#USA #Fitch Ratings #PenFed Credit Union #Auto Loans #Tysons, Virginia

Fitch Ratings Upgrades PenFed Auto Loan Securitizations

In a significant move reflecting robust financial performance, Fitch Ratings has announced upgrades to the ratings of the bonds issued through PenFed Credit Union's prime auto loan securitization, known as PenFed Auto Receivables Owner Trust 2024-A. This upgrade was driven by the exceptional performance of the financial instruments, showcasing PenFed's strength in the auto loan market.

Rating Details

On July 28, 2025, Fitch upgraded the class B notes while affirming the ratings on class A, C, and D notes. Notably, the class A notes received a reaffirmation and maintain a stable outlook, indicating Fitch’s confidence in their ability to withstand adverse credit conditions. The class B notes' upgrade signifies improved risk metrics and the potential for heightened investor confidence.

Additionally, Fitch revised the Rating Outlooks for classes C and D from Stable to Positive, suggesting an upward trajectory in their rating in the near future. This positive shift is attributed to the solid credit enhancements and favorable loss performance observed thus far.

According to the latest report from June 2025, delinquency rates over 60 days stood at an impressively low 0.25% of the collateral balance, while cumulative net losses (CNL) were recorded at 0.26%. These metrics are significantly below the initial rating case of 1.60%, indicating that the collateral pool is performing exceptionally well, even better than anticipated.

Financial Enhancements

Fitch has acknowledged that the cumulative net losses are currently tracking inside a revised rating case credit proxy, which was lowered from 1.60% to a more conservative 1.30%. This adjustment reflects Fitch's recognition of the potential for increased delinquencies but also highlights the strong performance metrics that PenFed has delivered. The hard credit enhancement levels have improved for all classes since the securitization closed, further bolstering investor confidence in the stability and security of these investments.

The rating actions by Fitch underscore the performance of the collateral pool, which has remained within expectations, and affirm that the securities are capable of handling potential stress scenarios. This resilience is illustrated by their consistent ability to remit full payments to investors per the terms laid out in their financial documentation.

The base case credit loss expectation as evaluated by Fitch is currently pegged at 0.80%. This statistic, which does not incorporate a margin of safety, stems from Fitch’s Global Economic Outlook for June 2025 and aligns with historical performance metrics from previous securitizations.

About PenFed Credit Union

Established in 1935, PenFed Credit Union has grown into one of America’s largest federal credit unions, boasting nearly three million members globally and assets amounting to approximately $31 billion. PenFed has built a strong reputation for its wide array of financial products, including competitive auto loans, personal loans, mortgages, and a variety of other services, all tailored with the welfare of its members in mind.

PenFed's auto loan portfolio ranks among the largest in the nation, with operations across all 50 states and Puerto Rico, providing a comprehensive suite of products to its members. Its dedication to exceptional service and member satisfaction is continually reinforced through responsible lending practices and rigorous financial management, as evidenced by the latest ratings from Fitch.

For further details about PenFed’s offerings or to learn more about membership opportunities, visit PenFed.org, follow them on social media, or view employment opportunities on LinkedIn.