ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On August 18, 2014, Consumer Portfolio Services, Inc. ("CPS" or the "Company")
and its subsidiary Page Eight Funding LLC renewed and amended their existing
revolving credit agreement (as renewed and amended, the "Credit Agreement") and
related agreements with Citibank, N.A. (the "Lender"), and with others. Loans
under the Credit Agreement are to be secured by automobile receivables that CPS
now holds or may purchase in the future from dealers.
Under the Credit Agreement, and subject to its terms and conditions, the lenders
have agreed to lend from time to time through August 15, 2016 up to a maximum of
$100 million. At the conclusion of the two-year revolving period, at the
election of either the borrower or the lender, the loans are to amortize for an
additional one year, and then become due in full. Loans under the Credit
Agreement bear interest during the revolving period at a floating rate equal to
one-month LIBOR plus 5.50%, but in all events no less than 6.25% per year, and
during the amortization period (if any) at a floating rate equal to one-month
LIBOR plus 6.50%, but in all events no less than 7.25% per year. The loans are
subject to acceleration upon the occurrence of certain defined events of
default. In connection with the renewal of the Credit Agreement, CPS paid a
closing fee of $603,022 to the Lender.
Affiliates of the Lender have also performed investment banking and advisory
services for CPS from time to time, for which they have received customary fees
and expenses. Additional information regarding transactions and relationships
between CPS and affiliates of the Lender is set forth in the definitive proxy
statement of CPS filed April 30, 2014, under the caption "Certain Transactions -
Citigroup," which information is incorporated herein by reference.
CPS disclaims any implication that the agreements described in this report are
other than agreements entered into in the ordinary course of CPS's business.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information provided in response to item 1.01 is incorporated herein by
CPS first incurred indebtedness under the original Credit Agreement in the
amount of approximately $9.1 million on May 14, 2012. As of the date of this
report, the amount owed is $44.0 million. CPS intends to incur indebtedness
under the Credit Agreement from time to time as it purchases motor vehicle
receivables from dealers. CPS does not undertake to provide updates regarding
the amount of indebtedness outstanding from time to time, and no inference
should be drawn that such indebtedness has not changed.