Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 823

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 4
Chunk 823
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 as secured financings for financial accounting purposes,
and the asset-backed securities issued in such securitizations remain on our consolidated balance sheet as securitization trust debt.
We had $2,594.4 million of securitization trust debt outstanding at December 31, 2024.

Subordinated Renewable
Notes Debt.   In June 2005, we began issuing registered subordinated renewable notes in an ongoing offering to the public.
Upon maturity, the notes are automatically renewed for the same term as the maturing notes, unless we repay the notes or the investor
notifies us within 15 days after the maturity date of his note that he wants it repaid. Renewed notes bear interest at the rate we are
offering at that time to other investors with similar note maturities. Based on the terms of the individual notes, interest payments may
be required monthly, quarterly, annually or upon maturity. At December 31, 2024 there were $26.5 million of such notes outstanding.

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, capitalization, investments, acquisitions, restricted payments and certain dividend restrictions. In
addition, certain securitization and non-securitization related debt contain cross-default provisions that would allow certain creditors
to declare default if a default occurred under a different facility. As of December 31, 2024, we were in compliance with all such covenants.

Item 7A. Quantitative and Qualitative Disclosures About Market
Risk

Interest Rate Risk

We are subject to interest
rate risk during the period between when contracts are purchased from dealers and when such contracts become part of a term securitization.
Specifically, the interest rate due on our warehouse credit facilities are adjustable while the interest rates on the contracts are fixed.
Therefore, if interest rates increase, the interest we must pay to our lenders under warehouse credit facilities is likely to increase
while the interest we receive from warehoused automobile contracts remains the same. As a result, excess spread cash flow would likely
decrease during the warehousing period. Additionally, automobile contracts warehoused and then securitized during a rising interest rate
environment may result in less excess spread cash flow to us. Historically, our securitization facilities have paid fixed rate interest
to security holders set at prevailing interest rates