S&P rates Credit Acceptance notes BB

Standard & Poor’s said it assigned a BB rating on Credit Acceptance Corp.’s proposed $250 million senior unsecured notes.

The proceeds will be used for general corporate purposes.

The notes are rated in line with the company’s BB issuer credit rating because the company’s unencumbered assets are well in excess of its unsecured debt and its secured recourse debt makes up a fairly small portion of its balance sheet, S&P said.

The ratings reflect the company’s concentration in subprime auto lending, dependence on wholesale funding markets and concentrated ownership, the agency said.

The company’s low leverage, strong profitability and well-established business model mitigate these weaknesses, S&P said.

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