TORONTO--(BUSINESS WIRE)--Axis Auto Finance Inc. (“Axis” or the “Company”), (TSX: AXIS) a fintech lender servicing the alternative auto finance market, announced today that it has purchased a portfolio of auto loans (“Portfolio”) from an Ontario based competitor (“Vendor”).
- $17.2 million in auto loan balances
- The purchase will boost the Axis owned auto loan portfolio by 12%
- Funded through cash on closing and a holdback to be released over 36 months subject to portfolio performance.
The Portfolio is made up of loan contracts similar in geographical distribution, customer credit profile and vehicle age and mileage to organically originated Axis loans. The Vendor has made the decision to exit the auto lending business and executives of the Vendor have signed non-competition agreements on a go forward basis.
The $17.2 million in principal balances represent approximately 1,100 loan contracts. No purchased loan contracts are over 30 days delinquent, and the portfolio is being purchased at a discount to the customer loan balance. Approximately 15% of the purchase price is structured as a holdback, to be released in 4 installments over 36 months following the closing of the transaction. The holdback acts as a buffer should credit losses on the Portfolio exceed pre-set thresholds. The transaction is scheduled to close on January 31, 2023.
About Axis Auto Finance
Axis is a financial technology company changing the way Canadians buy and finance used vehicles. Through our direct-to-consumer portal, DriveAxis.ca, customers can choose their next used vehicle, arrange financing, and get the car delivered to their home. In addition, the company continues to grow B2B non-prime auto loan originations by delivering innovative technology solutions and superior service to its Dealer Partner Network. All Axis auto loans report to Equifax, resulting in over 70% of customers seeing a significant improvement of their credit scores. Further information on the Company can be found at https://www.axisfinancegroup.com/investors-press-releases/.
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