KBRA Downgrades All Outstanding TAST Ratings and Maintains Watch Downgrade

KBRA downgraded and maintained its Watch Downgrade Placements on all 34 outstanding ratings from seven Tricolor Auto Securitization Trust (TAST) transactions. These rating actions reflect the potential missed distribution of funds on the September distribution date and the likelihood of disruptions to collections and noteholder remittances due to the ensuing servicing transfer and resignation of the Indenture Trustee, as further described below.

The ratings were previously placed on Watch Downgrade following Tricolor Holdings, LLC filing a Chapter 7 petition on September 10, 2025, amidst allegations of fraud. Tricolor Auto Acceptance, LLC (“Tricolor” or the “Company”) was included as a debtor in the Chapter 7 filing. Tricolor was the Originator for the loans in these auto ABS transactions and Tricolor served as the transaction Servicer, with Vervent, Inc. (“Vervent”) designated as Back-up Servicer.

Following Tricolor’s bankruptcy filing, Wilmington Trust, National Association (“WTNA”), as Indenture Trustee, provided notice of a servicer termination event for each of the outstanding TAST transactions. Vervent is expected to assume the servicing responsibilities, however their ability to take over Tricolor’s servicing operations is subject to authorization by the related bankruptcy court. On September 19, 2025, the Bankruptcy Court issued an order authorizing Vervent to access and use funds from the Company’s collection accounts, subject to certain approvals. The order is effective until October 17, 2025 unless extended by the Bankruptcy Court. KBRA has made several attempts to contact representatives of Vervent and was unable to confirm whether the transfer had occurred. As of September 21, 2025, KBRA’s understanding based on media reporting is that the servicing transfer, while expected, has not yet occurred. Involuntary servicing transfers can cause meaningful disruptions in collection activity and may result in decreased recoveries, particularly with respect to subprime borrowers.

September 15, 2025 was the scheduled September distribution date, the first to occur after the Company’s bankruptcy filing. To KBRA’s knowledge, no servicer report was made available and therefore KBRA has no evidence that funds to pay interest or principal were distributed to noteholders. Failure to pay interest to the most senior outstanding class, if uncured for five business days (i.e., as of September 22, 2025), would constitute an event of default pursuant to each transaction’s indenture. Although funds were available in the reserve account to cover interest payments, KBRA was unable to confirm whether payments were made to the noteholders for the September distribution.

On September 20, 2025, WTNA as Indenture Trustee and Custodian for each transaction provided notice of its resignation as Indenture Trustee (and, thereby, its termination as Custodian). The resignation of the Indenture Trustee will become effective upon the acceptance of appointment by a successor Indenture Trustee pursuant to Sections 2.05(a) and 6.08(e) of the Indenture and Sections 3.04(a) and 3.11 of the Trust Agreement.

The table below displays the current capital structures and the rating actions undertaken in this review.

KBRA will continue to monitor the performance of the transactions and will seek to resolve or update the Watch Placements in due course. KBRA has made attempts to reach the Company but has not been able to make contact. KBRA has also made several attempts to contact representatives for the back-up servicer and the indenture trustee, and while KBRA was able to make contact, these parties were unable to share any meaningful information with KBRA as noted above. If KBRA continues to not receive sufficient information to allow KBRA to maintain ratings on the transactions, KBRA may withdraw such ratings.

For additional information regarding a specific transaction, see the list below to access such transaction’s ratings, reports, and disclosures:

Methodologies