Consumer Portfolio Services Announces Record \$716.88 Million Asset-Backed Securitization
Key Highlights
- Largest securitization in company history: Consumer Portfolio Services, Inc. (CPS) has closed its third term securitization of 2026, totaling \$716.88 million in asset-backed notes. This marks the largest securitization ever completed by CPS.
- Strong track record of securitizations: This is the company’s 60th senior subordinate securitization since 2011 and the 43rd consecutive securitization to receive a triple “A” rating from at least two rating agencies on the senior class of notes.
- High ratings from leading agencies: The transaction received strong ratings from Standard & Poor’s and DBRS Morningstar, with the senior “A” class notes rated AAA by both agencies.
- Notes sold to institutional investors: The notes, issued by CPS Auto Receivables Trust 2026-C, were purchased by qualified institutional buyers and are secured by \$734.51 million in automobile receivables originated by CPS.
- Attractive note terms: The transaction comprises five classes of notes, with weighted average coupon of approximately 5.90%. Credit enhancement includes a 1.00% cash deposit and 2.40% overcollateralization, with requirements for accelerated principal payments to reach higher overcollateralization levels.
- Private transaction: The notes were privately offered and not registered under the Securities Act of 1933 or state securities laws.
Detailed Transaction Structure
| 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 |
Important Information for Shareholders
- Record-breaking transaction: This securitization is the largest in CPS history, demonstrating the company’s ability to originate and finance a growing portfolio of receivables. This could be seen as a positive indicator of business growth and market confidence.
- Consistent high credit ratings: The continued achievement of AAA ratings on the senior class notes from major agencies signals strong underwriting standards and quality of receivables.
- Credit enhancement measures: The transaction’s initial credit enhancement through cash deposits and overcollateralization offers additional security to investors, potentially reducing risk and lowering the cost of capital for CPS.
- Potential impact on share price: The successful closing of such a large, well-rated securitization could be a positive catalyst for CPS’s share price, as it demonstrates both operational execution and strong demand for the company’s asset-backed securities.
- Funding model: CPS continues to fund contract purchases primarily through securitization markets, reinforcing its business model and ability to service contracts over their lifespans.
About Consumer Portfolio Services, Inc.
Consumer Portfolio Services, Inc. is an independent specialty finance company focused on providing indirect automobile financing to individuals with past credit problems or limited credit history. CPS primarily purchases retail installment sales contracts from franchised automobile dealerships, secured mainly by late-model used vehicles and, to a lesser extent, new vehicles. The company funds these purchases on a long-term basis through the securitization markets and manages servicing of these contracts over their lifetimes.
Investor Relations Contact
Danny Bharwani, Chief Financial Officer
Phone: 949-753-6811
Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult with a financial advisor before making investment decisions. The information is based on a company news release and may include forward-looking statements subject to risks and uncertainties.
