Preliminary ratings
Class	Preliminary rating	Type	Interest rate(i)	Base amount (mil. $)	Upsized amount (mil. $)	Expected legal final maturity date
A-1	A-1+ (sf)	Senior	Fixed	191.20	241.40	Feb. 17, 2026
A-2a/A-2b(ii)	AAA (sf)	Senior	Fixed/floating	332.41	419.76	April 17, 2028
A-3	AAA (sf)	Senior	Fixed	332.41	419.76	March 15, 2030
A-4	AAA (sf)	Senior	Fixed	70.67	89.30	Nov. 15, 2030
B	AA+ (sf)	Subordinate	Fixed	29.11	36.76	Nov. 15, 2030
C	AA (sf)	Subordinate	Fixed	14.56	18.38	Oct. 15, 2031
Note: This presale report is based on information as of Jan. 15, 2025. The ratings shown are preliminary. This report does not constitute a recommendation to buy, hold, or sell securities. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. (i)The coupons on the tranches will be determined on the pricing date. (ii)The class A-2 notes will have a fixed interest rate or a combination of fixed and floating interest rates if both fixed- and floating-rate tranches are issued. If a floating-rate tranche is issued, the floating rate will be indexed to compounded SOFR plus a margin. The allocation of the principal amount between the class A-2a and A-2b notes will be determined on the pricing date. If class A-2b notes are issued, the depositor does not expect the initial principal balance of the class A-2b notes to exceed $248.05 million ($313.23 million if upsized).

Profile
Expected closing date	Jan. 29, 2025.
Collateral	Prime auto loan receivables.
Originator, sponsor, and servicer	World Omni Financial Corp. (BBB/Stable/A-2), a wholly owned subsidiary of JM Family Enterprises Inc.
Depositor	World Omni Auto Receivables LLC.
Issuing trust	World Omni Auto Receivables Trust 2025-A.
Indenture trustee	U.S. Bank Trust Co. N.A. (A+/Stable/A-1).
Bank account provider	U.S. Bank N.A. (A+/Stable/A-1).
Owner trustee	Wilmington Trust N.A. (A-/Negative/A-2).

Rationale

The preliminary ratings assigned to World Omni Auto Receivables Trust 2025-A's (WOART 2025-A) asset-backed notes reflect:

• The availability of approximately 9.8%, 7.5%, and 6.5% credit support (hard credit enhancement and excess spread) for the class A (classes A-1, A-2a, A-2b, A-3, and A-4), B, and C notes, respectively, based on stressed break-even cash flow scenarios. These credit support levels provide at least 5.0x, 4.5x, and 4.0x coverage of our expected cumulative net loss (ECNL) of 1.25% for the class A, B, and C notes, respectively (see the Credit Enhancement And Collateral and the Cash Flow Modeling Assumptions And Results sections).
• The expectation that under a moderate ('BBB') stress scenario (2.0x our expected loss level), all else being equal, our preliminary 'AAA (sf)', 'AA+ (sf)', and 'AA (sf)' ratings on the class A, B, and C notes, respectively, are within our credit stability limits (see the Cash Flow Modeling Assumptions And Results section).
• The timely payment of interest each month and full payment of principal by the designated legal final maturity dates under our stressed cash flow modeling scenarios, which we believe are appropriate for the assigned preliminary ratings.
• The collateral characteristics of the series' prime automobile loans, our view of the credit risk of the collateral pool, and our updated macroeconomic forecast for and forward-looking view of the auto finance sector (see the Credit Enhancement And Collateral and the Macroeconomic And Auto Finance Sector Outlook sections).
• The transaction's credit enhancement in the form of subordination, a nonamortizing reserve account, overcollateralization that builds to a target level and is subject to a minimum floor level, a yield supplement overcollateralization amount (YSOA), and excess spread (see the Credit Enhancement And Collateral section).
• Our review of World Omni Financial Corp.'s (World Omni; BBB/Stable/A-2) origination static pool data, managed portfolio data, and 39-year auto loan securitization track record, as well as WOART's historical and current securitization performance.
• The transaction's payment and legal structures.
• The series' bank accounts at U.S. Bank N.A., which do not constrain the preliminary ratings.
• Our operational risk assessment of World Omni as servicer and our view of the company's underwriting and servicing.
• Our assessment of the transaction's potential exposure to environmental, social, and governance credit factors, which are in line with our sector benchmark.

Credit Enhancement And Collateral

Structural changes from WOART 2024-C

The key credit enhancement and structural changes from the WOART 2024-C transaction include that:

• The initial YSOA discount rate decreased to 9.25% from 10.10%.
• If class A-2b floating-rate notes are issued, the YSOA discount rate will step down to 9.00% from 9.25% after the class A-2 notes are paid off, compared with 9.85% from 10.10% for WOART 2024-C. If no class A-2b notes are issued, the YSOA discount rate will be 9.00% from the outset.
• The initial YSOA amount decreased to approximately 6.54% (6.55% if upsized) of the initial adjusted pool balance from 8.43%.
• The estimated pre-pricing annual excess spread (adjusted for YSOA) slightly decreased to 3.50% from 3.52% due to the lower YSOA discount rate.

Table 1 shows a comparison of WOART 2025-A's credit enhancement and other recent WOART transactions.

Table 1

Credit enhancement summary
	2025-A (base)	2025-A (upsized)	2024-C	2024-B	2024-A	2023-D
Subordination (% of the initial adjusted receivables balance)
Class A	4.50	4.50	4.50	4.50	4.50	4.50
Class B	1.50	1.50	1.50	1.50	1.50	1.50
Class C	0.00	0.00	0.00	0.00	0.00	0.00
Reserve account (% of the initial adjusted receivables balance)
Initial	0.25	0.25	0.25	0.25	0.25	0.25
Target	0.25	0.25	0.25	0.25	0.25	0.25
Floor	0.25	0.25	0.25	0.25	0.25	0.25
Overcollateralization
Initial (% of the initial adjusted receivables balance)	0.00	0.00	0.00	0.00	0.25	0.25
Target (% of the current adjusted receivables balance)	0.90	0.90	0.90	0.90	1.15	1.15
Floor (% of the initial adjusted receivables balance)	0.50	0.50	0.50	0.50	0.50	0.50
Total initial hard credit enhancement (% of the initial adjusted receivables balance)
Class A	4.75	4.75	4.75	4.75	5.00	5.00
Class B	1.75	1.75	1.75	1.75	2.00	2.00
Class C	0.25	0.25	0.25	0.25	0.50	0.50
Total hard floor credit enhancement (% of the initial adjusted receivables balance)
Class A	5.25	5.25	5.25	5.25	5.25	5.25
Class B	2.25	2.25	2.25	2.25	2.25	2.25
Class C	0.75	0.75	0.75	0.75	0.75	0.75
YSOA discount rate initial (%)	9.25	9.25	10.10	10.75	10.35	11.15
YSOA discount rate (after step-down, if applicable) (%)(i)	9.00	9.00	9.85	10.50	10.10	10.90
Estimated excess spread per year (pre-pricing), including the YSOA (% of initial adjusted receivables balance)(ii)	3.5	3.5	3.5	4.2	4.1	4.1
Estimated excess spread per year (post-pricing), including the YSOA (% of initial adjusted receivables balance)(ii)	N/A	N/A	4.6	4.6	4.5	4.3
Initial gross receivables balance ($)	1,033,865,021	1,305,673,100	1,312,595,947	1,335,109,741	1,343,677,475	1,119,368,245
YSOA ($)	63,499,644	80,311,393	102,041,857	102,750,989	114,582,212	117,514,550
Initial adjusted receivables balance ($)	970,365,377	1,225,361,707	1,210,554,090	1,232,358,752	1,229,095,263	1,001,853,696
Initial overcollateralization ($)	5,377	1,707	4,090	58,752	3,075,263	2,513,696
Total securities issued ($)	970,360,000	1,225,360,000	1,210,550,000	1,232,300,000	1,226,020,000	1,038,750,000
(i)If class A-2b floating-rate notes are issued, the YSOA discount rate for the series 2025-A notes will step down to 9.00% from 9.25% after the class A-2 notes are paid off. If no class A-2b floating-rate notes are issued, the YSOA discount rate will be 9.00% from the outset. (ii)Includes the 1.00% annual servicing fee. WOART--World Omni Auto Receivables Trust. YSOA--Yield supplement overcollateralization amount. N/A--Not applicable.

Collateral changes from WOART 2024-C

The WOART 2025-A collateral pool is generally comparable to WOART 2024-C's except for certain notable differences:

• The weighted average seasoning increased to 7.23 months (7.24 if upsized) from 5.72 months.
• The average original amount financed increased to $36,369 ($36,383 if upsized) from $35,130.
• The average monthly payment increased to $651.80 ($652.26 if upsized) from $630.18.
• The percentage of used vehicles increased to 4.43% (4.44% if upsized) from 3.80%.
• The percentage of loans with remaining terms of 73-75 months decreased to 4.01% (4.04% if upsized) from 11.10%.
• The concentration of large trucks and SUV vehicles increased to 18.54% (18.66% if upsized) from 12.58%. Per the issuer, this increase in concentration can be attributed to the relaunch of the Land Cruiser and the higher incentives on Tundra.

Table 2 shows a comparison of the WOART 2025-A collateral pools (base and upsized) and other recent WOART pools. As of the Jan. 2, 2025, cutoff date, the WOART 2025-A base collateral pool consisted of $1.03 billion (approximately $1.31 billion if upsized) in World Omni-originated auto loans. The weighted average FICO score of 756 is in line with prior series' weighted average FICO score.

World Omni has introduced and applied tighter pool selection criteria for its WOART securitizations over time. This has resulted in higher credit quality pools and better performance than historical WOART pools. The eligibility criteria for WOART 2025-A remains consistent with those of recent WOART pools. They include that:

• None of the loans have an original term greater than 75 months.
• The loans have a minimum FICO score of 650. Loans with FICO scores of 649 and lower have been excluded from WOART pools since series 2017-B.
• Since WOART 2018-A, the securitized pools are made up of only Toyota-manufactured vehicles.
• Each loan in the securitized pool has made the first payment as of the cutoff date. This criterion was added to the transactions beginning with WOART 2019-C.

Table 2

Collateral comparison(i)
	2025-A (base)	2025–A (upsized)	2024-C	2024-B	2024-A	2023-D
Receivables balance (mil. $)	1,033.86	1,305.67	1,312.60	1,335.11	1,343.68	1,119.37
No. of receivables	35,835	45,263	46,537	47,844	40,916	42,446
Avg. original loan balance ($)	36,369	36,383	35,130	34,238	36,123	33,597
Weighted avg. contract rate (%)	6.61	6.60	6.67	7.32	6.54	6.13
Weighted avg. original term (mos.)	68.21	68.18	68.10	68.38	67.60	67.43
Weighted avg. remaining term (mos.)	60.99	60.95	62.37	62.60	61.97	59.81
Weighted avg. seasoning (mos.)	7.23	7.24	5.72	5.78	5.63	7.62
Weighted avg. FICO score	756	756	756	757	756	755
Average monthly payment ($)	651.80	652.26	630.18	622.23	666.03	601.47
FICO score distribution (%)
720+	65.99	66.15	66.09	67.22	67.13	66.63
700-719	10.16	10.19	9.70	8.88	9.74	10.18
680-699	10.15	9.94	10.03	9.83	9.84	9.92
650-679	12.10	12.14	12.83	12.70	12.03	12.09
No FICO score	1.60	1.59	1.36	1.37	1.26	1.18
Original term greater than 60 months (% of pool balance)	80.12	80.05	79.57	80.48	78.05	76.88
Original term of 61-72 months (% of pool balance)	56.91	56.93	55.77	44.72	46.30	51.83
Original term of 73-75 months (% of pool balance)	23.22	23.12	23.81	35.75	31.75	25.06
Remaining term of 73-75 months (% of pool balance)	4.01	4.04	11.10	11.02	6.26	8.94
New vehicles (%)	95.57	95.56	96.20	95.24	95.69	95.60
Used vehicles (%)	4.43	4.44	3.80	4.76	4.31	4.40
Toyota vehicles (%)	100.00	100.00	100.00	100.00	100.00	100.00
Non-Toyota vehicles (%)	0.00	0.00	0.00	0.00	0.00	0.00
Clean-up collateral (%)	4.95	4.97	5.58	5.31	0.00	9.08
Top five state concentrations by state of residence (%)
	FL=46.40	FL=46.45	FL=46.22	FL=43.77	FL=48.00	FL=44.93
	GA=18.68	GA=18.69	GA=19.11	GA=19.89	GA=18.16	GA=19.35
	NC=15.50	NC=15.56	NC=15.65	NC=16.83	NC=15.65	NC=16.52
	AL=9.85	AL=9.74	AL=9.77	AL=9.69	AL=8.99	AL=9.23
	SC=7.07	SC=7.06	SC=6.97	SC=7.17	SC=6.42	SC=7.14
(i)All percentages are of the initial receivables balance as of the cutoff date. WOART--World Omni Auto Receivables Trust.

Overall, we believe the WOART 2025-A collateral pool's credit quality is comparable to that of WOART 2024-C. In determining our base-case expected loss for the transaction, we considered WOART 2025-A's pool collateral characteristics, the outstanding WOART securitizations' performance trends, WOART's managed portfolio, and our macroeconomic and auto finance sector outlooks, including our baseline forecast and the effect on collateral credit quality. Our ECNL for WOART 2025-A is 1.25%, which is unchanged from the last transaction, WOART 2024-C (see the S&P Global Ratings' Expected Loss section).

Macroeconomic And Auto Finance Sector Outlook

In our analysis, we considered the economic data and forecasts outlined in table 3 and their baseline effect on collateral credit quality to determine our base-case expected loss level. Historically, changes in the unemployment rate have been a key determinant of charge-offs in the auto finance industry. More recently, inflationary effects have also contributed to higher defaults, especially among lower-income consumers.

Heading into 2025, the U.S. economy is expanding at a solid pace. We forecast the U.S. economy to expand 2.0% in the next two years--incorporating partial implementation of the government's proposed policies--following 2.7% growth in 2024. Inflation is likely to be above the 2.0% target for longer than we previously thought. The probability of a disruption to the Federal Reserve's easing bias has risen. We now expect the Fed to reduce the federal funds rate more gradually, and for the federal funds rate to reach 3.50%-3.75% by the end of 2026. The labor market has cooled off from the overheated conditions of 2022 and 2023 and, by many metrics, looks to be back to pre-pandemic levels. The pace of job gains has continued to moderate since the beginning of 2024, and the unemployment rate has increased but remains low. The unemployment rate, at 4.1%, remains just under the longer-run sustainable estimate, and we forecast unemployment of 4.2% for 2025 and 2026.

Uncertainty around our forecasts is high, given unknowns about how many of the president-elect's campaign promises will materialize. Policy proposals, at face value, could result in higher inflation in the near term and lower growth in the medium to long term. Also, the probability of a disruption to the Fed's easing bias over the next two years has risen (see "Economic Outlook U.S. Q1 2025: Steady Growth, Significant Policy Uncertainty," published Nov. 26, 2024).

There are other developments we are also closely watching:

• Vehicle affordability issues. Consumers continue to face vehicle affordability issues due to higher monthly auto loan payments, stemming from vehicle prices and interest rates that are higher than pre-pandemic levels. Many consumers are also paying much higher auto insurance premiums. Over time, given the lag of transmission to prices (particularly in shelter and energy costs, which remain elevated), the expected lower policy rate and inflation rate should reduce the risk of affordability. However, emerging policies could, in the short term, negatively impact prices and inflation, which could keep the pressure on affordability.
• Growing consumer debt levels. A higher percentage of consumers are carrying credit card balances and maxing out their credit card limits. In addition, the amount of buy-now, pay-later arrangements, which are largely unreported to the credit bureaus, is growing. Revised economic data suggest that income growth was understated, and the savings rate is higher than indicated. While this is generally credit positive for collateral performance, savings vary by income groups.
• Normalizing used vehicle values. We believe used vehicle values will continue to normalize to historical levels as new vehicle supply imbalances continue to ease, inventory levels rebuild, and manufacturer incentives increase. Tariff-related policies could increase vehicle prices and benefit vehicle wholesale prices and recoveries, but dampen demand for new vehicles.

Table 3

U.S. economic factors
	Actual	Forecast
	2023	2024	2025	2026	2027
Real GDP (% year-over-year growth)	2.9	2.7	2.0	2.0	1.7
Unemployment rate (% annual average)	3.6	4.0	4.2	4.2	3.9
Consumer Price Index (% annual average)	4.1	2.9	2.3	2.5	2.3
Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, and S&P Global Ratings Economics' forecasts.

S&P Global Ratings' Expected Loss: 1.25%

We determined our expected loss for WOART 2025-A by analyzing:

• The transaction's collateral characteristics relative to those of outstanding series (see table 2);
• The managed portfolio's performance (see table 4) and origination static pool data and their relative performances; and,
• The relevant paid-off and outstanding series' performance (see table 5 and charts 1-3).

Given World Omni's established performance track record as a frequent issuer, we placed more emphasis on origination static pool analysis and outstanding series performance when determining the expected loss for this series. We complemented this analysis with our forward-looking view of the economy and the auto finance sector (see the Macroeconomic And Auto Finance Sector Outlook section).

Overall, we expect WOART 2025-A to experience lifetime CNLs of 1.25%, which is similar to WOART 2024-C's.

Managed portfolio

As of Sept. 30, 2024, World Omni's serviced retail installment sale contracts portfolio totaled approximately $13.95 billion, up from $13.20 billion as of Sept. 30, 2023. Total delinquencies as a percentage of the ending net receivables increased to 2.34% as of Sept. 30, 2024, from 2.18% a year earlier due primarily to an increase in 31- to 60-day delinquencies. Annualized net losses as a percentage of the average outstanding principal amount increased to 0.51% for the nine months ended Sept. 30, 2024, from 0.32% for the prior-year period. Annualized repossessions as a percentage of the average number of contracts outstanding increased to 1.18% for the nine months ended Sept. 30, 2024, from 1.02% for the prior-year period.

We attribute this performance to ongoing normalization to pre-COVID-19 pandemic levels, as well as to recent economic headwinds, including inflationary pressures, affecting consumers.

The portfolio performance data shown in table 4 include World Omni's total auto loan serviced portfolio and loans on non-Toyota vehicles. In comparison, the WOART 2025-A securitized pool and earlier WOART pools since 2018 consist primarily of loans with higher FICO scores (the minimum FICO score is 650) and exclude non-Toyota vehicles and loans with original terms greater than 75 months.

Table 4

Managed portfolio performance of retail installment contracts
	Sept. 30		Year ended Dec. 31
	2024	2023	2023	2022	2021	2020	2019
Ending net receivables ($000s)	13,946,193	13,201,056	13,521,099	12,739,696	12,438,689	11,961,792	11,409,089
Ending no. of contracts	614,064	601,612	610,440	596,766	602,402	604,898	596,514
Delinquency (based on ending net receivables) (%)(i)
31-60 days	1.70	1.59	1.75	1.60	1.30	1.43	1.68
61-90 days	0.52	0.49	0.52	0.48	0.35	0.41	0.50
91-120 days	0.11	0.09	0.10	0.09	0.07	0.06	0.08
Over 120 days	0.00	0.01	0.01	0.01	0.01	0.00	0.02
Total 31-plus-day delinquencies	2.34	2.18	2.38	2.18	1.73	1.90	2.29
Avg. portfolio outstanding ($000s)	13,776,949	12,855,943	12,988,220	12,466,833	12,295,671	11,585,335	10,919,473
Avg. no. of contracts outstanding	614,340	596,504	599,056	594,540	607,305	598,081	580,291
No. of repossessions	5,438	4,555	6,180	6,137	6,757	8,463	10,985
Repossessions (% of the avg. no. of contracts outstanding)(ii)	1.18	1.02	1.03	1.03	1.11	1.42	1.89
Net losses ($000s)	52,703	30,416	49,346	36,641	28,940	98,140	106,223
Net losses (% of the avg. portfolio outstanding)(ii)	0.51	0.32	0.38	0.29	0.24	0.85	0.97
(i)The dollar amount of delinquent contracts as a percentage of the ending net receivables. (ii)Annualized for non-annual periods.

Origination static pool analysis

To derive the base-case expected net credit loss for WOART 2025-A, we analyzed World Omni's monthly origination static pool net loss data stratified by original terms (less than 48, 49-63, 64-66, and 67-75 months), credit tiers, and new and used Toyota vehicle composition. We developed expected net loss projections for each cohort and then weighted these projections by their respective concentrations in the WOART 2025-A pool to determine a base-case loss expectation.

WOART series performance

World Omni's paid-off transactions from WOART 2011-A through WOART 2017-A experienced CNLs of 0.96%-2.54%, while the paid-off WOART 2017-B through 2020-C transactions experienced CNLs of 0.23%-1.37% (see chart 1). We currently maintain ratings on 15 WOART transactions issued between 2020 and 2024 (see table 5 and charts 2-3).

On Dec, 13, 2024, we revised our lifetime loss expectations for the series 2021-A, 2021-B, 2021-C, 2021-D, 2022-A, 2022-B, 2022-C, 2022-D, 2023-C, and 2023-D transactions and affirmed 30 ratings on the transactions (see "Eleven Ratings Raised And 30 Affirmed From 10 World Omni Auto Receivables Trust Transactions," published Dec. 13, 2024).

On May 28, 2024, we revised our lifetime loss expectations for series 2023-A and 2023-B (see "Twelve Ratings On Two World Omni Auto Receivables Trust Transactions Affirmed," published May 28, 2024).

In our view, each outstanding transaction is performing better than our initial expectations.

Table 5

Securitization performance on outstanding WOART transactions(i)
Series	Month	Pool factor (%)	Current CNL (%)	60-plus-day delinquencies (%)	Initial lifetime CNL exp. (%)	Revised lifetime CNL exp. (%)(ii)
2021-A	46	11.55	0.38	0.98	1.80-2.00	0.45
2021-B	43	15.61	0.40	0.91	1.55-1.75	0.40
2021-C	40	17.45	0.46	0.85	1.40-1.60	0.55
2021-D	37	21.33	0.48	0.94	1.40-1.60	0.60
2022-A	34	25.04	0.66	0.90	1.35-1.55	0.80
2022-B	30	27.87	0.55	0.77	1.30-1.50	0.80
2022-C	28	33.14	0.61	0.82	1.30-1.50	0.95
2022-D	25	37.79	0.62	0.73	1.40	1.10
2023-A	22	40.98	0.52	0.62	1.35	1.25
2023-B	20	45.24	0.54	0.59	1.35	1.30
2023-C	16	53.17	0.49	0.70	1.30	1.25
2023-D	13	60.26	0.37	0.47	1.30	1.25
2024-A	10	69.18	0.38	0.45	1.30	N/A
2024-B	7	75.69	0.24	0.38	1.30	N/A
2024-C	4	84.08	0.13	0.33	1.25	N/A
(i)As of the December 2024 distribution date. (ii)Series 2021-A, 2021-B, 2021-C, 2021-D, 2022-A, 2022-B, 2022-C, 2022-D, 2023-C, and 2023-D were revised as of December 2024. Series 2023-A and 2023-B were revised as of May 2024. WOART--World Omni Auto Receivables Trust. CNL exp.--Cumulative net loss expectations. N/A--Not applicable.

We will continue to monitor the performance of the outstanding transactions to ensure that the credit enhancement remains sufficient to cover the revised CNL expectations under our stress scenarios for the rated classes.

Legal Overview And Transaction Structure

Legal overview

In rating this transaction, S&P Global Ratings will review the legal matters it believes are relevant to its analysis, as outlined in its criteria.

On the closing date, the depositor will purchase from World Omni, without recourse (except for repurchases due to breach of certain representations, warranties, or covenants), World Omni's entire interest in the receivables and its security interests in the related financed vehicles. When the WOART 2025-A notes are issued, the depositor will sell and assign its entire interest in the receivables and its security interests in the financed vehicles to the issuing trust according to a sale and servicing agreement. The issuing trust will pledge its interest in the receivables to the indenture trustee on the noteholders' behalf, according to the indenture (see chart 4).

Transaction structure

WOART 2025-A is World Omni's first auto loan securitization in 2025 and its 31st to be issued under its Regulation AB II-compliant retail shelf. The notes will be backed by a pool of fixed-rate retail installment sale contracts used to finance new and used automobiles and light-duty trucks. Interest and principal on the notes are scheduled to be paid on the 15th of each month (or the next business day) beginning Feb. 18, 2025.

WOART 2025-A incorporates certain structural features:

• A sequential-pay mechanism that results in increased credit enhancement for the senior notes as the pool amortizes.
• Notes that pay a fixed interest rate, except for class A-2, which will pay either a fixed interest rate or a combination of fixed and floating interest rates that will be indexed to the 30-day average compounded SOFR.
• Overcollateralization that begins at 0.00% of the initial adjusted pool balance and builds to a target of 0.90% of the outstanding adjusted pool balance. Overcollateralization will build using excess spread to pay principal on the notes until it reaches the target, and then it will amortize down to 0.50% of the initial adjusted pool balance and remain at that amount until the rated notes are paid in full.
• A fully funded nonamortizing reserve account that will equal 0.25% of the initial adjusted pool balance.
• A YSOA that initially will be approximately 6.54% of the collateral balance (6.55% if upsized). The YSOA will be calculated each month as the pool amortizes based on the difference between the aggregate receivables balance outstanding and the present value of the receivables balance and discounted at the greater of 9.25% per year and the receivables' actual annual percentage rate (APR). The YSOA is sized so that the yield on the contracts with APRs below the YSOA required rate is raised to the required rate. Once the class A-2b notes are fully repaid, the YSOA discount rate will step down to 9.00%. If no class A-2 floating-rate notes are issued, the YSOA discount rate will be 9.00% from the outset.
• Excess spread, to the extent available after covering net losses, to pay principal on the outstanding notes and build credit enhancement to the target level.

Payment Priority

Distributions will be made from available funds according to a specified priority (see table 6). The available funds for each payment date will be reduced by the servicing fee for the payment date and any previously unpaid servicing fees. The reserve account can be drawn on to cover any shortfalls to items 1-7 in the payment waterfall in table 6 and is available to cover principal on the legal final maturity date.

Table 6

Payment waterfall
Priority	Payment
1	Asset representations reviewer fees, up to a maximum amount of $150,000 per year.
2	Class A note interest.
3	First-priority principal distributable amount (if the class A notes' outstanding amount exceeds the adjusted pool balance).
4	Class B note interest.
5	Second-priority principal distributable amount (if the class A and B notes' outstanding amount exceeds the adjusted pool balance) minus any amount allocated to pay principal of the notes in item 3 above.
6	Class C note interest.
7	Third-priority principal distributable amount (if the class A, B, and C notes' outstanding amount exceeds the adjusted pool balance) minus any amount allocated to pay principal of the notes in items 3 and 5 above.
8	To the required reserve account until it reaches the required amount of 0.25% of the initial adjusted pool balance.
9	The noteholders' principal distributable amount minus the amounts allocated to pay principal of the notes in items 3, 5, and 7 above. This will build overcollateralization to the 0.90% target of the current adjusted pool balance.
10	Unpaid fees, expenses, and indemnities due to the asset representations reviewer.
11	Any remainder to the certificateholders.
Class A--Class A-1, A-2a/A-2b, A-3, and A-4 notes, collectively.

On each payment date, principal distributions will be made to:

• The class A-1 notes until they are paid in full; then
• The class A-2 notes, pro rata between the class A-2a and A-2b notes, until they are paid in full; then
• The class A-3 notes until they are paid in full; then
• The class A-4 notes until they are paid in full; then
• The class B notes until they are paid in full; and then
• The class C notes until they are paid in full.

Payment distributions after an event of default

The payment priorities above can change if certain events of default occur and continue, including:

• A failure to pay interest on the controlling class;
• A failure to pay principal at final maturity;
• A material breach of a representation, warranty, or covenant; and
• The trust's involuntary and voluntary bankruptcy.

If an event of default occurs and continues, the indenture trustee or the holders of a majority of the controlling class's outstanding amount may accelerate the notes. The trust estate may be liquidated as a result, but only in certain circumstances and in order:

• If the event of default is related to the payment of principal or interest on the notes, the trust estate may be liquidated without further caveat; or
• If the event of default is related to a breach of representations, warranties, or covenants, or to bankruptcy, the trust estate may be liquidated if all the noteholders consent to it; if the sale or liquidation proceeds are sufficient to ensure all noteholders are paid in full; or if the indenture trustee determines that the trust estate cannot provide sufficient funds to pay principal and interest on the notes and obtains noteholder consent of two-thirds of the controlling class's principal amount.

If the notes are accelerated following an event of default, then distributions will be made from the available funds according to the priority shown in table 7.

Table 7

Event of default payment waterfall
Priority	Payment
1	Any fees, expenses, and indemnities due to the owner trustee, the indenture trustee, and the asset representations reviewer not previously paid by the servicer.
2	Any accrued and unpaid interest on the class A notes.
3	Principal to the class A-1 notes until the class's note balance is reduced to zero; and then principal, pro rata, to the class A-2a/A-2b, A-3, and A-4 notes until the classes' note balances are reduced to zero.
4	Any accrued and unpaid interest on the class B notes.
5	Principal to the class B notes until the class's note balance is reduced to zero.
6	Any accrued and unpaid interest on the class C notes.
7	Principal to the class C notes until the class's note balance is reduced to zero.
8	Any remaining funds to the certificateholders.
Class A--Classes A-1, A-2a/A-2b, A-3, and A-4, collectively.

Cash Flow Modeling Assumptions And Results

In our cash flow analysis, we assess the availability of asset cash flows to meet the transaction's promised obligations under a variety of stress assumptions while considering the transaction structure and available credit support. We also use our cash flow analysis in other aspects of our ratings analysis, including the testing of credit stability (sensitivity analysis) and legal final analysis.

In a stressed scenario, liquidity risk could arise due to interest shortfalls from the yield on the loans being lower than the yield on the notes (negative carry risk). This could occur because the notes pay sequentially, leading to higher-coupon debt remaining outstanding at the tail end of the transaction. In this transaction, negative carry risk is addressed through the YSOA.

Break-even analysis

For the WOART 2025-A transaction structure, we used a bifurcated-pool method and applied the assumptions outlined in table 8 in our cash flow analysis to simulate stress scenarios that we believe are appropriate for the assigned preliminary ratings. To assign a rating to a class, we consider the class's lower break-even level (the maximum net losses the class can withstand without defaulting) and generally expect it to be equal to or greater than the rating stressed scenario break-even requirement.

Under this approach, we bifurcated the pool between low-APR loans (those with an APR of 5% or less; underwater loans) and high-APR loans (those with an APR greater than 5%; above-water loans) and applied different prepayment and default assumptions between the two pools. For above-water loans, we ran faster voluntary prepayments, disproportionately higher losses, and faster loss timing than for the underwater loans. Conversely, we ran a slower voluntary prepay speed, disproportionately lower losses, and slower loss timing on the underwater loans.

These combined assumptions caused the weighted average APR of the pool to decrease faster over time, which increases the likelihood that the YSOA will be used for yield enhancement rather than credit enhancement, thus decreasing the break-even levels.

For the class A-2b floating-rate tranche, we applied our stressed interest rates for one-month SOFR as described in our criteria and corresponding guidance "Methodology To Derive Stressed Interest Rates In Structured Finance," published Oct. 18, 2019. We modeled the maximum potential size of the class A-2b note balance (up to approximately 75% of the class A-2 notes) indexed to SOFR.

Based on our stressed cash flows, the break-even net loss results show that the class A, B, and C notes are credit-enhanced to the degree appropriate for the assigned preliminary ratings (see table 9).

Table 8

Cash flow assumptions
Servicing fee (%)	1.00
Recovery rate (%)	50.00
Charge-off and recovery lag (mos.)	4
Bifurcated pool (%)(i)
Underwater	26.72
Above-water	73.28
Loss allocation (% of total losses)
Underwater	15.00
Above-water	85.00
Voluntary ABS (%)
Underwater	0.25
Above-water	1.50
CNL timing (mos. 12/24/36/48)(%)
Underwater	25/60/80/100
Above-water	40/75/95/100
(i)Upsized pool. The proportions for the base pool are similar. ABS--Absolute prepayment speed. CNL--Cumulative net loss.

Table 9

Break-even cash flow results
	Class A	Class B	Class C
Preliminary rating	AAA (sf)	AA+ (sf)	AA (sf)
CNL timing (mos. 12/24/36/48)(%)
Aggregate	40/75/94/100	40/75/94/100	40/75/94/100
Underwater	33/70/87/100	33/70/87/100	33/70/87/100
Above-water	40/75/94/100	40/75/94/100	40/75/94/100
Approximate break-even CNL levels(%)(i)
Required	6.3	5.6	5.0
Available	9.8	7.5	6.5
(i)The maximum cumulative net losses, with 100% credit to any excess spread, the transaction can withstand without triggering a payment default on the relevant class of notes. CNL--Cumulative net loss.

Although the break-even levels for classes B and C satisfy our minimum requirement for the preliminary ratings assigned to the classes immediately above, given their relative subordinated position and distribution of losses within the transaction's structure, the ratings on classes B and C are structurally constrained (see "S&P Global Ratings Definitions," published June 9, 2023).

Sensitivity analysis

In addition to running break-even cash flows, we undertook sensitivity analyses using the assumptions in table 8. We believe that under a moderate ('BBB') stress scenario (2.00x of our 1.25% expected loss level) and with 100% credit to any excess spread, all else being equal, our preliminary ratings will be within the credit stability limits specified by section A.4 of the Appendix in "S&P Global Ratings Definitions" (see table 10 and chart 5).

Table 10

Maximum projected deterioration under moderate stress conditions(i)
	Stress scenario
Horizon	AAA	AA	A	BBB	BB	B
One year	AA	A	BB	B	CCC	D
Three years	BBB	BB	B	CCC	D	D
(i)These credit quality transitions do not reflect our view of the expected degree of deterioration that rated issuers or obligations could experience over the specified time horizons. Nor do they reflect the typical historical levels of deterioration among rated issuers and securities.

Money market tranche sizing

The proposed legal final maturity date for the money market tranche (class A-1) is Feb. 17, 2026. To test whether the money market tranche can be repaid 12 months from closing, we ran cash flows using assumptions that delay the principal collections during the 12-month period. In addition to zero defaults, we assumed a 0.5% absolute prepayment speed on above-water loans and a 0.0% absolute prepayment speed on underwater loans in our cash flow scenario. Based on our cash flow scenario, approximately eight months of collections would be sufficient to pay off the money market tranche.

Legal final maturity

To test the legal final maturity dates for classes A-2 and B, we determined when the respective notes would be fully amortized in a zero-loss, zero-prepayment scenario and then added three months to the result. To test the legal final maturity date for the class C notes, we determined the latest-maturing loan's distribution date and then added at least six months to accommodate extensions. Furthermore, in our break-even cash flow scenario for each respective rating level, we confirmed that there was sufficient credit enhancement to both cover losses and repay the related notes in full by the legal final maturity date. The notes were all paid off by their legal final maturity dates using these modeling assumptions.

Counterparty And Operational Risks

On or before the closing date, the series bank accounts will be established in the name of the account bank, U.S. Bank N.A. (an affiliate of the indenture trustee), as segregated trusts accounts. The bank account provider is consistent with our counterparty criteria for a 'AAA' supported transaction (see "Counterparty Risk Framework: Methodology And Assumptions," published March 8, 2019).

As a servicer, World Omni has an experienced management team that oversees origination, underwriting, servicing, collections, and general operational practices, and it satisfies our requirements for commingling risk. If World Omni were to no longer satisfy our commingling requirement, collections would be required to be deposited into the series collections account within two business days of collection. Our operational risk assessment of World Omni as servicer does not constrain the ratings (see "Global Framework For Assessing Operational Risk In Structured Finance Transactions," published Oct. 9, 2014).

World Omni

World Omni is a Florida corporation and an indirect wholly owned subsidiary of JM Family Enterprises Inc. (JMFE), a Delaware corporation. JMFE, through its subsidiaries, provides a full range of automotive-related distribution and financial services to Toyota dealerships in Florida, Georgia, North Carolina, South Carolina, and Alabama (the five-state area). The company also provides financial services to other dealerships throughout the U.S.

World Omni provides retail installment financing and lease contract financing to retail customers of Toyota automotive dealers within the five-state area and services automobile-related receivables both for its own accounts and third-party accounts. It also provides wholesale floorplan financing and capital and mortgage loans to some Toyota dealers and their affiliates. Established in 1981, World Omni has provided financial services to Toyota dealers in the five-state area and has operated under the Southeast Toyota Finance name since 1996.

Southeast Toyota Finance, an indirect wholly owned subsidiary of JMFE, is the exclusive distributor of Toyota cars and light-duty trucks, parts, and accessories in the five-state area. Its distributor agreement with Toyota Motor Sales USA Inc. began in 1968 and has been renewed through October 2029. World Omni Financial Corp. has been engaged in the securitization of assets since 1986.

Environmental, Social, And Governance Factors

Our rating analysis considers a transaction's potential exposure to environmental, social, and governance (ESG) credit factors. For the auto ABS sector, we view the exposure to environmental credit factors as above average, to social credit factors as average, and to governance credit factors as below average (see "ESG Industry Report Card: Auto Asset-Backed Securities," published March 31, 2021). The transaction's exposure to social and governance credit factors is in line with our sector benchmark. However, the geographic concentration in the portfolio differs from our sector benchmark: approximately 46% of the loans were originated in Florida. Geographically concentrated portfolios can be riskier due to the potential for greater localized economic downturns or disasters (e.g., physical climate risks such as hurricanes) that may adversely impact the pool's performance. In our analysis, we took into account mitigating factors that include geographic diversity within Florida, including a significant portion of the collateral located outside coastal areas, the ability to relocate the collateral, and World Omni's operating history of servicing and originating loans in Florida since 1981.

We generally view environmental credit factors as above average because the collateral pool primarily consists of vehicles with internal combustion engines (ICEs), which emit pollutants that contribute to climate transition risk. Although the adoption of electric vehicles and future regulation could lower ICE vehicle values over time, we believe our current approach to evaluating recovery and residual values adequately account for vehicle values over the transaction's relatively short expected life. As a result, we did not identify this as a separate material ESG credit factor in our analysis.

Related Criteria

• Criteria | Structured Finance | ABS: Global Auto ABS Methodology And Assumptions, July 26, 2024
• General Criteria: Environmental, Social, And Governance Principles In Credit Ratings, Oct. 10, 2021
• Criteria | Structured Finance | General: Global Framework For Payment Structure And Cash Flow Analysis Of Structured Finance Securities, Dec. 22, 2020
• Criteria | Structured Finance | General: Methodology To Derive Stressed Interest Rates In Structured Finance, Oct. 18, 2019
• Criteria | Structured Finance | Legal: U.S. Structured Finance Asset Isolation And Special-Purpose Entity Criteria, May 15, 2019
• Criteria | Structured Finance | General: Counterparty Risk Framework: Methodology And Assumptions, March 8, 2019
• Criteria | Structured Finance | General: Incorporating Sovereign Risk In Rating Structured Finance Securities: Methodology And Assumptions, Jan. 30, 2019
• General Criteria: Methodology For Linking Long-Term And Short-Term Ratings, April 7, 2017
• Criteria | Structured Finance | General: Global Framework For Assessing Operational Risk In Structured Finance Transactions, Oct. 9, 2014
• General Criteria: Global Investment Criteria For Temporary Investments In Transaction Accounts, May 31, 2012
• General Criteria: Principles Of Credit Ratings, Feb. 16, 2011
• Criteria | Structured Finance | General: Methodology For Servicer Risk Assessment, May 28, 2009

Related Research

• U.S. Auto Loan ABS Tracker: November 2024 Performance, Jan. 9, 2025
• Eleven Ratings Raised And 30 Affirmed From 10 World Omni Auto Receivables Trust Transactions, Dec. 13, 2024
• Credit Conditions North America Q1 2025: Policy Shifts, Rising Tensions, Dec. 3, 2024
• Economic Outlook U.S. Q1 2025: Steady Growth, Significant Policy Uncertainty, Nov. 26, 2024
• World Omni Financial Corp., Oct. 24, 2024
• Twelve Ratings On Two World Omni Auto Receivables Trust Transactions Affirmed, May 28, 2024

Primary Credit Analyst:	Ambika Garg, Chicago + 1 (312) 233 7034; ambika.garg@spglobal.com
Secondary Contact:	Jennie P Lam, New York + 1 (212) 438 2524; jennie.lam@spglobal.com
Research Contributor:	Davuluri Sarma, CRISIL Global Analytical Center, an S&P affiliate, Mumbai