--- title: "How Tricolor financed its cars and loans" language: en canonical: https://dossiertwist.com/dossiers/tricolor-holdings/financing/ as_of: 2026-10-13 keywords: ["Tricolor Holdings","Tricolor Auto Group","Tricolor Auto Acceptance","Ganas Investors","Daniel Chu","Tricolor Auto Securitization Trust","Tricolor Funding SPV 4","warehouse facility","subprime auto loans","asset-backed securities","JPMorgan Chase","Fifth Third","Barclays","Origin Bank","TBK Bank","BlackRock","Chapter 7","Anne Elizabeth Burns","Vervent","Wilmington Trust"] --- # How Tricolor financed its cars and loans **Question.** Who lent to Tricolor, through which facilities, and on what terms? **Answer.** Tricolor borrowed against its vehicle inventory from TBK Bank's floorplan facility and from Renasant Bank, and against notes receivable from Origin Bank; it funded its customer loans through warehouse facilities lent to special purpose vehicles, the largest being SPV 4 with JPMorgan Chase Bank as agent, and refinanced the loans by selling them to securitisation trusts. In 2021 Tricolor announced $90 million of convertible preferred equity from BlackRock-managed funds, alongside earlier BlackRock agreements whose amounts are not in the record. The indictment puts the debt owed through the credit lines and warehouses at about $923 million at the bankruptcy; other sources measure commitments, borrowing base or secured debt differently. ## Three layers of funding - Analysis: In an October 2025 filing in the bankruptcy case, citing the hearing of September 18, 2025, JPMorgan Chase Bank, N.A., as agent of the SPV 4 warehouse facility, described three categories of Tricolor's financing: loans from floorplan lenders to buy the vehicle inventory; money from bankruptcy-remote special purpose vehicles that borrowed under warehouse facilities, bought the auto loans the Tricolor companies made to their customers and pledged those loans, the financed vehicles and all proceeds to the warehouse lenders; and securitisation, in which the companies periodically repurchased bundles of loans from the SPVs and sold them to trusts that issued notes secured by the loans. A February 2026 law-firm restructuring note, citing a demonstrative exhibit the Chapter 7 trustee used on October 3, 2025, gave the same plan in four steps, adding that the vehicles were refurbished at two reconditioning facilities and that securitisation proceeds repaid the warehouse debt; the note is commentary, not a court record, and the exhibit is not retained. A September 2025 trade-press report described the funding as bank warehouse lines, term securitisations and equity capital. [src-027] [src-035] [src-003] ## Lines secured by inventory and notes - Analysis: Three banks reported direct loans to Tricolor at the bankruptcy. Triumph Financial reported that its bank, TBK Bank, SSB, is agent for a $60.5 million floorplan facility, of which it holds about $22.5 million, with Tricolor Holdings, LLC as lead borrower, secured by a first-priority interest in the vehicle inventory and certain other assets; other creditors had claimed interests in some of the same vehicles, the bank said the bankruptcy court may have to decide between them, and at December 31, 2025 it still believed its collateral adequately secured the balance. These are the lender's own statements, and no court decision on the competing claims is in the retained record. Renasant Corporation reported that its bank was owed about $22.5 million under a facility secured primarily by liens on the used car inventory; its filing does not say whether this is the facility for which TBK Bank is agent, so the two $22.5 million figures are not treated here as one loan. Origin Bank had total commitments of about $30.1 million to Tricolor Holdings, primarily secured by notes receivable. The Renasant and Origin loans were performing until the filing and were then placed on nonaccrual. [src-018] [src-112] [src-024] [src-006] ## The warehouse facilities - Analysis: The largest warehouse facility, SPV 4, is governed by a credit agreement dated November 13, 2020. Its borrower, Tricolor Funding SPV 4 LLC, is a special purpose vehicle that is not itself a debtor and that bought auto loans from the Tricolor companies with money borrowed under the facility. Tricolor Auto Acceptance, LLC was the servicer, JPMorgan Chase Bank, N.A. the administrative agent, Vervent Inc. the backup servicer, and Wilmington Trust, National Association the collateral custodian and the account bank holding collections. The commitment ran to November 13, 2021, extendable by the lenders, and JPMorgan's commitment in the lender schedule was $100,000,000, funded through an account of Chariot Funding LLC. The noteholders allege that JPMorgan and Barclays ultimately agreed to provide $777 million through SPV 4, active until September 2025, and that the facility grew from $379 million to $693 million in the months before February 2024. A November 2025 news investigation, citing unnamed people familiar with the matter, put the line at roughly $770 million with backing from Barclays, AllianceBernstein and Waterfall Asset Management, which declined to comment; the indictment's "about $770 million" SPV4 facility names no lenders. [src-027] [src-028] [src-020] [src-037] - Analysis: The agreement capped borrowing at the net eligible pool balance less a required credit enhancement, set at 40% in the text filed, rising to 50% after a step-up trigger event and to 100% after a termination event. The noteholders say the facility allowed borrowing of up to 80% of the eligible loan balance and the SEC that advance rates on Tricolor's facilities were generally only 70% to 80% of pledged collateral; amendments that may have changed the 40% figure are not retained, so the difference is not resolved here. The agent reported $612,748,356 of principal outstanding on August 15, 2025, supported by a borrowing base purportedly larger than that. Tricolor Holdings was the facility's performance guarantor, and it was a termination event if its tangible net worth fell below $36,000,000 plus 50% of its cumulative positive quarterly net income and 75% of the net proceeds of equity issued after closing, if its unrestricted cash fell below $3,000,000 or if the debt service coverage ratio fell below 1.25 to 1.0. The SEC says certain of Tricolor's warehouse agreements required a ratio of at least 1.35 to 1 but does not say which, so that figure is not presented as an SPV 4 term. [src-028] [src-001] [src-027] [src-020] - Analysis: The lenders also tied the facility to Chu and to Tricolor's other financing. A "Key Man Event" occurred if Daniel Chu ceased to be employed by Tricolor Auto Acceptance as chief executive officer for any reason, was not directly involved in its day-to-day operations or suffered a permanent disability, without a replacement reasonably satisfactory to the agent within 45 days. A change of control included a change of control under any agreement governing debt of a Tricolor company, and the list of such debt documents includes the BlackRock subscription agreement. A letter agreement among KLDL, LLC, Tricolor Auto Acceptance, the borrower and the agent is one of the facility's documents, but the agreement does not describe KLDL's role. [src-028] - Analysis: According to the noteholders, Fifth Third Bank, National Association was administrative agent and lender of Tricolor's second-largest warehouse facility, Tricolor Funding SPV 6 LLC, with a $250 million commitment active from 2022 to September 2025; a trade publication reported that Tricolor set up a credit facility with Fifth Third in September 2022, while Fifth Third's own filings do not name the borrower. For SPV 3, the schedule of investments of CION Ares Diversified Credit Fund, externally managed by CION Ares Management, listed at September 30, 2022 a first-lien revolver to Tricolor Funding SPV 3 LLC at SOFR plus 7.50% (10.13%), maturing on August 6, 2027, with a fund commitment of $2,273 thousand, $1,498 thousand drawn and $775 thousand unfunded; the fund had sold a participating interest of $1,023 thousand of principal and, because the sale did not qualify as a true sale, recorded a secured borrowing of $674 thousand. That is one fund's share, not the facility's size, and the filing does not identify the fund with the indictment's "Lender-3". The noteholders describe SPV3 as a facility later rolled into JPMorgan's SPV 4. [src-020] [src-003] [src-034] - Analysis: Before JPMorgan, according to the November 2025 news investigation, Tricolor obtained a $133 million warehouse facility from Credit Suisse Group AG in 2018 and issued $101 million of asset-backed securities, its first rated deal; two years later JPMorgan agreed to provide up to $100 million of warehouse financing and took the lead in arranging Tricolor's asset-backed bond sales, helping to arrange more than three-quarters of some $2.7 billion of them. In a 2020 complaint Tricolor described itself as having completed five term securitisations, the most recent a rated securitisation underwritten by Credit Suisse; Credit Suisse's own records are not retained. [src-037] [src-009] ## The facilities as the indictment describes them - Analysis: The indictment describes the same facilities without naming any lender: a revolving line from a U.S. bank ("Lender-1") from about February 2018, reaching about $25 million and secured by car loan receivables; an inventory line from another U.S. bank ("Lender-2") from about January 2020, reaching $87 million and supposedly secured by used vehicle inventory; and, from about August 2020, warehouse facilities associated with SPV3, SPV4, SPV5 and SPV6. It puts SPV3 at about $100 million with lenders including a California-based investment manager, SPV4 at about $770 million shared among a U.S. bank, another bank and two junior mezzanine lenders based in New York, and SPV6, entered in August 2022 with a U.S. bank, at $250 million, and adds a $35 million mezzanine loan from a New York asset manager in March 2025. Each credit agreement set eligibility requirements: advances covered only part of an eligible loan's balance, such as 60% to 80%; loans more than 60 days past due were generally ineligible and some lines excluded loans more than 30 days past due; and Tricolor requested advances with borrowing base reports, often several times a week, and a monthly servicer report. By the bankruptcy, the indictment says, Tricolor owed about $923 million through these facilities. Its lenders are identified only by numbers (Lender-1 to Lender-9), and this dossier does not match them to named banks. [src-011] ## BlackRock-managed funds - Analysis: The SPV 4 agreement refers to two BlackRock financing documents: a subscription agreement of January 27, 2020 between Tricolor Holdings and the subscribers party to it, and a loan and security agreement of August 6, 2020 under which Tricolor Auto Acceptance and Tricolor Holdings were borrowers, with guarantors and lenders party to it and Wilmington Savings Fund Society, FSB as agent. The SPV 4 borrower represented that it was a "Special Purpose Affiliate" and an "Excluded Subsidiary" under the BlackRock loan agreement, and the SPV 4 agreement classifies preferred equity as debt. The amount and collateral of the BlackRock loan are not stated in the retained documents, which do not include the BlackRock agreements themselves. On September 9, 2021 Tricolor announced a $90 million convertible preferred equity investment from funds managed by BlackRock, convertible into a minority stake, to expand its lending model nationally and grow its software-as-a-service unit, Tricolor Financial. [src-028] [src-007] ## Securitisation volume and total debt - Analysis: The sources count the securitisations differently. The SEC says Tricolor raised more than $1.9 billion from 2013 to 2025 through 14 subprime TAST offerings, seven of which, issued from 2022 to 2025, were still at least partly outstanding at the bankruptcy. The noteholders say Tricolor sponsored over $2 billion of securitisations between 2022 and 2025, of which $945 million of notes remained outstanding when they sued, and that nearly $2 billion was sold after audits in 2022 and 2024, more than $1.1 billion of it since February 2024. A law-firm note called the June 2025 deal Tricolor's 17th asset-backed securitisation, counting all such transactions. [src-001] [src-035] [src-020] - Analysis: Accounts of the total debt measure different things at different dates and are not added together or reconciled here. The indictment says Tricolor owed about $923 million to the lenders through its credit lines and warehouse facilities at the bankruptcy. The noteholders say the warehouse facilities had a combined borrowing base above $1.1 billion at their peak and that the defendant banks' warehouse commitments, over $750 million at the time of the 2024 audits, grew to over a billion dollars by the collapse. A law-firm note reported that the Chapter 7 trustee had reported $1.9 billion of secured debt involving about twenty lenders. [src-035] [src-020] [src-011] ## Sources - [src-027] Court record source · src-027 - [src-035] Research source · src-035 - [src-003] Media source · src-003 - [src-018] Triumph Financial, Inc. Form 10-Q for the quarter ended September 30, 2025, U.S. Securities and Exchange Commission (EDGAR), 2025-10-13 - [src-112] Triumph Financial, Inc. Form 10-K for 2025, U.S. Securities and Exchange Commission (EDGAR), 2026-02-09 - [src-024] Renasant Corporation Form 8-K, U.S. Securities and Exchange Commission (EDGAR), 2025-09-11 - [src-006] Origin Bancorp, Inc. Form 8-K (Items 5.02 and 7.01), U.S. Securities and Exchange Commission (EDGAR), 2025-09-10 - [src-028] Court record source · src-028 - [src-020] Court record source · src-020 - [src-037] Media source · src-037 - [src-001] Complaint, SEC v. Daniel Chu, Jerome Kollar and Ameryn Seibold (S.D.N.Y. 26-cv-7041), U.S. Securities and Exchange Commission, 2026-08-18 - [src-034] CION Ares Diversified Credit Fund schedule of investments as of September 30, 2022 (Form NPORT-P), U.S. Securities and Exchange Commission (EDGAR) - [src-009] Court record source · src-009 - [src-011] Indictment, United States v. Daniel Chu and David Goodgame (S.D.N.Y.), U.S. Attorney's Office, Southern District of New York - [src-007] Company statement source · src-007