Mercedes-Benz Auto Trust Flags Servicing Lapses, Trustee Litigation

TL;DR

Mercedes-Benz's auto loan trust revealed minor servicing missteps and its trustee is embroiled in significant RMBS and student loan litigation, raising red flags for ABS investors.

AI Summary

The Mercedes-Benz Auto Receivables Trust 2023-1 filed its 10-K for the fiscal year ended December 31, 2025, primarily detailing compliance with servicing criteria and legal proceedings. The trust, an issuing entity for asset-backed notes, reported no material changes in revenue or net income, as these items are typically not applicable to a pass-through trust of this nature. Key business changes include the ongoing administration of auto receivables, with Mercedes-Benz Financial Services USA LLC acting as Servicer and U.S. Bank Trust Company, National Association as Indenture Trustee. A significant risk highlighted is the ongoing litigation against U.S. Bank National Association in its trustee capacity for RMBS and student loan trusts, specifically the NCMSLT Action filed on March 9, 2018, which could impact its ability to perform its duties. Strategic outlook remains focused on maintaining compliance and efficient servicing of the underlying auto loan portfolio, despite two identified material instances of noncompliance by the Servicer related to post-repossession and pre-repossession notices for specific receivables.

Why It Matters

This 10-K provides crucial transparency into the operational health of the Mercedes-Benz Auto Receivables Trust 2023-1, a securitization vehicle. For investors holding the Asset Backed Notes, the identified servicing noncompliance by Mercedes-Benz Financial Services USA LLC, though minor in scope (two specific instances), signals potential operational weaknesses that could impact cash flow or collateral recovery. The ongoing legal challenges faced by U.S. Bank National Association, the Indenture Trustee, in other securitization contexts (RMBS and student loans) introduce a systemic risk, as a significant adverse ruling could impair its capacity to fulfill its fiduciary duties across all trusts, including this one. This competitive context underscores the importance of robust trustee oversight in the broader asset-backed securities market.

Risk Assessment

Risk Level: medium — The risk level is medium due to two material instances of noncompliance by the Servicer, Mercedes-Benz Financial Services USA LLC, regarding required notices for defaulted and bankrupt receivables, as detailed in Item 1122(d)(4)(vii). Additionally, the Indenture Trustee, U.S. Bank National Association, is involved in significant legal proceedings concerning RMBS and student loan trusts, including the NCMSLT Action filed on March 9, 2018, which, while not directly related to this trust, could impact its overall operational capacity and reputation.

Analyst Insight

Investors should closely monitor the Servicer's remediation efforts for the identified compliance issues and assess the potential impact of the ongoing litigation against U.S. Bank National Association on its ability to serve as Indenture Trustee. Consider the broader implications for other asset-backed securities where U.S. Bank acts as trustee, and evaluate the credit enhancement mechanisms within the Mercedes-Benz Auto Receivables Trust 2023-1 to mitigate these operational and legal risks.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$0

total Debt

$0

net Income

$0

eps

$0

gross Margin

N/A

cash Position

$0

revenue Growth

N/A

Key Numbers

• 2 — Material instances of noncompliance by Servicer (Identified in the Report on Assessment of Compliance with Servicing Criteria for the fiscal year ended December 31, 2025.)
• 2025-12-31 — Fiscal year end date (The period covered by this 10-K filing.)
• 2026-03-31 — Filing date of 10-K (Date the annual report was submitted to the SEC.)
• 2018-03-09 — Date of NCMSLT Action filing (Lawsuit against U.S. Bank National Association as trustee for student loan trusts.)

Key Players & Entities

• Mercedes-Benz Auto Receivables Trust 2023-1 (company) — Issuing Entity
• Mercedes-Benz Financial Services USA LLC (company) — Servicer and Sponsor
• U.S. Bank Trust Company, National Association (company) — Indenture Trustee
• Wilmington Trust, National Association (company) — Owner Trustee
• Mercedes-Benz Retail Receivables LLC (company) — Depositor
• Christian Rottenkolber (person) — Vice President and Chief Financial Officer of Servicer
• Grant Thornton LLP (company) — Auditor for Servicer's Attestation Report
• Ernst & Young LLP (company) — Auditor for Indenture Trustee's Attestation Report
• Delaware Court of Chancery (regulator) — Court overseeing NCMSLT Action
• The National Collegiate Student Loan Master Trust I (company) — Plaintiff in NCMSLT Action

FAQ

Risk Factors

• Litigation Against Trustee [high — legal]: U.S. Bank National Association, acting as Indenture Trustee, is involved in ongoing litigation, specifically the NCMSLT Action filed on March 9, 2018. This lawsuit, concerning RMBS and student loan trusts, could potentially impair the trustee's ability to fulfill its duties for the Mercedes-Benz Auto Receivables Trust 2023-1.
• Servicer Noncompliance [medium — operational]: The Servicer, Mercedes-Benz Financial Services USA LLC, identified two material instances of noncompliance during the fiscal year ended December 31, 2025. These instances relate to post-repossession and pre-repossession notices for specific receivables, indicating potential operational deficiencies in servicing procedures.

Industry Context

The auto finance industry is characterized by intense competition among captive finance companies, banks, and independent finance firms. Key trends include the increasing adoption of digital platforms for loan origination and servicing, evolving consumer preferences towards mobility services, and ongoing regulatory scrutiny regarding lending practices and data privacy. The market is sensitive to interest rate fluctuations and economic conditions impacting consumer creditworthiness.

Regulatory Implications

The trust operates within a framework of financial regulations, including those governing securitization and consumer protection. The identified instances of noncompliance by the servicer, particularly concerning notices, could attract regulatory attention and potential penalties. Furthermore, the litigation involving the Indenture Trustee poses a systemic risk that could impact regulatory oversight and the overall stability of the securitization structure.

What Investors Should Do

1. Monitor Servicer Compliance
2. Assess Trustee Litigation Risk
3. Review Underlying Asset Performance

Key Dates

• 2023-01-01: Trust and Servicing Agreements Effective — Marks the commencement of operations for the Mercedes-Benz Auto Receivables Trust 2023-1, including the Indenture, Trust Agreement, Sale and Servicing Agreement, and Receivables Purchase Agreement.
• 2023-01-18: Underwriting Agreement — Formalized the agreement with underwriters for the issuance of asset-backed notes.
• 2023-01-20: Underwriting Agreement Filing — The Underwriting Agreement was filed via Form 8-K, providing public disclosure of the terms of the note issuance.
• 2023-01-27: Key Trust Document Filings — The Indenture, Trust Agreement, Sale and Servicing Agreement, and Receivables Purchase Agreement were filed via Form 8-K, detailing the structure and operational framework of the trust.
• 2025-12-31: Fiscal Year End — The end of the reporting period for which the 10-K provides financial and operational details, including the assessment of compliance with servicing criteria.
• 2026-03-31: 10-K Filing Date — The date the annual report was submitted to the SEC, containing the comprehensive review of the trust's activities for the fiscal year 2025.

Glossary

Issuing Entity

The special purpose entity created to issue asset-backed securities (notes) backed by a pool of assets, in this case, auto receivables. (This is the core entity of the Mercedes-Benz Auto Receivables Trust 2023-1, responsible for holding the collateral and issuing the notes.)

Servicer

The entity responsible for managing the underlying assets (auto loans), including collecting payments, handling delinquencies, and managing repossessions. (Mercedes-Benz Financial Services USA LLC acts as the Servicer, and its performance and compliance are critical to the trust's operations.)

Indenture Trustee

A trustee appointed under an indenture to represent the interests of the noteholders and ensure the issuer complies with the terms of the indenture. (U.S. Bank Trust Company, National Association serves this role, and its potential legal issues are a significant risk factor.)

Asset-Backed Notes

Securities that are collateralized by a pool of assets, such as auto loans, credit card receivables, or mortgages. (These are the securities issued by the trust to investors, representing claims on the cash flows from the underlying auto receivables.)

Servicing Criteria

A set of standards and requirements that the servicer must adhere to when managing the underlying assets of an asset-backed security trust. (The 10-K includes a report on the trust's compliance with these criteria, highlighting any deviations.)

Year-Over-Year Comparison

This filing pertains to the Mercedes-Benz Auto Receivables Trust 2023-1, which was established in January 2023. Therefore, a direct comparison of key metrics like revenue growth, net income, or margin changes to a prior year's filing for this specific trust is not applicable. The focus of this report is on the initial operational period and compliance assessment for the fiscal year ending December 31, 2025, including the identification of two material instances of servicer noncompliance and the ongoing litigation risk associated with the trustee.

Filing Documents

• mbart20231_10k_32026.htm (10-K) — 87KB
• e311_mbart20231.htm (EX-31) — 7KB
• e331_mbenserv23.htm (EX-33) — 65KB
• e332_ubtcintr.htm (EX-33) — 98KB
• e341_mbenserv23.htm (EX-34) — 14KB
• e342_ubtcintr.htm (EX-34) — 9KB
• e351_mbenserv23mbart20231.htm (EX-35) — 4KB
• 0001853620-26-000089.txt ( ) — 285KB

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments. Nothing to report. The following Items have been omitted in accordance with General Instruction J(1) to Form 10-K:

Risk Factors

Item 1A. Risk Factors .

Cybersecurity

Item 1C. Cybersecurity.

Properties

Item 2. Properties .

Legal Proceedings

Item 3. Legal Proceedings .

Mine Safety Disclosures

Item 4. Mine Safety Disclosures PART II

Other Information

Item 9B. Other Information. Nothing to report. 1 The following Items have been omitted in accordance with General Instruction J(1) to Form 10-K:

Market for Registrant’s Common Equity, Related

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities .

Management’s Discussion and Analysis of Financial

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

Quantitative and Qualitative Disclosures About Market

Item 7A. Quantitative and Qualitative Disclosures About Market Risk .

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data .

Changes in and Disagreements with Accountants on

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .

Controls and Procedures

Item 9A. Controls and Procedures .

Disclosure Regarding Foreign Jurisdictions that Prevent

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III The following Items have been omitted in accordance with General Instruction J(1) to Form 10-K:

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance.

Executive Compensation

Item 11. Executive Compensation.

Security Ownership of Certain Beneficial Owners and

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .

Certain Relationships and Related Transactions, and

Item 13. Certain Relationships and Related Transactions, and Director Independence .

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services . PURSUANT TO GENERAL INSTRUCTION J(2) THE FOLLOWING SUBSTITUTE INFORMATION IS BEING PROVIDED IN THIS REPORT ON FORM 10-K:

(b) of Regulation AB. Significant Obligors

Item 1112(b) of Regulation AB. Significant Obligors of Pool Assets – Financial Information. Nothing to report.

(b)(2) of Regulation AB. Credit Enhancement

Item 1114(b)(2) of Regulation AB. Credit Enhancement and Other Support, Except for Certain Derivatives Instruments – Financial Information. Nothing to report.

(b) of Regulation AB. Certain Derivatives Instruments

Item 1115(b) of Regulation AB. Certain Derivatives Instruments – Financial Information. Nothing to report.

of Regulation AB. Legal Proceedings

Item 1117 of Regulation AB. Legal Proceedings. There are no legal proceedings pending, or any proceedings known to be contemplated by governmental authorities, against the Sponsor, the Depositor, U.S. Bank Trust Company, National Association (the “Indenture Trustee”), Wilmington Trust, National Association (the “Owner Trustee”), the Issuing Entity, or any property thereof, that are material to holders of the Asset Backed Notes issued by the Issuing Entity (the “Notes”), except to the extent set forth below with respect to the Indenture Trustee. 2 The Indenture Trustee has provided the information contained in the following five paragraphs for purposes of compliance with Regulation AB: U.S. Bank National Association (“U.S. Bank”) 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 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 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 vig

of Regulation AB. Affiliations and Certain

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. 3

of Regulation AB. Compliance with Applicable

Item 1122 of Regulation AB. Compliance with Applicable Servicing Criteria. Each of the Sponsor, in its capacity as Servicer, and the Indenture Trustee (together with the Sponsor in its capacity as Servicer, each, a “Servicing Participant”) has been identified by the registrant as a party participating in the servicing function during the reporting period with respect to the pool assets held by the Issuing Entity. 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 reporting period, which Reports on Assessment are attached as Exhibits 33.1 and 33.2 to this report on Form 10-K. In addition, each Servicing Participant has provided an attestation report (each, an “Attestation Report”) by a registered independent public accounting firm on its Report on Assessment. The Attestation Reports are attached as Exhibits 34.1 and 34.2 to this report on Form 10-K. The Report on Assessment prepared by the Indenture Trustee and the Attestation Report provided by the Indenture Trustee did not identify any material instance of noncompliance with the servicing criteria applicable to the Indenture Trustee. The Report on Assessment prepared by the Servicer and the Attestation Report provided by the Servicer identified the following material instances of noncompliance with the servicing criteria applicable to the Servicer: In regard to one defaulted receivable, the Servicer did not send a post-repossession notice within the timeframe required by the applicable state resulting in a reportable finding under Item 1122(d)(4)(vii). The receivable in question was part of the assets backing the Notes. In regard to one receivable that was involved in a bankruptcy proceeding, the Servicer did not send a pre-repossession notice after it was released from bankruptcy resulting in a reportable f

of Regulation AB. Servicing Compliance

Item 1123 of Regulation AB. Servicing Compliance The Servicer has completed a statement of compliance with its obligations under the applicable servicing agreement (a “Compliance Statement”) signed by an authorized officer of the Servicer. The Compliance Statement is attached as Exhibit 35.1 to this report on Form 10-K. PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits 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 4 Exhibit Number Description 1.1 Underwriting Agreement, dated January 18, 2023, among Mercedes-Benz Retail Receivables LLC, Mercedes-Benz Financial Services USA LLC and MUFG Securities Americas Inc., BofA Securities, Inc. and SG Americas Securities, LLC, , as representatives of the several underwriters named therein (included in Exhibit 1.1 to the Form 8-K of the Issuing Entity, as filed with the SEC on January 20, 2023, which is incorporated herein by reference). 3.1 Certificate of Formation of Mercedes-Benz Retail Receivables LLC (included in Exhibit 3.1 to the Registration Statement on Form SF-3 of Mercedes-Benz Retail Receivables LLC, No. 333-266303, as filed with the SEC on July 22, 2022, which is incorporated herein by reference). 3.2 Limited Liability Company Agreement of Mercedes-Benz Retail Receivables LLC (included in Exhibit 3.2 to the Form 8 K/A of Mercedes-Benz Auto Receivables Trust 2022-1 (cik: 0001951118), as filed with the SEC on November 18, 2022, which is incorporated herein by reference). 4.1 Indenture, dated as of January 1, 2023, between the Issuing Entity and U.S. Bank Trust Company, National Association, as indenture trustee (included in Exhibit 4.1 to the Form 8-K of the Issuing Entity, as filed with the SEC on January 27, 2023, which is incorporated herein by reference). 4.2 Amended and Restated Trust Agreement, dated as of January 1, 2023, between Mercedes-Benz Retail Receivables LLC, as depositor, and Wilmington Trust, National Association, as owner trustee (included in Exhibit 4.2 to the Form 8-K of the Issuing Entity, as filed with the SEC on January 27, 2023, which is incorporated herein by reference). 10.1 Sale and Servicing Agreement, dated as of January 1, 2023, amo

Form 10–K Summary

Item 16. Form 10–K Summary Not included. 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 any security holders or is presently anticipated to be furnished to security holders subsequent to the filing of this annual report on Form 10-K. 6

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. Mercedes-Benz Auto Receivables Trust 2023-1 (Issuing Entity) By: Mercedes-Benz Financial Services USA LLC (Servicer) By: /s/ Rottenkolber Name: Christian Rottenkolber Title: Vice President and Chief Financial Officer (senior officer in charge of the servicing function for the Servicer) Dated: March 25, 2026 7 EXHIBIT INDEX Exhibit Number Description 1.1

Underwriting

Underwriting Agreement, dated January 18, 2023, among Mercedes-Benz Retail Receivables LLC, Mercedes-Benz Financial Services USA LLC and MUFG Securities Americas Inc., BofA Securities, Inc. and SG Americas Securities, LLC, as representatives of the several underwriters named therein (included in Exhibit 1.1 to the Form 8-K of the Issuing Entity, as filed with the SEC on January 20, 2023, which is incorporated herein by reference). 3.1 Certificate of Formation of Mercedes-Benz Retail Receivables LLC (included in Exhibit 3.1 to the Registration Statement on Form SF-3 of Mercedes-Benz Retail Receivables LLC, No. 333-266303, as filed with the SEC on July 22, 2022, which is incorporated herein by reference). 3.2 Limited Liability Company Agreement of Mercedes-Benz Retail Receivables LLC (included in Exhibit 3.2 to the Form 8 K/A of the Mercedes-Benz Auto Receivables Trust 2022-1 (cik: 0001951118), as filed with the SEC on November 18, 2022, which is incorporated herein by reference). 4.1 Indenture, dated as of January 1, 2023, between the Issuing Entity and U.S. Bank Trust Company, National Association, as indenture trustee (included in Exhibit 4.1 to the Form 8-K of the Issuing Entity, as filed with the SEC on January 27, 2023, which is incorporated herein by reference). 4.2 Amended and Restated Trust Agreement, dated as of January 1, 2023, between Mercedes-Benz Retail Receivables LLC, as Depositor, and Wilmington Trust, National Association, as owner trustee (included in Exhibit 4.2 to the Form 8-K of the Issuing Entity, as filed with the SEC on January 27, 2023, which is incorporated herein by reference). 10.1 Sale and Servicing Agreement, dated as of January 1, 2023, among the Issuing Entity, Mercedes-Benz Retail Receivables LLC, and Mercedes-Benz Financial Services USA LLC, as seller and as servicer (included in Exhibit 10.1 to the Form 8-K of the Issuing Entity, as filed with the SEC on January 27, 2023, which is incorporated herein by reference

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