Consumer Portfolio Services, Inc. Announces $716.9M Asset‑Backed Securitization

What Happened
Consumer Portfolio Services, Inc. (CPS) filed an 8‑K disclosing that, on July 22, 2026, it completed a securitization (the “2026‑C” transaction) that resulted in the issuance of $716.88 million of asset‑backed notes. CPS sold consumer receivables to a consolidated subsidiary, which sold them to a grantor trust that issued five classes of fixed‑rate notes backed by those receivables. Computershare Trust Company, N.A. (CTCNA) is acting as trustee/collateral agent and backup servicer; CPS will remain the servicer of the receivables. For accounting and tax purposes the transaction is treated as secured financings and the Notes are reflected as long‑term obligations of CPS, although legally the Notes are obligations of the Trust only.

Key Details

• Total Notes issued: $716.88 million across five classes:
  • Class A: $317,300,000 at 4.52%
  • Class B: $99,900,000 at 4.84%
  • Class C: $113,110,000 at 5.05%
  • Class D: $81,530,000 at 5.72%
  • Class E: $105,040,000 at 7.65%
• Credit enhancement: 1.00% cash Reserve Account of original pool balance and 2.40% initial over‑collateralization; final enhancement must reach the lesser of 7.70% of original pool or 19.10% of then‑outstanding pool (but not less than 1.50% of original pool).
• Initial receivable pool: $734.51 million. When outstanding receivables fall below 10% of that initial balance, CPS may purchase the Trust estate at fair market value sufficient to redeem the Notes.
• Events of default (e.g., missed payments, breaches, certain bankruptcy events) would allow the Trustee to accelerate the Notes and redirect receivable cash flows to noteholders.

Why It Matters
This transaction provides CPS with immediate funding by converting a pool of receivables into cash while transferring legal ownership to the Trust. For investors, the key points are: (1) the Notes increase reported long‑term secured obligations of CPS for accounting and tax purposes, which can affect leverage and debt metrics; (2) legally, repayment is limited to the Trust’s receivables and pledged collateral (not CPS’s other assets); and (3) CPS retains servicing responsibilities and potential residual interests, while the structure’s credit enhancements and Trustee remedies determine how cash flows will protect noteholders in stress scenarios.