CPS Announces $286.1 Million Senior Subordinate Asset-Backed Securitization

Rhea-AI Summary

Consumer Portfolio Services, Inc. closes fourth term securitization in 2023, selling $286.1 million of asset-backed notes secured by $306.7 million in automobile receivables. The transaction received a triple 'A' rating from two rating agencies. The notes consist of five classes with interest rates ranging from 6.40% to 10.13%. The weighted average coupon on the notes is approximately 7.89%.

Positive

• Consumer Portfolio Services, Inc. successfully closed its fourth term securitization, indicating strong investor confidence and potential for future growth. The transaction received a triple 'A' rating from two rating agencies, demonstrating the high quality of the asset-backed notes. The sale of $286.1 million in notes secured by $306.7 million in automobile receivables provides a significant influx of capital for CPS. The weighted average coupon on the notes is approximately 7.89%, which could attract investors seeking competitive returns.

Negative

• None.

LAS VEGAS, Nevada, Oct. 24, 2023 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) announced the closing of its fourth term securitization in 2023 on Tuesday, October 24, 2023. The transaction is CPS's 49th senior subordinate securitization since the beginning of 2011 and the 32^nd consecutive securitization to receive a triple “A” rating from at least two rating agencies on the senior class of notes.

In the transaction, qualified institutional buyers purchased $286.1 million of asset-backed notes secured by $306.7 million in automobile receivables originated by CPS. The sold notes, issued by CPS Auto Receivables Trust 2023-D, consist of five classes. Ratings of the notes were provided by Standard & Poor’s and DBRS Morningstar, and were based on the structure of the transaction, the historical performance of similar receivables and CPS’s experience as a servicer.

Note Class	Amount (in millions)		Interest Rate	Average Life (years)	Price	S&P’s Rating	DBRS Rating
A	$131.113		6.40%	0.66	99.99776%	AAA	AAA
B	$38.490		6.78%	1.70	99.99799%	AA	AA
C	$49.686		7.17%	2.36	99.98140%	A	A
D	$33.737		7.80%	3.25	99.99172%	BBB	BBB
E	$33.123		10.13%	4.01	99.96993%	NR	BB

The weighted average coupon on the notes is approximately 7.89%.

The 2023-D transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 6.70%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 9.70% of the original receivable pool balance, or 26.75% of the then outstanding pool balance.

The transaction was a private offering of securities, not registered under the Securities Act of 1933, or any state securities law. All such securities having been sold, this announcement of their sale appears as a matter of record only.

About Consumer Portfolio Services, Inc.

Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis through the securitization markets and service the loans over their entire contract terms.

Investor Relations Contact

Danny Bharwani, Chief Financial Officer
949-753-6811

FAQ

What is the significance of Consumer Portfolio Services, Inc. closing its fourth term securitization?

Closing the fourth term securitization indicates successful fundraising and potential for future growth.

How were the asset-backed notes rated?

The asset-backed notes received a triple 'A' rating from two rating agencies, indicating their high quality and low risk.

What is the total value of the asset-backed notes sold?

The asset-backed notes sold have a total value of $286.1 million.

What is the weighted average coupon on the notes?

The weighted average coupon on the notes is approximately 7.89%, which could attract investors seeking competitive returns.