5. Securitization of Receivables

There were no securitization transactions during the three months ended March 31, 2013. During the three months ended March 31, 2012, the Predecessor sold financing receivables in securitization transactions, recognizing gains of $1,095,057. In securitizations, the Predecessor retained servicing responsibilities and interests in certain cash reserve accounts and deferred fees. In certain instances, the Predecessor receives annual servicing fees ranging from 0.05% to 0.20% of the outstanding balance. The investors and the securitization trusts have no recourse to the Predecessor’s other assets for failure of debtors to pay when due. The Predecessor’s retained interests in cash reserve accounts and deferred fees are subordinate to investors’ interests, and their values are subject to credit, prepayment and interest rate risks on the transferred financial assets.

As of March 31, 2013 and December 31, 2012, the fair values of retained interests, discount rates used in valuing those interests and the sensitivity to an increase in the discount rates of 5% and 10% were as follows:

In computing gains and losses on securitizations recorded during the three months ended March 31, 2012, the discount rates were consistent with the discount rates presented in the above table. Based on the nature of the receivables and experience-to-date, the Predecessor does not currently expect to incur any credit losses on the receivables sold.

The following is an analysis of certain cash flows between the Predecessor and the securitization trusts for the three months ended March 31, 2013 and 2012:

As of March 31, 2013 and December 31, 2012, the Predecessor’s managed receivables totaled $1,590,256,470 and $1,623,034,217, of which $1,398,004,576 and $1,431,635,500 were securitized, respectively.

There were no credit losses during the three months ended March 31, 2013 and 2012, and no material delinquencies as of March 31, 2013 and December 31, 2012.