(5) Securitization Trust Debt

12 Months Ended

Dec. 31, 2021

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: 

										Weighted
										Average
	Final	Receivables				Outstanding		Outstanding		Contractual
	Scheduled	Pledged at				Principal at		Principal at		Interest Rate at
	Payment	December 31,		Initial		December 31,		December 31,		December 31,
Series	Date (1)	2021 (2)		Principal		2021		2020		2021
(Dollars in thousands)
CPS 2015-B	September 2022	$	–	$	250,000	$	–	$	17,984		–
CPS 2015-C	December 2022		–		300,000		–		28,529		–
CPS 2016-A	March 2023		–		329,460		–		37,158		–
CPS 2016-B	June 2023		–		332,690		–		46,079		–
CPS 2016-C	September 2023		–		318,500		–		47,325		–
CPS 2016-D	April 2024		–		206,325		–		36,455		–
CPS 2017-A	April 2024		21,381		206,320		17,644		40,619		7.07	%
CPS 2017-B	December 2023		27,922		225,170		12,491		39,016		5.75	%
CPS 2017-C	September 2024		30,061		224,825		25,846		47,553		5.68	%
CPS 2017-D	June 2024		30,994		196,300		26,744		49,297		4.95	%
CPS 2018-A	March 2025		34,363		190,000		29,518		53,549		4.68	%
CPS 2018-B	December 2024		42,054		201,823		36,092		66,955		5.10	%
CPS 2018-C	September 2025		47,708		230,275		42,765		77,345		5.27	%
CPS 2018-D	June 2025		58,204		233,730		49,634		88,228		5.12	%
CPS 2019-A	March 2026		72,750		254,400		62,667		114,373		4.90	%
CPS 2019-B	June 2026		72,683		228,275		61,730		118,982		4.61	%
CPS 2019-C	September 2026		85,381		243,513		75,065		142,080		3.76	%
CPS 2019-D	December 2026		109,469		274,313		98,625		181,485		3.20	%
CPS 2020-A	March 2027		104,000		260,000		99,485		184,944		3.32	%
CPS 2020-B	June 2027		110,962		202,343		87,048		164,403		4.58	%
CPS 2020-C	November 2027		150,173		252,200		138,899		231,961		2.35	%
CPS 2021-A	March 2028		162,217		230,545		147,516		–		0.97	%
CPS 2021-B	June 2028		189,319		240,000		179,856		–		1.24	%
CPS 2021-C	September 2028		264,525		291,000		250,003		–		1.11	%
CPS 2021-D	December 2028		340,451		349,202		330,325		–		1.39	%
		$	1,954,617	$	6,271,209	$	1,771,953	$	1,814,320

_________________________

(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 $687.9 million in 2022, $621.2 million in 2023, $150.6 million in 2024, $167.0 million in 2025, $92.1 million in 2026, and $41.2 million in 2027.

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

Debt issuance costs of $12.0 million and $10.6 million as of December 31, 2021 and December 31, 2020, 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, 2021.

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, 2021, restricted cash under the various agreements totaled approximately $146.6 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.