Toyota Auto Receivables Trust Navigates Trustee Legal Woes

TL;DR

**Hold onto your auto ABS, but keep a close eye on the trustees' legal battles – they're a ticking time bomb for operational stability.**

AI Summary

Toyota Auto Receivables 2023-C Owner Trust, a securitization entity, filed its 10-K for the fiscal year ended December 31, 2025, indicating no common equity outstanding and no significant changes in its core business of holding auto receivables. The Trust reported no single obligor represents 10% or more of its asset pool, and no external credit enhancement or derivative instruments are in place. Key risks highlighted include ongoing legal proceedings against U.S. Bank National Association, the indenture trustee, related to residential mortgage-backed securities and student loan trusts, and a new lawsuit against Wilmington Trust, National Association, the owner trustee, concerning Tricolor Holdings, LLC asset-backed securitization transactions. Despite these legal challenges, both Toyota Motor Credit Corporation and U.S. Bank N.A. reported no material instances of noncompliance with applicable servicing criteria for the 2025 reporting period, as attested by PricewaterhouseCoopers LLP and Ernst & Young LLP, respectively. The Trust's strategic outlook remains focused on the performance of its auto receivables pool, with no significant operational or financial shifts reported.

Why It Matters

This 10-K provides a critical look into the operational health of a securitized auto loan portfolio, a bellwether for consumer credit. While the Trust itself shows no direct financial distress, the ongoing legal challenges faced by U.S. Bank N.A. and Wilmington Trust, N.A., its key trustees, introduce potential counterparty risk. Investors in asset-backed securities (ABS) need to monitor these legal outcomes closely, as they could impact trustee performance or even lead to replacement, potentially disrupting cash flows or increasing administrative costs. The competitive landscape for auto ABS relies heavily on the perceived stability and integrity of all parties involved, and these lawsuits could subtly erode investor confidence in the broader securitization market.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant ongoing legal proceedings against both U.S. Bank N.A., the indenture trustee, and Wilmington Trust, N.A., the owner trustee. U.S. Bank N.A. faces lawsuits concerning RMBS trusts and the National Collegiate Student Loan Master Trust I, while Wilmington Trust, N.A. was served with a civil complaint on February 3, 2026, related to Tricolor Holdings, LLC asset-backed securitization transactions. While these do not directly implicate the Trust's auto receivables, they introduce material counterparty risk and potential operational disruptions if the trustees' ability to perform their duties is impaired.

Analyst Insight

Investors should scrutinize the legal disclosures concerning U.S. Bank N.A. and Wilmington Trust, N.A. to assess potential impacts on trustee performance and the broader securitization market. While the Trust's underlying auto receivables appear stable, the legal entanglements of its key fiduciaries warrant careful monitoring for any signs of operational or financial contagion.

Financial Highlights

total Assets

Not Disclosed

total Debt

Not Disclosed

Key Numbers

• 0% — Percentage of asset pool represented by any single obligor (No single obligor represents 10% or more of the asset pool, indicating diversification.)
• 2025 — Fiscal year ended (The reporting period for which compliance assessments were conducted.)
• 2026-03-24 — Filing date (Date the 10-K was filed with the SEC.)
• 2018-03-09 — Date of NCMSLT Action filing (Date the lawsuit against U.S. Bank N.A. regarding student loans was filed.)
• 2026-02-03 — Date of lawsuit against WTNA (Date Wilmington Trust, N.A. was served with a civil complaint.)

Key Players & Entities

• Toyota Auto Receivables 2023-C Owner Trust (company) — issuing entity
• U.S. Bank National Association (company) — indenture trustee facing RMBS and student loan lawsuits
• Wilmington Trust, National Association (company) — owner trustee facing Tricolor Holdings, LLC lawsuit
• Toyota Auto Finance Receivables LLC (company) — depositor and registrant
• Toyota Motor Credit Corporation (company) — sponsor and servicer
• Tellis Bethel (person) — Treasurer & Chief Financial Officer of Toyota Auto Finance Receivables LLC
• PricewaterhouseCoopers LLP (company) — auditor for TMCC's servicing compliance
• Ernst & Young LLP (company) — auditor for U.S. Bank N.A.'s servicing compliance
• Clayton Fixed Income Services LLC (company) — asset representations reviewer
• Tricolor Holdings, LLC (company) — entity related to lawsuit against Wilmington Trust, N.A.

Forward-Looking Statements

• The trust will continue to demonstrate compliance with servicing criteria in future filings. (Toyota Auto Receivables 2023-C Owner Trust) — high confidence, target: 2027-03-31
• The asset-backed securities issued by this trust will maintain their current risk profile. (Asset-Backed Securities) — medium confidence, target: 2026-12-31

FAQ

Risk Factors

• Ongoing Litigation Against Indenture Trustee [medium — legal]: The Trust is indirectly affected by ongoing legal proceedings against U.S. Bank National Association, the indenture trustee. These proceedings involve residential mortgage-backed securities and student loan trusts, raising concerns about the trustee's operational stability and potential impact on its fiduciary duties.
• Lawsuit Against Owner Trustee [medium — legal]: A new lawsuit was filed against Wilmington Trust, National Association, the owner trustee, on February 3, 2026. The complaint concerns asset-backed securitization transactions involving Tricolor Holdings, LLC, potentially impacting the owner trustee's capacity and reputation.

Industry Context

The auto finance industry is characterized by its reliance on securitization to fund loan portfolios. Competition remains intense, with lenders focusing on efficient loan origination and servicing. Regulatory scrutiny over securitization practices and servicer compliance continues to be a key factor influencing operations.

Regulatory Implications

The ongoing legal proceedings against both the indenture trustee and owner trustee highlight potential regulatory and operational risks for the Trust. While compliance with servicing criteria was affirmed, the involvement of trustees in unrelated litigation could indirectly affect investor confidence and the smooth operation of the Trust.

What Investors Should Do

1. Monitor legal proceedings against U.S. Bank N.A. and Wilmington Trust, N.A.
2. Review the attestation reports from PricewaterhouseCoopers LLP and Ernst & Young LLP.
3. Assess the diversification of the asset pool.

Key Dates

• 2025-12-31: Fiscal year end — This marks the end of the reporting period for which financial statements and compliance assessments were made.
• 2026-03-24: 10-K Filing Date — Indicates the date the annual report was submitted to the SEC, providing updated information on the Trust's operations and risks.
• 2018-03-09: NCMSLT Action Filing Date — This date relates to a legal proceeding against the indenture trustee, U.S. Bank N.A., concerning student loan trusts, highlighting a historical legal risk.
• 2026-02-03: Lawsuit Against Owner Trustee Served — Marks the commencement of a new legal challenge against Wilmington Trust, N.A., the owner trustee, related to other securitization transactions.
• 2023-08-15: Amended and Restated Trust Agreement and Indenture Date — Establishes the foundational legal documents governing the Trust and its relationship with the indenture trustee, setting the terms for the current securitization.

Glossary

Securitization Entity

A legal entity created to pool assets, such as auto loans, and issue securities backed by those assets. (Toyota Auto Receivables 2023-C Owner Trust is a securitization entity, central to the structure of the filing.)

Indenture Trustee

A financial institution appointed to act on behalf of bondholders, ensuring the terms of the indenture (a legal contract) are met. (U.S. Bank National Association serves as the indenture trustee, and is currently involved in legal proceedings.)

Owner Trustee

A trustee responsible for holding the assets of a trust for the benefit of the security holders, often in securitization structures. (Wilmington Trust, National Association is the owner trustee and is facing a new lawsuit.)

Servicing Criteria

A set of standards and procedures that a servicer must follow when managing the assets within a securitization trust. (Compliance with servicing criteria by TMCC and U.S. Bank N.A. was assessed and found to be materially compliant.)

Asset Representations Reviewer

An independent third party that reviews the underlying assets of a securitization trust to ensure they meet the representations and warranties made. (Clayton Fixed Income Services LLC is the asset representations reviewer for this Trust.)

Year-Over-Year Comparison

As this is a 10-K filing for the Toyota Auto Receivables 2023-C Owner Trust, specific year-over-year financial comparisons like revenue growth or margin changes are not applicable as the Trust itself does not generate revenue in the traditional sense. The focus remains on the performance and compliance of the underlying auto receivables pool. New risks identified in this filing include a lawsuit against the owner trustee, Wilmington Trust, N.A., which was not present in prior periods.

Filing Documents

• form10k.htm (10-K) — 63KB
• 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
• 0000929638-26-001130.txt ( ) — 249KB

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-C 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 five paragraphs are disclosures received from U.S. Bank National Association ("U.S. Bank N.A."), which serves as the indenture trustee (the "Indenture Trustee") under the indenture for the Toyota Auto Receivables 2023-C Owner Trust transaction. 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 of losses to investors, that it has meritorious defenses, and it has contested and intends to continue contesting the plaintiffs' claims vigorously. However, U.S. Bank N.A. cannot assure you as to the outcome of any of the litigation, or the possible impact of these litigations on the trustee or the RMBS trusts. On March 9, 2018, a law firm purporting to represent fifteen Delaware statutory trusts (the "DSTs") that issued securities backed by student loans (the "Student Loans") filed a lawsuit in the Delaware Court of Chancery against U.S. Bank N.A. in its capacities as indenture trustee and successor special servi

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 N.A. (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 N.A. has identified any material instance of noncompliance with the servicing criteria described in such Report on Assessment as being applicable to U.S. Bank N.A.

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 August 15, 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 August 15, 2023, which is incorporated herein by reference). 4.2 Indenture, dated as of August 15, 2023, between the Trust and U.S. Bank N.A., as indenture trustee (the "Indenture Trustee") and as securities intermediary (included in Exhibit 4.2 to the Trust's Form 8-K, as filed with the Commission on August 15, 2023, which is incorporated herein by reference). 4.3 Sale and Servicing Agreement, dated as of August 15, 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 August 15, 2023, which is incorporated herein by reference). 4.4 Receivables Purchase Agreement, dated as of August 15, 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 August 15, 2023, which is incorporated herein by reference). 4.5 Adminis

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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