DALLAS, Feb. 15, 2023 (GLOBE NEWSWIRE) -- Tricolor today announced a $224 million social bond – its second - to empower underserved, low-income communities and provide them with improved access to mainstream financing that ultimately allows them to build a better future.
JPM Morgan Securities LLC acted as the sole lead book-running manager with Barclays and Fifth Third Bank as joint book runners. The Class A, Class B, Class C, Class D, Class E, and Class F were rated by Kroll Bond Rating Agency and Moody’s and were placed with a diversified mix of institutional investors in a private offering pursuant to Rule 144A under the Securities Act of 1933, as amended.
Using artificial intelligence (AI), Tricolor can successfully underwrite and extend affordable loans to credit invisible customers. Through these successful offerings, investors participate in the company’s strategy to reverse systemic financial inequality in America by providing deserving people with access to reliable, affordable transportation and moving them into the financial mainstream.
“We’re extremely pleased with the continued validation of our ability to leverage technology to create both a physical and financial mobility solution for underserved Hispanics, attracting investor demand that exceeded $700 million, or greater than 3x the offering size,” said Daniel Chu, founder and CEO of Tricolor. “We believe that consistently strong demand for our securities reflects capital markets investors’ embrace of our ability to provide customers with the opportunity for a better future, an enduring American value. Furthermore, we successfully added a number of new prominent ABS investors to supplement continued participation from our last transaction, growing the number of participants to 19 unique investors.”
The Tricolor Social Bond is collateralized with loans that provide affordable access to low-income borrowers with no FICO score for financing the purchase of a motor vehicle. Tricolor has secured a Second Party Opinion (“SPO”) from S&P Global Ratings to provide an opinion on the social benefits of this Framework as well as the alignment to the International Capital Markets Association (ICMA) Social Bond Principles.
Tricolor has now completed ten well-received ABS transactions and is the only issuer in all of subprime auto ABS with loans primarily backed by no-file or thin file borrowers. The Company issued its first securitization in July 2013.
“As we execute and expand our core business strategy, the achievement of a social purpose is a natural outcome,” continued Chu. “It was encouraging to experience growing demand for our value proposition in 2022, increasing our unit sales volume by 33% while the industry declined in the low double digits.”
Meeting the Needs of Underserved Hispanics
The more than 59 million Hispanics in the United States would collectively rank as the eighth largest economy in the world. Yet, according to the FDIC National Survey of Unbanked and Underbanked Households, 32% of this US Hispanic population has no or limited access to mainstream credit.
Tricolor uses AI and nearly 15 years of proprietary customer insights and with over 25 million unique non-traditional credit attributes to unlock financially inclusive opportunities for low-income, credit invisible Hispanics left behind by mainstream financial providers. To date, Tricolor, a U.S. Department of the Treasury certified Community Development Financial Institution (CDFI), has disbursed over $2 billion in affordable auto loans as part of its mission to empower underserved Hispanics and provide them a path to a better future through both physical mobility and upward financial mobility.
Tricolor has been routinely recognized for its important work supporting consumers, including being named one of Inc. Magazine’s Best in Business for 2022 and the winner of the Excellence in Financial Inclusion Award at the 2022 LendIt Fintech Industry Awards.
This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
For more information about Tricolor, please visit tricolorholdings.com and tricolor.com.
About Tricolor
Tricolor is a U.S. Department of the Treasury certified Community Development Financial Institution (CDFI) and a mission-driven company that leverages its direct-to-consumer, A.I.-powered platform to provide transportation and upward financial mobility solutions for underserved Hispanics in the United States. It utilizes advanced data analytics and technology to advance financial inclusion to a highly underserved market and offer responsible, affordable, credit-building auto loans to individuals with no or limited credit history.
Headquartered in Dallas, Texas, Tricolor and its affiliate Ganas Auto Group operate 50 retail centers across 20 markets in Texas, California, Nevada, and Arizona with a shared services center in Guadalajara, Mexico. On a combined basis, Tricolor and Ganas have served over 90,000 customers and disbursed over $2 billion in affordable auto loans using their proprietary model to segment risk.
CONTACT INFORMATION
Stephanie Hicks
Cosmo PR for Tricolor
(805) 295-9455
stephanie@cosmo-pr.com
