Last week, Consumer Portfolio Services announced the closing of its first term securitization of 2018.
Officials highlighted the transaction is CPS’ 27th senior subordinate securitization since the beginning of 2011 and the 10th consecutive securitization to receive a triple “A” rating on the senior class of notes from at least two rating agencies.
In the transaction, qualified institutional buyers purchased $190.0 million of asset-backed notes secured by $193.6 million in automobile receivables originated by CPS.
The sold notes, issued by CPS Auto Receivables Trust 2018-A, consist of five classes.
Ratings of the notes were provided by Standard & Poor’s and DBRS, and were based on the structure of the transaction, the historical performance of similar receivables and CPS’s experience as a servicer.
|Note Class||Amount||Interest Rate||Average Life||Price||S&P Rating||DBRS Rating|
|A||$88.5 million||2.16%||.76 years||99.99832%||AAA||AAA|
|B||$31.5 million||2.77%||1.95 years||99.99632%||AA||AA|
|C||$26.9 million||3.05%||2.66 years||99.97596%||A||A|
|D||$23.1 million||3.66%||3.49 years||99.98720%||BBB||BBB|
|E||$20.0 million||5.17%||4.14 years||99.99278%||BB-||BB|
Officials indicated the weighted average coupon on the notes is approximately 3.46 percent.
The company explained the 2018-A transaction has initial credit enhancement consisting of a cash deposit equal to 1.00 percent of the original receivable pool balance and over-collateralization of 1.85 percent.
CPS added the final enhancement level requires accelerated payment of principal on the notes to reach over-collateralization of the lesser of 6.80 percent of the original receivable pool balance, or 18.50 percent of the then outstanding pool balance.
Officials went on to mention the transaction utilizes a pre-funding structure, in which CPS sold approximately $121.3 million of receivables last week and plans to sell approximately $72.3 million of additional receivables during the month.
“This further sale is intended to provide CPS with long-term financing for receivables purchased primarily in the month of January,” the company said.