Tricolor Issues $277M Social Bond to Support Physical Mobility and Expand Financial Inclusion in Underserved Hispanic Communities
22 May 2024 - 10:02PM
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 TricolorTricolor 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 INFORMATIONStephanie Hicks Cosmo PR for Tricolor (805)
295-9455 stephanie@cosmo-pr.com