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Related Content:
Avis Budget Rental Car Funding LLC, Series 2025-1 and 2025-2 (US ABS)
Avis Budget Rental Car Funding LLC, Series 2025-1 and 2025-2 - Appendix

���������ֳ� - New York - 15 May 2025: ���������ֳ� expects to assign ratings and Rating Outlooks to the notes issued by Avis Budget Rental Car Funding (AESOP) LLC, Series 2025-1 and 2025-2 (AESOP 2025-1 & 2025-2).

KEY RATING DRIVERS

Transaction Analysis — Sufficient Credit Enhancement: ���������ֳ� analyzed the structural features, including a monthly mark-to-market (MTM) vehicle value test and a minimum monthly vehicle depreciation test. This was done by stressing the transaction's liquidation timing, vehicle depreciation, disposition losses and expected carrying costs at various rating levels to determine an expected loss level (ELL). Credit enhancement (CE) for the notes comprises subordination, LOC and dynamic overcollateralization (OC), which will shift according to the fleet mix. CE levels for each class of notes are sufficient to cover ���������ֳ�'s maximum and minimum ELL for each class under the respective ratings.

The 2025-1 and 2025-2 series includes structural features that are consistent with recent prior series. This includes original equipment manufacturer (OEM) concentration limits, the inclusion of medium- and heavy-duty trucks and a different minimum depreciation rate of nonprogram vehicles (NPVs) to account for market value and an increase to the vehicle age limit.

Vehicle Value Risks — Depreciation Declined as Used Vehicle Values Rise: Decline of used vehicle values from historically elevated levels was observed through 2024 but has since been on an upward trend. This resulted in higher depreciation for NPVs and lower disposition proceeds in 2024. Depreciation has since declined as used vehicle values have strengthened, supporting the MTM and disposition tests in the trust. Box trucks have limited performance experience but were assumed to have an annual depreciation rate consistent with the minimum required depreciation for these vehicles in the first two years of life, which exceeds available historical depreciation data.

Collateral Analysis — High Fleet Diversity: AESOP's car and light truck fleet is deemed diverse due to the high degree of OEM, model, segment and geographical diversification. Concentration limits mitigate risks associated with OEM defaults, declining vehicle values or vehicle recalls. AESOP's vehicle fleet remains diverse, with a notable shift to NPVs in recent years as auto manufacturers push the burden of residual values onto rental car companies. Although a strong secondary vehicle market supported vehicle values, the aftermath of the supply issues stemming from the pandemic has constrained sales and purchases, leading to an aging fleet.

Rental Fleet Company/Servicer Operational Risks — Adequate Servicer and Fleet Manager: ABCR is deemed an adequate servicer and administrator, as evidenced by its fleet management abilities and securitization performance to date. ���������ֳ� does not publicly rate ABCR. The company's fleet remains stable, and AESOP trust performance metrics are within expectations across depreciation, MTM tests and disposition proceeds. defi AUTO, LLC, formerly known as Fiserv, is the backup disposition agent, while Lord Securities is the backup administrator. Both entities have substantial experience in their respective roles.

RATING SENSITIVITIES

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

Unanticipated increases in depreciation, declines in vehicle values and higher disposition losses in a fleet liquidation scenario can all combine to produce ELL levels higher than those currently determined in ���������ֳ�'s fleet liquidation scenario. Weakening rental market operations put the lease at risk of default in the future and pressure a rental car company's ability to meet its trust operating lease obligations, including adding in CE to cover unexpected jumps in depreciation levels as an example. Higher expected losses could affect the ratings and Outlooks, depending on the extent of the decline in coverage.

���������ֳ�'s rating sensitivity analysis focuses on two scenarios involving potentially extreme market disruptions that would force the agency to redefine its stress assumptions. The first scenario examines the effect of moving ���������ֳ�'s bankruptcy/liquidation timing scenario to eight months at 'AAAsf' with subsequent increases to each rating level. The second scenario considers the effect of moving the disposition stresses to the higher end of the range at each rating level for a diverse fleet of NPVs, and to the higher end of the range for a non-diverse fleet for trucks. For example, the 'AAAsf' stress levels would move to 28% from 24% and to 32% from 28% for NPVs and trucks, respectively.

The next sensitivity shows the impact of both stresses on the structure. The purpose of these stresses is to demonstrate the potential rating impact on a transaction if one or a combination of these scenarios were to occur.

With a sufficient increase in either the timing of the liquidation of the fleet or disposition fees, the class A notes could still be maintained at 'AAAsf'. To approach non-investment-grade rating levels or a 'CCCsf' rating, in addition to the combined scenario described above, depreciation costs would need to rise to previously unseen levels for the platform, increasing to, at minimum, 2x the highest monthly depreciation levels seen for both program vehicles and NPVs at the height of the recession.

In the event of an amendment to the base documents, the AESOP trust may be allowed to contain a certain portion of non-liened vehicles that do not give the trustee a first-priority-perfected security interest, and may not be available in the event of a bankruptcy of the owner of the vehicles and early amortization of the notes. Although the likelihood of this scenario is deemed extremely remote, to account for such a change, ���������ֳ� ran a sensitivity expected loss analysis assuming 5.00% of the asset base becomes unavailable in the event of a bankruptcy in both the best- and worst-case fleets, no rating impact on the class A notes and a potential downgrade of up to two notches for the class B and C notes.

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

Overall improvement in the secondary market and lower than expected depreciation versus historical levels could have a positive effect on the rating.

There is limited upgrade potential for rated rental fleet ABS notes given the revolving nature of the structure, where collateral changes on a daily basis through fleet purchases and dispositions, as well as trust concentration limits in place. Therefore, upgrades are very limited, if at all, as the composition of the fleet changes daily, which includes PV versus NPV (or risk vehicles), and OEM brand/segment/model concentrations.

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

���������ֳ� was provided with Form ABS Due Diligence-15E (Form 15E) as prepared by Deloitte & Touche LLP. The third-party due diligence described in Form 15E focused on comparing or recomputing certain information with respect to 365 vehicle records from the statistical data file. ���������ֳ� considered this information in its analysis and it did not have an effect on ���������ֳ�'s analysis or conclusions.

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 ���������ֳ� 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

As of March 31, 2025, electric vehicles make up 5.9% of AESOP's fleet. Together with the 25% concentration limit for Tesla vehicles, this did not have an impact on ���������ֳ�'s rating analysis or conclusions for this transaction; therefore, it has no impact on ���������ֳ�'s ESG Relevance Score.

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. ���������ֳ�'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 ���������ֳ�'s ESG Relevance Scores, visit /topics/esg/products#esg-relevance-scores.

Additional information is available on

ADDITIONAL DISCLOSURES

• Dodd-Frank Rating Information Disclosure Form
• ABS Due Diligence Form 15E 1
• Solicitation Status
• Endorsement Policy

ENDORSEMENT STATUS