CNH Equipment Trust 2025-A Annual Report - How They Did This Year

1. What does this trust do and how did it perform this year? CNH Equipment Trust 2025-A is not a typical company. It is a special trust that turns loans into investments. It buys many loans for farm, construction, and commercial equipment, which CNH Industrial Capital America LLC originally created and set up the trust. The trust sells "asset-backed notes" to investors, and payments on these notes come from the equipment loans and leases. This setup helps CNH Industrial Capital America LLC turn loans into investments that can be easily bought and sold.

   The trust issued $850,760,000 in asset-backed notes. Money from equipment sales or leases backs these notes. New Holland Credit Company, LLC is the "Servicer," managing the equipment loans and leases daily, including collecting payments and handling late payments.

   The trust's success depends on how well these loans are managed and on reliable payment collection for investors. For 2025, the Servicer (New Holland Credit Company, LLC) followed all SEC rules for managing the loans. An independent auditor, Deloitte & Touche LLP, confirmed the Servicer met SEC rules. This independent check adds confidence, showing operations run smoothly and investor cash flows are properly managed.

   The Indenture Trustee (Citibank, N.A.) holds the loan assets and pays investors. KPMG LLP checked their compliance with payment rules (SEC Regulation AB) and confirmed Citibank followed all rules for 2025, with an accurate report. So, two major accounting firms approved both key entities, ensuring they meet standard reporting rules for these investments. These checks found no major issues or rule-breaking, giving investors strong confidence in the trust's operations.

   Important for investors: This trust does not issue common stock. You cannot buy shares like a regular company. To invest, you would buy its asset-backed notes.

2. Financial performance - revenue, profit, growth metrics This trust issues asset-backed notes and is not a traditional company. Its financial performance is not measured by typical company metrics like sales or profit. Instead, its performance depends on how well the underlying equipment loans and leases perform. Investors typically look at key numbers for these notes, such as late payments, defaults, and early payoffs, as these directly impact cash flow to investors.

3. Major wins and challenges this year The trust had a major "win" this year by successfully issuing $850,760,000 in asset-backed notes. This sale was the trust's main way to raise money, funding CNH Industrial Capital America LLC, who created the loans. Operationally, the Servicer and Indenture Trustee followed all their rules, and independent auditors confirmed this. This is a strong positive sign for investors, showing the loans are managed well and payments are handled correctly, following SEC rules.

   An equipment trust could face challenges such as more late payments or defaults on loans. Economic downturns in farming, construction, or commercial sectors could cause this. Changes in interest rates could also impact the notes' market value if an investor sells them before they mature. These factors could reduce the cash flow to investors.

4. Financial health - cash, debt, cash flow The trust's financial structure differs from a regular company. The trust's main "debt" is the $850,760,000 in asset-backed notes it issued, which represent its promise to investors. The trust gets its cash mainly from scheduled and early payments from the equipment loans and leases. These cash flows are set aside to pay interest and principal on the notes. Asset-backed trusts usually pay themselves off, and their financial health depends on the loans' performance and the cash generated, rather than typical company cash reserves or credit lines.

5. Key risks that could hurt the investment value This is crucial: This trust does not have a "stock price" and does not issue shares, so typical risks affecting a company's stock price do not apply here. For investors in these notes, risks relate to the equipment loans' performance. These include:

   • Credit Risk: The main risk is that borrowers might not make payments, which reduces cash flow to the trust and investors. Economic conditions in farming, construction, and commercial sectors influence this.
   • Prepayment Risk: Borrowers might pay off loans early. This could reduce total interest paid to investors. Investors might then reinvest at lower rates.
   • Servicer Performance Risk: The Servicer received a good audit. But future problems collecting payments or managing late payments could affect the trust, impacting its ability to pay investors.
   • Interest Rate Risk: For fixed-rate notes, rising market rates could make them less attractive. This might affect their market value if an investor sells them early.
   • Concentration Risk: The loans might focus on one equipment type, region, or borrower. Bad events in that area could greatly hurt the trust's performance.
   • Liquidity Risk: Notes are usually less liquid than publicly traded stocks, meaning it might be harder or take longer to sell them at a desired price if you need to exit your investment before maturity.