Consumer Portfolio Services plans to issue $273 million of securities that are backed by subprime auto loan receivables.
Citigroup is the lead underwriter on the deal.
The deal, CPS Auto Receivables Trust 2014-C, will offer one $187 million senior tranche rated AA-’ by Standard & Poor’s that benefits from credit enhancement at 45.1%. There is also al $36 million of A’ rated, class B notes with credit enhancement at 36.7%; $28.67 million of BBB’ rated class C notes have credit enhancement at 29.5%; $13.65 million of BB’ rated class D notes have credit enhancement at 26%; and $7.5 million of B+’ rated class E notes have credit enhancement at 24.3%.
This transaction is the third securitization for CPS this year. CPS will prefund approximately $87.8 million, which will constitute approximately 32.1% of the total pool, during a 60-day prefunding period that ends on Oct. 31. 2014.
Compared with CPS’ previous securitization, completed in June, the percentage of loans in CPS’ top four credit tiers (Preferred, Super Alpha, Alpha Plus, and Alpha) increased to 76% from 73.9%. The percentage of loans originated under CPS' lower credit tiers (Standard, Delta, and First-Time Buyer) decreased to 24.0% from 26.1%.
The issuer also increased the percentage of new vehicles included in the pool to 19.3% from 14.8%. The weighted average FICO of the pool remained relatively the same at 568 from 569 and the percentage of loans with original terms of 61-72 months increased to 63.3% from 58.3%.
The deal is expected to close on Sept. 17, 2014.