CPS Announces $291.0 Million Senior Subordinate Asset-Backed Securitization

Rhea-AI Summary

Consumer Portfolio Services (CPSS) announced the closing of its third term securitization in 2021, marking its 40th senior subordinate securitization since 2011. This transaction involved the sale of $291 million in asset-backed notes secured by $300 million in automobile receivables. Notably, it is the 23rd consecutive securitization to receive a triple 'A' rating from at least two agencies. The weighted average coupon on the notes is approximately 1.55%. The transaction enhances CPS's financing for future receivables, with a pre-funding structure in place.

Positive

• Successfully closed $291 million in asset-backed note sales.
• Achieved a triple 'A' rating for the 23rd consecutive time.
• Weighted average coupon is favorable at approximately 1.55%.
• Strong initial credit enhancement with overcollateralization of 3.00%.

Negative

• None.

LAS VEGAS, Nevada, July 28, 2021 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced the closing of its third term securitization in 2021.  The transaction is CPS's 40th senior subordinate securitization since the beginning of 2011 and the 23^rd 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 $291.0 million of asset-backed notes secured by $300.0 million in automobile receivables originated by CPS.  The sold notes, issued by CPS Auto Receivables Trust 2021-C, 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.

	Amount		Average		S&P’s	DBRS
Note Class	(in millions)	Interest Rate	Life (years)	Price	Rating	Rating
A	$ 126.000	0.33%	0.58	99.99665%	AAA	AAA
B	$ 51.450	0.84%	1.65	99.99914%	AA	AA
C	$ 45.150	1.21%	2.40	99.98604%	A	A
D	$ 44.100	1.69%	3.36	99.98047%	BBB	BBB
E	$ 24.300	3.21%	4.12	99.99454%	BB-	BB

The weighted average coupon on the notes is approximately 1.55%.

The 2021-C transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 3.00%.  The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 7.75% of the original receivable pool balance, or 25.25% of the then outstanding pool balance.

The transaction utilizes a pre-funding structure, in which CPS sold approximately $211.6 million of receivables at inception and plans to sell approximately $88.4 million of additional receivables in July 2021.  This further sale is intended to provide CPS with long-term financing for receivables purchased primarily in the month of July.

The transaction was a private offering of securities, not registered under the Securities Act of 1933, or any state securities law.  All of 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, low incomes 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

Jeffrey P. Fritz, Chief Financial Officer
844-878-CPSS (844-878-2777)

FAQ

What was the total amount of notes sold in CPSS's latest securitization?

CPSS sold a total of $291 million in asset-backed notes.

How many consecutive securitizations have received a triple 'A' rating?

This is the 23rd consecutive securitization to receive a triple 'A' rating.

What is the weighted average coupon for CPSS's recent securitization?

The weighted average coupon on the notes is approximately 1.55%.

What is the purpose of the pre-funding structure in CPSS's securitization?

The pre-funding structure allows CPS to sell receivables for long-term financing.

What types of receivables are secured in CPSS's securitization?

The securitization is secured by automobile receivables originated by CPS.