CPS Announces $324.8 Million Senior Subordinate Asset-Backed Securitization

Rhea-AI Summary

Consumer Portfolio Services, Inc. (Nasdaq: CPSS) has successfully completed its first term securitization of 2023, marking its 46th senior subordinate securitization since 2011. This transaction involved the sale of $324.8 million in asset-backed notes, supported by $362.9 million in automobile receivables. Notably, this securitization received a triple “A” rating from at least two rating agencies for the senior class of notes. The weighted average coupon on the notes stands at approximately 6.82%, with initial credit enhancement comprising a cash deposit and overcollateralization. The offering was a private transaction, exempt from registration under securities laws.

Positive

• Successful closing of the first term securitization of 2023, improving liquidity.
• 39 consecutive securitizations receiving a triple “A” rating indicates strong creditworthiness.
• Sale of $324.8 million in asset-backed notes enhances financial stability.

Negative

• None.

LAS VEGAS, Nevada, Jan. 25, 2023 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced the closing of its first term securitization in 2023. The transaction is CPS's 46th senior subordinate securitization since the beginning of 2011 and the 29^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 $324.8 million of asset-backed notes secured by $362.9 million in automobile receivables originated by CPS.   The sold notes, issued by CPS Auto Receivables Trust 2023-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.

Note Class	Amount (in millions)		Interest Rate	Average Life (years)	Price	S&P’s Rating	DBRS Rating
A	$154.582		5.54%	0.65	99.99610%	AAA	AAA
B	$44.080		5.47%	1.68	99.99354%	AA	AA(H)
C	$57.161		5.54%	2.31	99.98403%	A	A(H)
D	$39.553		6.44%	3.28	99.97740%	BBB	BBB
E	$29.392		10.59%	4.03	99.99588%	BB	BB(H)

The weighted average coupon on the notes is approximately 6.82%.  

The 2023-A transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 10.50%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 14.00% of the original receivable pool balance, or 38.00% 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' first term securitization in 2023?

It marks CPS's 46th securitization and enhances liquidity with a successful issuance of $324.8 million in asset-backed notes.

What was the total amount of asset-backed notes sold by CPSS in the recent securitization?

Consumer Portfolio Services sold a total of $324.8 million in asset-backed notes.

What rating did the 2023 securitization receive?

The 2023 securitization received a triple 'A' rating from at least two rating agencies for the senior class of notes.

How does overcollateralization affect CPSS's securitization?

The initial credit enhancement includes overcollateralization of 10.50%, which helps improve the security of the notes issued.

What is the weighted average coupon on the notes from CPSS's securitization?

The weighted average coupon on the notes is approximately 6.82%.