(4) Securitization Trust Debt

3 Months Ended

Mar. 31, 2012

(4) Securitization Trust Debt

We have completed a number of securitization transactions that are structured as secured borrowings for financial accounting purposes. The debt issued in these transactions is shown on our Unaudited Condensed Consolidated Balance Sheets as “Securitization trust debt,” and the components of such debt are summarized in the following table:

											Weighted
											Average
	Final		Receivables				Outstanding		Outstanding		Contractual
	Scheduled		Pledged at				Principal at		Principal at		Interest Rate at
	Payment		March 31,	Initial				March 31,	December 31,		March 31,
Series	Date (1)		2012	Principal		2012			2011		2012

(Dollars in thousands)
CPS 2006-B	January 2013	$	-	$	257,500		$	-	$	6,604	-
CPS 2006-C	June 2013		-		247,500			-		14,873	-
CPS 2006-D	August 2013		-		220,000			-		15,716	-
CPS 2007-A	November 2013		-		290,000			-		34,312	-
CPS 2007-TFC	December 2013		-		113,293			-		7,771	-
CPS 2007-B	January 2014		24,845		314,999			32,272		40,916	6.77%
CPS 2007-C	May 2014		33,711		327,499			41,998		52,723	6.91%
CPS 2008-A	October 2014		43,829		310,359			64,133		77,284	8.37%
Page Five Funding	January 2018		33,994		9,174			33,115		36,701	9.46%
CPS 2011-A	April 2018		73,865		100,364			69,175		75,625	3.95%
CPS 2011-B	September 2018		97,553		109,936			92,492		101,268	4.40%
CPS 2011-C	March 2019		113,916		119,400			111,511		119,272	4.85%
CPS 2012-A	June 2019		103,425		155,000			154,982		-	3.33%
		$	525,138	$	2,575,024		$	599,678	$	583,065

_________________

(1)

The Final Scheduled Payment Date represents final legal maturity of the securitization trust debt. Securitization trust debt is expected to become due and to be paid prior to those dates, based on amortization of the finance receivables pledged to the Trusts. Expected payments, which will depend on the performance of such receivables, as to which there can be no assurance, are $178.4 million in 2012, $171.3 million in 2013, $110.5 million in 2014, $81.8 million in 2015, $41.6 million in 2016 and $16.1 million in 2017.

All of the securitization trust debt was sold in private placement transactions to qualified institutional buyers. The debt was issued through our wholly-owned bankruptcy remote subsidiaries and is secured by the assets of such subsidiaries, but not by our other assets. Principal of $90.8 million, and the related interest payments, are guaranteed by financial guaranty insurance policies issued by third party financial institutions.

The terms of the various securitization agreements related to the issuance of the securitization trust debt andthe warehouse credit facilities require that we meet certain delinquency and credit loss criteria with respect to the collateral pool, and certain of the agreements require that we maintain minimum levels of liquidity and net worth and not exceed maximum leverage levels. In addition, certain securitization and non-securitization related debt contain cross-default provisions, which would allow certain creditors to declare a default if a default were declared under a different facility.

We are responsible for the administration and collection of the automobile contracts. The securitization agreements also require certain funds be held in restricted cash accounts to provide additional collateral for the borrowings or to be applied to make payments on the securitization trust debt. As of March 31, 2012, restricted cash under the various agreements totaled approximately $131.5 million. Interest expense on the securitization trust debt consists of the stated rate of interest plus amortization of additional costs of borrowing. Additional costs of borrowing include facility fees, insurance and amortization of deferred financing costs and discounts on notes sold. Deferred financing costs and discounts on notes sold related to the securitization trust debt are amortized using a level yield method. Accordingly, the effective cost of the securitization trust debt is greater than the contractual rate of interest disclosed above.

Our wholly-owned bankruptcy remote subsidiaries were formed to facilitate the above asset-backed financing transactions. Similar bankruptcy remote subsidiaries issue the debt outstanding under our credit facilities. Bankruptcy remote refers to a legal structure in which it is expected that the applicable entity would not be included in any bankruptcy filing by its parent or affiliates. All of the assets of these subsidiaries have been pledged as collateral for the related debt. All such transactions, treated as secured financings for accounting and tax purposes, are treated as sales for all other purposes, including legal and bankruptcy purposes. None of the assets of these subsidiaries are available to pay other creditors.