John Deere Owner Trust 2023-B

John Deere Owner Trust 2023-B Annual Report: A Review for Investors

Curious about your investment in John Deere Owner Trust 2023-B? This review cuts through the jargon of its latest Form 10-K filing (for the fiscal year ended November 2, 2025) to explain what this unique investment vehicle means for you. Unlike traditional stock in a company like Deere & Company, this Trust offers a different kind of opportunity.

Understanding Your Investment: John Deere Owner Trust 2023-B

Business Overview

John Deere Owner Trust 2023-B is a special purpose entity that issues asset-backed securities (ABS). Unlike a traditional company, it doesn't make products or earn revenue. Instead, this entity was created to:

• Acquire Assets: The Trust purchases a pool of customer loans (also called "receivables") from John Deere Capital Corporation (JDCC) that financed new and used agricultural and construction equipment.
• Issue Securities: The Trust then issues "Notes" (debt securities, similar to bonds) to investors. Cash flows from the underlying customer loans back these Notes.
• Facilitate Payments: As customers make payments on their equipment loans, the Trust uses these funds to pay interest and principal to the Noteholders.

Key Roles:

• John Deere Capital Corporation (JDCC): JDCC plays multiple roles: "Sponsor" (initiates the securitization), "Servicer" (manages and collects payments on the underlying loans), and "Administrator" (handles the Trust's day-to-day operations).
• U.S. Bank Trust Company, National Association: This independent "Trustee" oversees the Trust's operations, ensuring compliance with governing documents and protecting Noteholder interests.

Your investment in this Trust means you own "Notes," which are claims on the cash flows from these equipment loans, not equity in a company.

Fiscal Year 2025 Performance Overview (Reporting Period: October 28, 2024, to November 2, 2025)

Financial Performance & Management Discussion

For an ABS Trust, "performance" is measured by the health of the underlying loan portfolio and the efficiency of its administration.

• Servicer and Administrator Compliance: Both key entities showed strong operational compliance:

  • John Deere Capital Corporation (JDCC): JDCC confirmed its compliance, in all material respects, with the specific servicing criteria outlined in SEC Regulation AB for managing the underlying loan portfolio. This compliance covers its entire asset-backed securities platform. An independent accounting firm, Deloitte & Touche LLP, confirmed JDCC's assessment, providing external validation.
  • U.S. Bank Trust Company, National Association: U.S. Bank also confirmed its compliance, in all material respects, with its specific applicable servicing criteria as Trustee and Administrator. This applies to its wider Corporate Trust Asset-Backed Securities Platform. Ernst & Young LLP, another independent accounting firm, confirmed U.S. Bank's assessment.

  This dual confirmation by independent auditors provides confidence in the operational integrity and adherence to regulatory standards from those managing the assets and the Trust.

Financial Health & Credit Enhancement

Financial Health

The Trust's financial health is directly tied to the asset pool's performance and the structural protections in place for Noteholders. These typically include:

• Overcollateralization: The principal balance of the underlying loans exceeds the principal balance of the Notes issued (e.g., 105% overcollateralization), which acts as a buffer against losses.
• Reserve Accounts: The Trust holds cash reserves to cover potential shortfalls in payments to Noteholders.
• Subordination: Different classes of Notes (e.g., Class A, B, C), meaning junior classes absorb losses before senior classes do, protecting the higher-rated Notes.

Key Risks for Noteholders

Risk Factors

While the 10-K summary indicated no material legal proceedings, investors in ABS Notes face specific risks that differ from equity investments:

• Credit Risk of Borrowers: The primary risk is that equipment loan borrowers might default, causing losses in the asset pool. This risk is influenced by economic conditions, particularly in the agricultural and construction sectors.
• Economic Downturns: A significant downturn in the agricultural or construction industries could hurt equipment sales, borrower income, and repossessed collateral values, leading to more delinquencies and losses.
• Servicer Performance Risk: While JDCC showed compliance, future operational failures or inefficient loan servicing could affect Noteholder cash flows.
• Prepayment Risk: If interest rates decline, borrowers might refinance their loans, resulting in earlier principal repayment. While generally positive, it may mean reinvesting at lower rates. Conversely, if rates rise, prepayments may slow, extending the investment's duration.
• Interest Rate Risk: For Notes with floating interest rates, rising rates could raise the Trust's funding cost (if applicable) or affect the Notes' market value.
• Liquidity Risk: While ABS Notes generally trade in institutional markets, their liquidity can vary, especially for smaller portions or during periods of market stress.
• Non-Recourse Nature: The Notes are obligations of the Trust only; Deere & Company or John Deere Capital Corporation do not directly guarantee them. Investors rely solely on the securitized assets' performance and structural credit enhancements.

Competitive Position

Not Applicable for an Asset-Backed Securities Trust

An asset-backed securities trust, such as John Deere Owner Trust 2023-B, is a special purpose entity created solely to hold financial assets and issue securities backed by them. It doesn't engage in competitive business, produce goods, or compete for market share like a traditional operating company.

Conclusion

John Deere Owner Trust 2023-B offers investors a way to access cash flows from John Deere equipment financing. The fiscal year 2025 report highlights strong operational compliance from John Deere Capital Corporation (as Servicer and Administrator) and U.S. Bank Trust Company (as Trustee), which independent auditors validated. While the Trust itself does not have traditional financial statements, its performance is directly tied to the health and management of its underlying equipment loan pool. Investors should focus on the stability of delinquency and loss rates, the strength of credit enhancements, and the broader economic outlook for the agricultural and construction sectors when evaluating this debt investment opportunity.