LAS VEGAS - Consumer Portfolio Services, Inc. (NASDAQ:CPSS), a specialty finance company, has closed a $50 million securitization of residual interests from its previous securitizations. The transaction involved the sale of asset-backed notes to a qualified institutional buyer, secured by an 80% interest in a CPS affiliate. This affiliate owns the residual interests in five CPS securitizations that were issued between January 2022 and January 2023.
The collateral for these notes includes 80% of the funds in the spread accounts and 80% of the over-collateralization from each related securitization. Over-collateralization refers to the excess of the receivables' outstanding principal balance over the associated notes' outstanding principal balance.
The notes will receive monthly interest payments at the coupon rate and, if necessary, principal payments to maintain a minimum collateral ratio.
This deal was conducted as a private offering and was not registered under the Securities Act of 1933 or any state securities laws. The announcement comes after the completion of the sale and is for record-keeping purposes.
Consumer Portfolio Services, Inc. specializes in providing indirect automobile financing to individuals with limited credit histories or past credit problems. The company purchases retail installment sales contracts mainly from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles.
CPS funds these purchases through the securitization markets and services the contracts throughout their duration.
This financial maneuver reflects CPS's ongoing engagement in the securitization markets to support its auto financing business. The information is based on a press release statement from Consumer Portfolio Services, Inc.
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