Tricolor Issues $277M Social Bond to Support Physical Mobility and Expand Financial Inclusion in Underserved Hispanic Communities
Responsible lender’s second issuance this year and fourth social bond overall signals strong investor demand for differentiated fintech platform
DALLAS, May 22, 2024 (GLOBE NEWSWIRE) — Tricolor today announced its fourth social bond, a $277 million issuance to empower underserved, low-income Hispanic communities with access to affordable financing for their vital transportation needs that ultimately unlocks a path to mainstream financing.
Tricolor is an award-winning fintech innovator that leverages artificial intelligence (AI) to successfully underwrite and extend affordable loans to credit invisible customers. By providing deserving people with access to reliable, affordable transportation and moving them into the financial mainstream, Tricolor aims to reverse systemic financial inequality in America. Investors are able to participate in this mission through these successful securitizations.
JPMorgan acted as the lead structuring agent with Barclays serving as Joint Bookrunner and Fifth Third Securities as Co-Manager. 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 27 institutional investors in a private offering pursuant to Rule 144A under the Securities Act of 1933, as amended. The transaction was oversubscribed by nearly 6.5 times on available classes (The Class E and Class F tranches were pre-placed).
“For more than 16 years, Tricolor has developed leading technology alongside a best practice discipline to help America’s most underserved communities overcome systemic financial and mobility challenges,” said Daniel Chu, founder and CEO of Tricolor. “Investors are increasingly embracing double-bottom line models like ours that provide both meaningful value for customers and consistent returns over time. We will continue to aggressively scale in support of our mission to help our customers achieve their American Dream.”
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 thirteen well-received ABS transactions and is the only issuer in all of subprime auto ABS to be certified by the US Treasury as a Community Development Financial Institution (CDFI). The Company issued its first securitization in July 2013.
Meeting the Needs of Underserved Hispanics
The more than 59 million Hispanics in the United States would collectively rank as the fifth 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 over 16 years of proprietary customer insights and with over 40 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 nearly $3 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 and as the winner of Excellence in Financial Inclusion awards by both Finovate Awards and the 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 52 retail centers across 20 markets in Texas, California, Nevada, Arizona, and New Mexico with a shared services center in Guadalajara, Mexico. On a combined basis, Tricolor and Ganas have served over 100,000 customers and disbursed nearly $3 billion in affordable auto loans using their proprietary model to segment risk.
CONTACT INFORMATION
Stephanie Hicks
Cosmo PR for Tricolor
(805) 295-9455
[email protected]
