Company: CPSS
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001683168-25-003436
Chunk: 63

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 2
Chunk 63
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ivables across the facility. The capacity was then increased from $200 million at the most recent renewal date
to $335 million in December 2024.

In November 2015, we entered
into another $100 million facility. 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 most recently renewed in March 2024, extending the revolving period to March 2026, followed
by an amortization period to March 2028.

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In a securitization and in
our warehouse credit facilities, we are required to make certain representations and warranties, which are generally similar to the representations
and warranties made by dealers in connection with our purchase of the automobile contracts. If we breach any of our representations or
warranties, we may be required to repurchase the automobile contract at a price equal to the principal balance plus accrued and unpaid
interest. We may then be entitled under the terms of our dealer agreement to require the selling dealer to repurchase the contract at
a price equal to our purchase price, less any principal payments made by the customer. Subject to any recourse against dealers, we will
bear the risk of loss on repossession and resale of vehicles under automobile contracts that we repurchase.

In a securitization, the related
special purpose subsidiary may be unable to release excess cash to us if the credit performance of the securitized automobile contracts
falls short of pre-determined standards. Such releases represent a material portion of the cash that we use to fund our operations. An
unexpected deterioration in the performance of securitized automobile contracts could therefore have a material adverse effect on both
our liquidity and results of operations.

In addition, from time to
time, we have also completed financings of our residual interests in other securitizations that we and our affiliates previously sponsored.
On March 20, 2025, we completed a $65 million securitization of residual interests from previously issued securitizations. In the transaction,
a qualified institutional buyer purchased $65.0 million of asset-backed notes secured by an 80% interest in a CPS affiliate that owns
the residual interests in five CPS securitizations issued from October 2023 through September 2024. The sold notes (“2025-1 Notes”),
issued by CPS Auto Securitization Trust 2025-1, consist of a single