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HBAN will service the transaction, with an A3 rating for long-term, senior unsecured debt, an A2 long-term credit assessment, and P-1 for short-term deposits.

The company was able release credit reserves because of actual and forecasted prices that boosted net income, CEO Priscilla Almodovar said.

The notes benefit from total hard target credit enhancement of 16.50%, with an estimated 4.02% in estimated excess spread per year.

Like a growing number of auto ABS deals, the pool has more battery electric vehicles, which represent 10.6% of the pool, compared with 3.8% on the previous deal, FCAOT REV 2023-1.

The government-sponsored enterprise financed 955,000 mortgages last year, down from the 1.8 million loans it backed in 2022.

The risk that inflation could remain stuck above their 2% target is guiding Fed officials' preference to keep interest rates where they are for now, even as investors have clamored for cuts.

Treasuries sold off, with two-year yields hitting the highest since before the December central bank "pivot." Swap traders ratcheted down their expectations for a Fed cut before July.

Consumer obligors represent a slight majority of the pool, 54%, while loans to commercial obligors represent the remaining 46%.

Shared services organizations PSCU and Co-op Solutions are offering post-purchase buy now/pay later loans, with the goal of reaching consumers who are concerned about managing their credit.

In the current pool, some 77.4% for all three pools are composed of tier A loans. This is slightly higher than the concentrations of tier A loans seen in several previous deals.