CPS Achieves Significant Milestone with $418.33 Million Deal
Consumer Portfolio Services Announces Major Securitization
Consumer Portfolio Services, Inc. (NASDAQ: CPSS) recently celebrated a significant achievement as it closed its third term securitization of the year. This milestone transaction marked the company’s 56th senior subordinate securitization since 2011, maintaining its exemplary record with 39 consecutive securitizations rated triple ‘A’ by multiple agencies.
Details of the Transaction
In this latest transaction, CPS successfully sold $418.33 million in asset-backed notes, which are secured by a robust portfolio of $433.50 million in automobile receivables. These receivables are primarily derived from transactions facilitated by CPS, reinforcing their role in the automotive financing arena. The asset-backed notes were issued through CPS Auto Receivables Trust 2025-C, reflecting the trust's strategic focus on diversifying funding sources and capitalizing on prevailing market conditions.
Note Class and Ratings
The notes offered in this transaction are divided into five distinct classes, each designed to cater to a variety of investor preferences:
- Class A: $184.450 million with an interest rate of 4.71% and an average life of 0.63 years, rated AAA by both S&P and DBRS.
- Class B: $57.440 million at 4.71%, with a slightly longer average life of 1.66 years, rated AA.
- Class C: Offering $72.390 million at an interest rate of 4.91%, averaging 2.35 years of life, rated A.
- Class D: Consisting of $47.690 million at 5.28%, with an average life of 3.21 years, rated BBB.
- Class E: The smallest class at $56.360 million with a higher interest of 6.59%, and an average life of 4.02 years, rated NR and BB.
Strengthening Financial Foundations
The overall weighted average coupon on these notes stands at a competitive 5.43%, showcasing CPS's commitment to offering attractive financing solutions. The financial stability of this transaction is bolstered by initial credit enhancements that include a cash deposit representing 1.00% of the original receivable pool balance, along with a strategic overcollateralization of 3.50%. Ensuring the health of the investment, the terms require accelerated principal payments to maintain overcollateralization at specified thresholds.
About Consumer Portfolio Services
CPS stands out as an independent specialty finance company dedicated to providing indirect automobile financing, particularly focusing on individuals with historical credit challenges or limited credit profiles. The company effectively invests in retail installment sales contracts originated primarily from recognized automobile dealerships, primarily involving late-model used vehicles. CPS finances these contracts through long-term securitization strategies while ensuring efficient servicing throughout the contract duration.
Investor Relations Contact
Danny Bharwani, Chief Financial Officer
949-753-6811
Frequently Asked Questions
What was the total amount raised in the securitization?
Consumer Portfolio Services raised $418.33 million in its recent securitization.
What classes were included in the securitization notes?
The notes included five classes: A, B, C, D, and E, each with different amounts and ratings.
What is the weighted average coupon rate for the notes?
The weighted average coupon is approximately 5.43%.
How does CPS ensure financial stability in its transactions?
CPS utilizes credit enhancements, including cash deposits and overcollateralization, to ensure financial stability.
What services does Consumer Portfolio Services offer?
CPS provides indirect automobile financing and specializes in purchasing retail installment sales contracts from automobile dealerships.
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