Consumer Portfolio Services (NASDAQ:CPSS) Secures $442.4 Million in Asset-Backed Notes through Subsidiary Transaction

Consumer Portfolio Services, Inc. (CPSS) recently announced the completion of a significant financial transaction involving a securitization agreement with its wholly owned subsidiary, CPS Receivables Five LLC. The subsidiary, in conjunction with CPSS, entered into various agreements, culminating in the purchase and sale of approximately $462.5 million worth of subprime automotive receivables, known as the “Receivables,” to the CPS Auto Receivables Trust 2025-A (the “Trust”).

Under these agreements, finalized on January 22, 2025, the Trust, CPSS, and the subsidiary created long-term financial obligations that are deemed material to the companies and entail the sale and issuance of asset-backed Notes, consisting of five different classes, collectively valued at $442.4 million. These proceeds were utilized to secure the Receivables within the trust.

The security for repayment of the Notes is backed by the Receivables and their corresponding payment rights. CPSS procured the Receivables from automobile dealers and will serve as the Receivables’ servicer. Credit enhancement for the Notes includes over-collateralization and a Reserve Account, underscoring the financial stability of the agreement.

While the Notes exclusively represent obligations of the Trust and not of the subsidiary or CPSS, they have been appropriately categorized as long-term debt obligations for CPSS. In the occurrence of default events specified within the agreements, the Trustee retains the right to accelerate the maturity of the Notes. Additionally, an option is provided for CPSS to repurchase the Trust estate if the outstanding principal balance of the Receivables declines below a certain threshold, ensuring the redemption and full payment of the Notes.

Investors and regulatory bodies are closely monitoring the details of this transaction. The closing of this securitization marks a significant milestone for CPSS, continuing its trend of successful financial operations in the sector.

The securities offered in this private transaction were not registered under the Securities Act of 1933, maintaining their status as private offerings. The transaction reinforces CPSS’s commitment to innovative financial maneuvers within the industry.

For further details on the transaction, interested parties can refer to the exhibit 99.1 attached to CPSS’s filing.

Consumer Portfolio Services, Inc., operates as an independent specialty finance company, catering to individuals with past credit challenges or limited credit histories. The company specializes in indirect automobile financing, primarily acquiring retail installment sales contracts secured by late model used vehicles.

Investor Relations Contact:
Danny Bharwani, Chief Financial Officer
Telephone: 949-753-6811.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Consumer Portfolio Services’s 8K filing here.

Consumer Portfolio Services Company Profile

Consumer Portfolio Services, Inc operates as a specialty finance company in the United States. It is involved in the purchase and service of retail automobile contracts originated by franchised automobile dealers and select independent dealers in the sale of new and used automobiles, light trucks, and passenger vans.