Tricolor Issues $288M ABS Social Bond to Support Scale and Advance Financial Inclusion in Underserved Hispanic Communities

Responsible lender’s third issuance of the year and fifth social bond overall was oversubscribed 7.8X and will be used to support upward financial mobility and expand financial inclusion for low income, credit invisible Hispanics

DALLAS, Oct. 07, 2024 (GLOBE NEWSWIRE) — Tricolor today announced a $288 million social bond – its third this year and fifth overall – to empower underserved, low-income communities through improved access to affordable financing to meet their vital transportation needs and ultimately provide a path to mainstream financing.

Leveraging its proprietary dataset of over 45 million unique attributes, Tricolor is an award-winning fintech innovator that utilizes artificial intelligence (AI) across its integrated, end-to-end model to create a superior value proposition for historically underserved customers. By providing deserving people with access to reliable, affordable transportation, Tricolor helps move them into the financial mainstream and reverse systemic financial inequities in America.

Now the third largest used retailer in Texas and California, Tricolor has completed three securitizations this year, collateralized by loans totaling over $1 billion. Investors are able to actively participate in Tricolor’s mission through these successful issuances.

“A key component of our strategy has always been to invest ahead of growth to ensure we execute on our value proposition as we scale,” said Daniel Chu, founder and CEO of Tricolor. “Over the past two years, this has included building out robust infrastructure, like our nearly 500,000 square feet of new state-of-the-art reconditioning capacity, to deliver on our brand promise of superior vehicle quality. This focus on controlling for collateral quality has been a principal driver of our consistent and predictable performance in the ABS markets despite unprecedented macroeconomic volatility and a more than 200 basis point improvement in our cost of capital since our first transaction of the year.”

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.

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 institutional investors in a private offering pursuant to Rule 144A under the Securities Act of 1933, as amended.
Tricolor has now completed fourteen 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 17 years of proprietary customer insights and with over 45 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 $4 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, which now rank as the third largest used retailer in Texas and California, operate 56 retail centers across 20 markets in Texas, California, Nevada, Arizona, New Mexico, and Illinois with a shared services center in Guadalajara, Mexico. On a combined basis, Tricolor and Ganas have disbursed nearly $4 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]