Morningstar DBRS Takes Credit Rating Actions on Four Arivo Acceptance Auto Loan Receivables Trust Transactions

DBRS, Inc. (Morningstar DBRS) eight credit ratings were confirmed, six credit ratings were upgraded, one credit rating was discontinued due to repayment, and one credit rating was withdrawn at the request of the issuer, from four Arivo Acceptance Auto Loan Receivables Trust transactions as detailed in the summary chart below

The credit rating actions are based on the following analytical considerations:
-- Arivo Acceptance Auto Loan Receivables Trust 2022-2 has amortized to a pool factor of 42.70% and has a current cumulative net loss (CNL) of 17.77%. Current CNL is tracking above Morningstar DBRS' initial base-case loss expectation of 9.10%. While current credit enhancement (CE) has increased for the Class A Notes, Class B Notes, and Class C Notes, CE has declined for the Class D Notes.

-- On November 19, 2024, Morningstar DBRS placed the credit rating on the Class D Notes from Arivo Acceptance Auto Loan Receivables Trust 2022-2 Under Review with Negative Implications.

-- Because of weaker-than-expected performance, Morningstar DBRS has revised the base-case loss expectation for Arivo Acceptance Auto Loan Receivables Trust 2022-2 to 22.25%.

-- As of the May 2025 payment date, Arivo Acceptance Auto Loan Receivables Trust 2022-2 has a current overcollateralization (OC) amount of 0.00% relative to the target of 12.00% of the outstanding receivables balance. Additionally, the transaction has a current cash collateral account (CCA) of 1.36% of the current aggregate pool balance.

-- For Arivo Acceptance Auto Loan Receivables Trust 2022-2, the Indenture was amended on February 14, 2024 to modify the definition of "Required Cash Collateral Account Balance" to mean an amount equal to 2.37% multiplied by the sum of (i) the aggregate Receivable Balance of the Initial Receivables as of the Initial Cut-Off Date and (ii) the aggregate Receivable Balance of all Subsequent Receivables as of the related Subsequent Cut-Off Date.

-- For Arivo Acceptance Auto Loan Receivables Trust 2022-2, the Indenture was amended on June 13, 2025 to modify the definition of "Class D Interest Rate" to mean 0.00%. Additionally, On June 12, 2025, a capital contribution of $4,600,000 was made by Arivo Acceptance, LLC to Arivo Acceptance Auto Loan Receivables Trust 2022-2 to the Collection Account.

-- Arivo Acceptance, LLC is the holder of one-hundred percent (100%) of the Class D Notes.

-- As of the May 15, 2025 distribution date, the CCA balance for Arivo Acceptance Auto Loan Receivables Trust 2022-2 is equal to $1,551,531.38, compared to the required balance of $6,351,584.63.

-- Morningstar DBRS has concluded its review and determined that the current level of hard CE (inclusive of the capital contribution of $4,600,000) and the estimated excess spread, are sufficient to support the current credit rating on the Class D Notes in Arivo Acceptance Auto Loan Receivables Trust 2022-2. Consequently, the aforementioned credit rating was confirmed, and the Under Review with Negative Implications status has been removed. Additionally, the credit rating on the Class D Notes has been withdrawn at the request of the issuer.

-- For Arivo Acceptance Auto Loan Receivables Trust 2021-1, losses are tracking below the Morningstar DBRS initial base-case CNL expectation. The current level of hard CE and estimated excess spread are sufficient to support the Morningstar DBRS projected remaining CNL assumption at multiples of coverage commensurate with the credit ratings.

-- For Arivo Acceptance Auto Loan Receivables Trust 2022-1, although losses are tracking above the Morningstar DBRS initial base-case CNL expectation, the current level of hard CE and estimated excess spread are sufficient to support the Morningstar DBRS projected remaining CNL assumption at multiples of coverage commensurate with the credit ratings.

-- For Arivo Acceptance Auto Loan Receivables Trust 2024-1, losses are tracking in line with Morningstar DBRS' initial base case CNL expectation. The current level of hard CE and estimated excess spread are sufficient to support the Morningstar DBRS' projected remaining CNL assumption at multiples of coverage commensurate with the credit ratings.

-- The credit rating actions are the result of collateral performance as of the May 2025 payment date, and Morningstar DBRS' assessment of future performance assumptions.

-- The transaction parties' capabilities regarding originating, underwriting, and servicing.

-- The transaction assumptions consider Morningstar DBRS' baseline macroeconomic scenarios for rated sovereign economies, available in its commentary, "Baseline Macroeconomic Scenarios for Rated Sovereigns March 2025 Update," published on March 26, 2025. These baseline macroeconomic scenarios replace Morningstar DBRS' moderate and adverse coronavirus pandemic scenarios, which were first published in April 2020.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025) https://dbrs.morningstar.com/research/454196.

Notes:
All figures are in US dollars unless otherwise noted

The principal methodology applicable to the credit ratings is Morningstar DBRS Master U.S. ABS Surveillance (April 10, 2025) https://dbrs.morningstar.com/research/451793.

Other methodologies referenced in these transactions are listed at the end of this press release.

The credit ratings were initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for these credit rating actions.

Morningstar DBRS had access to the accounts, management and other relevant internal documents of the rated entity or its related entities in connection with these credit rating actions.

These are solicited credit ratings.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

DBRS, Inc.
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The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- Operational Risk Assessment for U.S. ABS Originators and Servicers (March 26, 2025),
https://dbrs.morningstar.com/research/450709

-- Legal Criteria for U.S. Structured Finance (December 03, 2024),
https://dbrs.morningstar.com/research/444064

-- Rating U.S. Structured Finance Transactions (March 10, 2025),
https://dbrs.morningstar.com/research/449616

-- Rating U.S. Retail Auto Loan Securitizations (May 15, 2025),
https://dbrs.morningstar.com/research/454100

For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.