CNH Equipment Trust 2024-C Annual Report - How They Did This Year

This analysis reviews the CNH Equipment Trust 2024-C annual report. It covers its structure, how it performed, and its key operations.

Important Note for Investors: CNH Equipment Trust 2024-C is not a typical company with stock to buy. It's a special financial trust. It issues asset-backed notes. When you "invest," you buy these debt instruments. Your returns come from regular interest and principal payments. These depend on how well the underlying assets perform. So, noteholders care most about the assets' credit quality. They also care about the cash flow these assets create. Things like "stock price" or "common equity" don't apply here.

Here's what we'll cover:

1. What does this company do and how did they perform this year? CNH Equipment Trust 2024-C is a statutory trust. It started in August 2024. Its main job is to buy and hold equipment loans, called "receivables." It then uses these as collateral to issue asset-backed notes to investors. This process is called securitization. CNH Capital Receivables LLC (the "Seller") is part of CNH Industrial N.V. It makes loans to people and businesses. These loans are for buying farm and construction equipment. The Seller transfers a specific group of them to the Trust. The Trust uses these receivables to back the notes for investors. This turns hard-to-sell loans into marketable securities.

   This annual report covers the year ending December 31, 2025.

   Good operational oversight is vital for asset-backed securities. New Holland Credit Company, LLC is also part of CNH Industrial N.V. It acts as the "Servicer." The Servicer manages all equipment loans in the Trust. This includes collecting payments, handling late payments, processing early payoffs, and keeping accurate records. Citibank, N.A. is the "Indenture Trustee." It's an important independent party. It holds the collateral for noteholders. It also checks the Servicer's compliance with documents. And it helps send payments to investors.

   A big positive for noteholders is confirmed strong servicing compliance. Independent accountants Deloitte & Touche LLP reviewed the Servicer's activities. This was for the year ending December 31, 2025. Deloitte confirmed the Servicer followed all key rules. These rules are set by the SEC under Regulation AB. This independent check means the Servicer manages loans well. This is crucial for steady cash flow to pay noteholders. It includes following procedures for payments, account upkeep, and managing defaults. The report also states the Servicer might use outside vendors. But the Servicer remains fully responsible. It must ensure these vendors also meet the servicing rules. To further back this up, the Servicer's President self-certified. They confirmed all obligations were met. This was under the Sale and Servicing Agreement. This covered the same 12-month period. This double check, by auditors and management, builds strong confidence. It shows the Servicer operates with integrity.

   The Indenture Trustee's compliance was also confirmed. KPMG LLP checked Citibank, N.A.'s management claims. These claims were about its Agency and Trust division's compliance. They looked at specific servicing rules (Item 1122(d) of SEC's Regulation AB). This was for the CNH Equipment Trust securities. KPMG's report also covered the year ending December 31, 2025. It found Citibank's compliance was "fairly stated in all material respects." This confirmation is vital. The Indenture Trustee protects investors. It oversees Trust assets and ensures funds are distributed correctly. Both the Servicer and Indenture Trustee must operate smoothly and comply. This is key to the notes' stability and performance.

2. Financial performance - revenue, profit, growth metrics CNH Equipment Trust 2024-C is a securitization trust. It doesn't make "revenue" or "profit" like a regular company. It also doesn't show "growth" metrics. The Trust's "performance" is mainly about cash flow. This comes from the equipment loans. It means collecting principal and interest on time. It also means avoiding many late payments or defaults. Detailed financial statements go to noteholders. These include cash flows, late payments, and losses. They come in monthly or quarterly servicer reports. The annual 10-K focuses on compliance and structure instead.

3. Major wins and challenges this year For an asset-backed trust, "wins" mean strong asset performance. This includes low late payments, few write-offs, and steady early payoffs. This ensures consistent cash flow for noteholders. "Challenges" would show up as weaker loan quality. This could mean more defaults than expected. Or it could mean operational problems with the Servicer. Deloitte & Touche LLP and KPMG LLP gave positive compliance reports. These show that servicing and trusteeship operations were well-managed. These operations are crucial for the Trust's stability.

4. Financial health - cash, debt, liquidity For this Trust, "debt" means the asset-backed notes. These are the Trust's main liabilities. "Cash" is mostly money collected from equipment loans. This cash awaits distribution to noteholders and others. The Trust's "liquidity" depends on steady cash flow. This comes from the loan pool. It also depends on the Servicer's efficient collection. Securitization has structural features. Reserve accounts or overcollateralization boost liquidity and credit support for the notes.

5. Key risks that could hurt the stock price For asset-backed notes like these, risks center on two things. First, how the underlying equipment loans perform. Second, the securitization's structural soundness.

   • Credit Risk: The biggest risk is that borrowers won't pay their equipment loans. This can happen due to economic slowdowns. Or industry problems, like in farming or construction. Or if individual borrowers face financial trouble. If many borrowers don't pay, the Trust might struggle. It might not make timely interest and principal payments to noteholders.
   • Prepayment Risk: Borrowers might pay off loans early. This could be due to refinancing or selling equipment. If so, noteholders get their principal back sooner. This lowers credit risk. But it can hurt investors who paid extra for notes. Or those who find lower rates to reinvest their money.
   • Servicer Performance Risk: The report confirms the Servicer's strong compliance. But if the Servicer fails in the future, it's a risk. Not collecting payments, managing late payments, or handling loans well could hurt the Trust's cash flow.
   • Interest Rate Risk: Notes with floating interest rates face rising rates. This could increase the Trust's funding cost (if it applies). Or it could impact the notes' market value. For fixed-rate notes, market interest rate changes can affect their value if you sell them early.
   • Liquidity Risk: The market for selling asset-backed securities can dry up. This makes it hard for noteholders to sell their investments. They might not get their desired price before the notes mature.

   The report highlights a positive point: no "significant obligors." This means many different borrowers hold the equipment loans. No single large borrower's default would badly hurt the whole loan pool. This spread helps manage credit risk. Also, the report states there are no major lawsuits against the Trust or its related parties. This shows a stable legal and operational environment.

6. Competitive positioning CNH Equipment Trust 2024-C is a securitization vehicle. It doesn't compete like a company selling products or services. Its "positioning" comes from several things. These include the quality of its equipment loans. Also, the reputation of its originator (CNH Capital Receivables LLC). And the track record of its Servicer (New Holland Credit Company, LLC). Finally, its structural features protect noteholders. CNH Capital's ability to make good loans is key. So is the Servicer's efficiency. These factors drive investor demand and pricing for the Trust's notes.

7. Leadership or strategy changes CNH Equipment Trust 2024-C is a passive trust. It has no board of directors or executive officers. No active management team makes strategic decisions. Securitization documents govern its operations. For example, the Indenture and Sale and Servicing Agreement. The Servicer and Trustee carry out these operations. So, leadership or strategy changes, like for a regular company, don't apply to this Trust.

8. Future outlook This is a static pool securitization. So, the Trust's "future outlook" depends on its equipment loans. It also depends on wider economic conditions. These can affect how borrowers repay. Unlike a regular company, the Trust has no management. They don't issue forecasts or strategic plans. Investors usually look at servicer reports. They also analyze the asset class and economy. This helps them guess the notes' future performance.

9. Market trends or regulatory changes affecting them For asset-backed securities, market trends matter. These include current interest rates. (They affect note prices and early payoffs.) Also, the health of farm and construction equipment markets. (This impacts loan demand and borrower credit.) And the overall economy. (It affects jobs, income, and defaults.) Regulatory changes also affect the securitization market. Things like risk retention rules or investor capital requirements. Or disclosure standards. These could indirectly affect the Trust. They might change investor interest and market liquidity for the notes.

Understanding these points helps you evaluate the stability and potential returns of CNH Equipment Trust 2024-C notes. Remember, your investment relies on the consistent performance of the underlying equipment loans and the robust operation of the Servicer and Trustee.