Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 288

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1A
Chunk 288
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 such subsidiaries, but not by any of our other assets.

The terms of the various securitization
agreements related to the issuance of the securitization trust debt require that certain delinquency and credit loss criteria be met with
respect to the collateral pool, and require that we maintain minimum levels of liquidity and net worth and not exceed maximum leverage
levels. We were in compliance with all such covenants as of December 31, 2024.

We are responsible for the
administration and collection of the contracts. The securitization agreements also require certain funds be held in restricted cash accounts
to provide additional credit enhancement for the Notes or to be applied to make payments on the securitization trust debt. As of December
31, 2024, restricted cash under the various agreements totaled approximately $125.7 million. Interest expense on the securitization trust
debt is composed of the stated rate of interest plus amortization of additional costs of borrowing. Additional costs of borrowing include
facility fees, insurance premiums, amortization of deferred financing costs, and amortization of discounts required on the notes at the
time of issuance. Deferred financing costs related to the securitization trust debt are amortized using the interest method. Accordingly,
the effective cost of borrowing of the securitization trust debt is greater than the stated rate of interest.

Our wholly-owned, bankruptcy
remote subsidiaries were formed to facilitate the above asset-backed financing transactions. Similar bankruptcy remote subsidiaries issue
the debt outstanding under our warehouse line of credit. Bankruptcy remote refers to a legal structure in which it is expected that the
applicable entity would not be included in any bankruptcy filing by its parent or affiliates. All of the assets of these subsidiaries
have been pledged as collateral for the related debt. All such transactions, treated as secured financings for accounting and tax purposes,
are treated as sales for all other purposes, including legal and bankruptcy purposes. None of the assets of these subsidiaries are available
to pay any of our other creditors.

     F-21 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(6) Debt

The terms of our debt outstanding at December
31, 2024 and 2023 are summarized below:

     Schedule of debt outstanding 

    Amount Outstanding at 

    December 31,  
    December 31, 

    2024