Services Inc. (Nasdaq: CPSS - news) Tuesday announced that it has completed the securitization of $310 million of its automobile receivables.
CPS Auto Receivables Trust 1998-4 issued five classes of notes with interest rates ranging from 5.473% to 5.890%. The A-1 class of notes is rated A-1+ by Standard & Poor's and P-1 by Moody's Investors Service
Inc. The remaining classes are all rated AAA by Standard & Poor's and Aaa by Moody's Investors Service Inc. Full and timely payment of interest on and principal of the notes is guaranteed by an insurance
policy issued by Financial Security Assurance Inc. First Union Capital Markets managed the offering of the notes.
In addition, the company reported that it has entered into an agreement with General Electric Capital Corp. for a $100 million revolving
warehouse line of credit. Borrowings under the line will be secured by automobile contracts pending their sale through a securitization. This new facility coincides with the termination on Nov. 30, 1998 of a similar facility that was provided by an affiliate of General Electric Capital Corp.
``This securitization represents our 21st triple A rated transaction since 1994, and is our largest to date. Although spreads for asset backed securities have widened considerably since our previous transaction in July 1998, the various benchmarks by which our notes are priced are much lower. As a result, the interest rates on these notes are somewhat less than the notes issued in July. We are also pleased to announce that we will be continuing our long relationship with General
Electric Capital Corp. in the form of the new warehouse line of credit,'' reported Charles E. Bradley, Jr., President and Chief Executive Officer.
``These important transactions along with the proceeds from the $25 million subordinated notes issued on November 17, 1998 to Levine Leichtman Capital Partners II, L.P., and our commitment from Financial
Security Assurance Inc. for our next securitization represent a foundation from which CPS can achieve its goal of being a leading player in the sub-prime automobile finance industry,'' Bradley continued.