RIFCO National Auto Finance Corporation, a subsidiary of RIFCO Inc. announced that it has closed a $70 million secured revolving line of credit from Wells Fargo. The term of the facility is three years.

The facility has replaced the $10 million senior credit facility with BMO Bank of Montreal. In addition to the seven fold increase in the borrowing limit, other terms and conditions are improved. RIFCO has now drawn on the new facility. The facility is denominated in Canadian dollars. RIFCO has no currency risk with the facility.

RIFCO has sought to obtain increased capacity to maintain non-securitized loans for some time. RIFCO said in a press release that it is very pleased to have Wells Fargo as a significant funding partner.

With this facility, RIFCO expects the following benefits: Reduction (improvement) of the average interest expense ratio, reduction in current taxes being paid, improved cash flow as prepaid cash taxes ($6.0M as at June 30, 2012) are reduced, reduction of funding risk as provided by a multi-year and committed facility, increased permanent funding opportunities based on accumulating larger amounts of finance receivables before securitization. Opportunities could include much larger securitization tranches of such finance receivables, and potentially improved securitization rates due to scale. The company also expects an increase in overall funding capacity to support RIFCO’s finance receivable growth.

RIFCO employs a balanced approach for loan portfolio funding of equity, secured revolving credit, unsecured debentures and loan securitization funders. This new facility provides improved funding balance that complements the existing $150 million in securitization facilities.

RIFCO Inc. operates through its wholly owned subsidiary Rifco National Auto Finance Corporation to provide automobile loans through its dealership network across Canada.