S&P Upgrades PenFed Auto Loan Securitizations Due to Strong Performance

S&P Global Ratings upgraded ratings on three classes and affirmed ratings on three remaining classes in PenFed Auto Receivables Owner Trust 2022-A.

Positive Outlooks were assigned to the class B, C and D notes.

The affirmations and upgrades reflect collateral performance to date, expectations regarding future collateral performance, the transaction's structure and credit enhancement.

PenFed Credit Union, the nation's second-largest federal credit union, received notable upgrades on the ratings of the bonds issued through its inaugural prime auto loan securitization offering PenFed Auto Receivables Owner Trust 2022-A (PAROT 2022-A) due to strong performance.

The rating actions reflect collateral performance to date and S&P expectations regarding future collateral performance, as well as the transaction's structure and credit enhancement. Additionally, S&P incorporated secondary credit factors, including credit stability, payment priorities under various scenarios, and sector- and issuer-specific analyses. Considering all these factors, S&P believes the creditworthiness of the notes remains consistent with the raised and affirmed ratings. S&P's full rating action commentary can be found here.

PenFed's August 2022 transaction issued $460,292,000 of fixed-rate, amortizing asset-backed notes backed by prime auto loans. The securitization is a private placement offering, which in the United States is offered only to qualified institutional buyers under Rule 144A. The asset-backed notes were offered in four senior and three subordinate tranches of notes and rated by S&P and Fitch.

PenFed has the second-largest consumer loan portfolio among all credit unions across auto, personal, student, consumer loans and credit cards. PenFed also possesses one of the largest auto loan portfolios among federal credit unions, with originations across all 50 states and Puerto Rico.