Fitch Ratings has affirmed four classes of asset-backed floating-rate notes from Plenti Auto ABS Trust 2022-1 and Plenti Auto ABS Trust 2023-1 at 'AAAsf'.

The Outlook is Stable. The transactions are backed by pools of first-ranking Australian automotive loan receivables originated by Plenti Finance Pty Limited, a subsidiary of Plenti Group Limited (Plenti). The notes were issued by Perpetual Corporate Trust Limited in its capacity as trustee.

RATING ACTIONS

Entity / Debt

Rating

Prior

Plenti Auto ABS Trust 2022-1

A AU3FN0069100

LT

AAAsf

Affirmed

AAAsf

A-X AU3FN0069118

LT

AAAsf

Affirmed

AAAsf

Plenti Auto ABS Trust 2023-1

A AU3FN0078267

LT

AAAsf

Affirmed

AAAsf

A-X AU3FN0078275

LT

AAAsf

Affirmed

AAAsf

Page

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VIEW ADDITIONAL RATING DETAILS

KEY RATING DRIVERS

Stable Asset Performance: Obligor default is a key assumption in our quantitative analysis. The performance of the underlying assets has been better than Fitch's base-case default expectations for Plenti 2022-1. Plenti 2023-1 closed in June 2023, resulting in limited performance reporting. The assumptions used in this analysis are detailed below.

Weighted-average (WA) base-case remaining default expectations (and 'AAAsf' default multiples):

Plenti 2022-1: 2.3% (6.25x)

Plenti 2023-1: 2.5% (5.9x) - unchanged from closing

Base-case recovery expectations (and 'AAAsf' recovery haircuts) are as follows, all unchanged from closing:

Plenti 2022-1: 30.0%% (50.0%)

Plenti 2023-1: 30.0%% (50.0%)

The 30+ day arrears as of end-February 2024 were 1.8% for Plenti 2022-1 and 1.5% for Plenti 2023-1, tracking above Fitch's 3Q23 Australian Dinkum ABS Index of 1.19%. The 60+ day arrears over the same period were 0.6% and 0.5%, respectively, compared to the Dinkum ABS Index of 0.55%.

Cumulative net losses at end-February were 0.5% for Plenti 2022-1 and 0.2% for Plenti 2023-1. Defaulted loans in Plenti 2022-1 have predominantly consisted of used cars (83% of defaults) and have been concentrated in the Tier 1 and 2 consumer risk categories.

Cumulative recoveries as of end-February 2024 were 41.5% for Plenti 2022-1 and 12.3% for Plenti 2023-1, compared to base-case recovery assumptions of 30%. The actual cumulative recovery rates may be understated, as there may be receivables that have defaulted but have yet to receive full recoveries.

Portfolio performance is supported by Australia's continued economic growth and tight labour market, despite rapid interest rate hikes in 2022-2023. GDP growth was 1.5% in 2023 and unemployment was 4.1% in January 2024. Fitch forecasts GDP growth of 1.4% in 2024, with unemployment rising to 4.2%. This reflects Fitch's expectation of the impact of China's property downturn and lagged effects of tighter monetary policy on consumption.

No Updated Cash Flow Modelling: Cash flow analysis was not performed for the transactions, as the rated notes are rated at the highest possible level, credit enhancement has increased since closing and all other variables are in line with expectations. Excess spread has been variable due to the paydown of the Class A-X principal through the interest waterfall based on a pre-determined amortisation schedule. There have been no principal draws, liquidity draws or note charge-offs.

Plenti 2022-1 is currently paying down principal pro rata, with pro rata triggers in place that can switch principal paydown back to sequential if breached. Plenti 2023-1 is currently paying sequentially and therefore continuing to build up credit enhancement.

Low Operational and Servicing Risk: All receivables were originated by Plenti Finance, which demonstrates adequate capability as originator, underwriter and servicer. Plenti is not rated by Fitch. Servicer disruption risk is mitigated by back-up servicing arrangements. The nominated back-up servicer is Perpetual Corporate Trust Limited. Fitch undertook an operational and file review and found that the operations of the originator and servicer were comparable with those of other auto lenders.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

Transaction performance may be affected by changes in market conditions and the economic environment. Weakening asset performance is strongly correlated with increasing levels of delinquencies and defaults that could reduce credit enhancement available to the notes.

Downgrade Sensitivity

Unanticipated increases in the frequency of defaults could produce loss levels higher than Fitch's base case and are likely to result in a decline in credit enhancement and remaining loss-coverage levels available to the notes. Decreased credit enhancement may make certain note ratings susceptible to negative rating action, depending on the extent of coverage decline. Hence, Fitch conducts sensitivity analysis by stressing a transaction's initial base-case assumptions. Fitch stresses the recovery rate to isolate the effect of a change in recovery proceeds at the borrower level.

For Fitch's previous rating sensitivities, please see:

rating action commentary for Plenti 2022-1, dated 16 June 2022; and

rating action commentary for Plenti 2023-1, dated 9 June 2023.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

The rated notes are at 'AAAsf', which is the highest level on Fitch's scale. The ratings cannot be upgraded and so upgrade sensitivities are not relevant.

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information as part of its ongoing monitoring.

Prior to the transactions closing, Fitch reviewed the results of third-party assessments conducted on the asset portfolio information, and concluded that there were no findings that affected the rating analysis.

As part of its ongoing monitoring, Fitch reviewed a small targeted sample of the originator's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio.

Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis, according to its applicable rating methodologies, indicates that it is adequately reliable.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

The issuer has informed Fitch that not all relevant underlying information used in the analysis of the rated notes is public.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/topics/esg/products#esg-relevance-scores.

Additional information is available on www.fitchratings.com

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