CPS Announces $384.6 Million Senior Subordinate Asset-Backed Securitization

Rhea-AI Summary

Consumer Portfolio Services (Nasdaq: CPSS) closed a $384.6 million senior subordinate asset-backed securitization (CPS Auto Receivables Trust 2025-D) on October 23, 2025.

The transaction sold $384.6 million of notes backed by $392.46 million in automobile receivables and consisted of five classes (A–E). Ratings agency coverage included S&P and DBRS Morningstar, with the senior class receiving AAA ratings from both agencies and the weighted average coupon on the notes at approximately 5.72%.

Initial credit enhancement included a 1.00% cash deposit and 2.00% overcollateralization, with an accelerated principal requirement to reach the lesser of 7.00% of the original pool or 21.00% of the outstanding pool.

Positive

• $384.6M of asset-backed notes sold to institutional buyers
• $392.46M in automobile receivables secured the transaction
• Senior class AAA ratings from S&P and DBRS Morningstar
• 40th consecutive securitization with a AAA-rated senior class
• 1.00% cash plus 2.00% OC initial credit enhancement

Negative

• Weighted average coupon of 5.72% increases funding cost
• Class E carries 7.69% coupon and BB/NR junior risk
• Accelerated principal required to reach up to 21% OC

Insights

Structured finance analyst

CPS closed a $384.6 million senior‑subordinate auto receivables securitization with strong senior ratings and modest initial credit support.

Consumer Portfolio Services funded $392.46 million of automobile receivables by issuing $384.6 million of notes through CPS Auto Receivables Trust 2025-D. The deal splits into five classes (A–E) with a weighted average coupon of 5.72%, prices near par and senior notes rated AAA by both Standard & Poor’s and DBRS Morningstar; the transaction uses a 1.00% cash reserve and 2.00% overcollateralization as initial credit enhancement.

The business mechanism is straightforward: sale of installment contracts reduces on‑balance sheet receivables and supplies term funding secured by the pool. Key dependencies and risks are explicit in the transaction terms: performance of the underlying borrower payments and the requirement to accelerate principal payments when needed to attain higher overcollateralization (the lesser of 7.00% of original pool balance or 21.00% of outstanding pool balance). The E class is unrated by S&P and rated BB by DBRS, which concentrates residual risk in subordinated positions.

Concrete items to watch over the short term: monitor reported pool performance metrics (delinquencies, recoveries and prepayment speeds) relative to the structure that supported the AAA ratings and the scheduled credit enhancement targets; near‑term reporting will show whether ramping to the lesser of 7.00% or 21.00% overcollateralization becomes a trigger. The closing date is October 23, 2025, which establishes the pool cut‑off for early performance disclosures.

LAS VEGAS, Nevada, Oct. 23, 2025 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) announced the closing of its fourth term securitization in 2025 on Thursday October 23, 2025. The transaction is CPS's 57th senior subordinate securitization since the beginning of 2011 and the 40th 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 $384.6 million of asset-backed notes secured by $392.46 million in automobile receivables originated by CPS. The sold notes, issued by CPS Auto Receivables Trust 2025-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	$170.910		4.46%	0.66	99.99991%	AAA	AAA
B	$52.200		4.48%	1.72	99.99532%	AA	AA
C	$64.950		4.85%	2.40	99.99632%	A	A
D	$43.170		5.45%	3.23	99.98364%	BBB	BBB
E	$53.370		7.69%	4.04	99.99120%	NR	BB

The weighted average coupon on the notes is approximately 5.72%. 

The 2025-D transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 2.00%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 7.00% of the original receivable pool balance, or 21.00% 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 primarily through the securitization markets and service the contracts over their lives.

Investor Relations Contact

Danny Bharwani, Chief Financial Officer
949-753-6811

FAQ

What did CPSS announce on October 23, 2025 regarding securitization?

CPSS closed CPS Auto Receivables Trust 2025-D, selling $384.6M of notes backed by $392.46M in receivables.

What ratings did the CPSS 2025-D senior notes receive and from whom?

The senior class received AAA ratings from S&P and DBRS Morningstar.

What is the weighted average coupon and what does it mean for CPSS funding?

The notes carry a weighted average coupon of about 5.72%, reflecting the transaction's blended funding cost.

How much initial credit enhancement does CPSS 2025-D include?

Initial enhancement includes a 1.00% cash deposit and 2.00% overcollateralization.

What are the structural overcollateralization triggers in the 2025-D deal?

The deal accelerates principal to reach the lesser of 7.00% of original pool or 21.00% of outstanding pool.

Which classes in CPSS 2025-D carry higher credit risk and yield?

Class D and Class E are junior classes; Class E is unrated/BB with a 7.69% coupon.

Was the CPSS 2025-D offering registered with the SEC?

No; the transaction was a private offering not registered under the Securities Act.