S&P Upgrades PenFed Auto Loan Securitizations Due to Strong Performance

S&P Global Ratings upgraded ratings on two classes and affirmed ratings on three classes in PenFed Auto Receivables Owner Trust 2022-A.

TYSONS, Va., Dec. 16, 2024 — PenFed Credit Union, the nation’s second-largest federal credit union, received notable upgrades on the ratings of the bonds issued through its inaugural prime auto loan securitization offering PenFed Auto Receivables Owner Trust 2022-A (PNFED 2022-A) due to strong performance.

S&P has revised the Cumulative Net Loss (CNL) expectations of the PNFED 2022-A transaction to 0.40 bps from the current estimate of 0.70 bps. Their original estimate of CNL was 1.40 – 1.60 bps at the time of closing. S&P has also upgraded the C and D tranches to “AAA” from their current rating of “AA+” and “AA” ratings respectively. They have also affirmed the “AAA” rating to A-3, A-4 and B tranches. Currently all the tranches that are outstanding in this transaction have a “AAA” rating from S&P.

The rating actions reflect collateral performance to date and S&P’s expectations regarding future collateral performance, as well as the transaction’s structure and credit enhancement. Additionally, S&P incorporated secondary credit factors, including credit stability and sector- and issuer-specific analyses. Considering all these factors, S&P believes the creditworthiness of the notes remains consistent with the raised and affirmed ratings. S&P’s full rating action commentary can be found here.

PenFed’s August 2022 transaction issued $460,292,000 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 America’s second-largest federal credit union, serving 2.8 million members worldwide with over $32.7 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.                   

SOURCE PenFed Credit Union