A revolving pool of mobile device payment plans, mostly on smart phones, will secure $900 million in asset-backed securities (ABS) from two trusts, the Verizon Master Trust, series 2025-3 and 2025-4.
The capital structures driving both deals are almost identical. Both sell notes through class A, B and C notes, and the series 2025-4 issues three tranches of notes, all fixed rate, according to Moody’s Ratings. The series 2025-3 issues four tranches of notes, which includes an A1B tranche, benchmarked to the one-month Secured Overnight Financing Rate (SOFR), Moody’s said.
All the notes in the 2025-3 series have a legal final maturity date of March 20, 2030, and benefits from initial overcollateralization and reserves in amounts representing 8.25% and 1.00%, respectively. The series 2025-4 notes have a legal final maturity date of March 21, 2033.
The notes benefit from total initial hard credit enhancement representing 19.25% on the class A notes; 13.00% on the class B notes; and 9.25% on the class C notes.
Securities, Barclays Capital, TD Securities and Truist Securities are initial purchasers, Moody’s said. Cellco Partnership is the servicer on the underlying device payment plans, and because Moody’s considers it a financially strong company, which counts as a credit strength.
Most customers are longtime Version customers with a weighted average (WA) score of 725, and a WA customer tenure of 121 months, and residential customers make up most of the pool by far. Business device payment plans only account for up to 10% of the pool, Moody’s said.
Another potential positive credit characteristic is the assets’ relatively fast amortization. The installment plans have an average remaining term of 24 months, with 58% of the assets eligible for upgrades. These terms could accelerate repayment after the 60-month revolving period.
Yet the 60-month revolving period could change the quality of the pool as Verizon adds new receivables to the transaction over time, Moody’s said.
