Ford Credit Auto Lease Trust 2024-B Annual Report - How They Did This Year

This report covers the fiscal year that ended on December 31, 2025.

What Exactly Is Ford Credit Auto Lease Trust 2024-B?

First, this isn't a regular company like Ford Motor Company. You can't buy its stock. Instead, think of Ford Credit Auto Lease Trust 2024-B as a special financial "basket" or "trust." Ford Motor Credit Company LLC (the "sponsor") created it. Its purpose is to bundle auto lease payments. This type of structure is called an asset-backed security (ABS).

Here's the gist:

• Ford Credit, Ford's finance arm, creates many auto leases for customers. For example, in a typical deal, Ford Credit might create tens of thousands of leases. Their total initial value often exceeds $1 billion.
• Ford Credit bundles many of these leases. For instance, it might gather 50,000 to 70,000 leases. Their total outstanding value could be $1.5 billion to $2.5 billion. Then, it sells them to this Trust (Ford Credit Auto Lease Trust 2024-B). The Trust is "bankruptcy-remote." This means its assets are usually safe. They are protected even if Ford Credit faces financial trouble.
• The Trust then issues special bonds to investors. We call these "asset-backed securities" or "notes." Cash from the auto leases backs these bonds. A typical ABS deal might issue several types of notes. These include Class A-1 through A-4, Class B, and Class C notes. They have different maturities, from 1 to 5 years. They also have different credit ratings, like AAA to BBB.
• So, when you invest, you lend money to the Trust. You get paid back from car lease payments. This includes regular monthly payments. It also includes money from selling cars when leases end. Investors receive principal and interest payments. These usually come monthly or quarterly.

Since it's a special trust, it has no common stock. You cannot buy or sell shares like a regular company. The report confirms this: "REGISTRANT HAS NO VOTING OR NON-VOTING COMMON EQUITY OUTSTANDING HELD BY NON-AFFILIATES." For investors, this means no stock growth potential. Your returns come only from interest and principal payments on the notes.

How Did They Make Money This Year?

These trusts "make money" for investors by collecting payments. These payments come from the bundled auto leases. They mainly consist of:

1. Scheduled monthly lease payments: Lessees make these regular payments to use the vehicle.
2. Money from vehicle sales at lease end: When a lease ends, the vehicle returns and sells. The Trust receives money from the sale. This amount is up to the car's residual value. Residual value is the estimated worth at lease end. If the sale price is higher, the extra money usually goes to the servicer or sponsor. If it's lower, the Trust takes the loss. This can affect cash flow for junior noteholders.

These collected payments then pay back bondholders (investors) with interest. A pre-defined "payment waterfall" guides this. Senior noteholders, like AAA-rated Class A notes, get paid first. Then come junior noteholders, such as BBB-rated Class C notes. Junior noteholders take more risk but might earn more. The Trust's "income" is the total cash from the lease pool. It covers expenses, like servicing fees. Then it pays principal and interest to noteholders.

Any Big Wins or Challenges?

This report tells us about "servicing" these leases. Ford Credit is the main servicer. U.S. Bank National Association acts as indenture trustee and backup servicer. These groups handle collecting payments and customer issues. They manage delinquencies and lease terminations. Essentially, they manage the Trust's leases. Both had to check their compliance with rules and agreements. This includes the "pooling and servicing agreement." SEC regulations (Item 1122 of Regulation AB) require this check.

Good news: Neither Ford Credit nor U.S. Bank National Association found major rule violations. This was for the fiscal year ending December 31, 2025. This compliance statement often comes with an accountant's report. It assures investors about the servicing process's operational integrity. It shows that cash collection and lease management follow legal rules. This reduces operational risk for noteholders.

What Might Affect Them in the Future?

A trust like this sees its future performance affected by:

• The overall economy: An economic downturn, with rising unemployment (e.g., 3.5% to 6%), can increase lease payment delays and defaults. If people lose jobs or face hardship, they struggle to make car payments. This raises the risk of losses for the Trust.
• Interest rates: New interest rates don't directly change existing lease payments. But they can affect the wider auto market. Higher rates (e.g., a 2% rise in the federal funds rate) can lower demand for new leases. This might affect the sponsor's ability to create new leases for future deals. More importantly, interest rate changes affect how we value future cash. For floating-rate notes, they directly impact the Trust's interest costs.
• Used car values: This is likely the biggest risk for auto lease ABS. The Trust heavily relies on selling returned cars when leases end. This helps it recover the residual value. If used car values drop a lot (e.g., 10-15% yearly in auctions), car sales might bring in less money. This creates "residual value losses." These losses directly cut the Trust's cash flow. They can also reduce credit protection. Junior noteholders might feel the impact first. More new cars, changing tastes (like EV shifts), or a recession can all lower used car values.

In a Nutshell

Ford Credit Auto Lease Trust 2024-B is a financial tool. It lets investors put money into a fixed pool of Ford auto leases. Investors receive principal and interest from these lease payments. This annual report (Form 10-K) covers the fiscal year ending December 31, 2025. It focuses on the Trust's administration and compliance. Ford Credit (the servicer) and U.S. Bank National Association (the indenture trustee) manage the leases. They reported no major compliance issues, which shows sound operational management. This report confirms the servicing process works well, which is key to the Trust's performance.