Fitch Upgrades PenFed Auto Loan Securitizations Due to Strong Performance

Fitch Global Ratings upgraded ratings on one class and affirmed ratings on three classes in PenFed Auto Receivables Owner Trust 2024-A.

TYSONS, Va., July 28, 2025 /PRNewswire/ -- PenFed Credit Union, one of the nation's largest federal credit unions, received notable upgrades from Fitch on the ratings of the bonds issued through its prime auto loan securitization offering PenFed Auto Receivables Owner Trust 2024-A (PNFED 2024-A) due to strong performance.

Fitch Ratings has affirmed the class A notes and upgraded the class B notes in PenFed Auto Receivables Owner Trust 2024-A. Fitch also affirmed the class C and D notes and revised the Rating Outlooks to Positive from Stable.

The rating actions reflect available credit enhancement (CE) and loss performance to date. Overall, cumulative net losses (CNL) are tracking within the initial rating case proxy, and hard CE levels have grown for all classes since close. The Stable Outlooks on the 'AAAsf' rated classes reflect Fitch's expectation that the classes have sufficient levels of credit protection to withstand potential deterioration in credit quality of the portfolio in stress scenarios and that loss coverage will continue to increase as the transaction amortizes. The Positive Outlooks for classes C and D reflect the possibility for an upgrade in the next one to two years.

As of the June 2025 report date, 60+ day delinquencies total 0.25% of the remaining collateral balance and the CNL was 0.26%, tracking below the initial rating case of 1.60%.

The CNLs are tracking inside of Fitch's revised rating case credit proxy, and hard CE levels have grown for all classes since close. The rating case proxy utilized was lowered to 1.30% from 1.60%. To account for potential increases in delinquencies and losses, Fitch applied conservative assumptions in deriving the updated rating case proxy while also acknowledging the strong performance to date.

The rating actions are based on available CE and CNL performance to date. The collateral pool has performed within Fitch's expectations to date, and hard CE is building for the notes. The securities are able to withstand stress scenarios, consistent with the ratings and make full payments to investors in accordance with the terms of the documents.

Fitch's base case credit loss expectation, which does not include a margin of safety and is not used in Fitch's quantitative analysis to assign ratings, is 0.80% based on Fitch's Global Economic Outlook - June 2025 and historical securitization performance. Fitch's full rating action commentary can be found here.

PenFed's August 2024 transaction issued $447,400,000 of fixed-rate, amortizing asset-backed notes backed by prime auto loans. The securitization is a private placement offering, which in the United States is offered only to qualified institutional buyers under Rule 144A. The asset-backed notes were offered in four senior and three subordinate tranches of notes and rated by S&P and Fitch.

PenFed has the second-largest consumer loan portfolio among all credit unions across auto, personal, student, consumer loans and credit cards. PenFed also possesses one of the largest auto loan portfolios among federal credit unions, with originations across all 50 states and Puerto Rico.

About PenFed Credit Union

Established in 1935, Pentagon Federal Credit Union (PenFed) is one of America's largest federal credit unions, serving nearly 3 million members worldwide with $31 billion in assets. PenFed Credit Union offers market-leading certificates, checking, credit cards, personal loans, mortgages, auto loans, student loans, and a wide range of other financial services with members' interests always in mind. PenFed Credit Union is federally insured by the NCUA and is an Equal Housing Lender. To learn more about PenFed Credit Union, visit PenFed.org, like us on Facebook and follow us @PenFed on X. Interested in working for PenFed? Check us out on LinkedIn. We are proud to be an Equal Employment Opportunity Employer.       

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SOURCE PenFed Credit Union