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6. Securitization Trust Debt

12 Months Ended

Dec. 31, 2014

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 Payment	Receivables Pledged at December 31,		Initial		Outstanding Principal at December 31,		Outstanding Principal at December 31,		Weighted Average Interest Rate at December 31,
Series	Date (1)	2014 (2)		Principal		2014		2013		2014
		(Dollars in thousands)
Page Five Funding	January 2018		–		46,058		–		9,358		–
CPS 2011-A	April 2018		12,613		100,364		8,457		24,526		2.84	%
CPS 2011-B	September 2018		23,569		109,936		22,985		44,433		4.54	%
CPS 2011-C	March 2019		30,662		119,400		30,601		56,271		4.95	%
CPS 2012-A	June 2019		36,757		155,000		35,923		65,051		3.41	%
CPS 2012-B	September 2019		51,168		141,500		50,125		86,254		3.11	%
CPS 2012-C	December 2019		56,717		147,000		55,619		93,006		2.45	%
CPS 2012-D	March 2020		68,703		160,000		67,833		108,815		2.12	%
CPS 2013-A	June 2020		98,601		185,000		97,775		142,842		1.97	%
CPS 2013-B	September 2020		119,537		205,000		118,692		172,499		2.46	%
CPS 2013-C	December 2020		135,980		205,000		133,628		191,504		2.75	%
CPS 2013-D	March 2021		134,498		183,000		132,150		183,000		2.44	%
CPS 2014-A	June 2021		146,784		180,000		143,456		–		2.05	%
CPS 2014-B	September 2021		180,717		202,500		177,601		–		1.87	%
CPS 2014-C	December 2021		259,899		273,000		256,151		–		2.10	%
CPS 2014-D (3)	March 2022		180,449		267,500		267,500		–		2.34	%
		$	1,536,654	$	2,680,258	$	1,598,496	$	1,177,559

_________________________

(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 $636.5 million in 2015, $468.3 million in 2016, $285.8 million in 2017, $143.2 million in 2018, $56.8 million in 2019, and $7.9 million in 2020.

(2)

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

(3)

An additional $85.3 million of receivables were pledged to CPS 2014-D in January 2015.

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, 2014.

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, 2014, restricted cash under the various agreements totaled approximately $175.4 million. This amount includes $85.3 million in pre-funding proceeds related to CPS 2014-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.