Consumer Portfolio Services is preparing to sell investors $384.6 million in securitized bonds from a pool of subprime auto loan contracts on a pool of primarily used vehicles.
Five classes and tranches of notes will be sold to investors, and classes A, B, C, D and E have legal final maturity dates of July 16, 2029, April 15, 2030, Feb. 17, 2032, Feb 17, 2032 and May 16, 2030, respectively.
The deal, CPS Auto Receivables Trust, series 2025-D, is slated to close on October 23, with monthly repayments starting on November 17, according to Morningstar | DBRS, one of two rating agencies assessing the notes, including S&P Global Ratings. Citigroup Global Markets is the lead underwriter.
S&P says the deal has about 59.75%, 51.84%, 39.97% and 30.89% of credit support levels for classes A, B, C and D, respectively. The rating agency said that from its standpoint, credit support levels provide expected coverage of about 3.0x, 2.6x, 2.0x, and 1.5x of its expected cumulative net loss range for classes A, B, C and D, respectively.
CPS 2025-D's structural components go along way to preserving cash flow to the notes, according to S&P. When the deal closes, it will start with overcollateralization (OC) that equals 2.0% of the pool balance and is subject to a target OC of 7.00% of the initial pool balance or 21.0% of the current balance, whichever is smaller.
A reserve account equaling 1.00% of the pool balance also supports the fixed-rate notes, according to DBRS.
Also, the deal will repay investors sequentially, starting with the senior notes.
As for the collateral pool, the loans are financing automobiles, light-duty trucks, vans and minivans, according to the rating agency.
S&P assigns AAA, AA, A and BBB to classes A, B, C and D, respectively. DBRS assigns AAA, AA, A, BBB and BB to classes A, B, C, D and E, respectively.
