Consumer Portfolio Services Secures Solid Asset-Backed Financing

Consumer Portfolio Services Strengthens Financial Position

Consumer Portfolio Services, Inc. (NASDAQ: CPSS) has made headlines by successfully closing its third term securitization in 2025, showcasing its dedication to maintaining robust financial practices. This event marks the company’s 56th senior subordinate securitization since 2011 and highlights an impressive streak – the 39th consecutive securitization to earn a triple "A" rating from multiple rating agencies for the senior class of notes.

Understanding the Recent Securitization

The recent transaction involved qualified institutional buyers who acquired $418.33 million worth of asset-backed notes, which were secured by $433.50 million in automobile receivables. These receivables originated from Consumer Portfolio Services, emphasizing the trust and stability the company has built within the industry.

Details of the Asset-Backed Notes

The notes, issued by CPS Auto Receivables Trust 2025-C, comprise of five distinct classes, each serving unique investor profiles and risk tolerances. Notably, the average coupon rate on these notes is approximately 5.43%, an attractive feature considering the current market conditions. Major credit rating agencies like Standard & Poor's and DBRS Morningstar assessed the notes based on transaction structure, historical performance metrics, and CPS's operational experience.

Class Details of the Notes

Here’s a closer look at the classes of the notes issued during this transaction:

Note Class A: Amount: $184.450 million, Interest Rate: 4.71%, Average Life: 0.63 years, S&P Rating: AAA, DBRS Rating: AAA.

Note Class B: Amount: $57.440 million, Interest Rate: 4.71%, Average Life: 1.66 years, S&P Rating: AA, DBRS Rating: AA.

Note Class C: Amount: $72.390 million, Interest Rate: 4.91%, Average Life: 2.35 years, S&P Rating: A, DBRS Rating: A.

Note Class D: Amount: $47.690 million, Interest Rate: 5.28%, Average Life: 3.21 years, S&P Rating: BBB, DBRS Rating: BBB.

Note Class E: Amount: $56.360 million, Interest Rate: 6.59%, Average Life: 4.02 years, S&P Rating: NR, DBRS Rating: BB.

Financial Foundation and Investor Confidence

As part of this financing structure, the transaction includes an initial credit enhancement, featuring a cash deposit equivalent to 1.00% of the original receivable pool balance along with a substantial overcollateralization of 3.50%. This meticulous approach reflects the company’s commitment to safeguarding investors’ assets and enhancing confidence in the long-term viability of the securitization.

About Consumer Portfolio Services, Inc.

Consumer Portfolio Services, Inc. specializes in offering indirect automobile financing to individuals with challenging credit histories. The company typically purchases retail installment sales contracts from franchised auto dealerships, which are secured primarily by late-model used vehicles, extending to new vehicles as well. Funding for these contract purchases primarily occurs through the securitization markets, allowing CPS to service these contracts effectively over their lifespan.

Investor Relations

For interested investors, the Chief Financial Officer, Danny Bharwani, is available for inquiries at 949-753-6811. This open line of communication demonstrates the company's transparency and eagerness to engage with stakeholders actively.

Frequently Asked Questions

What is the significance of the recent securitization for CPS?

The recent securitization is significant as it reflects CPS's ongoing ability to access capital and maintain a strong financial foundation despite market fluctuations.

How does CPS ensure security for its investors?

CPS employs a robust overcollateralization strategy along with cash reserves to enhance security for investors, thereby building trust in their financial practices.

What makes CPS a reliable company for automobile financing?

CPS specializes in financing for individuals with less favorable credit histories, providing essential services that contribute to improving their financial standings and vehicle ownership opportunities.

How frequently does CPS perform securitizations?

CPS has a consistent track record, having completed its 56th securitization, indicating their experience and reliability in this financial practice.

Where can I get more information on CPS's financial health?

Investors can contact Danny Bharwani, the Chief Financial Officer of CPS, for detailed insights and inquiries regarding the company's financial health and future outlook.

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