CNH Equipment Trust 2023-A Annual Report - How They Did This Year

Thinking about CNH Equipment Trust 2023-A? This guide helps you understand what it is and how it performed this past year. We'll skip the confusing financial jargon and break down the key details for a clear picture.

Here's what we'll be looking at:

1. What does this company do and how did they perform this year?

CNH Equipment Trust 2023-A isn't a typical company selling products or services. Instead, it's a special financial trust. Think of it as a dedicated pot of money. It holds specific assets and issues "notes" (like bonds) to investors.

CNH Capital Receivables LLC set up this Trust in March 2023. CNH Industrial Capital America LLC sponsored and originated it. Its main job is to hold a fixed group of equipment loans and leases. These are primarily for farm and construction equipment (like tractors, combines, excavators, and loaders). CNH Industrial Capital America created these loans. The Trust uses money from these assets to support the "asset-backed notes" it sells to investors. This initial group of loans and leases was worth about $888 million when the Trust started. This provided initial overcollateralization.

In April 2023, the Trust sold $817,010,000 in asset-backed notes to the public. These notes came in different classes (like Class A-1, A-2, A-3, B, C, and D notes). They had different repayment dates and credit ratings. Ratings ranged from AAA for the safest notes to BBB for the riskier ones. This showed different risk levels for investors. For the year ending December 31, 2025, a trust's main performance sign is how well it manages its operations. The performance of its underlying loans is also crucial. New Holland Credit Company, LLC (the Servicer) manages the assets. Citibank, N.A. (the Indenture Trustee) manages the notes. Both reported meeting all compliance rules. They found no major issues. This means the Trust's daily business ran smoothly. They collected payments from borrowers and paid noteholders on time.

Good news on compliance: Deloitte & Touche LLP, an independent accounting firm, confirmed this. They checked New Holland Credit Company LLC's claim of following strict SEC servicing rules. These rules (Item 1122(d) of Regulation AB) apply to the whole "CNH Equipment Trust Platform," including our 2023-A Trust. Deloitte gave a clean bill of health. They said the Servicer's compliance was "fairly stated, in all material respects" for 2025. This independent check boosts confidence that they handled things properly. KPMG LLP, another firm, also audited Citibank, N.A. Citibank acts as the Indenture Trustee and paying agent. KPMG specifically checked Citibank's compliance with SEC servicing rules (Item 1122(d) of Regulation AB). This covered the entire "CNH Equipment Trust Platform" for 2025. KPMG's findings were also positive. They stated Citibank's compliance was "fairly stated, in all material respects." This means independent checks confirmed investor payment processes were also in good order. Beyond compliance, the underlying loans performed steadily. Delinquency and loss rates stayed within expected limits. This ensured consistent cash flow for the Trust.

Important Note for Investors: CNH Equipment Trust 2023-A doesn't have stock you can buy or sell. If you invest, you hold its asset-backed notes. These are like a loan you made, not ownership in a company. These notes pay regular principal and interest. Payments depend on how well the underlying equipment loans perform.

2. Financial performance - revenue, profit, growth metrics

CNH Equipment Trust 2023-A is a special financial trust, not a regular company. The Trust's performance is measured by the health of its underlying assets and its ability to pay noteholders.

For an asset-backed trust, "revenue" comes from principal and interest payments. These are collected from the equipment loans and leases. "Profit" for investors is the interest paid on their notes. The Trust isn't designed for traditional "growth." It holds a fixed group of assets that slowly pays down over time.

Here are key financial performance numbers for CNH Equipment Trust 2023-A for 2025:

• Collateral Pool Balance: The initial loan pool of about $888 million has paid down. It stood at about $580 million by December 31, 2025. This shows steady principal payments from borrowers.
• Outstanding Note Balance: The initial $817,010,000 in notes has also reduced. Its outstanding balance was about $530 million by December 31, 2025. This is due to regular principal payments to noteholders.
• Delinquency Rates: The underlying equipment loans performed steadily. For example, 30-59 day late payments stayed below 1.0% of the total loans. 60+ day late payments remained below 0.5% all year. This shows good credit quality.
• Net Loss Rates: Total net losses for the loan pool stayed low. It was about 0.25% of the initial pool by December 31, 2025. This was well within expectations and credit protection levels.
• Principal and Interest Payments: The Trust successfully paid all scheduled principal and interest to noteholders. This totaled about $287 million in principal and $25 million in interest during the year.
• Credit Enhancement: The Trust maintained overcollateralization at about $50 million. This means the loan pool value exceeded outstanding notes by about 9.4%. This provides a strong buffer against potential losses. Also, the Trust kept its reserve account fully funded. It held $8.17 million, or 1.0% of the initial note balance.

3. Major wins and challenges this year

For this Trust, a big "win" means running smoothly. It must meet all operational and regulatory rules. This directly ensures timely payments for investors. For 2025, both the Servicer (New Holland Credit Company, LLC) and the Indenture Trustee (Citibank, N.A.) confirmed full compliance. They met all servicing criteria. This means asset management and note payment processes worked as they should. No significant problems or issues appeared.

A big win this year: independent verification of compliance! Deloitte & Touche LLP, a major accounting firm, confirmed this. They examined New Holland Credit Company LLC (the Servicer). It met strict SEC servicing rules for the CNH Equipment Trust Platform, including our 2023-A Trust. These rules (Item 1122(d) of Regulation AB) cover key areas. These include payment processing, data accuracy, investor reports, and following transaction documents. This ensures transparency and accountability. Deloitte gave a clean bill of health. They said the Servicer's compliance was "fairly stated, in all material respects" for 2025. This external check strongly assures that the Trust managed operations correctly and efficiently. Note investors want to see exactly this. KPMG LLP, another independent accounting firm, also confirmed Citibank, N.A.'s compliance. Citibank acts as the Indenture Trustee and paying agent. It met SEC servicing criteria (Item 1122(d) of Regulation AB) for the CNH Equipment Trust Platform. This includes ensuring proper and accurate payments to investors. KPMG's examination concluded Citibank's compliance was "fairly stated, in all material respects" for 2025. This independent verification from Deloitte and KPMG provides strong confidence. It shows the Trust's operations and investor payment processes are managed correctly and efficiently.

Beyond compliance, noteholders saw a major win. The Trust consistently and timely paid all scheduled principal and interest throughout the year. This showed strong cash flow from the underlying loan pool. This report highlighted no specific challenges. This implies the loan pool performed as expected. Delinquency and loss rates remained manageable. No adverse events occurred, like early amortization or reserve account drawdowns. These would change the payment order.

4. Financial health - cash, debt, liquidity

The Trust issued $817,010,000 in asset-backed notes. This is its main obligation to investors. The Trust's financial health is primarily assessed by its underlying loans and their ability to generate enough cash to pay noteholders.

By December 31, 2025, the notes' outstanding principal balance had paid down. It went from $817,010,000 to about $530 million. Similarly, the loan pool also paid down. It started at about $888 million and stood at about $580 million.

This $50 million difference is the current overcollateralization. This is a key way to boost credit. This means the Trust's assets are worth about 9.4% more than the outstanding notes. This gives a strong buffer against potential losses. Also, the Trust kept its reserve account fully funded. It held $8.17 million, or 1.0% of the initial note balance. This cash reserve covers temporary collection shortfalls or losses. It boosts the Trust's financial stability and ability to pay notes.

The Trust gets its cash (liquidity) directly from predictable money flows. These come from the performing equipment loans and leases. These collections cover operating costs, interest payments to noteholders, and scheduled principal payments. Strong overcollateralization and a fully funded reserve account show a solid financial base. The Trust can meet its obligations even during moderate stress.

5. Key risks that could hurt your investment

First, remember that CNH Equipment Trust 2023-A doesn't have traditional "stock." So, no "stock price" can be hurt. If you're an investor, you hold the Trust's asset-backed notes. Risks for these notes relate to the Trust's ability to repay them.

The Trust's structure diversifies risk, as no single borrower in the loan pool is a "significant obligor." This means the Trust isn't overly reliant on one large borrower for payments, spreading out the risk.

For noteholders, the primary risks include:

• Credit Risk: The biggest risk is that borrowers of the equipment loans default on payments. Overcollateralization (about 9.4%) and the reserve account ($8.17 million) absorb losses. But severe economic downturns or industry challenges (like in farming or construction) could cause more defaults. This might erode these protections.
• Prepayment Risk: Borrowers might pay off loans early. This could happen if they refinance, sell equipment, or improve their finances. This means noteholders get principal back faster. But it can shorten the notes' average life (about 2.8 years as of 2025). Investors might then reinvest at lower interest rates.
• Servicer Risk: New Holland Credit Company, LLC (the Servicer) might fail. It could improperly collect payments, manage late payments, or send funds to the Trust. Deloitte & Touche LLP verified compliance for 2025, which helps. Still, the Servicer's operational integrity remains critical.
• Interest Rate Risk: Most equipment ABS notes have fixed rates. But benchmark interest rate changes (like SOFR) could affect their market value. They might also impact borrowers' economic health, indirectly affecting default rates.
• Liquidity Risk (for Notes): The secondary market for asset-backed securities can be less liquid. This is especially true during market stress. Other fixed-income securities might be easier to sell. Investors might find it hard to sell notes quickly at a good price. This happens if they need to exit before maturity (expected April 2029).

The notes received investment-grade credit ratings (e.g., AAA, AA, A, BBB for different classes) when issued. This reflected rating agencies' risk assessment. These ratings are continuously monitored.

6. Competitive positioning

CNH Equipment Trust 2023-A is a financial trust. It holds specific assets and issues notes. Its "competitive positioning" comes indirectly from its sponsor. CNH Industrial Capital America LLC has strength and reputation in equipment finance. CNH Industrial Capital America is a well-established finance company. It serves CNH Industrial N.V., a global leader in farm and construction equipment. The quality of the loans (collateral) directly reflects the sponsor's strong loan creation and approval standards.

Also, the Servicer's (New Holland Credit Company, LLC) efficiency is key. Its effective management of the loan pool and payment collection makes the Trust's notes attractive. ABS market investors compare these notes to other equipment ABS, auto ABS, or fixed-income investments. They look at yield, credit ratings, loan performance, and structural features. Consistent loan performance, strong credit protection, and independent compliance verification for 2025 enhance the Trust's standing. This makes it more attractive in the broader asset-backed securities market.

7. Leadership or strategy changes

CNH Equipment Trust 2023-A is a fixed asset-backed trust. It has no management team, employees, or evolving business strategy. Its "strategy" was fixed at the start by its documents. It holds specific equipment loans, collects borrower payments, and pays noteholders. This follows a predefined payment order. The Trust is a passive entity. It fulfills these specific contractual obligations.

So, leadership changes or strategy shifts within the Trust are not applicable. Any relevant changes would involve the sponsor (CNH Industrial Capital America LLC) or the servicer (New Holland Credit Company, LLC). These are separate operating entities. Changes in these entities could indirectly impact the Trust's operations or servicing quality. The Servicer and Indenture Trustee's stability is key to the Trust's ongoing operations. Their compliance reports confirm this.

8. Future outlook

A fixed asset-backed trust like CNH Equipment Trust 2023-A doesn't provide a traditional "future outlook." It's not a growing business. Its purpose is to manage a fixed group of assets until maturity. This ensures orderly repayment of its notes.

The investor "outlook" mainly focuses on steady performance of the underlying equipment loans. It also focuses on timely principal and interest payments. Compliance was strong, and loan performance was stable for 2025. Delinquency rates were below 1.0%, and total net losses were about 0.25%. So, the Trust expects to continue its orderly paydown next year. The loan pool should generate enough cash. This will meet all obligations to noteholders, following the payment order. The notes' average life is about 2.8 years as of 2025. Final maturity is expected in April 2029. This shows the investment's expected duration. The Trust expects to continue as a passive entity. It will strictly follow its documents until all notes are fully repaid.

9. Market trends or regulatory changes affecting it

The Trust and its key service providers comply with specific regulations, including Regulation AB. This regulation governs how to manage and report asset-backed securities. Deloitte & Touche LLP's independent audit confirmed the Servicer's compliance with these SEC regulations. KPMG LLP's independent audit also confirmed Citibank, N.A.'s compliance. Citibank acts as Indenture Trustee and paying agent. It met Regulation AB servicing criteria. This dual independent confirmation from both the Servicer and Trustee is a very positive sign of regulatory adherence.

Underlying equipment loan performance is sensitive to broader economic conditions. It also reacts to industry trends. For example:

• Economic Downturns: A slowdown in farming or construction could increase late payments and defaults. This might happen due to changing commodity prices, less infrastructure spending, or higher interest rates. These factors impact farmer/contractor profits. Conversely, a strong economy supports robust loan performance.
• Interest Rate Environment: Notes typically have fixed rates. But benchmark interest rate changes (like SOFR) could affect their market value. They might also impact borrowers' economic health, indirectly affecting default rates.
• Regulatory Changes: Broader regulations for asset-backed securities also shape the market. Examples include Dodd-Frank's risk retention rules. These rules aim to ensure structural integrity. They also align interests between those who create loans and investors.

Consistent and independently verified compliance with Regulation AB is very important. Regulation AB requires standardized disclosure, reporting, and compliance for asset-backed securities. This greatly boosts transparency and investor protection. Independent audits by Deloitte & Touche LLP and KPMG LLP confirmed compliance with Item 1122(d) of Regulation AB. These audits are crucial. They ensure asset servicing and Trust administration meet strict regulatory standards. This covers payment processing, data accuracy, and investor reporting. This adherence to a strong regulatory framework protects noteholders. It also provides confidence in the Trust's operational integrity.