ABS

The latest consumer conditions study from the American Financial Services Association paints a less-than-rosy picture of how lenders expect the second half of the year to play out.

Assets have a non-zero credit score is 631, notably lower than previous transactions. Also, a slight majority of borrowers, 53.23%, have credit scores of 660 or lower.

The current pool's major loan characteristics were higher than that those seen on the RKTL 2026-2, with 60-month loans representing a higher concentration of the current pool (77.0%) compared with 73.7% on the previous deal.

Structured as a master trust deal, AVCCT 2026-1 includes a three-year revolving period, when no principal payments will be made on the series 2026-1—unless an early amortization event happens.

Notes are expected to pay coupons of 4.05% on the notes rated R-1 (high) (sf) and 4.59% and 4.79% on the A1 and A2 notes, respectively.

The rule 144A deal's structure includes a cash collateral account represents 1.00% of the note balance across all tranches.

Until this quarter, car-loan delinquencies for the Detroit-based bank had been steadily dropping. But in the spring of 2026, that momentum showed signs of slowing.

After the turbo period—months 12 through 39—classes A2, A2, B, C, D, E and F1 will receive enough principal payments to reach their respective target note balances and stay there.

The pool includes called collateral and smaller concentrations of loans originated in higher credit tiers, resulting in some underlying asset weakness compared with a previous deal.

The initial overcollateralization level was 14.50%, an increase from 14.00%. Target overcollateralization, meanwhile, increased to 18.75, compared with 16.50% on the previous deal.

Subprime auto and unsecured consumer loans are under pressure even as overall ABS performance remains steady.

The current transaction issues an additional series of notes, which will be paid to noteholders after it reaches the overcollateralization targets for the other notes.

Navient will follow a sequential repayment structure, and no subordinate classes will receive any principal until the most senior outstanding class is paid in full.

This series of CarMax Select Receivables notes is offering 8.42% in excess spread, a reduction from 9.85% on the CMXS 2026-A notes.

Defaults have also bumped up, another problematic indication of stress for investors in securitizations of consumer loans.