CONSUMER PORTFOLIO SERVICES, INC. 8-K

What Happened

• Consumer Portfolio Services, Inc. (CPS) and its subsidiary completed a securitization transaction on January 27, 2026. CPS sold automobile receivables to its subsidiary, which transferred them to a grantor trust that issued $345.61 million of asset-backed notes in five classes. Computershare Trust Company, N.A. (CTCNA) serves as trustee/collateral agent and backup servicer. Although the Notes are obligations of the Trust (not CPS or the subsidiary), CPS treats the transaction as long-term debt for accounting and tax purposes.

Key Details

• Transaction size and classes: $345.61 million total issued across five classes:
  • Class A $155,520,000 at 4.19% interest
  • Class B $47,790,000 at 4.43%
  • Class C $58,360,000 at 4.63%
  • Class D $38,440,000 at 4.98%
  • Class E $45,500,000 at 6.66%
• Credit enhancement: 1.00% cash Reserve Account plus initial overcollateralization of 2.00%; final OC required is the lesser of 7.30% of original pool or 18.00% of then‑outstanding pool, but at least 1.50% of original pool.
• Security and servicing: Notes are secured solely by the receivables and related payment rights; CPS will act as servicer. If default occurs, the Trustee can accelerate the Notes and apply cash flows to note repayment.
• Optional repurchase: When outstanding receivables fall below 10% of the original $352.66M pool, CPS may purchase the Trust at fair market value to redeem the Notes and satisfy Trust obligations.

Why It Matters

• Liquidity and funding: The securitization raises $345.61M of secured funding backed by CPS’s auto loan receivables, which can support operations or new originations without using CPS’s other assets.
• Balance‑sheet and investor impact: Although the Notes are legal obligations of the Trust, CPS treats them as long‑term debt for accounting — investors should watch leverage, interest expense, and coverage metrics in upcoming filings.
• Risk profile: The financing is non‑recourse to CPS beyond the receivables in the Trust, limiting creditor claims on CPS’s other assets, but performance of the underlying receivables, servicing quality, and covenant/default terms could affect timing and priority of payments to noteholders.