Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 1160

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 7
Chunk 1160
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 rate of automobile contract purchases at a level that matches our available capital, and, as appropriate, minimizing our
operating costs. If we are unable to complete such securitizations, we may be unable to increase our rate of automobile contract purchases,
in which case our interest income and other portfolio related income could decrease.

Our liquidity will also be
affected by releases of cash from the trusts established with our securitizations. While the specific terms and mechanics of each spread
account vary among transactions, our securitization agreements generally provide that we will receive excess cash flows, if any, only
if the amount of credit enhancement has reached specified levels and the delinquency or net losses related to the automobile contracts
in the pool are below certain predetermined levels. In the event delinquencies or net losses on the automobile contracts exceed such levels,
the terms of the securitization may require increased credit enhancement to be accumulated for the particular pool. There can be no assurance
that collections from the related trusts will continue to generate sufficient cash.

Our warehouse credit facilities
contain various financial covenants requiring certain minimum financial ratios and results. Such covenants include maintaining minimum
levels of liquidity and net worth and not exceeding maximum leverage levels. In addition, certain of our debt agreements other than our
term securitizations contain cross-default provisions. Such cross-default provisions would allow the respective creditors to declare a
default if an event of default occurred with respect to other indebtedness of ours, but only if such other event of default were to be
accompanied by acceleration of such other indebtedness. As of December 31, 2024, we were in compliance with all such financial covenants.

We currently have and will
continue to have a substantial amount of outstanding indebtedness. At December 31, 2024, we had approximately $3,130.9 million of debt
outstanding. Such debt consisted primarily of $2,594.4 million of securitization trust debt, and also included $410.9 million of warehouse
lines of credit, $99.2 million of residual interest financing debt and $26.5 million in subordinated renewable notes.

Although we believe we are
able to service and repay our debt, there is no assurance that we will be able to do so. If our plans for future operations do not generate
sufficient cash flows and earnings, our ability to make required payments on our debt would be impaired. If we fail to pay our indebtedness