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Securitization Trust Debt

3 Months Ended

Mar. 31, 2025

(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:

Schedule of securitization trust debt
										Weighted
										Average
	Final	Receivables				Outstanding		Outstanding		Contractual Debt
	Scheduled	Pledged at				Principal at		Principal at		Interest Rate at
	Payment	March 31,		Initial		March 31,		December 31,		March 31,
Series	Date (1)	2025 (2)		Principal		2025		2024		2025
	(Dollars in thousands)
CPS 2020-C	November 2027		22,486		252,200		17,548		22,453		4.95%
CPS 2021-A	March 2028		26,575		230,545		19,067		22,396		2.50%
CPS 2021-B	June 2028		34,772		240,000		27,234		31,903		3.41%
CPS 2021-C	September 2028		54,285		291,000		42,922		49,739		2.55%
CPS 2021-D	December 2028		75,514		349,202		62,973		72,090		3.39%
CPS 2022-A	April 2029		85,515		316,800		66,736		77,872		3.61%
CPS 2022-B	October 2029		136,495		395,600		115,569		132,002		5.83%
CPS 2022-C	April 2030		163,166		391,600		122,681		141,176		6.76%
CPS 2022-D	June 2030		141,231		307,018		121,637		135,857		9.08%
CPS 2023-A	August 2030		170,620		324,768		128,500		146,020		6.97%
CPS 2023-B	November 2030		185,817		332,885		152,296		172,154		7.10%
CPS 2023-C	February 2031		180,556		291,732		156,898		175,219		6.98%
CPS 2023-D	May 2031		194,089		286,149		171,113		191,621		7.71%
CPS 2024-A	August 2031		207,289		280,924		185,746		206,348		6.26%
CPS 2024-B	November 2031		259,400		319,871		239,755		262,768		6.42%
CPS 2024-C	March 2032		376,172		436,310		348,842		379,254		6.24%
CPS 2024-D	June 2032		388,933		416,816		359,232		390,983		5.20%
CPS 2025-A	August 2032		443,564		442,420		420,527		–		5.37%
	–	$	3,146,479	$	5,905,840	$	2,759,276	$	2,609,855

_________________

(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 $810.2 million in 2025, $810.4 million in 2026, $548.7 million in 2027, $329.7 million in 2028, $171.8 million in 2029, $70.7 million in 2030, and $1.7 million in 2031.

(2)

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

Debt issuance costs of $16.0 million and $15.5 million as of March 31, 2025, and December 31, 2024, respectively, have been excluded from the table above. These debt issuance costs are presented as a direct deduction to the carrying amount of the Securitization trust debt on our Consolidated Balance Sheets.

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 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 March 31, 2025.

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 March 31, 2025, restricted cash under the various agreements totaled approximately $153.6 million. 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 deferred financing 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.