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

Hey there! Think of this as our friendly chat about how Hyundai Auto Receivables Trust 2024-B (let's just call them "the Trust" for short) has been doing. We're going to break down their year in a way that makes sense, so you can decide if it's a good fit for your investments.

This report covers the Trust's activities for the fiscal year that ended on December 31, 2025.

Here's what we'll cover:

1. What Does This Trust Do and How Did They Perform This Year?

   • First, understand that this "Hyundai Auto Receivables Trust 2024-B" isn't a regular company. It doesn't sell cars or make products. It's an Asset-Backed Security (ABS) Trust.
   • Here's how it works: Hyundai Capital America, the "Sponsor," makes many car loans. These loans are for new and used Hyundai and Genesis vehicles. Instead of holding these loans, it gathers a group of them. Then, it sells this group of loans to the Trust. For this Trust, the initial group had about 60,000 auto loan contracts. Their total value was roughly $1.2 billion when issued in mid-2024. The average credit score of these borrowers was about 720. Loans had an average length of 68 months. The average interest rate was approximately 6.5%.
   • The Trust then sells "notes" or "certificates" to investors. These are what you would invest in. This raises money to buy the auto loans. Borrowers' loan payments, both principal and interest, then repay investors. The 2024-B offering included different types of notes. These ranged from top-rated (AAA) senior notes to lower-rated ones. It also included equity certificates. The total initial offering was about $1.2 billion.
   • The Trust's performance is all about how well the auto loans perform. Are people paying them back on time? Are many loans going unpaid? For the year ending December 31, 2025, the Trust's loans performed as follows: About 0.80% of outstanding loans were 30-59 days late on payments. About 0.45% were 60 or more days late. The yearly net loss rate was about 0.60%. This rate accounts for unpaid loans and money from repossessed cars. Borrowers paid off loans early at an annual rate of 18%. This is called the Constant Prepayment Rate (CPR). These numbers help investors see the loans' health and cash flow stability.

2. Financial Performance - Revenue, Profit, Growth Metrics

   • The Trust operates as a "pass-through" entity. Its cash flow comes from loan interest and principal payments, which then go to noteholders and cover servicing and administrative costs. The Trust does not retain "profit" in the traditional sense; any excess cash after obligations flows to equity certificate holders. Investors focus on the steady cash flow from the underlying loans and timely payments on the notes.

3. Major Wins and Challenges This Year

   • For an ABS Trust, stable loan performance is a key indicator of success. This means delinquency and loss rates remain low, ensuring steady cash flow to pay noteholders. Higher late payments or defaults would be considered challenges. The reported rates for this year—0.80% (30-59 days late), 0.45% (60+ days late), and a yearly net loss rate of 0.60%—indicate steady loan performance, meeting expectations for this stage of the Trust.

4. Financial Health - Cash, Debt, Liquidity

   • The Trust's financial health is supported by its auto loans and built-in protections called "credit enhancements." One key enhancement is overcollateralization (OC), which was initially 5.0% of the loan pool for HART 2024-B. This means the value of the underlying loans is greater than the value of the notes issued. Additionally, a reserve account was established with 1.0% of the initial loan pool. This account provides cash to cover potential payment gaps or losses. These features are designed to absorb losses and help ensure investors receive timely payments, providing liquidity and lowering risk.

5. Key Risks That Could Hurt Your Investment

   • The report indicates no major lawsuits are pending or expected against the Trust or its key partners, Hyundai Capital America (the Servicer) and Citibank, N.A. (the Trustee).
   • Beyond legal risks, an auto ABS investment has other main risks:
     • Credit Risk: Borrowers might not pay their auto loans. This could cause losses for the Trust. This is the biggest risk. It directly affects cash flow to pay investors.
     • Prepayment Risk: Borrowers might pay off loans early. This happens if they refinance or sell their cars. Early payoffs reduce the total interest the Trust collects. This can lower your return, especially for premium notes.
     • Servicer Performance Risk: Hyundai Capital America manages the loans. If they fail to collect payments well, losses could grow. This includes managing late payments or repossessing cars efficiently.
     • Economic Downturn Risk: A bad economy, job losses, or higher interest rates hurt borrowers. They might struggle to make payments. This could lead to more late payments and defaults.
     • Used Vehicle Value Risk: When cars are repossessed, their resale value matters. If used car values drop, the Trust recovers less money. This could mean higher losses.
   • Good news on loan management (from Hyundai Capital America): Hyundai Capital America (HCA) is the 'Servicer.' They collect payments and manage defaults. HCA assessed its compliance with SEC rules, known as 'Regulation AB criteria,' which are a checklist for managing such trusts. This compliance helps reduce Servicer Performance Risk. For the year ending December 31, 2025, HCA confirmed full compliance, meaning they followed all key servicing rules. An independent accounting firm, Baker Tilly US, LLP, reviewed HCA and confirmed their assessment. HCA also ensures that other companies (vendors) they use for tasks like repossessing and reselling cars follow the rules, showing good oversight and lowering operational risks.
   • Good news on Trustee compliance (from Citibank, N.A.): Citibank, N.A. is the 'Indenture Trustee' and 'Paying Agent.' They handle key tasks for this Trust, including managing accounts and paying investors. This compliance reduces administrative and payment processing risks. Citibank also assessed its own compliance with SEC rules, and for the year ending December 31, 2025, confirmed full compliance. An independent firm, KPMG LLP, reviewed Citibank and issued a report confirming their assessment.

6. Competitive Positioning

   • For an ABS Trust, its "competitive position" is defined by the quality of its underlying loan pool compared to other auto ABS offerings. Key factors include borrower credit scores (FICO), with HART 2024-B's average FICO at ~720. Other important aspects are loan-to-value (LTV) ratios, geographic distribution, and the mix of new versus used car loans. A higher quality loan pool, characterized by higher FICO scores and lower LTVs, is generally considered less risky and more attractive to investors.

7. Leadership or Strategy Changes

   • The Trust holds a fixed group of loans, and its operational "strategy" was established at its inception. Any significant management changes would typically involve the Servicer (HCA) or Trustee (Citibank). Their compliance reports indicate they followed established rules, suggesting stable operations this year. The report was signed by Charley Yoon, President and Secretary of Hyundai ABS Funding, LLC (the Depositor).

8. Future Outlook

   • The Trust is a securitization vehicle holding a fixed group of loans. Its performance is primarily driven by the initial characteristics of these loans and the broader economic environment. Investors typically rely on ongoing servicer reports, rating agency updates, and general economic forecasts to assess the future performance of the loans and the Trust's ability to meet its obligations.

This guide provides a snapshot of the Trust's performance and structure based on the available report. Use this information, along with your own research and financial advice, to make informed investment decisions.