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5. Securitization Trust Debt

12 Months Ended

Dec. 31, 2015

(5) Securitization Trust Debt

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)		2015 (2)		Principal		2015		2014		2015
				(Dollars in thousands)
	CPS 2011-A		April 2018		–		100,364		–		8,457		–
	CPS 2011-B		September 2018		10,469		109,936		10,023		22,985		4.40%
	CPS 2011-C		March 2019		14,756		119,400		14,785		30,601		4.91%
	CPS 2012-A		June 2019		18,273		155,000		16,795		35,923		3.15%
	CPS 2012-B		September 2019		27,463		141,500		26,758		50,125		3.07%
	CPS 2012-C		December 2019		31,556		147,000		30,653		55,619		2.34%
	CPS 2012-D		March 2020		38,886		160,000		37,464		67,833		1.92%
	CPS 2013-A		June 2020		58,082		185,000		56,583		97,775		1.85%
	CPS 2013-B		September 2020		72,081		205,000		70,332		118,692		2.36%
	CPS 2013-C		December 2020		83,811		205,000		82,851		133,628		3.43%
	CPS 2013-D		March 2021		83,263		183,000		82,337		132,150		2.99%
	CPS 2014-A		June 2021		93,776		180,000		92,571		143,456		2.51%
	CPS 2014-B		September 2021		121,772		202,500		121,515		177,601		2.21%
	CPS 2014-C		December 2021		184,739		273,000		183,802		256,151		2.41%
	CPS 2014-D		March 2022		200,611		267,500		198,533		267,500		2.63%
	CPS 2015-A		June 2022		203,819		245,000		201,527		–		2.48%
	CPS 2015-B		September 2022		226,054		250,000		221,587		–		2.57%
	CPS 2015-C		December 2022		287,685		300,000		283,482		–		2.96%
				$	1,757,096	$	3,429,200	$	1,731,598	$	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 $669.2 million in 2016, $506.5 million in 2017, $315.4 million in 2018, $172.2 million in 2019, $64.3 million in 2020, and $4.0 million in 2021.

(2)

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

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, 2015.

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, 2015, restricted cash under the various agreements totaled approximately $106.1 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.