XML 71 R14.htm IDEA: XBRL DOCUMENT

7. Securitization Trust Debt

12 Months Ended

Dec. 31, 2013

We have completed numerous term securitization transactions that are structured as secured borrowings for financial accounting purposes. The debt issued in these transactions is shown on our consolidated balance sheets as “Securitization trust debt,” and the components of such debt are summarized in the following table:

	Final Scheduled	Receivables Pledged at				Outstanding Principal at		Outstanding Principal at		Weighted Average Interest Rate at
	Payment	December 31,		Initial		December 31,		December 31,		December 31,
Series	Date (1)	2013 (2)		Principal		2013		2012		2013
		(Dollars in thousands)
CPS 2008-A	October 2014	$	–	$	310,359	$	–	$	40,713		–
Page Five Funding	January 2018		11,038		46,058		9,358		21,251		9.37%
CPS 2011-A	April 2018		28,278		100,364		24,526		48,368		3.42%
CPS 2011-B	September 2018		44,704		109,936		44,433		70,863		4.67%
CPS 2011-C	March 2019		56,232		119,400		56,271		88,269		5.01%
CPS 2012-A	June 2019		65,557		155,000		65,051		105,485		3.56%
CPS 2012-B	September 2019		86,555		141,500		86,254		122,329		3.24%
CPS 2012-C	December 2019		93,098		147,000		93,006		135,219		2.59%
CPS 2012-D	March 2020		111,633		160,000		108,815		160,000		2.17%
CPS 2013-A	June 2020		152,575		185,000		142,842		–		1.90%
CPS 2013-B	September 2020		179,952		205,000		172,499		–		2.32%
CPS 2013-C	December 2020		194,810		205,000		191,504		–		2.41%
CPS 2013-D (3)	March 2021		117,804		183,000		183,000		–		2.19%
		$	1,142,236	$	2,067,617	$	1,177,559	$	792,497

_________________________

(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 $445.7 million in 2014, $345.1 million in 2015, $216.6 million in 2016, $117.0 million in 2017, $40.3 million in 2018, and $12.9 million in 2019.

(2)

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

(3)

An additional $63.4 million of receivables were pledged to CPS 2013-D in January 2014.

All of the securitization trust debt was issued in private placement transactions to qualified institutional investors. The debt was issued by our wholly-owned, bankruptcy remote subsidiaries and is secured by the assets of such subsidiaries, but not by any of our other assets.

The terms of the various securitization agreements related to the issuance of the securitization trust debt require that certain delinquency and credit loss criteria be met with respect to the collateral pool, and require that we maintain minimum levels of liquidity and net worth and not exceed maximum leverage levels. We were in compliance with all such covenants as of December 31, 2013.

We are responsible for the administration and collection of the contracts. The securitization agreements also require certain funds be held in restricted cash accounts to provide additional credit enhancement for the Notes or to be applied to make payments on the securitization trust debt. As of December 31, 2013, restricted cash under the various agreements totaled approximately $132.3 million. This amount includes $63.4 million in pre-funding proceeds related to CPS 2013-D. Interest expense on the securitization trust debt is composed of the stated rate of interest plus amortization of additional costs of borrowing. Additional costs of borrowing include facility fees, insurance premiums, amortization of transaction costs, and amortization of discounts required on the notes at the time of issuance. Deferred financing costs related to the securitization trust debt are amortized using the interest method. Accordingly, the effective cost of borrowing of the securitization trust debt is greater than the stated rate of interest.

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 warehouse line of credit. 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 any of our other creditors.