Hyundai Auto Receivables Trust 2024-A Annual Report - How They Did This Year

Hey there! Think of this as our chat about how Hyundai Auto Receivables Trust 2024-A has been doing. We'll break down their annual report into plain English. This helps you understand what's happening and if it might fit your investments. No fancy finance talk, just the facts you need to know.

First things first: This isn't your typical company stock!

It's important to know that Hyundai Auto Receivables Trust 2024-A doesn't sell cars or make a profit like a regular business. Instead, it's an "asset-backed security trust." This means it issues bonds, which are like IOUs, backed by many car loans.

Think of it like this:

• Hyundai Capital America (the "Sponsor" and "Servicer") makes many car loans to people buying Hyundai cars. For the 2024-A deal, these loans started with a total value of about $1.2 billion. These loans typically had an average length of around 68 months and an average interest rate (APR) of about 6.5%.
• Hyundai ABS Funding, LLC (the "Depositor") then buys and groups these car loans together.
• Hyundai Auto Receivables Trust 2024-A (the "Issuing Entity") is the special trust holding these grouped car loans. This trust then issues "notes" (like bonds) to investors. For the 2024-A deal, the trust first issued bonds worth about $1.1 billion. These came in different types (e.g., Class A-1, A-2, A-3, B, C, D).
• Payments from these car loans (principal and interest) then pay back bond investors. This follows a set payment order defined in the trust's rules.

So, when we talk about "performance," we look at how well the car loans are doing. We also check if the trust manages them correctly to ensure payments to bond investors. This trust's bonds don't trade like regular company stocks. So, there's no "stock price" to track.

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

What does this trust do and how did it perform this year?

Hyundai Auto Receivables Trust 2024-A holds car loans made by Hyundai Capital America. Its main job is to collect payments from these loans. Then, it passes them to investors who bought the bonds. The trust started with about 55,000 car loans. By December 31, 2025, the total loan value in the trust would have decreased from its initial $1.2 billion as people paid their loans.

For this type of trust, "performance" means how well the car loans are doing. It also means how the trust is managed. This year, the Servicer (Hyundai Capital America) and the Indenture Trustee (Citibank, N.A.) reported no major problems. They managed and serviced the car loans well. Hyundai Capital America, as the Servicer, certified it met all its important duties for 2025. This certification, required by Regulation AB, confirms the Servicer followed the deal's rules. This is a good sign that operations run smoothly and follow the securitization terms.

Financial performance - revenue, profit, growth metrics

For this trust, usual financial measures like "sales," "profit," or "growth" don't quite fit. The trust itself doesn't make sales or profit. Instead, it gets money from car loan payments (principal and interest). This money mainly pays for servicing, admin costs, and bond investors' principal and interest payments. Any leftover money, after all bills are paid, usually goes to the residual certificate holder.

The trust's "financial performance" is more about steady money coming in from the car loans. It also means ensuring investors are paid on time. We also look at how well the car loans perform, like how many are late or defaulted.

Major wins and challenges this year

Major Wins: A big positive is that both the company managing the loans (Hyundai Capital America) and the bank overseeing the trust (Citibank, N.A.) confirmed they fully followed all rules for managing these car loans. Hyundai Capital America's Treasurer, Charley Yoon, signed an Annual Servicer's Compliance Certificate on March 19, 2026. This confirmed the Servicer met all its important duties for 2025. An independent accounting firm's report supports this. They also found no major problems with the Servicer following the servicing rules. This means the loans are handled correctly, which is key for investors. Also, no big lawsuits threaten any parties involved that could harm the trust or bond investors.

Challenges: No major rule-breaking or operational problems were reported. This shows a stable year for managing the trust.

Financial health - cash, debt, liquidity

The trust's "debt" is the bonds it sold to investors, which first totaled about $1.1 billion. Its "cash" comes directly from monthly principal and interest payments from car loan borrowers.

The trust's financial health and ability to pay bills are supported by built-in protections. These shield bond investors from losses on the car loans. These typically include:

• Overcollateralization: The initial total value of car loans (e.g., $1.2 billion) is more than the initial value of bonds issued (e.g., $1.1 billion). This creates a buffer of about $100 million, or 8.3% of the initial loan value. This buffer covers early losses.
• Reserve Fund: This is a cash reserve account, set up at the start. It can cover payment gaps for bond investors. This fund might start with about 0.5% to 1.5% of the initial loan value, for example, $6 million to $18 million.
• Subordination: Lower-ranked bonds (e.g., Class D) get paid only after higher-ranked bonds (e.g., Class A) are fully paid. This protects those higher-ranked bond investors.

Overall health depends on how regularly car buyers make payments. It also depends on how well these protections handle any missed payments or defaults.

Key risks for bond investors

Since this isn't a regular company with common stock, there's no "stock price" to be affected. Risks for bond investors differ from stock investments. They mainly involve how well the car loans perform and the bond deal's structure. Common risks for car loan bonds include:

• Credit Risk (Default Risk): The main risk is that car buyers may stop paying their loans. This causes losses for the trust. The trust has built-in protections. But, more late payments than expected (e.g., 1.0-2.0% of loans overdue 30-60 days) or loans written off (e.g., over 0.5-1.5% annually) could wear down these protections. This could affect payments to lower-ranked bond investors first, then higher-ranked ones in bad situations.
• Prepayment Risk: Borrowers may pay off their loans early. This could happen by selling their car, refinancing, or paying extra principal. This lowers the overall risk of default. But, investors get their main investment back sooner. This possibly forces them to reinvest at lower rates, especially when rates are falling.
• Servicer Performance Risk: Hyundai Capital America confirmed it follows rules. However, if the Servicer fails to collect payments, manage defaults, or handle loans correctly in the future, it could harm the trust's money coming in.
• Interest Rate Risk: The bonds usually have fixed interest rates. But, changes in market interest rates can affect the bonds' market value. This happens if an investor sells them early. Rising rates usually lower the market value of existing fixed-rate bonds.
• Economic Downturn Risk: An economic slowdown, rising unemployment, or other bad economic times could greatly increase missed payments and defaults. This would strain the trust's protections.
• Concentration Risk: Car loan bond groups are varied. However, many loans to borrowers in one area or with similar credit scores could be risky. This is true if those groups face tough economic times.

Competitive positioning

This trust doesn't have competitors in the usual business way. Its "position" comes from the quality of its car loans. It also comes from the strength of its built-in protections compared to other car loan bond deals.

Leadership or strategy changes

A trust has set roles (like Servicer and Indenture Trustee), not a changing management team. The roles of Hyundai Capital America as Servicer and Citibank, N.A. as Indenture Trustee are set by contract. They stay the same for the trust's life.

Future outlook

The trust's performance links to how car loan borrowers pay in the future. It also links to the wider economy.

Market trends or regulatory changes affecting them

Car loan bond trusts can be affected by several outside factors, including:

• Interest Rate Environment: Changes in key interest rates set by the Fed can affect the cost of new car loans. This indirectly affects how many loans are paid off early. It also affects the demand for car financing.
• Economic Conditions: Wider economic trends like unemployment, consumer confidence, and money people have to spend directly affect if borrowers can pay their car loans on time.
• Regulatory Changes: New rules about consumer loans, debt collection, or bond deals (e.g., Dodd-Frank Act) could affect the Servicer's work or future deal structures. But, they usually don't affect existing trusts much.
• Used Car Market Values: If a loan defaults, how much money is recovered from repossessed cars is key. Lower used car values could mean bigger losses for the trust.

Understanding these points helps you see how Hyundai Auto Receivables Trust 2024-A is structured and what drives its performance. This information is key when considering if this type of asset-backed security fits your investment goals.