CPS Announces $395.6 Million Senior Subordinate Asset-Backed Securitization

Rhea-AI Summary

Consumer Portfolio Services (Nasdaq: CPSS) announced the successful closing of its second term securitization in 2022, marking its 43rd overall since 2011. The securitization involved $395.6 million in asset-backed notes backed by $430 million in automobile receivables. This transaction received a triple ‘A’ rating from major agencies and features a weighted average coupon of approximately 4.83%. Additionally, the initial credit enhancement includes a cash deposit and overcollateralization. CPS aims to sell an additional $144.2 million of receivables in May 2022.

Positive

• Successful closing of $395.6 million securitization, enhancing liquidity.
• 43rd securitization since 2011, highlighting operational stability and market confidence.
• 26th consecutive securitization with a triple 'A' rating, indicating strong credit quality.

Negative

• None.

LAS VEGAS, Nevada, April 20, 2022 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced the closing of its second term securitization in 2022. The transaction is CPS's 43rd senior subordinate securitization since the beginning of 2011 and the 26^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 $395.6 million of asset-backed notes secured by $430.0 million in automobile receivables originated by CPS.   The sold notes, issued by CPS Auto Receivables Trust 2022-B, 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	$	213.920	2.88	%	0.89	99.99340	%	Aaa	AAA
B	$	41.930	3.88	%	2.07	99.99518	%	Aa1	AA
C	$	60.200	4.33	%	2.68	99.98584	%	A1	A
D	$	25.800	5.19	%	3.39	99.97416	%	Baa3	BBB
E	$	53.750	7.14	%	4.05	99.98002	%	NR	BB

The weighted average coupon on the notes is approximately 4.83%.  

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 8.00%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 9.00% 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 $285.8 million of receivables at inception and plans to sell approximately $144.2 million of additional receivables in May 2022.   This further sale is intended to provide CPS with long-term financing for receivables purchased primarily in the month of April.

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 announced by Consumer Portfolio Services?

Consumer Portfolio Services announced a $395.6 million securitization.

How many securitizations has CPSS completed since 2011?

CPSS has completed 43 securitizations since 2011.

What is the weighted average coupon rate for the recent securitization by CPSS?

The weighted average coupon rate for the recent securitization is approximately 4.83%.

What is the credit enhancement for the recent securitization by CPSS?

The credit enhancement includes a cash deposit of 1.00% and overcollateralization of 8.00%.

What additional sales does CPSS plan after this securitization?

CPSS plans to sell approximately $144.2 million of additional receivables in May 2022.