CPS Announces $349.2 Million Senior Subordinate Asset-Backed Securitization

Rhea-AI Summary

Consumer Portfolio Services (CPSS) has successfully closed its fourth term securitization in 2021, marking its 41st since 2011. The transaction involved the sale of $349.2 million in asset-backed notes backed by $360.0 million of automobile receivables. All notes received a triple 'A' rating from Moody's and DBRS Morningstar. The weighted average coupon on the notes is approximately 2.09%, and the transaction features initial credit enhancements of 4.00%. A pre-funding structure allows for the sale of additional receivables, facilitating long-term financing.

Positive

• Successful closing of fourth term securitization in 2021.
• Total of $349.2 million in asset-backed notes sold, backed by $360.0 million in receivables.
• Notes received triple 'A' ratings from two major agencies.
• Weighted average coupon at approximately 2.09%, indicating favorable borrowing costs.
• Initial credit enhancement of 4.00% supports transaction stability.

Negative

• None.

LAS VEGAS, Nov. 03, 2021 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced the closing of its fourth term securitization in 2021. The transaction is CPS's 41st senior subordinate securitization since the beginning of 2011 and the 24th 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 $349.2 million of asset-backed notes secured by $360.0 million in automobile receivables originated by CPS. The sold notes, issued by CPS Auto Receivables Trust 2021-D, consist of five classes. Ratings of the notes were provided by Moody’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	Moody’s Rating	DBRS Rating
A	$189.000		0.61%	0.72	99.99411%	Aaa	AAA
B	$44.460		1.09%	1.94	99.99901%	Aa1	AA
C	$37.801		1.59%	2.52	99.99824%	A1	A
D	$39.240		2.31%	3.27	99.98179%	Baa3	BBB
E	$38.701		4.06%	3.99	99.97662%	NR	BB

The weighted average coupon on the notes is approximately 2.09%.  

The 2021-D 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 6.30% of the original receivable pool balance, or 20.25% of the then outstanding pool balance.

The transaction utilizes a pre-funding structure, in which CPS sold approximately $256.5 million of receivables at inception and plans to sell approximately $103.5 million of additional receivables in November 2021. This further sale is intended to provide CPS with long-term financing for receivables purchased primarily in the month of October.

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 announced by Consumer Portfolio Services on November 3, 2021?

Consumer Portfolio Services announced the closing of its fourth term securitization in 2021.

How much was raised in the recent securitization by CPSS?

The recent securitization by CPSS raised $349.2 million in asset-backed notes.

What is the significance of the ratings received in the CPSS securitization?

The notes received triple 'A' ratings from Moody's and DBRS Morningstar, reflecting high credit quality.

What is the weighted average coupon for the notes issued by CPSS?

The weighted average coupon on the notes is approximately 2.09%.

What kind of receivables back the notes in the CPSS securitization?

The notes are backed by $360.0 million in automobile receivables originated by Consumer Portfolio Services.