Debt

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Debt

(6) Debt

The terms of our debt outstanding at December 31, 2023 and 2022 are summarized below:

			Amount Outstanding at
			December 31,		December 31,
			2023		2022
			(In thousands)
Description	Interest Rate	Maturity
Warehouse lines of credit	3.00% over CP yield rate (Minimum 3.75%) 8.58% and 7.48% at December 31, 2023 and December 31 2022, respectively	July 2024	$	165,628	$	150,293
	4.15% over a commercial paper rate (Minimum 5.15%) 9.63% and 8.60% at December 31 2023, and December 31 2022, respectively	January 2024		68,997		137,585
Residual interest financing	7.86%	June 2026		50,000		50,000
Subordinated renewable notes	Weighted average rate of 8.45% and 7.82% at December 31, 2023 and December 31, 2022, respectively	Weighted average maturity of February 2026 and October 2024 at December 31, 2023 and December 31, 2022, respectively		17,188		25,263
			$	301,813	$	363,141

Debt issuance costs of $599,000 and $2.6 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 Warehouse lines of credit and residual interest financing on our Consolidated Balance Sheets.

On May 11, 2012, we entered into a $100 million one-year warehouse credit line with Citibank, N.A. The facility is structured to allow us to fund a portion of the purchase price of automobile contracts by borrowing from a credit facility to our consolidated subsidiary Page Eight Funding, LLC. The facility provides for effective advances up to 86.0% of eligible finance receivables. The Class A loans under the facility generally accrue interest during the revolving period at a per annum rate equal to one-month SOFR plus 3.00% per annum, with a minimum rate of 3.75% per annum and during the amortization period at a per annum rate equal to one-month SOFR plus 4.00% per annum, with a minimum rate of 4.75% per annum. The Class B loans under the facility generally accrue interest during the revolving period at a per annum rate equal to 8.50% per annum and during the amortization period at a per annum rate equal to 9.50% per annum. In July 2022, we renewed our two-year revolving credit agreement with Citibank, N.A., and doubled the capacity from $100 million to $200 million. This facility was amended to extend the revolving period to July 2024 and to include an amortization period through July 2025 for any receivables pledged to the facility at the end of the revolving period. At December 31, 2023 there was $165.6 million outstanding under this facility.

On February 2, 2022, we renewed our two-year revolving credit agreement with Ares Agent Services, L.P. The facility is structured to allow us to fund a portion of the purchase price of automobile contracts by borrowing from a credit facility to our consolidated subsidiary Page Nine Funding, LLC. The facility provides for effective advances up to 85.25% of eligible finance receivables. The loans under the facility accrue interest at a commercial paper rate plus 4.15% per annum, with a minimum rate of 5.15% per annum. In June 2022, we increased the capacity of our credit agreement with Ares Agent Services, L.P. from $100 million to $200 million. This facility was amended to extend the revolving period to January 2024 followed by an amortization period through January 2028 for any receivables pledged to the facility at the end of the revolving period. At December 31, 2023 there was $69.0 million outstanding under this facility.Prior to the expiration of the revolving period in January 2024, the revolving period was extended to March 31, 2024.

The total outstanding debt on our two warehouse lines of credit was $234.6 million as of December 31, 2023, compared to $287.9 million outstanding as of December 31, 2022.

On June 30, 2021, we completed a $50 million securitization of residual interests from previously issued securitizations. In this residual interest financing transaction, qualified institutional buyers purchased $50.0 million of asset-backed notes secured by residual interests in eleven CPS securitizations consecutively issued from January 2018 and September 2020. The sold notes (“2021-1 Notes”), issued by CPS Auto Securitization Trust 2021-1, consist of a single class with a coupon of 7.86%. At December 31, 2023 there was $50.0 million outstanding under this facility.

The agreed valuation of the collateral for the 2021-1 Notes is the sum of the amounts on deposit in the underlying spread accounts for each related securitization and the over-collateralization of each related securitization, which is the difference between the outstanding principal balances of the related receivables less the principal balance of the outstanding notes issued in the related securitization. On each monthly payment date, the 2021-1 Notes are entitled to interest at the coupon rate and, if necessary, a principal payment necessary to maintain a specified minimum collateral ratio.

Unamortized debt issuance costs of $125,000 and $377,000 as of December 31, 2023 and December 31, 2022, respectively, have been excluded from the amount reported above for residual interest financing. These debt issuance costs are presented as a direct deduction to the carrying amount of the debt on our Consolidated Balance Sheets.

We must comply with certain affirmative and negative covenants related to debt facilities, which require, among other things, that we maintain certain financial ratios related to liquidity, net worth and capitalization. Further covenants include matters relating to investments, acquisitions, restricted payments and certain dividend restrictions. See the discussion of financial covenants in Note 1.

The following table summarizes the contractual and expected maturity amounts of our outstanding subordinated renewable notes as of December 31, 2023:

	Subordinated
Contractual maturity	renewable
date	notes
	(In thousands)
2024	$	5,373
2025		3,955
2026		4,066
2027		2,337
2028		235
Thereafter		1,222
Total	$	17,188