Vroom Announces Pricing for First Auto Loan Securitization
NEW YORK, February 10, 2022–(BUSINESS WIRE)–vroom (NASDAQ: VRM), an innovative e-commerce platform that provides a better way to buy and sell used vehicles, today announced that United Auto Credit Corporation (UACC), a wholly owned of the Company, has priced an auto loan securitization offering of $296.17 million in aggregate principal amount of auto asset-backed notes on February 9, 2022.
The Q1 2022 securitization is a Rule 144A private offering in which UACC expects to sell approximately $281.35 million of rated notes. The transaction represents the 13and global securitization and the first since its acquisition by Vroom. The transaction includes five classes of sequentially paying securities with expected ratings of AAA/AAA to BB-/BB by S&P Global Ratings and DBRS Morningstar, respectively, and priced at a weighted average coupon of 3.01%.
The securitization was structured as an off-balance sheet transaction in which UACC expects to sell approximately $318.46 million of principal auto loan balances to a securitization trust and receive proceeds from the issuance and sale of rated notes and residual unrated certificates and to retain a minimum 5% vertical risk retention interest in each class of notes and certificates.
“This transaction is an exciting first step in integrating UACC’s strong reputation and AAA ratings into Vroom’s long-term strategic goals,” said Paul Hennessy, CEO of Vroom. “Over time, UACC’s in-house financing capabilities will allow us to deliver a superior customer experience of buying and lending digital cars, offering new ways for existing partners and new investors to access the Vroom’s lending portfolio and allowing us to fully participate in the lending economy, transitioning Vroom from a 100% indirect model to a fully captive model which has the potential to accelerate our sales velocity and bring significant improvement in gross profit to our shareholders.”
Settlement of the transaction for the rated notes is expected to occur on or about February 16, 2022. Wells Fargo Securities, LLC and Capital One Securities, Inc. acted as co-managers of the transaction and JP Morgan Securities, LLC, acted as co-manager. . UACC is represented in this transaction by Katten Muchin Rosenman LLP as issuer counsel.
Notes and certificates will not be registered under the Securities Act of 1933, as amended (the “Securities Law“), or any state securities law, and may not be offered or sold in the United States absent registration or applicable exemption, or transaction not subject to the registration requirements of the Securities Act and applicable state securities laws . The Notes and certificates have been offered and are being sold only to qualified institutional purchasers under Rule 144A of the Securities Act.
This press release is not an offer to sell, or a solicitation of an offer to buy, securities, and there will be no sale of such securities in any state or jurisdiction in which the offer, the solicitation or sale would be unlawful prior to registration. or qualification under the securities laws of such state or jurisdiction.
About Vroom, Inc.:
Vroom is an innovative end-to-end e-commerce platform designed to provide a better way to buy and a better way to sell used vehicles. The company’s scalable, data-driven technology brings all phases of the vehicle buying and selling process to consumers wherever they are and offers a wide selection of vehicles, transparent pricing, competitive financing and a pick-up and home delivery. Vroom has offices in New York, Houston and Detroit and also operates the Texas Direct Auto brand. For more information, visit vroom.com.
About United Auto Credit Corporation:
UACC is a leading national technology automotive lender serving the independent dealership market. UACC has made significant investments in the development of proprietary technology that has enabled it to adapt to an ever-changing market, scale efficiently and generate operational leverage. UACC is based in Newport Beach, Calif., Ft. Worth, TX and Buffalo, NY. For more information, visit unitedautocredit.net.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release that do not relate to historical facts should be considered forward-looking statements, including, without limitation, statements regarding our expectations regarding future operating results and the impact of the acquisition of UACC. These statements are based on management’s current assumptions and are not promises or guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements are materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. For factors that could cause actual results to differ materially from the forward-looking statements contained in this press release, please see the risks and uncertainties identified under “Risk Factors” in our Form 10-K for the fiscal year. ended December 31, 2020 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, which are available on our Investor Relations website at ir.vroom.com and on the website of the United States Securities and Exchange Commission at sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.
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