The average annual cash bonus fell 2% to $176,500 in 2023, the lowest since 2019. The drop was far less dramatic than it was in 2022, when the average bonus slumped 25%.

Diversification is just one of the deal's strengths, which includes higher excess spread than comparable floorplan transactions. The largest dealer accounts for 0.72% of the pool balance.

Banks have been boosting purchases of top-rated CLOs. Commercial bank holdings of mortgage bonds are also on the upswing, climbing 12 of the last 15 weeks.

Issuance has been scant since DRIVE 2021-3 closed in November 2021. A lack of comparison deals from recent years makes it more difficult to forecast losses.

The underlying loans are fixed rate, and they are financing a lower percentage of new vehicles, 22.8%. The loans also have a lower weighted average front-end loan-to-value (LTV) of 95.5%.

The collateral has a high principal payment rate, 63.1%, for the eleven months ended November 2023. It also had payment rates of 66.7% and 59.0% for the twelve-month averages for 2022 and 2021, respectively.

FCALT 2024A has a lower ratio of leases with an original term of 48 months, at 8.17%, compared with 6.85% on FCALT 2023B.

Despite tougher economic conditions, BNPL lenders are driving growth by expanding to new audiences and checkout channels, as well as fine-tuning proprietary risk-management models.

The A1 and A2 notes have a revolving period during which investors will receive fixed-rate and floating-rate payments, respectively.