Consumer Portfolio Services More Than Doubled Loan Purchases to $815 Million in Q3, Backed by New $768 Million ABS Deal
Consumer Portfolio Services more than doubled its auto loan purchases in the third quarter, buying $815 million in contracts — a volume jump that the Irvine, California-based subprime lender backed almost immediately with a new trip to the securitization market.
Investors bought $768 million in notes from the deal, which was collateralized by roughly $797 million in subprime auto loans. The gap between collateral and note proceeds reflects the subordination structure typical of subprime ABS — the overcollateralization provides a credit cushion for noteholders.
CPS is a non-bank specialty lender that buys retail installment contracts originated at franchised and independent dealers, then funds them through the ABS market. Its business model means securitization volume tracks origination volume closely, so a doubling of loan purchases flows directly into a larger, more frequent pipeline of note deals.
The $797 million collateral pool and $768 million in notes priced represent one of the larger single CPS transactions in recent quarters, consistent with the step-up in purchase volume the company reported for Q3.
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