John Deere Owner Trust 2023 Annual Report - What Investors Need to Know

Navigating SEC filings can be complex, but understanding the John Deere Owner Trust 2023 is crucial for investors. This polished summary cuts through the technical language to explain what this specific financial product entails, particularly for retail investors.

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Understanding the John Deere Owner Trust 2023 (Form 10-K for fiscal year ended November 2, 2025)

It's important to clarify from the outset: this 10-K is not an annual performance review for the main John Deere company that manufactures equipment. The "fiscal year ended November 2, 2025" signals its nature as a compliance filing for Asset-Backed Securities (ABS). This filing provides ongoing information about the structure and performance of a pool of financial assets, distinct from a traditional company's past revenue and profits. The 2025 date likely indicates the maturity or reporting cycle for the debt securities this Trust issues.

For you as an investor, here's what that means:

1. Business Overview

• Not a Tractor Company: This Trust does not manufacture equipment; it functions as a "Special Purpose Vehicle" (SPV) designed to facilitate financing.
• The Core Business: John Deere Capital Corporation (JDCC), Deere & Company's financing arm, originates loans for customers purchasing John Deere equipment. We call these customer loans "retail receivables."
• The Trust's Role: The John Deere Owner Trust 2023 acquires these retail receivables from another John Deere entity, John Deere Receivables LLC. The Trust then uses these pooled loans as collateral to issue "Notes" (debt securities, similar to bonds) to investors. When you invest in these Notes, you are essentially investing in a diversified pool of customer loans for John Deere equipment, not purchasing stock in the equipment manufacturer itself.
• Key Players:
  • John Deere Owner Trust 2023: Issues the Notes and holds the pool of customer loans.
  • John Deere Receivables LLC (JDR): The "depositor" that sells loans to the Trust.
  • John Deere Capital Corporation (JDCC): Serves as the "sponsor," "servicer," "administrator," and "originator" of these loans. JDCC originates the loans, collects customer payments, and passes them to the Trust.
  • Deere Credit Services, Inc. (DCS): Sub-services, assisting JDCC in managing the loans.

2. Risk Factors

The Trust issues debt securities (Notes), so the concept of "stock price" does not apply. Risks primarily impact the stability and value of these Notes.

• Collateral Performance Risk: The primary risk is that underlying John Deere equipment loan customers may default on payments, leading to insufficient funds for Noteholders. Economic conditions, agricultural sector health, and borrower credit quality heavily influence this risk.
• Servicer Risk: While JDCC has complied, any future failure to effectively service the loans could impact cash flow to Noteholders. This includes risks related to operational failures, data breaches, or inadequate collection efforts.
• Economic Downturns: A recession or downturn in the agricultural or construction sectors could significantly increase loan defaults and reduce equipment values, affecting recoveries.
• Interest Rate Risk: Changes in interest rates can affect the market value of the Notes, especially for fixed-rate securities, and may also influence prepayment behavior.
• Concentration Risk: While a pool, understanding the concentration of loan types, geographic regions, or borrower segments is important, as high concentrations can expose the Trust to localized economic shocks.
• Legal and Regulatory Risk: Changes in laws or regulations affecting consumer or commercial finance, or specific legal challenges, could impact the Trust's operations or the collateral's value.
• Liquidity Risk: While the Trust's structure provides predictable cash flows, unexpected events could impact the timing or sufficiency of funds to meet obligations.

3. Key Management Insights

• Servicer Performance: The filing confirms John Deere Capital Corporation (JDCC), the Servicer, complied in all material respects with the Applicable Servicing Criteria. This positive finding means JDCC has followed the rules for managing and collecting on the Trust's loans, including proper handling of payments, defaults, and reporting.
• No Material Legal Issues: The filing states no significant legal proceedings exist against the Trust or key entities (JDCC, JDR, DCS) that would materially impact Note investors. This reduces a potential source of unexpected risk.

4. Trust Financial Structure

• Cash Flow Waterfall: The 10-K outlines the precise order for distributing cash flows from the underlying receivables to pay expenses, servicer fees, interest to Noteholders, principal to Noteholders, and finally, any residual to the equity holder. This waterfall is critical for understanding payment priority.
• Cash Flows: The report details cash collections from receivables, distributions made, and the Trust's resulting cash position.

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In Summary for Investors: This 10-K confirms the John Deere Owner Trust 2023's structural and operational compliance. It clarifies the Trust's role as a financing vehicle for John Deere equipment loans, distinct from the equipment manufacturer. Key insights include the roles of the various John Deere entities, confirmation of JDCC's compliance with servicing criteria, and the absence of material legal proceedings. The filing also details the cash flow waterfall and general cash flow information. Understanding these aspects, along with the identified risk factors, is crucial for evaluating an investment in these asset-backed securities.