CPS Announces $316.8 Million Senior Subordinate Asset-Backed Securitization

Rhea-AI Summary

Consumer Portfolio Services (Nasdaq: CPSS) has successfully closed its first term securitization of 2022, marking its 42nd senior subordinate securitization since 2011. The transaction involved the sale of $316.8 million in asset-backed notes, backed by $330.0 million in automobile receivables. The notes received a triple “A” rating from two agencies and are structured with five classes of notes, featuring an average coupon rate of approximately 2.54%. Additionally, the securitization includes credit enhancements to support principal payments.

Positive

• Successful closing of $316.8 million asset-backed securitization.
• Achieved a triple 'A' rating for the senior notes from two agencies.
• Diverse class structure with a weighted average coupon of 2.54%.
• Initial credit enhancement including cash deposits and overcollateralization.

Negative

• None.

LAS VEGAS, Nevada, Feb. 02, 2022 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced the closing of its first term securitization in 2022. The transaction is CPS's 42nd senior subordinate securitization since the beginning of 2011 and the 25^th 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 $316.8 million of asset-backed notes secured by $330.0 million in automobile receivables originated by CPS. The sold notes, issued by CPS Auto Receivables Trust 2022-A, 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
Note Class	(in millions)	Interest Rate	Average Life (years)	Price	S&P’s Rating	DBRS Rating
A	$ 157.740	0.98%	0.70	99.99303%	AAA	AAA
B	$ 46.695	1.70%	1.87	99.98551%	AA	AA
C	$ 49.335	2.17%	2.57	99.98478%	A	A
D	$ 36.630	2.84%	3.51	99.98972%	BBB	BBB
E	$ 26.400	4.88%	4.12	99.97790%	BB-	BB

The weighted average coupon on the notes is approximately 2.54%.

The 2022-D transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 4.00%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 8.40% of the original receivable pool balance, or 25.80% of the then outstanding pool balance.

The transaction utilizes a pre-funding structure, in which CPS sold approximately $217.8 million of receivables at inception and plans to sell approximately $112.2 million of additional receivables in February 2022. This further sale is intended to provide CPS with long-term financing for receivables purchased primarily in the month of January.

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

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

FAQ

What is the recent securitization amount for CPSS?

Consumer Portfolio Services closed a $316.8 million securitization.

What rating did the recent notes for CPSS receive?

The notes received a triple 'A' rating from two rating agencies.

What was the average coupon rate for CPSS's recent securitization?

The average coupon rate was approximately 2.54%.

How many securitizations has CPSS completed since 2011?

CPSS has completed 42 senior subordinate securitizations since 2011.