This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
IRVINE, Calif., Sept. 27, 2010 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq:CPSS) ("CPS" or the "Company") today announced the closing of its first rated term securitization in over two years. The transaction is CPS's first senior subordinate securitization since 1993.
In the transaction, qualified institutional buyers purchased $85,352,000 of investment grade notes backed by automobile receivables purchased by CPS and its subsidiary, The Finance Company, primarily in 2008. These receivables were originally financed in September 2008 through CPS's non-consolidated subsidiary, Auto Loan Trust, in which an institutional investor purchased 95% of the issued notes and the Company retained the remaining 5%. Auto Loan Trust was terminated with this transaction.
The sold notes, issued by CPS Auto Receivables Trust 2010-A, consist of two classes. Ratings of the notes were provided by Standard & Poor's and were based on the structure of the transaction, the historical performance of similar receivables and CPS's experience as a servicer.
Standard & Poor's Rating
The weighted average effective coupon on the notes is approximately 3.21%.
The 2010-A transaction has initial credit enhancement consisting of a cash deposit equal to 1.00% of the original receivable pool balance, subordinated interests of 5.00% and overcollateralization of 12.75%. The final enhancement level requires accelerated payment of principal on the notes to reach overcollateralization of 23.00% of the then-outstanding receivable pool balance.
"This transaction is a significant milestone for us because it demonstrates our ability to access today's securitization market," said Charles E. Bradley, Jr., Chairman and Chief Executive Officer. "A lower cost of funds going forward, together with continued growth in our new contract purchases, should pave our way back to profitability."