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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
January 27, 2026
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CONSUMER PORTFOLIO SERVICES, INC. |
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(Exact Name of Registrant as Specified in Charter) |
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| california |
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1-11416 |
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33-0459135 |
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(State or Other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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3800 Howard Hughes Pkwy, Suite 1400, Las Vegas, NV 89169 |
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(Address of Principal Executive Offices) (Zip Code) |
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Registrant's telephone number, including area code
(949) 753-6800
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Not Applicable |
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(Former name or former address, if changed since last report) |
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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):
☐ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| Common Stock, no par value |
CPSS |
The Nasdaq Stock Market LLC (Global Market) |
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).
Emerging growth company ☐
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 January 27, 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-A (the "Trust"), approximately $352.66
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 January 27, 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 $345.61 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. The Receivables were purchased by CPS from automobile dealers, and 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 |
4.19% |
$ 155,520,000 |
| Class B |
4.43% |
$ 47,790,000 |
| Class C |
4.63% |
$ 58,360,000 |
| Class D |
4.98% |
$ 38,440,000 |
| Class E |
6.66% |
$ 45,500,000 |
The 2026-A 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 final enhancement level
requires accelerated payment of principal on the Notes to reach overcollateralization of the lesser of 7.30% of the original Receivables
pool balance, or 18.00% 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 $352.66 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). |
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.
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CONSUMER PORTFOLIO SERVICES, INC. |
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| Dated: January 27, 2026 |
By: /s/ Denesh Bharwani |
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Denesh Bharwani
Executive Vice President and Chief Financial Officer
Signing on behalf of the registrant |
