Mercedes-Benz Auto Trust Reports Servicing Lapses, Trustee Faces RMBS Suits

TL;DR

**Mercedes-Benz Auto Trust's servicing hiccups are minor, but the Indenture Trustee's broader legal woes are a yellow flag for ABS investors.**

AI Summary

The Mercedes-Benz Auto Receivables Trust 2024-1, a securitization entity, filed its 10-K for the fiscal year ended December 31, 2025, indicating no material changes in its financial condition or operations as a pass-through entity. The report highlights compliance with servicing criteria, with Mercedes-Benz Financial Services USA LLC, as Servicer, reporting two material instances of noncompliance under Item 1122(d)(4)(vii) related to notice requirements for defaulted and bankrupt receivables, though these specific receivables were not part of the assets backing the Notes. U.S. Bank Trust Company, National Association, as Indenture Trustee, reported no material noncompliance. The trust is primarily a vehicle for asset-backed notes, and its financial performance is directly tied to the underlying auto receivables. There are no legal proceedings material to the noteholders against the Issuing Entity, Sponsor, Depositor, or Owner Trustee, but the Indenture Trustee, U.S. Bank National Association, is involved in ongoing RMBS and student loan litigation, which it is vigorously contesting.

Why It Matters

This 10-K provides transparency into the operational health of the Mercedes-Benz Auto Receivables Trust 2024-1, a key securitization vehicle for Mercedes-Benz Financial Services USA LLC. While the reported servicing noncompliance instances did not directly impact the assets backing the Notes, they signal potential workflow issues that could affect future securitizations or investor confidence if not addressed. The ongoing legal challenges faced by U.S. Bank National Association, the Indenture Trustee, in unrelated RMBS and student loan trusts, introduce a layer of reputational and operational risk for all trusts it serves, including this one, potentially impacting its ability to fulfill its duties effectively. Investors in asset-backed securities rely heavily on the robust administration and servicing of the underlying assets, making these disclosures critical for assessing risk and the competitive landscape of auto loan securitization.

Risk Assessment

Risk Level: medium — The risk level is medium due to the Servicer's reported material instances of noncompliance with servicing criteria, specifically two failures to send required notices for defaulted and bankrupt receivables under Item 1122(d)(4)(vii). While these specific receivables were not part of the Notes' backing assets, they indicate potential systemic workflow issues. Additionally, the Indenture Trustee, U.S. Bank National Association, is embroiled in significant RMBS and student loan litigation, which, while unrelated to this trust, could impact its overall operational capacity and reputation.

Analyst Insight

Investors should monitor Mercedes-Benz Financial Services USA LLC's remediation efforts for the identified servicing noncompliance to ensure workflow processes are improved. Given the Indenture Trustee's ongoing legal challenges, investors should also assess the broader implications for U.S. Bank National Association's capacity and potential liabilities across all trusts it manages, including this one, and consider diversification across trustees.

Financial Highlights

debt To Equity

0.0

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

• December 31, 2025 — Fiscal year end (Reporting period for the 10-K filing)
• January 1, 2024 — Effective date of key agreements (Date of Indenture, Trust Agreement, Sale and Servicing Agreement, Receivables Purchase Agreement, Asset Representations Review Agreement, and Administration Agreement)
• 2 — Material instances of noncompliance (Reported by Mercedes-Benz Financial Services USA LLC as Servicer under Item 1122(d)(4)(vii))
• March 9, 2018 — Date of NCMSLT Action filing (Lawsuit against U.S. Bank National Association regarding student loan trusts)

Key Players & Entities

• Mercedes-Benz Auto Receivables Trust 2024-1 (company) — Issuing Entity
• Mercedes-Benz Financial Services USA LLC (company) — Sponsor and Servicer
• 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) — Public accounting firm for Servicer's attestation
• Ernst & Young LLP (company) — Public accounting firm for Indenture Trustee's attestation
• Citigroup Global Markets Inc. (company) — Underwriter
• MUFG Securities Americas Inc. (company) — Underwriter

FAQ

Risk Factors

• Servicer Noncompliance with Notice Requirements [medium — operational]: Mercedes-Benz Financial Services USA LLC, as Servicer, reported two material instances of noncompliance under Item 1122(d)(4)(vii) related to notice requirements for defaulted and bankrupt receivables. While these specific receivables were not part of the assets backing the Notes, this indicates potential weaknesses in the Servicer's internal controls and adherence to contractual obligations.
• Indenture Trustee Litigation [medium — legal]: The Indenture Trustee, U.S. Bank Trust Company, National Association, is involved in ongoing RMBS and student loan litigation. While the trust itself is not a party to these actions, significant adverse judgments against the Indenture Trustee could potentially impact its ability to fulfill its duties or lead to its replacement, creating operational uncertainty for the trust.
• Compliance with Servicing Criteria [low — regulatory]: The Servicer's compliance with servicing criteria under Item 1122 is crucial for investor confidence. The reported instances of noncompliance, although not affecting the current pool of assets, highlight the need for ongoing monitoring and assurance of the Servicer's adherence to all contractual and regulatory requirements.

Industry Context

The auto finance industry is characterized by intense competition among lenders, including captive finance companies like Mercedes-Benz Financial Services. Key trends include evolving consumer preferences towards digital loan applications, increasing demand for electric vehicles (which may have different financing structures), and a dynamic interest rate environment impacting loan origination costs and borrower affordability.

Regulatory Implications

The reported instances of noncompliance by the Servicer, even if not material to the current note pool, underscore the importance of robust internal controls and adherence to regulatory requirements under SEC Regulation AB. Ongoing scrutiny of servicing practices and trustee oversight remains a key regulatory focus in the asset-backed securities market.

What Investors Should Do

1. Monitor Servicer Compliance Reports
2. Assess Indenture Trustee Risk
3. Evaluate Underlying Asset Performance

Key Dates

• 2025-12-31: Fiscal year end — Marks the end of the reporting period for the 10-K filing, providing the latest financial snapshot.
• 2024-01-01: Effective date of key agreements — Indicates the commencement of the Indenture, Trust Agreement, Sale and Servicing Agreement, and other critical operational documents governing the trust.
• 2018-03-09: NCMSLT Action filing — Represents a significant legal action against the Indenture Trustee, U.S. Bank National Association, highlighting potential risks associated with the trustee's broader litigation exposure.

Glossary

Securitization

The process of pooling various types of contractual debt, such as mortgages, auto loans, or credit card debt, and selling these pools to third-party investors as securities. (The Mercedes-Benz Auto Receivables Trust 2024-1 is a securitization entity, meaning its primary function is to issue asset-backed securities backed by auto loan receivables.)

Pass-through entity

An entity that passes income, gains, losses, deductions, and credits through to its investors for both federal and state tax purposes. The entity itself does not pay income tax. (This describes the nature of the trust, indicating that its financial performance is directly tied to the underlying assets and is not subject to corporate income tax.)

Servicer

The entity responsible for managing the day-to-day operations of the securitized assets, including collecting payments, handling delinquencies, and managing defaults. (Mercedes-Benz Financial Services USA LLC acts as the Servicer, and its performance and compliance are critical to the trust's operations and the performance of the asset-backed notes.)

Indenture Trustee

A financial institution appointed to act on behalf of the bondholders (noteholders) in a securitization transaction, ensuring the terms of the indenture are met. (U.S. Bank Trust Company, National Association serves as the Indenture Trustee, and its role is to protect the interests of the noteholders.)

Item 1122(d)(4)(vii)

A specific item within the SEC's Regulation AB that requires servicers to report on their compliance with servicing criteria, including specific requirements related to notice provisions for defaulted and bankrupt receivables. (This is the specific regulation under which the Servicer reported instances of noncompliance, highlighting a potential operational weakness.)

Year-Over-Year Comparison

As this is the initial 10-K filing for the Mercedes-Benz Auto Receivables Trust 2024-1, a direct comparison of key metrics to a previous year's filing is not possible. The report establishes the baseline financial and operational status of the trust for the fiscal year ended December 31, 2025, highlighting initial compliance and identified areas for Servicer attention.

Filing Documents

• mbart20241_10k_32026.htm (10-K) — 110KB
• e311_mbart20241.htm (EX-31) — 13KB
• 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_mbenserv23mbart20241.htm (EX-35) — 8KB
• 0001853620-26-000092.txt ( ) — 318KB

, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy

Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes ( e.g. , annual report to security holders for the fiscal year ended December 24, 1980). None PART I

Unresolved

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

Risk

Item 1A. Risk Factors. Item IC. Cybersecurity.

Legal

Item 3. Legal Proceedings. Item 4. Mine Safety Disclosures PART II

Other

Item 9B. Other Information. Nothing to report. 1 The following Items have been omitted in accordance with General Instruction J(1) to Form 10K: Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Item 6. [Reserved] Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . Item 7A. Quantitative and Qualitative Disclosures About Market Risk . Item 8. Financial Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . Item 9A. Controls and Procedures . 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 10K: Item 10. Directors, Executive Officers and Corporate Governance. Item 11. Executive Compensation. Item 12. Security Item 13. Certain Relationships and Related Transactions, and Director Independence . 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 10K:

(b)

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

(b)(2)

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

(b)

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

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

(b) below

Item 15(b) below. (b) Exhibits Required by Item 601 of Regulation SK 4 Exhibit Number Description 1.1 Underwriting Agreement, dated January 17, 2024, among Mercedes-Benz Retail Receivables LLC, Mercedes-Benz Financial Services USA LLC and Citigroup Global Markets Inc., MUFG Securities Americas 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 19, 2024, 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, 2024, 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 29, 2024, which is incorporated herein by reference). 4.2 Amended and Restated Trust Agreement, dated as of January 1, 2024, 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 29, 2024, which is incorporated herein by reference). 10.1 Sale and Servicing Agreement, dated as of January 1, 2024, 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 th

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. MercedesBenz Auto Receivables Trust 20241 (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 Agreement, dated January 17, 2024, among Mercedes-Benz Retail Receivables LLC, Mercedes-Benz Financial Services USA LLC and Citigroup Global Markets Inc., MUFG Securities Americas 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 19, 2024, 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, 2024, between the Issuing Entity and U.S. Bank Trust Company, National Association, as indenture trustee (included in Exhibit 4.1 to the Form 8K of the Issuing Entity, as filed with the SEC on January 29, 2024, which is incorporated herein by reference). 4.2 Amended and Restated Trust Agreement, dated as of January 1, 2024, between Mercede

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