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Securitization Trust Debt

12 Months Ended

Dec. 31, 2023

(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:

Schedule of securitization trust debt
										Weighted
										Average
	Final	Receivables				Outstanding		Outstanding		Contractual Debt
	Scheduled	Pledged at				Principal at		Principal at		Interest Rate at
	Payment	December 31,		Initial		December 31,		December 31,		December 31,
Series	Date (1)	2023 (2)		Principal		2023		2022		2023
	(Dollars in thousands)
CPS 2018-A	March 2025	$	–	$	190,000	$	–	$	12,939		–
CPS 2018-B	December 2024		–		201,823		–		17,077		–
CPS 2018-C	September 2025		–		230,275		–		20,222		–
CPS 2018-D	June 2025		–		233,730		–		25,563		–
CPS 2019-A	March 2026		–		254,400		–		32,898		–
CPS 2019-B	June 2026		20,167		228,275		15,742		33,897		6.03%
CPS 2019-C	September 2026		24,448		243,513		19,725		41,515		5.05%
CPS 2019-D	December 2026		32,326		274,313		27,445		53,625		4.37%
CPS 2020-A	March 2027		31,101		260,000		26,382		52,705		4.79%
CPS 2020-B	June 2027		36,924		202,343		24,197		41,736		7.19%
CPS 2020-C	November 2027		51,128		252,200		43,487		72,894		4.00%
CPS 2021-A	March 2028		55,081		230,545		39,039		72,076		1.81%
CPS 2021-B	June 2028		69,614		240,000		55,684		101,206		2.50%
CPS 2021-C	September 2028		104,844		291,000		85,563		147,593		2.03%
CPS 2021-D	December 2028		143,579		349,202		126,059		209,277		2.53%
CPS 2022-A	April 2029		158,852		316,800		137,479		222,613		2.78%
CPS 2022-B	October 2029		243,310		395,600		213,779		325,907		4.83%
CPS 2022-C	April 2030		278,732		391,600		230,273		346,714		5.78%
CPS 2022-D	June 2030		232,868		307,018		205,583		292,461		7.91%
CPS 2023-A	August 2030		273,944		324,768		231,906		–		6.32%
CPS 2023-B	November 2030		303,157		332,885		268,172		–		6.59%
CPS 2023-C	February 2031		281,097		291,732		257,568		–		6.65%
CPS 2023-D	May 2031		293,940		286,149		271,939		–		7.22%
		$	2,635,113	$	6,328,171	$	2,280,021	$	2,122,919

_________________________

	(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 $826.3 million in 2024, $618.4 million in 2025, $386.5 million in 2026, $242.8 million in 2027, $152.6 million in 2028, and $38.8 million in 2029.

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

Debt issuance costs of $14.6 million and $14.2 million as of December 31, 2023 and December 31, 2022, 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, 2023.

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, 2023, restricted cash under the various agreements totaled approximately $119.3 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.