Securitization Trust Debt

9 Months Ended

Sep. 30, 2024

Securitization Trust Debt

Securitization Trust Debt

(3) Securitization Trust Debt

We have completed many 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 Debt
	Scheduled		Pledged at				Principal at		Principal at		Interest Rate at
	Payment		September 30,		Initial		September 30,		December 31,		September 30,
Series	Date (1)		2024 (2)		Principal		2024		2023		2024
	(Dollars in thousands)
CPS 2019-B		June 2026	$	–	$	228,275	$	–	$	15,742		–
CPS 2019-C		September 2026		–		243,513		–		19,725		–
CPS 2019-D		December  2026		–		274,313		–		27,445		–
CPS 2020-A		March 2027		–		260,000		–		26,382		–
CPS 2020-B		June 2027		22,376		202,343		14,713		24,197		7.38%
CPS 2020-C		November 2027		32,459		252,200		27,676		43,487		4.68%
CPS 2021-A		March 2028		36,454		230,545		25,947		39,039		2.14%
CPS 2021-B		June 2028		47,359		240,000		36,486		55,684		3.07%
CPS 2021-C		September 2028		72,712		291,000		56,495		85,563		2.34%
CPS 2021-D		December  2028		99,030		349,202		82,400		126,059		3.09%
CPS 2022-A		April 2029		111,547		316,800		90,679		137,479		3.23%
CPS 2022-B		October 2029		175,458		395,600		149,736		213,779		5.46%
CPS 2022-C		April 2030		206,276		391,600		160,019		230,273		6.35%
CPS 2022-D		June 2030		174,044		307,018		150,809		205,583		8.57%
CPS 2023-A		August 2030		207,876		324,768		164,803		231,906		6.64%
CPS 2023-B		November 2030		228,550		332,885		193,019		268,172		6.85%
CPS 2023-C		February 2031		218,498		291,732		194,436		257,568		6.82%
CPS 2023-D		May 2031		235,473		286,149		212,009		271,939		7.45%
CPS 2024-A		August 2031		249,646		280,924		227,163		–		6.16%
CPS 2024-B		November 2031		305,382		319,871		283,906		–		6.32%
CPS 2024-C		March 2032		435,745		436,310		406,350		–		6.19%
CPS 2024-D		June 2032		295,408		436,310		416,816		–		5.16%
			$	3,154,293	$	6,691,358	$	2,893,462	$	2,280,021

_________________

(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 $262.7 million in 2024, $1,003.5 million in 2025, $686.9 million in 2026, $460.9 million in 2027, $288.5 million in 2028, $134.8 million in 2029, and $38.5 million in 2030.

(2)

Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet.

Debt issuance costs of $17.7 million and $14.6 million as of September 30, 2024 and December 31, 2023, respectively, have been excluded from the table above. These debt issuance costs are presented as a direct deduction to the carrying amount of the Securitization trust debt on our Consolidated Balance Sheets.

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.

The terms of the securitization agreements related to the issuance of the securitization trust debt and the warehouse credit facilities require that we meet certain delinquency and credit loss criteria with respect to the pool of receivables, and certain of the agreements require that we maintain minimum levels of liquidity and not exceed maximum leverage levels. As of September 30, 2024, we were in compliance with all such covenants.

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, to be applied to make payments on the securitization trust debt or as pre-funding proceeds from a term securitization prior to the purchase of additional collateral. As of September 30, 2024, restricted cash under the various agreements totaled approximately $271.0 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, 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.