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Debt | 9 Months Ended
--- | ---
Sep. 30, 2021
Debt Disclosure [Abstract] |
Debt | DEBT Debt consists of the following:
(In millions) |  | As of September 30, 2021
|  | Principal Outstanding |  | Unamortized Debt Issuance Costs |  |  |  | Carrying Amount
Revolving secured line of credit (1) |  | $ | 72.2 |  |  | $ | — |  |  |  |  | $ | 72.2 |
Secured financing (2) |  | 3,752.7 |  |  | (19.7) |  |  |  |  | 3,733.0 |
Senior notes |  | 800.0 |  |  | (8.0) |  |  |  |  | 792.0 |
Mortgage note |  | 9.9 |  |  | — |  |  |  |  | 9.9 |
Total debt |  | $ | 4,634.8 |  |  | $ | (27.7) |  |  |  |  | $ | 4,607.1 |
(In millions) |  | As of December 31, 2020
|  | Principal Outstanding |  | Unamortized Debt Issuance Costs |  |  |  | Carrying Amount
Revolving secured line of credit (1) |  | $ | 95.9 |  |  | $ | — |  |  |  |  | $ | 95.9 |
Secured financing (2) |  | 3,728.7 |  |  | (17.1) |  |  |  |  | 3,711.6 |
Senior notes |  | 800.0 |  |  | (9.4) |  |  |  |  | 790.6 |
Mortgage note |  | 10.5 |  |  | — |  |  |  |  | 10.5 |
Total debt |  | $ | 4,635.1 |  |  | $ | (26.5) |  |  |  |  | $ | 4,608.6 |
(1)Excludes deferred debt issuance cost s of $2.3 million and $3.2 million as of September 30, 2021 and December 31, 2020, respectively, which are included in other assets. (2)Warehouse facilities and Term ABS. General information for each of our financing transactions in place as of September 30, 2021 is as follows:
(Dollars in millions) |  |  |  |  |  |  |  |  |  |
Financings |  | Wholly-owned Subsidiary |  | Maturity Date |  | Financing Amount |  | Interest Rate Basis as of September 30, 2021
Revolving Secured Line of Credit |  | n/a |  | 06/22/2023 |  |  | $ | 340.0 |  | (1) |  | At our option, either LIBOR plus 187.5 basis points or the prime rate plus 87.5 basis points
Warehouse Facility II (2) |  | CAC Warehouse Funding LLC II |  | 04/30/2024 | (3) |  | 400.0 |  |  |  | LIBOR plus 175 basis points (4)
Warehouse Facility IV (2) |  | CAC Warehouse Funding LLC IV |  | 11/17/2023 | (3) |  | 300.0 |  |  |  | LIBOR plus 210 basis points (4)
Warehouse Facility V (2) |  | CAC Warehouse Funding LLC V |  | 12/18/2023 | (5) |  | 125.0 |  |  |  | LIBOR plus 225 basis points (4)
Warehouse Facility VI (2) |  | CAC Warehouse Funding LLC VI |  | 09/30/2022 | (3) |  | 75.0 |  |  |  | LIBOR plus 200 basis points
Warehouse Facility VII (2) |  | CAC Warehouse Funding LLC VII |  | 12/16/2021 | (6) |  | 150.0 |  |  |  | Commercial paper rate plus 200 basis points (4)
Warehouse Facility VIII (2) |  | CAC Warehouse Funding LLC VIII |  | 09/01/2024 | (3) |  | 200.0 |  |  |  | LIBOR plus 190 basis points (4)
Term ABS 2018-3 (2) |  | Credit Acceptance Funding LLC 2018-3 |  | 08/17/2020 | (3) |  | 398.3 |  |  |  | Fixed rate
Term ABS 2019-1 (2) |  | Credit Acceptance Funding LLC 2019-1 |  | 02/15/2021 | (3) |  | 402.5 |  |  |  | Fixed rate
Term ABS 2019-2 (2) |  | Credit Acceptance Funding LLC 2019-2 |  | 08/15/2022 | (7) |  | 500.0 |  |  |  | Fixed rate
Term ABS 2019-3 (2) |  | Credit Acceptance Funding LLC 2019-3 |  | 11/15/2021 | (3) |  | 351.7 |  |  |  | Fixed rate
Term ABS 2020-1 (2) |  | Credit Acceptance Funding LLC 2020-1 |  | 02/15/2022 | (3) |  | 500.0 |  |  |  | Fixed rate
Term ABS 2020-2 (2) |  | Credit Acceptance Funding LLC 2020-2 |  | 07/15/2022 | (3) |  | 481.8 |  |  |  | Fixed rate
Term ABS 2020-3 (2) |  | Credit Acceptance Funding LLC 2020-3 |  | 10/17/2022 | (3) |  | 600.0 |  |  |  | Fixed rate
Term ABS 2021-1 (2) |  | Credit Acceptance Funding LLC 2021-1 |  | 02/15/2023 | (3) |  | 100.0 |  |  |  | LIBOR plus 198.5 basis points (4)
Term ABS 2021-2 (2) |  | Credit Acceptance Funding LLC 2021-2 |  | 02/15/2023 | (3) |  | 500.0 |  |  |  | Fixed rate
Term ABS 2021-3 (2) |  | Credit Acceptance Funding LLC 2021-3 |  | 05/15/2023 | (3) |  | 450.0 |  |  |  | Fixed rate
2024 Senior Notes |  | n/a |  | 12/31/2024 |  |  | 400.0 |  |  |  | Fixed rate
2026 Senior Notes |  | n/a |  | 03/15/2026 |  |  | 400.0 |  |  |  | Fixed rate
Mortgage Note (2) |  | Chapter 4 Properties, LLC |  | 08/06/2023 |  |  | 12.0 |  |  |  | LIBOR plus 150 basis points
(1)The amount of the facility will decrease by $35.0 million on June 22, 2022. For additional information, see Note 16. (2)Financing made available only to a specified subsidiary of the Company. (3)Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date based on the cash flows of the pledged assets. (4)Interest rate cap agreements are in place to limit the exposure to increasing interest rates. (5)Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on December 16, 2025 will be due on that date. (6)Represents the revolving maturity date. The outstanding balance will amortize after the revolving maturity date and any amounts remaining on December 16, 2023 will be due on that date. (7)Represents the revolving maturity date. The Company has the option to redeem and retire the indebtedness after the revolving maturity date. If we do not elect this option, the outstanding balance will amortize based on the cash flows of the pledged assets. Additional information related to the amounts outstanding on each facility is as follows:
(In millions) | For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Revolving Secured Line of Credit |  |  |  |  |  |  |
Maximum outstanding principal balance | $ | 72.2 |  |  | $ | 287.7 |  |  | $ | 216.0 |  |  | $ | 296.6 |
Average outstanding principal balance | 1.5 |  |  | 124.9 |  |  | 26.9 |  |  | 119.7 |
Warehouse Facility II |  |  |  |  |  |  |
Maximum outstanding principal balance | — |  |  | 201.0 |  |  | 201.0 |  |  | 201.0 |
Average outstanding principal balance | — |  |  | 161.5 |  |  | 15.6 |  |  | 127.8 |
Warehouse Facility IV |  |  |  |  |  |  |
Maximum outstanding principal balance | — |  |  | — |  |  | — |  |  | — |
Average outstanding principal balance | — |  |  | — |  |  | — |  |  | — |
Warehouse Facility V |  |  |  |  |  |  |
Maximum outstanding principal balance | — |  |  | 75.0 |  |  | — |  |  | 75.0 |
Average outstanding principal balance | — |  |  | 17.9 |  |  | — |  |  | 25.5 |
Warehouse Facility VI |  |  |  |  |  |  |
Maximum outstanding principal balance | — |  |  | 50.0 |  |  | — |  |  | 50.0 |
Average outstanding principal balance | — |  |  | 50.0 |  |  | — |  |  | 20.3 |
Warehouse Facility VII |  |  |  |  |  |  |
Maximum outstanding principal balance | — |  |  | 125.0 |  |  | — |  |  | 125.0 |
Average outstanding principal balance | — |  |  | 102.5 |  |  | — |  |  | 75.0 |
Warehouse Facility VIII |  |  |  |  |  |  |
Maximum outstanding principal balance | — |  |  | 149.0 |  |  | — |  |  | 149.0 |
Average outstanding principal balance | — |  |  | 35.6 |  |  | — |  |  | 37.7 |
(Dollars in millions) | As of
| September 30, 2021 |  | December 31, 2020
Revolving Secured Line of Credit |  |  |
Principal balance outstanding | $ | 72.2 |  |  | $ | 95.9 |
Amount available for borrowing (1) | 267.8 |  |  | 244.1 |
Interest rate | 2.53 | % |  | 2.02 | %
Warehouse Facility II |  |  |
Principal balance outstanding | $ | — |  |  | $ | 75.0 |
Amount available for borrowing (1) | 400.0 |  |  | 325.0 |
Loans pledged as collateral | — |  |  | 91.8 |
Restricted cash and cash equivalents pledged as collateral | 1.0 |  |  | 3.0 |
Interest rate | — | % |  | 1.90 | %
Warehouse Facility IV |  |  |
Principal balance outstanding | $ | — |  |  | $ | — |
Amount available for borrowing (1) | 300.0 |  |  | 300.0 |
Loans pledged as collateral | — |  |  | — |
Restricted cash and cash equivalents pledged as collateral | 1.0 |  |  | 1.0 |
Interest rate | — | % |  | — | %
Warehouse Facility V |  |  |
Principal balance outstanding | $ | — |  |  | $ | — |
Amount available for borrowing (1) | 125.0 |  |  | 125.0 |
Loans pledged as collateral | — |  |  | — |
Restricted cash and cash equivalents pledged as collateral | 1.0 |  |  | 1.0 |
Interest rate | — | % |  | — | %
Warehouse Facility VI |  |  |
Principal balance outstanding | $ | — |  |  | $ | — |
Amount available for borrowing (1) | 75.0 |  |  | 75.0 |
Loans pledged as collateral | — |  |  | — |
Restricted cash and cash equivalents pledged as collateral | — |  |  | — |
Interest rate | — | % |  | — | %
Warehouse Facility VII |  |  |
Principal balance outstanding | $ | — |  |  | $ | — |
Amount available for borrowing (1) | 150.0 |  |  | 150.0 |
Loans pledged as collateral | — |  |  | — |
Restricted cash and cash equivalents pledged as collateral | 1.0 |  |  | 1.0 |
Interest rate | — | % |  | — | %
Warehouse Facility VIII |  |  |
Principal balance outstanding | $ | — |  |  | $ | — |
Amount available for borrowing (1) | 200.0 |  |  | 200.0 |
Loans pledged as collateral | — |  |  | — |
Restricted cash and cash equivalents pledged as collateral | — |  |  | — |
Interest rate | — | % |  | — | %
Term ABS 2017-3 |  |  |
Principal balance outstanding | $ | — |  |  | $ | 70.9 |
Loans pledged as collateral | — |  |  | 215.8 |
Restricted cash and cash equivalents pledged as collateral | — |  |  | 23.2 |
Interest rate | — | % |  | 3.41 | %
Term ABS 2018-1 |  |  |
Principal balance outstanding | $ | — |  |  | $ | 196.4 |
Loans pledged as collateral | — |  |  | 394.1 |
Restricted cash and cash equivalents pledged as collateral | — |  |  | 36.2 |
Interest rate | — | % |  | 3.61 | %
Term ABS 2018-2 |  |  |
Principal balance outstanding | $ | — |  |  | $ | 254.3 |
Loans pledged as collateral | — |  |  | 410.0 |
Restricted cash and cash equivalents pledged as collateral | — |  |  | 34.6 |
Interest rate | — | % |  | 3.85 | %
Term ABS 2018-3 |  |  |
Principal balance outstanding | $ | 72.9 |  |  | $ | 296.1 |
Loans pledged as collateral | 262.9 |  |  | 408.8 |
Restricted cash and cash equivalents pledged as collateral | 30.5 |  |  | 32.9 |
Interest rate | 4.04 | % |  | 3.78 | %
Term ABS 2019-1 |  |  |
Principal balance outstanding | $ | 196.3 |  |  | $ | 402.5 |
Loans pledged as collateral | 340.8 |  |  | 482.3 |
Restricted cash and cash equivalents pledged as collateral | 35.4 |  |  | 35.4 |
Interest rate | 3.73 | % |  | 3.53 | %
Term ABS 2019-2 |  |  |
Principal balance outstanding | $ | 500.0 |  |  | $ | 500.0 |
Loans pledged as collateral | 586.4 |  |  | 575.4 |
Restricted cash and cash equivalents pledged as collateral | 51.8 |  |  | 41.2 |
Interest rate | 3.13 | % |  | 3.13 | %
Term ABS 2019-3 |  |  |
Principal balance outstanding | $ | 351.7 |  |  | $ | 351.7 |
Loans pledged as collateral | 407.9 |  |  | 420.9 |
Restricted cash and cash equivalents pledged as collateral | 37.9 |  |  | 30.8 |
Interest rate | 2.56 | % |  | 2.56 | %
Term ABS 2020-1 |  |  |
Principal balance outstanding | $ | 500.0 |  |  | $ | 500.0 |
Loans pledged as collateral | 605.8 |  |  | 749.3 |
Restricted cash and cash equivalents pledged as collateral | 53.1 |  |  | 48.8 |
Interest rate | 2.18 | % |  | 2.18 | %
Term ABS 2020-2 |  |  |
Principal balance outstanding | $ | 481.8 |  |  | $ | 481.8 |
Loans pledged as collateral | 581.1 |  |  | 606.6 |
Restricted cash and cash equivalents pledged as collateral | 49.6 |  |  | 41.1 |
Interest rate | 1.65 | % |  | 1.65 | %
Term ABS 2020-3 |  |  |
Principal balance outstanding | $ | 600.0 |  |  | $ | 600.0 |
Loans pledged as collateral | 709.5 |  |  | 759.1 |
Restricted cash and cash equivalents pledged as collateral | 58.7 |  |  | 49.3 |
Interest rate | 1.44 | % |  | 1.44 | %
Term ABS 2021-1 |  |  |
Principal balance outstanding | $ | 100.0 |  |  | $ | — |
Loans pledged as collateral | 151.7 |  |  | — |
Restricted cash and cash equivalents pledged as collateral | 10.7 |  |  | — |
Interest rate | 2.07 | % |  | — | %
Term ABS 2021-2 |  |  |
Principal balance outstanding | $ | 500.0 |  |  | $ | — |
Loans pledged as collateral | 667.8 |  |  | — |
Restricted cash and cash equivalents pledged as collateral | 51.8 |  |  | — |
Interest rate | 1.12 | % |  | — | %
Term ABS 2021-3 |  |  |
Principal balance outstanding | $ | 450.0 |  |  | $ | — |
Loans pledged as collateral | 642.3 |  |  | — |
Restricted cash and cash equivalents pledged as collateral | 45.4 |  |  | — |
Interest rate | 1.14 | % |  | — | %
2024 Senior Notes |  |  |
Principal balance outstanding | $ | 400.0 |  |  | $ | 400.0 |
Interest rate | 5.125 | % |  | 5.125 | %
2026 Senior Notes |  |  |
Principal balance outstanding | $ | 400.0 |  |  | $ | 400.0 |
Interest rate | 6.625 | % |  | 6.625 | %
Mortgage Note |  |  |
Principal balance outstanding | $ | 9.9 |  |  | $ | 10.5 |
Interest rate | 1.59 | % |  | 1.65 | %
(1)Availability may be limited by the amount of assets pledged as collateral. Revolving Secured Line of Credit Facility We have a $340.0 million revolving secured line of credit facility with a commercial bank syndicate. The amount of the facility will decrease by $35.0 million on June 22, 2022. For additional information, see Note 16. Borrowings under the revolving secured line of credit facility, including any letters of credit issued under the facility, are subject to a borrowing-base limitation. This limitation equals 80% of the value of Loans, as defined in the agreement, less a hedging reserve (not exceeding $1.0 million), and the amount of other debt secured by the collateral which secures the revolving secured line of credit facility. Borrowings under the revolving secured line of credit facility agreement are secured by a lien on most of our assets. Warehouse Facilities We have six Warehouse facilities with total borrowing capacity of $1,250.0 million. Each of the facilities is with a different lender or group of lenders. Under each Warehouse facility, we can contribute Loans to our wholly-owned subsidiaries in return for cash and equity in each subsidiary. In turn, each subsidiary pledges the Loans as collateral to lenders to secure financing that will fund the cash portion of the purchase price of the Loans. The financing provided to each subsidiary under the applicable facility is generally limited to the lesser of 80% of the value of the contributed Loans, as defined in the agreements, plus the restricted cash and cash equivalents pledged as collateral on such Loans or the facility limit. The financings create indebtedness for which the subsidiaries are liable and which is secured by all the assets of each subsidiary. Such indebtedness is non-recourse to us, even though we are consolidated for financial reporting purposes with the subsidiaries. Because the subsidiaries are organized as legal entities separate from us, their assets (including the contributed Loans) are not available to our creditors. The subsidiaries pay us a monthly servicing fee equal to 6% (4% for Warehouse Facility II and Warehouse Facility VIII) of the collections received with respect to the contributed Loans. The servicing fee is paid out of the collections. Except for the servicing fee and holdback payments due to Dealers, if a facility is amortizing, we do not have any rights in any portion of such collections until all outstanding principal, accrued and unpaid interest, fees and other related costs have been paid in full. If a facility is not amortizing, the applicable subsidiary may be entitled to retain a portion of such collections provided that the borrowing base requirements of the facility are satisfied. Term ABS Financings We have wholly-owned subsidiaries (the “Funding LLCs”) that have completed secured financing transactions with qualified institutional investors or lenders. In connection with these transactions, we contributed Loans on an arms-length basis to each Funding LLC for cash and the sole membership interest in that Funding LLC. In turn, each Funding LLC, other than those of Term ABS 2019-2 and 2021-1, contributed the Loans to the respective trusts that issued notes to qualified institutional investors. The Funding LLCs for the Term ABS 2019-2 and 2021-1 transactions pledged the Loans to the respective lenders. The Term ABS 2018-3, 2019-1, 2019-3, 2020-1, 2020-2, 2020-3, 2021-2 and 2021-3 transactions each consist of three classes of notes. Each financing at the time of issuance has a specified revolving period during which we are likely to contribute additional Loans to each Funding LLC. Each Funding LLC will then contribute the Loans to its respective trust. At the end of the applicable revolving period, the debt outstanding under each financing will begin to amortize. The financings create indebtedness for which the trusts or Funding LLCs are liable and which is secured by all the assets of each trust or Funding LLC. Such indebtedness is non-recourse to us, even though we are consolidated for financial reporting purposes with the trusts and the Funding LLCs. Because the Funding LLCs are organized as legal entities separate from us, their assets (including the contributed Loans) are not available to our creditors. We receive a monthly servicing fee on each financing equal to 6% (4% for Term ABS 2021-2 and 2021-3) of the collections received with respect to the contributed Loans. The fee is paid out of the collections. Except for the servicing fee and Dealer Holdback payments due to Dealers, if a facility is amortizing, we do not have any rights in any portion of such collections until all outstanding principal, accrued and unpaid interest, fees and other related costs have been paid in full. If a facility is not amortizing, the applicable subsidiary may be entitled to retain a portion of such collections provided that the borrowing base requirements of the facility are satisfied. However, in our capacity as servicer of the Loans, we do have a limited right to exercise a “clean-up call” option to purchase Loans from the Funding LLCs and/or the trusts under certain specified circumstances. For those Funding LLCs with a trust, when the trust’s underlying indebtedness is paid in full, either through collections or through a prepayment of the indebtedness, the trust is to pay any remaining collections over to its Funding LLC as the sole beneficiary of the trust. For all Funding LLCs, after the indebtedness is paid in full, any remaining collections will ultimately be available to be distributed to us as the sole member of the respective Funding LLC. The table below sets forth certain additional details regarding the outstanding Term ABS financings:
(Dollars in millions) |  |  |  |  |  |
Term ABS Financings |  | Close Date |  | Net Book Value of Loans Contributed at Closing |  | Revolving Period
Term ABS 2018-3 |  | August 23, 2018 |  | $ | 500.1 |  |  | Through August 17, 2020
Term ABS 2019-1 |  | February 21, 2019 |  | 503.1 |  |  | Through February 15, 2021
Term ABS 2019-2 |  | August 28, 2019 |  | 625.1 |  |  | Through August 15, 2022
Term ABS 2019-3 |  | November 21, 2019 |  | 439.6 |  |  | Through November 15, 2021
Term ABS 2020-1 |  | February 20, 2020 |  | 625.1 |  |  | Through February 15, 2022
Term ABS 2020-2 |  | July 23, 2020 |  | 602.3 |  |  | Through July 15, 2022
Term ABS 2020-3 |  | October 22, 2020 |  | 750.1 |  |  | Through October 17, 2022
Term ABS 2021-1 |  | January 29, 2021 |  | 125.1 |  |  | Through February 15, 2023
Term ABS 2021-2 |  | February 18, 2021 |  | 625.1 |  |  | Through February 15, 2023
Term ABS 2021-3 |  | May 20, 2021 |  | 562.6 |  |  | Through May 15, 2023
Senior Notes On December 18, 2019, we issued $400.0 million aggregate principal amount of 5.125% senior notes due 2024 (the “2024 senior notes”). The 2024 senior notes were issued pursuant to an indenture, dated as of December 18, 2019, among the Company, as issuer, the Company’s subsidiaries Buyers Vehicle Protection Plan, Inc. and Vehicle Remarketing Services, Inc., as guarantors (collectively, the “Guarantors”), and U.S. Bank National Association, as trustee. The 2024 senior notes mature on December 31, 2024 and bear interest at a rate of 5.125% per annum, computed on the basis of a 360-day year composed of twelve 30-day months and payable semi-annually on June 30 and December 31 of each year, beginning on June 30, 2020. We used a portion of the net proceeds from the 2024 senior notes to repurchase or redeem all of the $300.0 million outstanding principal amount of our 6.125% senior notes due 2021 (the “2021 senior notes”), of which $148.2 million was repurchased on December 18, 2019 and the remaining $151.8 million was redeemed on January 17, 2020. We used the remaining net proceeds from the 2024 senior notes, together with borrowings under our revolving credit facility, to redeem in full the $250.0 million outstanding principal amount of our 7.375% senior notes due 2023 (the “2023 senior notes”) on March 15, 2020. During the fourth quarter of 2019, we recognized a pre-tax loss on extinguishment of debt of $1.8 million related to the repurchase of the 2021 senior notes in the fourth quarter of 2019 and the irrevocable notice given in December 2019 for the redemption of the remaining 2021 senior notes in the first quarter of 2020. During the first quarter of 2020, we recognized a pre-tax loss on extinguishment of debt of $7.4 million related to the redemption of the 2023 senior notes. On March 7, 2019, we issued $400.0 million aggregate principal amount of 6.625% senior notes due 2026 (the “2026 senior notes”). The 2026 senior notes were issued pursuant to an indenture, dated as of March 7, 2019, among the Company, as issuer, the Guarantors and U.S. Bank National Association, as trustee. The 2026 senior notes mature on March 15, 2026 and bear interest at a rate of 6.625% per annum, computed on the basis of a 360-day year composed of twelve 30-day months and payable semi-annually on March 15 and September 15 of each year, beginning on September 15, 2019. We used the net proceeds from the offering of the 2026 senior notes for general corporate purposes, including repayment of outstanding borrowings under our revolving secured line of credit facility. The 2024 senior notes and 2026 senior notes (the “senior notes”) are guaranteed on a senior basis by the Guarantors, which are also guarantors of obligations under our revolving secured line of credit facility. Other existing and future subsidiaries of ours may become guarantors of the senior notes in the future. The indentures for the senior notes provide for a guarantor of the senior notes to be released from its obligations under its guarantee of the senior notes under specified circumstances. Mortgage Note On August 6, 2018, we entered into a $12.0 million mortgage note with a commercial bank that is secured by a first mortgage lien on a building acquired by us and an assignment of all leases, rents, revenues and profits under all present and future leases of the building. The note matures on August 6, 2023, and bears interest at LIBOR plus 150 basis points. Debt Covenants As of September 30, 2021, we were in compliance with our covenants under the revolving secured line of credit facility and our Warehouse facilities, including those that require the maintenance of certain financial ratios and other financial conditions. These covenants require a minimum ratio of (1) our net earnings, adjusted for specified items, before income taxes, depreciation, amortization and fixed charges to (2) our fixed charges, as defined in the agreements. These covenants also limit the maximum ratio of our funded debt less unrestricted cash and cash equivalents to tangible net worth. Additionally, we must maintain consolidated net income, as defined in the agreements, of not less than $1 for the two most recently ended fiscal quarters. Some of these covenants may indirectly limit the repurchase of common stock or payment of dividends on common stock. Our Warehouse facilities also contain covenants that measure the performance of the contributed assets. Our Term ABS financings also contain covenants that measure the performance of the contributed assets. As of September 30, 2021, we were in compliance with all such covenants. As of the end of the quarter, we were also in compliance with our covenants under the senior notes indentures.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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