Bridgecrest Lending Auto Securitization Trust 2024-3 Annual Performance Review

I’ve put together this guide to help you understand how this trust performed over the past year. Think of this as a "cheat sheet" to help you decide if this investment fits your goals, without the confusing Wall Street jargon.

1. What does this trust do?

Bridgecrest Lending Auto Securitization Trust 2024-3 is a financial container created in 2024. It holds a pool of subprime and non-prime auto loans. Investors buy different classes of Notes (A through E), which are backed by these loans.

The trust acts as a pass-through. It collects monthly payments from car owners and pays investors according to a strict priority list, after covering fees.

2. Financial performance

The trust measures its success by the cash collected from the $800 million pool of loans. The servicer, Bridgecrest Credit Company, reports that the pool is performing as expected. The trust successfully made all scheduled payments to investors, proving the payment system works as designed.

3. Wins and challenges

• Wins: The trust kept its "credit enhancement" on track. This means the cushion between the value of the car loans and the value of the notes remains at the target of 10.5%. Auditors confirmed that the servicer is following all rules.
• Challenges: The Owner Trustee, Wilmington Trust, is involved in unrelated lawsuits. While these cases do not involve this trust’s assets, they represent an administrative factor to keep in mind regarding the trustee's operations.

4. Financial health

The risk is spread out because no single borrower makes up more than 0.05% of the total pool. Instead of relying on insurance, the trust uses a cash reserve equal to 1% of the initial pool. This acts as a safety net to cover missed payments and keep interest flowing to investors.

5. Key risks

• Borrower Defaults: The main risk is that borrowers stop paying. Because these are subprime loans, they are sensitive to unemployment or inflation. If too many people default, the lower-rated notes (Classes D and E) could see their value impacted.
• Administrative Factors: The lawsuits against the trustee could cause administrative delays. If the trustee needs to be replaced, the costs could be charged to the trust, which would impact the total cash available for distribution.

6. Competitive positioning

This trust competes with other high-yield investments. Its advantage is a simple, rules-based payment structure. By avoiding complex derivatives and focusing only on loan payments, it offers investors a direct way to earn a return based on the performance of the underlying auto loans.

7. Strategy

The strategy remains consistent. Bridgecrest Credit Company continues to manage the loans using the same collection methods as when the trust started. The goal is to collect cash from the loan pool until the notes are paid off.

8. Future outlook

The trust is currently paying down its debt. As borrowers pay off their loans, the total pool balance will shrink. The trust is scheduled to finish by 2030. Investors should expect a steady decline in their note balances as the trust distributes cash.

9. Market trends

The trust follows all SEC disclosure rules and maintains "risk retention" compliance, ensuring the sponsor keeps a financial stake in the loans' success.

Decision Checklist:

• Risk Tolerance: Are you comfortable with subprime auto loans, which are more sensitive to economic shifts like inflation?
• Timeline: Does the 2030 maturity date align with your investment horizon?
• Goal: Are you looking for a rules-based, direct investment in auto loan cash flows rather than complex corporate derivatives?