Fitch Ratings has assigned ratings and Rating Outlooks to the
The VZMT series 2024-3 notes represent the 19th overall term issuance from the VZMT. The notes are collateralized by device payment plan agreements (DPPs), which were originated by
RATING ACTIONS
Entity / Debt
Rating
Prior
A1A
LT
AAAsf
New Rating
A1B
LT
AAAsf
New Rating
B
LT
AA+sf
New Rating
AA+(EXP)sf
C
LT
AA-sf
New Rating
AA-(EXP)sf
Page
of 1
VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Solid Receivable Quality: The VZMT pool is revolving and primarily consists of DPPs that are originated and serviced by affiliates of
The pool also features business DPP receivables at 10.00%, the maximum permitted based on the contractual concentration limits. Fitch believes handset receivables are supported by borrowers' prioritization of these installment payments over other consumer loans given the essential nature of internet connectivity for work, school and telehealth.
The DPPs were originated at 24-month (0.09%), 30-month (1.87%) and 36-month (98.04%) original terms. In
The DPPs in the pool may revolve for up to three years. Fitch applied a stress multiple of 4.30x and 4.80x at the 'AAAsf' stress level, for the consumer and business portfolios, respectively.
The stress multiples reflect the length of the revolving period with the view that customer and business payment behavior on the DPPs could be negatively affected by a
Stable Historical Performance: To date, overall default performance of
Fitch currently rates
Adequate Servicing Capabilities: Fitch considers
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Unanticipated increases in the frequency of defaults or charge-offs on customer accounts could produce loss levels higher than the base case and would likely result in declines of CE and remaining loss coverage levels available to the notes. Decreased CE may make certain ratings on the notes susceptible to potential negative rating actions, depending on the extent of the decline in coverage.
Fitch conducts sensitivity analysis by stressing a transaction's initial base case default assumption an additional 10%, 25%, 50% and 100% and examining rating implications. These increases of the base case are intended to provide an indication of the rating sensitivity of the notes to unexpected deterioration of a trust's performance.
Rating sensitivity to increased defaults (class A/class B/class C):
VZMT Series 2024-3
Current Ratings: 'AAAsf'/'AA+sf'/'AA-sf'
Increased default base case by 10%: 'AAAsf'/'AA+sf'/'A+sf';
Increased default base case by 25%: 'AAAsf'/'AA-sf'/'Asf';
Increased default base case by 50%: 'AAsf'/'Asf'/'BBB+sf';
Increased default base case by 100%: 'Asf'/'BBBsf'/'BB+sf'.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Stable to improved asset performance driven by stable delinquencies would lead to increasing CE levels and consideration for potential upgrades.
Rating sensitivity from decreased defaults (class A/class B/class C):
VZMT Series 2024-3
Current Ratings: 'AAAsf'/'AA+sf'/'AA-sf'
Decreased default base case by 20%: 'AAAsf'/'AAAsf'/'AA+sf'.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Fitch was provided with Form ABS Due Diligence-15E (Form 15E) as prepared by
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.
REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS
A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by clicking the link to the Appendix. The appendix also contains a comparison of these RW&Es to those Fitch considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions'.
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 https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
Additional information is available on www.fitchratings.com
(C) 2024 Electronic News Publishing, source