CONSUMER PORTFOLIO SERVICES, INC. - 10-K filing on 2014-03-10

8. Debt

12 Months Ended

Dec. 31, 2013

The terms of our debt outstanding at December 31, 2013 and 2012 are summarized below:

			Amount Outstanding at
			December 31,		December 31,
			2013		2012
			(In thousands)
Description	Interest Rate	Maturity

Warehouse lines of credit	5.73% over one month Libor (Minimum 6.73%)	March 2017	$	9,452	$	4,358

	6.00% over one month Libor (Minimum 6.75%)	June 2016		–		17,373

Residual interest financing	12.875% over one month Libor	September 2013		–		13,773

	11.75% over one month Libor	April 2018		19,096		–

Debt secured by receivables measured at fair value	n/a	Repayment is based on payments from underlying receivables. Final payment of the 8.00% loan was made in September 2013, with residual payments extending through 2016		13,117		57,107

Senior secured debt, related party	13.0% and 16.0% at December 31, 2013 and 2012, respectively	June 2014		37,128		50,135

	5.00%	June 2014		1,431		–

Subordinated renewable notes	Weighted average rate of 12.5% and 14.4% at December 31, 2013 and 2012, respectively	Weighted average maturity of July 2015 and June 2015 at December 31, 2013 and 2012, respectively		19,142		23,281
			$	99,366	$	166,027

In March 2013 we renewed our $100 million warehouse credit line with affiliates of Goldman, Sachs & Co. and Fortress Investment Group. The facility is structured to allow us to fund a portion of the purchase price of automobile contracts by borrowing from a credit facility to our consolidated subsidiary Page Six Funding LLC. The facility provides for advances up to 88% of eligible finance receivables and the loans under it accrue interest at a rate of one-month LIBOR plus 5.73% per annum, with a minimum rate of 6.73% per annum. There was $9.5 million outstanding under this facility at December 31, 2013. This facility has a revolving period through March 2015 and an amortization period through March 2017 for any receivables pledged to the facility at the end of the revolving period.

In June 2013, we renewed our $100 million warehouse credit line with Citibank, N.A. The facility is structured to allow us to fund a portion of the purchase price of automobile contracts by borrowing from a credit facility to our consolidated subsidiary Page Eight Funding, LLC. The facility provides for effective advances up to 88.4% of eligible finance receivables. The loans under the facility accrue interest at one-month LIBOR plus 6.00% per annum, with a minimum rate of 6.75% per annum. At December 31, 2013 there was no amount outstanding under this facility, which has a revolving period through June 2015 and an amortization period through June 2016 for any receivables pledged at the end of the revolving period.

The total outstanding debt on our warehouse lines of credit was $9.5 million as of December 31, 2013, compared to $21.7 million outstanding as of December 31, 2012.

The costs incurred in conjunction with the above debt are recorded as deferred financing costs on the accompanying consolidated balance sheets and are more fully described in Note 1.

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 and capitalization. Further covenants include matters relating to investments, acquisitions, restricted payments and certain dividend restrictions. See the discussion of financial covenants in Note 1.

The following table summarizes the contractual and expected maturity amounts of long term debt as of December 31, 2013:

Contractual maturity date	Residual interest financing (1)		Senior secured debt (2)		Subordinated renewable notes		Total
	(In thousands)
2014	$	6,333	$	38,559	$	11,400	$	56,292
2015		3,202		–		2,480		5,682
2016		1,159		–		3,267		4,426
2017		4,300		–		212		4,512
2018		4,102		–		565		4,667
Thereafter		–		–		1,218		1,218
Total	$	19,096	$	38,559	$	19,142	$	76,797

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(1)

The residual interest financing debt has a contractual maturity date in April 2018. This debt is expected to become due and payable prior to that date, based on the decreasing valuation of the underlying collateral.

(2)

The senior secured debt is shown net of unamortized debt discounts of $623,000. On a gross basis the scheduled maturity of this debt is $39.2 million in June 2014. On January 31, 2014, we prepaid $10.0 million of our senior secured debt prior to its contractual maturity in June 2014.

(3)

Debt secured by receivables measured at fair value, in the amount of $13.1 million as of December 31, 2013, is omitted from this table because it becomes due as and when the related receivables balance is reduced by payments and charge-offs.