Finance Ireland Auto Receivables no. 1 DAC class C notes upgraded by Fitch, senior tranches affirmed

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Finance Ireland auto notes upgrade

Highlights

Fitch upgraded Finance Ireland Auto Receivables no. 1 DAC class C notes to AAsf from A+sf, affirming class A at AAAsf and class B at AA+sf.
As of April 2026, loans more than 90 days delinquent were 0.6%, cumulative defaults 0.9%, and overall credit losses remained at 5.8% at the AAAsf level.
Credit enhancement increased due to recoveries used as principal proceeds, with combined voluntary termination and residual value loss at AAAsf falling to 3.9% by March 2026.

Transaction performance and rating action

As reported by Fitch Ratings, the agency upgraded the class C notes of Finance Ireland Auto Receivables no. 1 DAC to AAsf from A+sf, while affirming the class A notes at AAAsf and the class B notes at AA+sf.

The transaction is the first securitisation of auto loan receivables originated by Finance Ireland Credit Solutions DAC. The pool consists mainly of hire purchase receivables and personal contract purchase receivables.

Fitch said performance has remained in line with expectations since closing. As of the latest payment date in April 2026, loans more than 90 days delinquent stood at 0.6% and cumulative defaults were 0.9% of the initial portfolio balance, while default and recovery base cases remained unchanged and overall credit losses were 5.8% at the AAAsf level.

Credit enhancement and risk outlook

Credit enhancement has increased despite the pro rata amortisation of the class A to C notes since January 2025, after an initial sequential amortisation period. Fitch said this was supported by the treatment of recoveries as principal proceeds and their use for note amortisation through the April 2026 payment date, although it expects that treatment to stop from the next payment date and cash flows to revert to the allocation set out in the transaction documents.

The agency also said voluntary termination and residual value risk has fallen as the portfolio deleverages and the gap narrows between outstanding loan balances and stressed vehicle values. At March 2026, the combined voluntary termination and residual value loss at AAAsf fell to 3.9% from 6.5% at the last review, a shift that supported the affirmed ratings on the class A and B notes and the upgrade of the class C notes.

Fitch added that servicing continuity risk is adequately addressed even though the servicer is unrated and no back-up servicer was appointed at closing. A replacement servicer facilitator is in place, and the transaction's amortising reserve fund provides liquidity support. The agency said weaker asset performance, including higher defaults, lower recoveries or stronger market value stress, could pressure the ratings if macroeconomic conditions, business practices, credit policy or legislation deteriorate.

In our earlier article on Reach ABS Trust 2026-2, we covered Reach Financial’s $405.6 million term ABS backed by unsecured consumer loans and the preliminary ratings assigned across five note classes. We also outlined the transaction’s key credit enhancement features—such as overcollateralization, subordination, a closing-funded reserve, and excess spread—along with the deal’s structure and review items ahead of closing.

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