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CPS Announces $286.1 Million Senior Subordinate Asset-Backed Securitization
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
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Rhea-AI Summary
Consumer Portfolio Services, Inc. closes fourth term securitization in 2023, selling $286.1 million of asset-backed notes secured by $306.7 million in automobile receivables. The transaction received a triple 'A' rating from two rating agencies. The notes consist of five classes with interest rates ranging from 6.40% to 10.13%. The weighted average coupon on the notes is approximately 7.89%.
Positive
Consumer Portfolio Services, Inc. successfully closed its fourth term securitization, indicating strong investor confidence and potential for future growth. The transaction received a triple 'A' rating from two rating agencies, demonstrating the high quality of the asset-backed notes. The sale of $286.1 million in notes secured by $306.7 million in automobile receivables provides a significant influx of capital for CPS. The weighted average coupon on the notes is approximately 7.89%, which could attract investors seeking competitive returns.
Negative
None.
LAS VEGAS, Nevada, Oct. 24, 2023 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) announced the closing of its fourth term securitization in 2023 on Tuesday, October 24, 2023. The transaction is CPS's 49th senior subordinate securitization since the beginning of 2011 and the 32nd 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 $286.1 million of asset-backed notes secured by $306.7 million in automobile receivables originated by CPS. The sold notes, issued by CPS Auto Receivables Trust 2023-D, 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
$131.113
6.40%
0.66
99.99776%
AAA
AAA
B
$38.490
6.78%
1.70
99.99799%
AA
AA
C
$49.686
7.17%
2.36
99.98140%
A
A
D
$33.737
7.80%
3.25
99.99172%
BBB
BBB
E
$33.123
10.13%
4.01
99.96993%
NR
BB
The weighted average coupon on the notes is approximately 7.89%.
The 2023-D transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 6.70%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 9.70% of the original receivable pool balance, or 26.75% of the then outstanding pool balance.
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
Danny Bharwani, Chief Financial Officer 949-753-6811
FAQ
What is the significance of Consumer Portfolio Services, Inc. closing its fourth term securitization?
Closing the fourth term securitization indicates successful fundraising and potential for future growth.
How were the asset-backed notes rated?
The asset-backed notes received a triple 'A' rating from two rating agencies, indicating their high quality and low risk.
What is the total value of the asset-backed notes sold?
The asset-backed notes sold have a total value of $286.1 million.
What is the weighted average coupon on the notes?
The weighted average coupon on the notes is approximately 7.89%, which could attract investors seeking competitive returns.
consumer portfolio services 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 primarily through the securitization markets and service the contracts over their lives. our operational headquarters are located in irvine, california and we have four additional strategically located servicing branches in florida, illinois, nevada and virginia. since we began operations in 1991 and through june 2015, we have purchased over $11.8 billion in contracts. we currently service a total managed portfolio of approximately $1.8 billion with approximately 140,000 customers and 900 employees. we maintain dealer relationships in 48 states across the united states.
