Consumer Portfolio Services announced the closing of its second term securitization of the year earlier this week. The transaction is CPS’ 20th senior subordinate securitization since the beginning of 2011 and the third consecutive securitization to receive a triple-A rating on the senior class of notes from two rating agencies. 

In the transaction, the finance company indicated qualified institutional buyers purchased $332.7 million of asset-backed notes secured by $340.0 million in automobile receivables purchased by CPS.  The sold notes, issued by CPS Auto Receivables Trust 2016-B, 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.

CPS pointed out the weighted average coupon on the notes is approximately 4.65 percent.

The company went on to mention the 2016-B 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 2.15 percent. The final enhancement level requires accelerated payment of principal on the notes to reach overcollateralization of 5.65% of the then-outstanding receivable pool balance.

CPS added the transaction utilizes a pre-funding structure, in which CPS sold approximately $224.3 million of receivables today and plans to sell approximately $115.7 million of additional receivables during May.

“This further sale is intended to provide CPS with long-term financing for receivables purchased primarily in the month of April,” the company said.

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