) according to the terms and as of the date hereof, upon satisfaction of the following conditions:
(a)
receipt by the Agent of .pdf copies of counterpart originals of:
(i)
this Sixth Amendment, duly executed and delivered by the Company and the Banks; and
(b)
Company shall have paid to Agent and the applicable Banks all interest, fees and other amounts, if any, due and owing to the Agent and such Banks as of the Sixth Amendment Effective Date.
4.    Company hereby certifies that (a) all necessary actions have been taken by the Company to authorize execution and delivery of this Sixth Amendment and (b) after giving effect to this Sixth Amendment, no Default or Event of Default has occurred and is continuing on the Effective Date.
5.    The Company ratifies and confirms, as of the date hereof and after giving effect to the amendments contained herein, each of the representations and warranties set forth in Sections 6.1 through 6.19, inclusive, of the Credit Agreement and acknowledges that such representations and warranties are and shall remain continuing representations and warranties during the entire life of the Credit Agreement, except to the extent such representations and warranties speak only as of a specific date.
6.    Except as specifically set forth above, this Sixth Amendment shall not be deemed to amend or alter in any respect the terms and conditions of the Credit Agreement, any of the Notes issued thereunder or any of the other Loan Documents, or to constitute a waiver by the Banks or Agent of any right or remedy under or a consent to any transaction not meeting the terms and conditions of the Credit Agreement, any of the Notes issued thereunder or any of the other Loan Documents.
7.    Unless otherwise defined to the contrary herein, all capitalized terms used in this Sixth Amendment shall have the meaning set forth in the Credit Agreement.
8.    This Sixth Amendment may be executed in counterparts in accordance with Section 13.10 of the Credit Agreement.
9.    This Sixth Amendment shall be construed in accordance with and governed by the laws of the State of Michigan.

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[Signatures Follow on Succeeding Pages]



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WITNESS the due execution hereof as of the day and year first above written.

CREDIT ACCEPTANCE CORPORATION


By:/s/ Douglas W. Busk                
Name: Douglas W. Busk
Title: Treasurer



Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement




COMERICA BANK, as Administrative Agent and a Bank


By: /s/ Paul G. Russo                    
Name: Paul G. Russo
Title: Vice President


Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement




BANK OF AMERICA, N.A., as a Bank


By: /s/ Michael E. Miller II            
Name: Michael E. Miller II            
Title: Senior Vice President            


Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement





BANK OF MONTREAL, as a Bank


By: /s/ Matthew Witt                
Name: Matthew Witt                
Title: Assistant Vice President        


Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement





FIFTH THIRD BANK, an Ohio banking corporation, as a Bank


By: /s/ Steven J. Englehart            
Name: Steven J. Englehart            
Title: Sr. Vice President            


Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement





CITIZENS BANK, N.A., as a Bank


By: /s/ Michael S. Farley            
Name: Michael S. Farley            
Title:     Sr. Vice President            


Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement





THE HUNTINGTON NATIONAL BANK, as a Bank


By: /s/ Tara Donovan                
Name: Tara Donovan                
Title:     Vice President                


Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement





FLAGSTAR BANK, FSB, as a Bank


By: /s/ Patrick Green                
Name: Patrick Green                
Title:     Senior Vice President            


Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement





KEYBANK, NATIONAL ASSOCIATION, as a Bank


By: /s/ Michael Dolson            
Name: Michael Dolson            
Title:     Senior Vice President            


Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement





CHEMICAL BANK, a division of TCF National Bank, successor by merger to Chemical Bank, as a Bank


By: /s/ John R. Hruska            
Name: John R. Hruska            
Title:     Sr. Vice President            



Signature page to Sixth Amendment to Sixth Amended and Restated Credit Agreement


v3.20.2
Cover
Jun. 25, 2020
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jun. 25, 2020
Entity Registrant Name CREDIT ACCEPTANCE CORP
Entity Central Index Key 0000885550
Amendment Flag false
Entity Incorporation, State or Country Code MI
Entity File Number 000-20202
Entity Tax Identification Number 38-1999511
Entity Address, Address Line One   25505 West Twelve Mile Road
Entity Address, City or Town Southfield,
Entity Address, State or Province MI
Entity Address, Postal Zip Code 48034-8339
City Area Code 248
Local Phone Number 353-2700
Title of 12(b) Security Common Stock, $.01 par value
Trading Symbol CACC
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false