CPS Announces $391.6 Million Senior Subordinate Asset-Backed Securitization

Rhea-AI Summary

Consumer Portfolio Services (Nasdaq: CPSS) announced the closing of its third term securitization in 2022, marking the company's 44th senior subordinate securitization since 2011. The transaction involved the sale of $391.6 million in asset-backed notes backed by $440.0 million in automobile receivables. This securitization received a triple 'A' rating from two agencies, Standard & Poor's and DBRS Morningstar. The weighted average coupon on the notes is approximately 6.02%. Additionally, initial credit enhancements include a cash deposit of 1.00% and overcollateralization of 11.00%.

Positive

• Transaction marks CPS's 44th senior subordinate securitization since 2011.
• Received triple 'A' rating for the 27th consecutive securitization.
• Securitization of $391.6 million supported by $440.0 million in assets.

Negative

• None.

LAS VEGAS, Nevada, Aug. 03, 2022 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced the closing of its third term securitization in 2022. The transaction is CPS's 44th senior subordinate securitization since the beginning of 2011 and the 27^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 $391.6 million of asset-backed notes secured by $440.0 million in automobile receivables originated by CPS.   The sold notes, issued by CPS Auto Receivables Trust 2022-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.

Note Class	Amount (in millions)		Interest Rate		Average Life (years)	Price		S&P’s Rating	DBRS Rating
A	$ 201.520		4.18%		0.74	99.99485%		AAA	AAA
B	$ 54.340		4.88%		1.88	99.98946%		AA	AA
C	$ 58.740		5.28%		2.59	99.97998%		A	A
D	$ 42.240		6.45%		3.53	99.98592%		BBB	BBB
E	$ 34.760		9.08%		4.11	99.97929%		BB	BB

The weighted average coupon on the notes is approximately 6.02%.  

The 2022-C transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 11.00%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 13.00% of the original receivable pool balance, or 31.50% of the then outstanding pool balance.

The transaction utilizes a pre-funding structure, in which CPS sold approximately $368.0 million of receivables at inception and plans to sell approximately $72.0 million of additional receivables in August 2022.   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 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 significance of the CPSS securitization announcement?

The announcement signifies Consumer Portfolio Services' ongoing strength in executing secured financing, marking its 44th securitization since 2011.

What ratings did the notes for CPSS's latest securitization receive?

The notes received a triple 'A' rating from Standard & Poor's and DBRS Morningstar.

How much was raised in the latest CPSS securitization?

Consumer Portfolio Services raised $391.6 million through the sale of asset-backed notes.

What is the average interest rate on the notes issued by CPSS?

The weighted average coupon on the notes is approximately 6.02%.

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

The pre-funding structure allows CPS to sell approximately $72.0 million of additional receivables to secure long-term financing for recent purchases.