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5. Securitization Trust Debt
 12 Months Ended
Dec. 31, 2016
Securitization Trust Debt  
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:

 

                        Weighted
    Final   Receivables       Outstanding   Outstanding   Average
    Scheduled   Pledged at       Principal at   Principal at   Interest Rate at
    Payment   December 31,   Initial   December 31,   December 31,   December 31,
Series   Date (1)   2016 (2)   Principal   2016   2015   2016
          (Dollars in thousands)    
CPS 2011-B   September 2018                      –          109,936                        –            10,023                          –
CPS 2011-C   March 2019                      –          119,400                        –            14,785                          –
CPS 2012-A   June 2019                      –          155,000                        –            16,795                          –
CPS 2012-B   September 2019                      -          141,500                        –            26,758                          –
CPS 2012-C   December 2019            15,131          147,000              14,421            30,653   2.46%
CPS 2012-D   March 2020            19,232          160,000              17,865            37,464   1.86%
CPS 2013-A   June 2020            30,258          185,000              28,661            56,583   1.73%
CPS 2013-B   September 2020            40,395          205,000              37,570            70,332   2.19%
CPS 2013-C   December 2020            48,080          205,000              46,830            82,851   4.65%
CPS 2013-D   March 2021            48,487          183,000              46,345            82,337   4.10%
CPS 2014-A   June 2021            57,171          180,000              54,988            92,571   3.39%
CPS 2014-B   September 2021            76,158          202,500              75,140          121,515   2.90%
CPS 2014-C   December 2021          117,071          273,000            116,280          183,802   3.05%
CPS 2014-D   March 2022          127,721          267,500            127,307          198,533   3.27%
CPS 2015-A   June 2022          136,010          245,000            134,466          201,527   2.96%
CPS 2015-B   September 2022          155,303          250,000            153,893          221,587   2.97%
CPS 2015-C   December 2022          210,026          300,000            207,636          283,482   3.39%
CPS 2016-A   March 2023          265,496          329,460            262,260                      –   3.15%
CPS 2016-B   June 2023          294,463          332,690            284,752                      –   3.79%
CPS 2016-C   September 2023          296,179          318,500            285,618                      –   3.36%
CPS 2016-D   December 2023          204,432          206,325            200,221                      –   2.73%
        $ 2,141,613   $ 4,515,811   $ 2,094,253   $ 1,731,598    

_________________________

(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 $786.3 million in 2017, $612.1 million in 2018, $377.1 million in 2019, $209.4 million in 2020, $86.3 million in 2021, and $9.7 million in 2022.
(2)Includes repossessed assets that are included in Other Assets on our Consolidated Balance Sheets.

 

Debt issuance costs of $13.4 million and $11.6 million as of December 31, 2016 and December 31, 2015, 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 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, 2016.

 

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, 2016, restricted cash under the various agreements totaled approximately $112.8 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.