Toyota Auto Receivables Trust Faces Trustee Legal Headwinds

TL;DR

**Trustees for Toyota's auto loan ABS are facing serious legal challenges, casting a shadow on the broader securitization market despite the trust's clean internal bill of health.**

AI Summary

Toyota Auto Receivables 2023-B Owner Trust, a securitization entity, filed its 10-K for the fiscal year ended December 31, 2025, on March 24, 2026. As a pass-through entity, it does not report traditional revenue or net income figures. The Trust confirmed that no single obligor represents 10% or more of its asset pool, indicating diversified risk within its auto receivables. Key business changes include the strategic repositioning of U.S. Bank N.A.'s corporate trust business to its affiliate, U.S. Bank Trust Co., which now serves as the indenture trustee. Significant risks involve ongoing legal proceedings against U.S. Bank N.A. related to residential mortgage-backed securities (RMBS) and student loan trusts, and a new lawsuit against Wilmington Trust, National Association, as owner trustee, concerning alleged breaches in Tricolor Holdings, LLC asset-backed securitization transactions. Despite these legal challenges, both Toyota Motor Credit Corporation (TMCC) and U.S. Bank Trust Co. reported no material instances of noncompliance with applicable servicing criteria for the 2025 reporting period. The strategic outlook remains focused on maintaining compliance and defending against legal claims to protect the integrity of the securitized assets.

Why It Matters

This 10-K reveals that while the Toyota Auto Receivables 2023-B Owner Trust itself is performing its core function without direct servicing compliance issues, its key fiduciaries, U.S. Bank N.A. and Wilmington Trust, National Association, are embroiled in significant legal battles. For investors in asset-backed securities, these lawsuits against trustees, even if unrelated to this specific Toyota trust, highlight systemic risks within the broader securitization market and could impact the perceived stability and operational integrity of the trustee ecosystem. This competitive context means that any adverse outcomes for these trustees could lead to increased scrutiny and potentially higher costs for future securitization transactions across the industry, affecting other auto ABS issuers and their investors.

Risk Assessment

Risk Level: medium — The risk level is medium due to significant legal proceedings against key fiduciaries, U.S. Bank N.A. and Wilmington Trust, National Association. U.S. Bank N.A. is defending against lawsuits related to residential mortgage-backed securities (RMBS) and student loan trusts, including the 'NCMSLT Action' filed on March 9, 2018. Wilmington Trust, National Association, was served with a civil complaint on February 3, 2026, for an unspecified amount of damages related to alleged breaches in Tricolor Holdings, LLC asset-backed securitization transactions. While these do not directly involve the Toyota Trust's assets, they expose the Trust to potential indirect operational or reputational risks through its service providers.

Analyst Insight

Investors should monitor the legal proceedings against U.S. Bank N.A. and Wilmington Trust, National Association, as adverse outcomes could impact the broader securitization market and the perceived stability of trustee services. While the Toyota Auto Receivables 2023-B Owner Trust itself shows no direct compliance issues, investors should assess their exposure to other securitized products where these entities serve as fiduciaries.

Financial Highlights

debt To Equity

N/A

revenue

N/A

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

N/A

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Key Numbers

• 10% — Maximum percentage of asset pool represented by a single obligor (No single obligor represents 10% or more of the asset pool, indicating diversification.)
• 2025 — Fiscal year end (The report covers the fiscal year ended December 31, 2025.)
• 2026-03-24 — Filing date (The 10-K was filed on March 24, 2026.)
• 2018-03-09 — Date of NCMSLT Action filing (The lawsuit against U.S. Bank N.A. regarding student loans was filed on March 9, 2018.)
• 2026-02-03 — Date Wilmington Trust was served with complaint (Wilmington Trust, National Association, was served with a civil complaint on February 3, 2026.)

Key Players & Entities

• Toyota Auto Receivables 2023-B Owner Trust (company) — issuing entity
• Toyota Auto Finance Receivables LLC (company) — depositor and registrant
• Toyota Motor Credit Corporation (company) — sponsor and servicer
• U.S. Bank Trust Company, National Association (company) — indenture trustee
• U.S. Bank National Association (company) — former corporate trust business holder, facing lawsuits
• Wilmington Trust, National Association (company) — owner trustee, facing lawsuit
• Tellis Bethel (person) — Treasurer & Chief Financial Officer of Toyota Auto Finance Receivables LLC
• Delaware Court of Chancery (regulator) — court handling the NCMSLT Action
• Supreme Court of the State of New York, County of New York (regulator) — court handling the Tricolor Holdings, LLC lawsuit
• Clayton Fixed Income Services LLC (company) — asset representations reviewer

Forward-Looking Statements

• The trust will continue to demonstrate compliance with servicing criteria in future filings. (Toyota Auto Receivables 2023-B Owner Trust) — high confidence, target: 2027-03-31

FAQ

Risk Factors

• Ongoing Legal Proceedings Against U.S. Bank N.A. [medium — legal]: U.S. Bank N.A. is involved in significant legal proceedings related to residential mortgage-backed securities and student loan trusts, with a specific lawsuit concerning student loans filed on March 9, 2018. While these proceedings predate the current trust's operational period, they represent a potential reputational and operational risk for entities associated with U.S. Bank.
• Lawsuit Against Wilmington Trust [high — legal]: Wilmington Trust, National Association, as owner trustee, was served with a civil complaint on February 3, 2026, concerning alleged breaches in Tricolor Holdings, LLC asset-backed securitization transactions. This lawsuit introduces direct legal risk to the owner trustee, which could have implications for the trust's governance and asset integrity.
• Servicing Criteria Compliance [low — operational]: Despite legal challenges involving trustees, both Toyota Motor Credit Corporation (TMCC) and U.S. Bank Trust Co. reported no material instances of noncompliance with applicable servicing criteria for the 2025 reporting period. This indicates operational stability in core servicing functions.

Industry Context

The auto finance industry relies heavily on securitization to provide liquidity and fund new loan originations. Companies like Toyota Motor Credit Corporation leverage trusts to efficiently manage their loan portfolios. The broader market is influenced by interest rate environments and consumer creditworthiness, with regulatory scrutiny on securitization practices remaining a constant.

Regulatory Implications

The ongoing legal proceedings against trustees, particularly the new lawsuit against Wilmington Trust, highlight potential regulatory and legal risks inherent in the securitization market. While the Trust itself reported no noncompliance with servicing criteria, the actions of its fiduciaries can create indirect risks and necessitate careful monitoring by investors.

What Investors Should Do

1. Monitor legal proceedings against Wilmington Trust and U.S. Bank N.A.
2. Review the Trust's compliance with servicing criteria in future filings.
3. Assess the diversification of the asset pool.

Key Dates

• 2025-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K filing.
• 2026-03-24: 10-K Filing Date — Indicates the official submission date of the annual report to the SEC.
• 2023-05-23: Amended and Restated Trust Agreement and Indenture Effective Dates — Establishes the foundational legal documents governing the trust and its securitization structure.
• 2026-02-03: Wilmington Trust Served with Complaint — Highlights a new legal challenge directly impacting the owner trustee, potentially affecting trust operations.
• 2018-03-09: NCMSLT Action Filing Date — Represents an older legal proceeding against U.S. Bank N.A. that may still carry residual risk or implications.

Glossary

Securitization Entity

A legal entity created to pool assets and issue securities backed by those assets. (Toyota Auto Receivables 2023-B Owner Trust is a securitization entity, meaning it holds auto loan receivables and issues securities to investors.)

Pass-through Entity

An entity that passes income, gains, losses, deductions, and credits through to its investors for tax purposes. (As a pass-through entity, the Trust does not report traditional revenue or net income figures at the entity level.)

Indenture Trustee

A trustee appointed to represent the interests of bondholders in a debt issuance. (U.S. Bank Trust Co. serves as the Indenture Trustee for this trust, responsible for overseeing the terms of the indenture agreement.)

Owner Trustee

A trustee who holds legal title to the assets transferred into a trust for the benefit of the certificate holders. (Wilmington Trust, National Association, is the owner trustee, and is currently facing a lawsuit related to its role in other securitization transactions.)

Servicing Criteria

A set of standards and procedures that a servicer must adhere to when managing securitized assets. (Compliance with servicing criteria by TMCC and U.S. Bank Trust Co. is critical for the operational integrity of the trust.)

Asset-backed Securitization

A financial process where assets are pooled together and securitized, meaning they are used as collateral for the issuance of securities. (The lawsuit against Wilmington Trust pertains to alleged breaches in asset-backed securitization transactions.)

Year-Over-Year Comparison

This filing covers the fiscal year ended December 31, 2025. Specific comparative metrics to the prior year (2024) are not detailed in the provided text, as the focus is on the current report's structure and key events. However, the filing highlights a new significant legal challenge against the owner trustee, Wilmington Trust, which was served with a complaint on February 3, 2026, indicating a new risk factor compared to previous periods.

Filing Documents

• form10k.htm (10-K) — 64KB
• exhibit31-1.htm (EX-31.1) — 8KB
• exhibit33-1.htm (EX-33.1) — 84KB
• exhibit33-2.htm (EX-33.2) — 63KB
• exhibit34-1.htm (EX-34.1) — 8KB
• exhibit34-2.htm (EX-34.2) — 5KB
• exhibit35-1.htm (EX-35.1) — 3KB
• logo_ey.jpg (GRAPHIC) — 6KB
• logo_pwc.jpg (GRAPHIC) — 4KB
• 0000929638-26-001129.txt ( ) — 250KB

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments. None.

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. Not applicable. The following substitute information is provided in accordance with General Instruction J to Form 10-K:

(b) of Regulation AB. Significant Obligors of Pool Assets

Item 1112(b) of Regulation AB. Significant Obligors of Pool Assets. No single obligor represents 10% or more of the asset pool owned by Toyota Auto Receivables 2023-B Owner Trust (the "Trust").

(b)(2) of Regulation AB. Credit Enhancement and Other Support, Except for Certain Derivatives Instruments

Item 1114(b)(2) of Regulation AB. Credit Enhancement and Other Support, Except for Certain Derivatives Instruments. No entity or group of affiliated entities provides any external credit enhancement or other support with respect to either payment on the pool assets owned by the Trust or payments on the notes (the "Notes") or the certificate (the "Certificate") issued by the Trust.

(b) of Regulation AB. Certain Derivatives Instruments

Item 1115(b) of Regulation AB. Certain Derivatives Instruments. No entity or group of affiliated entities provides any external derivative instruments to either payment on the pool assets owned by the Trust or payments on the Notes or the Certificate.

of Regulation AB. Legal Proceedings

Item 1117 of Regulation AB. Legal Proceedings. The following six paragraphs are disclosures received from U.S. Bank Trust Company, National Association ("U.S. Bank Trust Co."), which serves as the indenture trustee (the "Indenture Trustee") under the indenture for the Toyota Auto Receivables 2023-B Owner Trust transaction. U.S. Bank National Association ("U.S. Bank N.A.") made a strategic decision to reposition its corporate trust business by transferring substantially all of its corporate trust business to its affiliate, U.S. Bank Trust Co., a non-depository trust company (U.S. Bank N.A. and U.S. Bank Trust Co. are collectively referred to herein as "U.S. Bank"). Upon U.S. Bank Trust Co.'s succession to the business of U.S. Bank N.A., it became a wholly owned subsidiary of U.S. Bank N.A. The Indenture Trustee will maintain the accounts of the issuing entity in the name of the Indenture Trustee at U.S. Bank N.A. U.S. Bank N.A. and other large financial institutions have been sued in their capacity as trustee or successor trustee for certain residential mortgage-backed securities ("RMBS") trusts. The complaints, primarily filed by investors or investor groups against U.S. Bank N.A. and similar institutions, allege the trustees caused losses to investors as a result of alleged failures by the sponsors, mortgage loan sellers and servicers to comply with the governing agreements for these RMBS trusts. Plaintiffs generally assert causes of action based upon the trustees' purported failures to enforce repurchase obligations of mortgage loan sellers for alleged breaches of representations and warranties, notify securityholders of purported events of default allegedly caused by breaches of servicing standards by mortgage loan servicers and abide by a heightened standard of care following alleged events of default. U.S. Bank N.A. denies liability and believes that it has performed its obligations under the RMBS trusts in good faith, that its actions were not the cause o

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk. Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. Item 9A.

Controls and Procedures

Controls and Procedures.

Other Information

Item 9B. Other Information. Nothing to report.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. PART III The following Items have been omitted in accordance with General Instruction J to Form 10-K: Item 10. Directors, Executive Officers and Corporate Governance. Item 11.

Executive Compensation

Executive Compensation. Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Item 13. Certain Relationships and Related Transactions, and Director Independence. Item 14. Principal Accountant Fees and Services. The following substitute information is provided in accordance with General Instruction J to Form 10-K:

of Regulation AB. Affiliations and Certain Relationships and Related Transactions

Item 1119 of Regulation AB. Affiliations and Certain Relationships and Related Transactions. Information required by Item 1119 of Regulation AB has been omitted from this report on Form 10-K in reliance on the Instruction to Item 1119.

of Regulation AB. Compliance with Applicable Servicing Criteria

Item 1122 of Regulation AB. Compliance with Applicable Servicing Criteria. Each of TMCC and U.S. Bank Trust Co. (each, a "Servicing Participant") has been identified by the registrant as a party participating in the servicing function during the year ended December 31, 2025 (the "2025 Reporting Period") with respect to the pool assets owned by the Trust. Each Servicing Participant has completed a report on an assessment of compliance with the servicing criteria applicable to such Servicing Participant (each, a "Report on Assessment") as of December 31, 2025, and for the 2025 Reporting Period. In addition, each Servicing Participant has provided an attestation report (each, an "Attestation Report") by a registered public accounting firm regarding its Report on Assessment. Each Report on Assessment and Attestation Report is attached as an exhibit to this Form 10-K. Neither the Report on Assessment nor the Attestation Report for TMCC has identified any material instance of noncompliance with the servicing criteria described in such Report on Assessment as being applicable to TMCC. Neither the Report on Assessment nor the Attestation Report for U.S. Bank Trust Co. has identified any material instance of noncompliance with the servicing criteria described in such Report on Assessment as being applicable to U.S. Bank Trust Co.

of Regulation AB. Servicer Compliance Statement

Item 1123 of Regulation AB. Servicer Compliance Statement. TMCC has been identified by the registrant as a servicer during the 2025 Reporting Period with respect to the pool assets owned by the Trust. TMCC has provided a statement of compliance for the 2025 Reporting Period, signed by an authorized officer, and such compliance statement is attached as an exhibit to this Form 10-K. PART IV

Exhibit and Financial Statement Schedules

Item 15. Exhibit and Financial Statement Schedules. (a) The following documents are filed as part of this report: (1) Not applicable. (2) Not applicable. (3) See Item 15(b) below. (b) Exhibits Required by Item 601 of Regulation S-K. Exhibit Number Description 3.1 Certificate of Formation of Toyota Auto Finance Receivables LLC ("TAFR LLC") (included in Exhibit 3.1 to Amendment No. 1 to Registration Statement on Form S-3 (333-159170), as filed by the registrant with the Commission on May 28, 2009, which is incorporated herein by reference). 3.2 Limited Liability Company Agreement of TAFR LLC (included in Exhibit 3.2 to Amendment No. 1 to Registration Statement on Form S-3 (333-159170), as filed by the registrant with the Commission on May 28, 2009, which is incorporated herein by reference). 4.1 Amended and Restated Trust Agreement, dated as of May 23, 2023, between TAFR LLC and Wilmington Trust, National Association, as owner trustee (included in Exhibit 4.1 to the Trust's Form 8-K, as filed with the Commission on May 23, 2023, which is incorporated herein by reference). 4.2 Indenture, dated as of May 23, 2023, among the Trust, U.S. Bank Trust Co., as indenture trustee (the "Indenture Trustee"), and U.S. Bank N.A., as securities intermediary (included in Exhibit 4.2 to the Trust's Form 8-K, as filed with the Commission on May 23, 2023, which is incorporated herein by reference). 4.3 Sale and Servicing Agreement, dated as of May 23, 2023, among TAFR LLC, as seller, TMCC, as servicer and sponsor, and the Trust, as issuer (included in Exhibit 4.3 to the Trust's Form 8-K, as filed with the Commission on May 23, 2023, which is incorporated herein by reference). 4.4 Receivables Purchase Agreement, dated as of May 23, 2023, between TAFR LLC, as purchaser, and TMCC, as seller (included in Exhibit 4.4 to the Trust's Form 8-K, as filed with the Commission on May 23, 2023, which is incorporated herein by reference). 4.5 Administration

SIGNATURES

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Toyota Auto Finance Receivables LLC (Depositor) Date: March 24, 2026 By: /s/ Tellis Bethel Tellis Bethel Treasurer & Chief Financial Officer (Senior officer in charge of securitization of the depositor) SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT No annual report to security holders, proxy statement, form of proxy or other proxy soliciting material has been sent to security holders or is anticipated to be furnished to security holders subsequent to the filing of this annual report on Form 10-K.

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