Exeter Automobile Receivables Trust notes see Fitch upgrades and negative outlooks

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Exeter Auto Trust Fitch moves

Highlights

Fitch upgrades class D notes of EART 2022-5 and 2022-6 to Positive Outlook but maintains Negative Outlook for class E notes due to ongoing weak performance.
September 2026 metrics show 61-plus day delinquencies at 13.59% for 2022-5 and 12.89% for 2022-6, with cumulative net losses at 26.42% and 26.53%, exceeding initial rating case proxies.
Fitch raises lifetime cumulative net loss proxies to 31.25% for 2022-5 and 32.00% for 2022-6, tightening rating pressure and reflecting increased risk of further deterioration.

Rating actions reflect loss trends and credit support

As reported by Fitch Ratings, the agency says the outstanding note actions for EART 2022-5 and 2022-6 reflect available credit enhancement, loss performance to date and information received from the issuer during its annual review process.

Fitch says cumulative net losses are running above the initial rating case proxies for both series, while hard credit enhancement has increased for all note classes since closing because of the lower current collateral balance. The agency assigns Positive Outlooks to the class D notes, pointing to potential upgrades over the next one to two years, while the class E notes keep Negative Outlooks because they still face possible downgrades over the same period.

Both transactions previously receive capital contributions that improve loss coverage, but Fitch says it continues to hold negative views on the class E notes because of weak ongoing performance and erosion in overcollateralization that previously prompted those capital infusions. The agency says it continues to monitor collateral performance and any effect on loss coverage for further rating pressure.

September metrics show ongoing stress in auto ABS pools

As of the September 2026 distribution date, 61-plus day delinquencies stand at 13.59% for EART 2022-5 and 12.89% for EART 2022-6. Cumulative net losses reach 26.42% and 26.53%, respectively, versus Fitch's initial rating case proxies of 18.75% and 19.00%.

Overcollateralization also remains below target levels. EART 2022-5 has overcollateralization of 15.48%, below its 18.00% target, while EART 2022-6 has 12.20%, below its 17.30% target.

Fitch says its revised lifetime cumulative net loss proxies take into account the remaining pool factors, collateral composition, performance to date and macroeconomic conditions that influence loss frequency. The assumptions also factor in wholesale vehicle values, which affect recovery rates and overall transaction losses.

To account for the risk of further deterioration in delinquencies and losses, Fitch raises its rating case loss proxies to 31.25% for 2022-5 and 32.00% for 2022-6, up from 28.00% and 29.00% at the last review. Updated cash flow modeling shows loss coverage multiples for the rated notes are consistent with or above 2.50x for 'AAsf' and 1.25x for 'BBsf', except for minor acceptable shortfalls from multiple compression on class E notes in series 2022-5. Fitch's base case loss expectations, which are not used in its quantitative rating analysis, stand at 30.50% for 2022-5 and 31.25% for 2022-6 based on its Global Economic Outlook for September 2026, transaction performance and projections.

Our earlier coverage of Fitch’s review of the AASET 2024-2 aviation ABS transaction explained that the deal’s investment-grade ratings were affirmed after note balances deleveraged ahead of schedule and collateral metrics improved under the agency’s updated Aviation ABS Rating Criteria. It also highlighted the sector backdrop, with Fitch revising its 2026 global airline outlook to deteriorating amid higher jet fuel costs and rising demand risks—factors that can influence stress assumptions in ABS surveillance.

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