Press Release|ABS
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KBRA Affirms and Upgrades Ratings for LAD Auto Receivables Trusts

9 Sep 2025   |   New York

Contacts

KBRA affirms its ratings for 24 classes of notes and upgrades its rating on 15 classes of notes issued from 9 LAD Auto Receivables Trusts (“LADAR”) transactions. KBRA’s analysis indicated that existing credit enhancement for the notes is sufficient to support the revised and affirmed ratings. All of the securities with upgraded ratings experienced increased credit enhancement. The data used for this review is as of the August 2025 distribution date (July 2025 collection period). To date, the securities have received timely interest payments.

In performing its rating review, KBRA utilized its Auto Loan ABS Global Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology. In determining these rating actions, KBRA reviewed the collateral performance to date and projected the remaining loss for the transactions based on current assumptions. The rating actions, along with related deal and tranche performance information, are available in spreadsheet form in the accompanying LAD Auto Receivables Trust Comprehensive Surveillance Dashboard.

Driveway Finance Corporation (“DFC” or the “Company”) has issued 11 securitizations since 2021, all of which are back by near prime collateral. The Company issued four securitizations under the LADAR shelf in 2023 and three in 2024. DFC was incorporated in Oregon in September 2012 under the name Southern Cascades Finance Corporation and rebranded as DFC on January 1, 2021. DFC is a wholly owned subsidiary of Lithia Financial Corporation, itself a wholly owned subsidiary of Lithia Motors, Inc. (“Lithia”). DFC has been originating and servicing loans in the automobile finance business since September 2012, initially targeting a subprime borrower base. Since May 2020, the Company has been a full credit spectrum lender, financing vehicles exclusively to Lithia customers through Lithia’s dealership network and e-commerce business channels.

Lithia was founded as a single automotive dealership in 1946 in Ashland Oregon, became incorporated in 1968, and completed an initial public offering on the New York Stock Exchange in 1996, trading under the ticker “LAD.” Today, Lithia is a Fortune 500 company operating 470 franchised dealership locations representing 52 brands in the United States, Canadian provinces, and the United Kingdom. Lithia offers an array of products and services including new and used vehicles, insurance, automotive repair and maintenance, and automobile financing through its DFC subsidiary. As of June 30, 2025, Lithia had total assets of $24.2 billion and equity of $7.0 billion. Lithia generated net income of $465.6 million in the six months ending June 30, 2025.

Click here to view the report.

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

Methodologies

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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