Carvana is preparing to sponsor a $934.7 million securitization of revenue from a pool of prime retail auto loan contracts, even as the deal faces potential headwinds from the impact of tariff policy and the risk of declines in used vehicle prices.
The deal will sell the notes through seven tranches of notes, which have legal final maturity dates ranging from Dec. 10, 2026 on the A1 tranche to Nov. 10, 2033 on the D notes, according to analysts at Moody's Ratings. There is also a class N tranche of notes that make payment to those noteholders if funds are available after the overcollateralization.
All the notes will pay investors a fixed rate based on the one-month I-curve, according to Asset Securitization Report's deal database, which also finds that the notes benefit from subordination, overcollateralization and reserve fund representing 0.50% of the note balances.
Although Carvana began to experience financial weakness in 2022 and 2023, higher unit sales and an improvement in retail gross profit per vehicle the company resumed generating positive earnings over the past several quarters, according to Moody's.
Recent securitizations have also improved, according to Moody's. Net charge-offs as a percentage of average principal outstanding for its managed portfolio reached 4.1% as of Sept. 30, 2025, down from 4.4% from the same period a year before.
One thing that works favor of the transaction, CRVNA 2025-P4, is that Bridgecrest Credits, has more than 30 years of experience servicing auto loans. Bridgecrest has a servicing portfolio of about $25 billion, and manages about $450 million in payment collections each year.
Classes A1 through A4 benefit from total initial hard credit enhancement levels that represent 10.70% of the note balance, Moody's said. Otherwise, credit enhancement levels amount to 6.75%, 3.00%, 0.50% and 0.25% to classes B, C, D and N.
Moody's assigns P1 to the A1 notes; Aaa on the A2 through A4 notes; Aa2 to the class B notes; A3 to the class C notes; and Baa3 to the class D notes. S&P assigns A1+ to the A1 notes; AAA to the A2 through A4 notes; AA to the class B notes; and A, BBB and BB- to classes C, D and N, respectively.
