Auto Lender Selling Loans

Consumer Portfolio Services, Inc. has sold $310 million in subprime auto loans to Wall Street. The auto loan lender funds loans from auto dealers, and then sells them to Wall Street’s investors as bonds.

The Irving based auto loan company used this auto loan transaction in its first securitization since their last one in November. According to Charles Bradley, Jr., CEO of Consumer Portfolio, they felt that the sale went very well considering the financial environment that they are currently facing.

As the bonds had “triple A” credit ratings, they were considered attractive and thus sold quickly. They are expected to pay out 6.23% in interest. It was not known how they would be received considering the way the market is today. With the subprime mortgage mess, it was expected that there might be some hesitation with subprime auto loans.

This was not the case however, and the bonds sold well. For their part, the company says that this was a good move for them, as their stocks have fallen about half over the past year.



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