Consumer Portfolio Services plans a $180 million securitization of subprime auto loans. It’s the lender’s first deal of 2014.

Citibank is lead manager on the deal, CPS Auto Receivables Trust 2014-A. Moody’s Investors Service and Standard & Poor’s have assigned preliminary ratings of ‘Aa3/ ‘AA-’ to $128.7 million of class A notes.

The capital structure will also offer $20.7 million of ‘A1’ / ‘A’ rated class B notes; $16.65 million of ‘Baa2’/ ‘BBB’ rated class C notes; $9 million of ‘Ba3’/ ‘BB+’ rated class D notes; and $5 million of ‘B2’ / ‘B+’ rated class E notes.

According to the presale reports, the 2014-A deal is collateralized by loans with a weighted average loan-to-value (LTV) ratio of 113.37%. The weighted average APR on the loans included in the pool is 20.28% and 91.21% of the loans were used to purchase used cars. The weighted average FICO score is 566.

The collateral in the 2014-A transaction has a similar LTV, APR and seasoning as lender's previous 2013-D transaction; however 2014-A has a slightly lower FICO score than the 2013-D deal.

“Following the liquidity crunch in 2008/2009, CPS has tightened its credit underwriting,” Moody’s stated in the presale report. “As a result, the collateral in general exhibits better credit quality evidenced by shorter term, lower LTV, and higher FICO overall.”

The transaction includes a two-month prefunding period. CPS expects to sell approximately $69 million of additional receivables to the trust within 60 days of closing.  Moody’s said in the presale that it took this “additional variability introduced by prefunding” into consideration when rating the notes.

The deal will bring year-to-date issuance of subprime auto loan ABS to $2.9 billion, according to S&P.  

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