(5) Securitization Trust Debt

12 Months Ended

Dec. 31, 2020

Securitization Trust Debt

(5) Securitization Trust Debt

(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:

Series	Final Scheduled Payment Date (1)	Receivables Pledged at December 31, 2020 (2)		Initial Principal		Outstanding Principal at December 31, 2020		Outstanding Principal at December 31, 2019		Weighted Average Contractual Interest Rate at December 31, 2020
	(Dollars in thousands)
CPS 2014-C	December 2021		–		273,000		–		19,758		0.00%
CPS 2014-D	March 2022		–		267,500		–		23,755		0.00%
CPS 2015-A	June 2022		–		245,000		–		26,713		0.00%
CPS 2015-B	September 2022		17,737		250,000		17,984		36,338		6.01%
CPS 2015-C	December 2022		27,788		300,000		28,529		53,579		6.77%
CPS 2016-A	March 2023		35,042		329,460		37,158		71,599		7.24%
CPS 2016-B	June 2023		45,407		332,690		46,079		82,667		7.42%
CPS 2016-C	September 2023		47,358		318,500		47,325		83,696		7.53%
CPS 2016-D	April 2024		38,498		206,325		36,455		65,021		5.81%
CPS 2017-A	April 2024		42,972		206,320		40,619		71,450		5.82%
CPS 2017-B	December 2023		53,753		225,170		39,016		76,201		5.00%
CPS 2017-C	September 2024		56,048		224,825		47,553		80,315		4.82%
CPS 2017-D	June 2024		57,986		196,300		49,297		83,801		4.32%
CPS 2018-A	March 2025		62,902		190,000		53,549		91,258		4.11%
CPS 2018-B	December 2024		75,400		201,823		66,955		111,188		4.51%
CPS 2018-C	September 2025		87,223		230,275		77,345		130,064		4.62%
CPS 2018-D	June 2025		104,155		233,730		88,228		149,470		4.58%
CPS 2019-A	March 2026		131,575		254,400		114,373		186,900		4.38%
CPS 2019-B	June 2026		128,787		228,275		118,982		184,308		3.95%
CPS 2019-C	September 2026		150,637		243,513		142,080		216,650		3.26%
CPS 2019-D	December 2026		190,916		274,313		181,485		265,035		2.80%
CPS 2020-A	March 2027		187,537		260,000		184,944		–		2.80%
CPS 2020-B	June 2027		187,597		202,343		164,403		–		3.09%
CPS 2020-C	November  2027		243,367		252,200		231,961		–		1.67%
		$	1,972,684	$	5,945,962	$	1,814,320	$	2,109,766

_________________________

(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 $818.4 million in 2021, $450.9 million in 2022, $350.7 million in 2023, $81.1 million in 2024, $83.7 million in 2025, and $18.7 million in 2026.

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

Debt issuance costs of $10.6 million and $12.0 million as of December 31, 2020 and December 31, 2019, 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, 2020.

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, 2020, restricted cash under the various agreements totaled approximately $130.7 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.