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3. Securitization Trust Debt

9 Months Ended

Sep. 30, 2015

(3) Securitization Trust Debt

We have completed many securitization transactions that are structured as secured borrowings for financial accounting purposes. The debt issued in these transactions is shown on our Unaudited Condensed Consolidated Balance Sheets as “Securitization trust debt,” and the components of such debt are summarized in the following table:

											Weighted
											Average
											Contractual
		Final	Receivables				Outstanding		Outstanding		Interest Rate
		Scheduled	Pledged at				Principal at		Principal at		at
		Payment	September 30,		Initial		September 30,		December 31,		September 30,
Series		Date (1)	2015 (2)		Principal		2015		2014		2015
		(Dollars in thousands)
	CPS 2011-A	April 2018	$	–	$	100,364	$	–	$	8,457		–
	CPS 2011-B	September 2018		13,377		109,936		12,772		22,985		4.41%
	CPS 2011-C	March 2019		18,242		119,400		18,157		30,601		4.89%
	CPS 2012-A	June 2019		22,383		155,000		20,863		35,923		3.20%
	CPS 2012-B	September 2019		32,755		141,500		31,791		50,125		3.05%
	CPS 2012-C	December 2019		37,358		147,000		36,281		55,619		2.35%
	CPS 2012-D	March 2020		45,427		160,000		43,822		67,833		1.99%
	CPS 2013-A	June 2020		66,889		185,000		65,182		97,775		1.87%
	CPS 2013-B	September 2020		82,263		205,000		80,244		118,692		2.39%
	CPS 2013-C	December 2020		95,208		205,000		94,095		133,628		3.22%
	CPS 2013-D	March 2021		94,650		183,000		93,291		132,150		2.82%
	CPS 2014-A	June 2021		104,926		180,000		103,290		143,456		2.37%
	CPS 2014-B	September 2021		135,749		202,500		134,742		177,601		2.11%
	CPS 2014-C	December 2021		204,004		273,000		201,727		256,151		2.31%
	CPS 2014-D	March 2022		219,252		267,500		216,362		267,500		2.54%
	CPS 2015-A	June 2022		220,214		245,000		215,598		–		2.42%
	CPS 2015-B	September 2022		238,978		250,000		235,361		–		2.52%
	CPS 2015-C (3)	December 2022		297,605		300,000		300,000		–		2.89%
			$	1,929,280	$	3,429,200	$	1,903,578	$	1,598,496

_________________

(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 $183.2 million in 2015, $664.4 million in 2016, $501.1 million in 2017, $316.4 million in 2018, $172.0 million in 2019, $63.2 million in 2020 and $3.3 million in 2021.
(2)	Includes repossessed assets that are included in Other assets on our Unaudited Condensed Consolidated Balance Sheet.
(3)	Includes $102.1 million of receivables that were pledged to CPS 2015-C after September 30, 2015, on October 9, 2015.

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

The terms of the securitization agreements related to the issuance of the securitization trust debt and the warehouse credit facilities require that we meet certain delinquency and credit loss criteria with respect to the pool of receivables, and certain of the agreements require that we maintain minimum levels of liquidity and not exceed maximum leverage levels. In addition, certain securitization and non-securitization related debt contain cross-default provisions, which would allow certain creditors to declare a default if a default were declared under a different facility. As of September 30, 2015, we were in compliance with all such covenants.

We are responsible for the administration and collection of the automobile contracts. The securitization agreements also require certain funds be held in restricted cash accounts to provide additional collateral for the borrowings, to be applied to make payments on the securitization trust debt or as pre-funding proceeds from a term securitization prior to the purchase of additional collateral. As of September 30, 2015, restricted cash under the various agreements totaled approximately $206.6 million, of which $102.1 million represented pre-funding proceeds. Interest expense on the securitization trust debt consists of the stated rate of interest plus amortization of additional costs of borrowing. Additional costs of borrowing include facility fees, amortization of deferred financing costs and discounts on notes sold. Deferred financing costs and discounts on notes sold related to the securitization trust debt are amortized using a level yield method. Accordingly, the effective cost of the securitization trust debt is greater than the contractual rate of interest disclosed above.

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 credit facilities. 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 other creditors.