CPS Details Year’s First Asset-Backed Securitization

IRVINE, Calif. — Consumer Portfolio Services announced this week the closing of its first rated term securitization of the year.

The company highlighted the transaction is CPS' second senior subordinate securitization since 1993. 

In the transaction, executives explained qualified institutional buyers purchased $100,364,000 of asset-backed notes secured by automobile receivables that were purchased by CPS primarily in 2010 and 2011. They said the sold notes, issued by CPS Auto Receivables Trust 2011-A, consist of four classes.

CPS mentioned 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' experience as a servicer. 

CPS also noted the weighted average effective coupon on the notes is approximately 3.77 percent.

The company went on to point out the 2011-A transaction has initial credit enhancement consisting of a cash deposit equal to 2 percent of the original receivable pool balance and overcollateralization of 4 percent.

Management added the final enhancement level requires accelerated payment of principal on the notes to reach overcollateralization of 15 percent of the then-outstanding receivable pool balance.

"The transaction was a private offering of securities, not registered under the Securities Act of 1933, or any state securities law," CPS executives emphasized. "All of such securities having been sold, this announcement of their sale appears as a matter of record only."