Company: CPSS
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001683168-25-005901
Chunk: 15

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 8
Chunk 15
---
 followed all such covenants as of June 30, 2025.

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 June 30, 2025, restricted
cash under the various agreements totaled approximately $144.4 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 financing 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.

     18 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

(4) Debt

The terms
and amounts of our other debt outstanding at June 30, 2025, and December 31, 2024, are summarized below: 

    Schedule of debt outstanding 

    Amount Outstanding at 

    June 30,  
    December 31, 

    2025  
    2024 

    (In thousands) 
  
    Description 
    Interest Rate 
    Subordinate Lender Interest Rate 
    Maturity 

    Warehouse lines of credit 
    2.85% over CP yield rate (Minimum 3.75%) 7.28% and