Fitch upgrades T-Mobile US Trust 2022-1 notes amid stable performance

Published 04/08/2025, 22:58
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Investing.com -- Fitch Ratings has upgraded T-Mobile US (NASDAQ:TMUS) Trust (TMUST) 2022-1 Class B notes to ’AAAsf’ from ’AAsf’ and Class C notes to ’AAsf’ from ’Asf’, while affirming Class A notes at ’AAAsf’. All ratings maintain a Stable Outlook.

The rating actions reflect increased credit enhancement and stable asset pool performance since the last review, according to Fitch’s Monday announcement. The transaction is backed by unsecured retail equipment installment plan sales contracts originated by T-Mobile Financial LLC and other T-Mobile US, Inc. affiliates.

The two-year revolving period for TMUST 2022-1 ended in November 2024, with bonds amortizing since then. The final post-revolving asset pool shows improved mix and lower risk than at closing, based on Fitch’s default assumptions which primarily consider customer tenure with T-Mobile.

Credit enhancement for Class A, B, and C notes has increased to 49.39%, 32.62%, and 15.85% respectively, up from 19.50%, 14.50%, and 9.50% at closing. The enhancement consists of junior note subordination, overcollateralization and a non-declining 1.00% reserve account.

The percentage of customers with tenure of 60 months or more has increased to 61.58% as of July 2025 from 46.29% at closing. The weighted average FICO score stands at 706.

Asset performance metrics remain strong, with loans 91+ days delinquent representing about 0.44% of the outstanding asset pool, below the 2.00% amortization trigger. Annualized trailing three-month average write-offs were 5.00%, well below the 10.00% trigger event.

Fitch assigned a base case remaining default rate of 3.45% of the outstanding asset pool balance, reflecting the improved pool mix by customer tenure and stable collateral performance.

The rating agency noted that the notes are exposed to T-Mobile’s credit profile, as its subsidiaries serve as originators, servicer and network operator. Fitch currently rates T-Mobile ’BBB+’ with a Stable Outlook.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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