Consumer Portfolio Services, Inc. (Nasdaq: CPSS) sells $716.88M notes in largest auto securitization
Rhea-AI Filing Summary
Consumer Portfolio Services, Inc. completed a securitization of approximately $734.51 million of subprime automobile receivables through CPS Auto Receivables Trust 2026-C. The trust issued and sold $716.88 million of asset-backed notes in five classes, backed by a fixed pool of amortizing receivables.
CPS sold the receivables to a wholly owned subsidiary, which sold them to the trust; the notes are obligations of the trust but are treated as long-term debt of CPS. Class A–E coupons range from 4.52% to 7.65%, with a weighted average coupon of approximately 5.90%. CPS will service the receivables, while Computershare Trust Company acts as trustee, collateral agent and backup servicer.
Initial credit enhancement consists of a reserve account equal to 1.00% of the receivable pool and 2.40% over-collateralization, with required enhancement building to the lesser of 7.70% of the original pool or 19.10% of the then outstanding balance, but not below 1.50%. This is described as the largest securitization in the company's history and its 60th senior subordinate transaction since 2011, and the 43rd consecutive securitization whose senior class received triple A ratings from at least two agencies.
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Filing Explained
The closed financing gives noteholders defined cash-priority protections on default and a conditional CPS purchase option once receivables fall below 10 percent.
The filing records the
If an event of default occurs, the trustee may accelerate the notes and direct cash proceeds that otherwise would go to the Subsidiary entirely to repayment.
When receivables fall below
8-K Event Classification
Key Figures
Key Terms
asset-backed Notes financial
credit enhancement financial
over-collateralization financial
grantor trust financial
certificate of beneficial interest financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What securitization transaction did Consumer Portfolio Services (CPSS) complete in July 2026?
How are the CPS (CPSS) 2026-C asset-backed notes structured by class and interest rate?
What credit enhancement supports the CPSS 2026-C securitization notes?
How are the CPS (CPSS) 2026-C notes treated from a legal and accounting perspective?
What ratings and milestones are associated with the CPSS 2026-C securitization?
Is the CPSS 2026-C securitization a registered public offering?
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
The information contained in Item 2.03 of this report is hereby incorporated by reference into this Item 1.01. The registrant disclaims any implication that the agreements relating to the transactions described in this report are other than agreements entered into in the ordinary course of its business.
Securitization of Receivables
On July 22, 2026, the registrant Consumer Portfolio Services, Inc. (“CPS”) and its wholly owned subsidiary CPS Receivables Five LLC (“Subsidiary”) entered into a series of agreements under which Subsidiary purchased from CPS, and sold to CPS Auto Receivables Trust 2026-C (the “Trust”), approximately $734.51 million of subprime automotive receivables (the “Receivables”).
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Securitization of Receivables
CPS, Subsidiary, the Trust and others on July 22, 2026, entered into a series of agreements that, among other things, created long-term obligations that are material to CPS, Subsidiary and the Trust. Under these agreements (i) CPS sold the Receivables to Subsidiary (ii) Subsidiary sold the Receivables to the Trust (iii) the Trust deposited the Receivables with Computershare Trust Company, N.A. (“CTCNA”), as trustee of a grantor trust, receiving in return a certificate of beneficial interest (“CBI”) representing beneficial ownership of the Receivables, (iv) the Trust pledged the CBI to CTCNA as indenture trustee for benefit of the holders of the Notes (as defined below), (v) the Trust issued and sold $716.88 million of asset-backed Notes, in five classes (such Notes collectively, the “Notes”), and (vi) a cash deposit (the “Reserve Account”) in the amount of 1.00% of the aggregate balance of the Receivables was pledged for the benefit of the holders of the Notes.
Security for the repayment of the Notes consists of the Receivables and the rights to payments relating to the Receivables. CPS will act as the servicer of the Receivables. Credit enhancement for the Notes consists of over-collateralization and the Reserve Account. CTCNA will act as collateral agent and trustee on behalf of the secured parties, and is the backup servicer.
The Notes are obligations only of the Trust, and not of Subsidiary nor of CPS. Nevertheless, the Notes are properly treated as long-term debt obligations of CPS. The sale and issuance of the Notes, treated as secured financings for accounting and tax purposes, are treated as sales for all other purposes, including legal and bankruptcy purposes. None of the assets of the Trust or Subsidiary are available to pay other creditors of CPS or its affiliates.
The Trust holds a fixed pool of amortizing assets. The Trust is obligated to pay principal and interest on the Notes on a monthly basis. Interest is payable at fixed rates on the outstanding principal balance of each of the five classes of the Notes, and principal is payable by reference to the aggregate principal balance of the Receivables (adjusted for chargeoffs and prepayments, among other things) and agreed required over-collateralization. The following table sets forth the interest rates and initial principal amounts of the five classes of Notes:
| Note Class | Interest Rate | Amount |
| Class A | 4.52% | $ 317,300,000 |
| Class B | 4.84% | $ 99,900,000 |
| Class C | 5.05% | $ 113,110,000 |
| Class D | 5.72% | $ 81,530,000 |
| Class E | 7.65% | $ 105,040,000 |
| 2 |
The 2026-C transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original Receivable pool balance and overcollateralization of 2.40%. The final enhancement level requires accelerated payment of principal on the Notes to reach overcollateralization of the lesser of 7.70% of the original Receivables pool balance, or 19.10% of the then outstanding pool balance, but in no event less than 1.50% of the original receivable pool balance.
If an event of default were to occur under the agreements, the Trustee would have the right to accelerate the maturity of the Notes, in which event the cash proceeds of the Receivables that otherwise would be released to Subsidiary would instead be directed entirely toward repayment of the Notes. Events of default include such events as failure to make required payments on the Notes, breaches of warranties, representations or covenants under any of the agreements or specified bankruptcy-related events.
At such time as the aggregate outstanding principal balance of the Receivables is less than 10% of the initial aggregate balance of $734.51 million, CPS will have the option to purchase the Trust estate at fair market value, provided that such purchase price is sufficient to cause the Notes to be redeemed and paid in full, and to cause other obligations of the Trust to be met.
Item 9.01. Financial Statements and Exhibits.
One exhibit is included with this report:
| 99.1 | News release re securitization transaction. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| 3 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CONSUMER PORTFOLIO SERVICES, INC. | |
| Dated: July 24, 2026 | By: /s/ Denesh Bharwani |
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Denesh Bharwani Executive Vice President and Chief Financial Officer Signing on behalf of the registrant |
| 4 |
Exhibit 99.1
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NEWS RELEASE |
CPS Announces $716.88 Million Senior Subordinate Asset-Backed Securitization
LAS VEGAS, Nevada, July 22, 2026, (GlobeNewswire) – Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) announced the closing of its third term securitization in 2026 on Wednesday July 22, 2026. This is the largest securitization in the history of the company. The transaction is CPS's 60th senior subordinate securitization since the beginning of 2011 and the 43rd 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 $716.88 million of asset-backed notes secured by $734.51 million in automobile receivables originated by CPS. The sold notes, issued by CPS Auto Receivables Trust 2026-C, 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 | $ 317.300 | 4.52% | 0.65 | 99.99748% | AAA | AAA |
| B | $ 99.900 | 4.84% | 1.72 | 99.99220% | AA | AA |
| C | $ 113.110 | 5.05% | 2.39 | 99.98790% | A | A |
| D | $ 81.530 | 5.72% | 3.21 | 99.97623% | BBB | BBB |
| E | $ 105.040 | 7.65% | 4.03 | 99.98014% | NR | BB |
The weighted average coupon on the notes is approximately 5.90%.
The 2026-C transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance and overcollateralization of 2.40%. The transaction agreements require accelerated payment of principal on the notes to reach overcollateralization of the lesser of 7.70% of the original receivable pool balance, or 19.10% 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