Fitch Revises CNH Industrial Capital LLC's Outlook to Negative; Affirms IDRs at 'BBB'/'F2'

Published: 2026-05-14 09:39:15 ET CNH

Published on 05/14/2026 at 09:39 am EDT

Fitch Ratings has affirmed CNH Industrial Capital LLC's (CNHI Capital) and its wholly owned subsidiary, CNH Industrial Capital Canada Ltd.'s (CNHI Canada), Long-Term Issuer Default Ratings (IDRs) and senior unsecured debt ratings at 'BBB'.

Fitch also affirmed the Shareholder Support Ratings (SSR) of CNHI Capital and CNHI Canada at 'bbb' and CNHI Capital's Short-Term IDR and commercial paper (CP) rating at 'F2'.

The Rating Outlook has been revised to Negative from Stable.

Key Rating Drivers

Outlook Aligns with Parent Rating: The affirmation and Outlook revision were driven by the concurrent rating affirmation and Outlook revision of parent company, CNH Industrial N.V. (CNHI; BBB/Negative) on May 13, 2026. The ratings and Outlooks for CNHI Capital and CNHI Canada are equalized with and linked to those of CNHI, as Fitch views both entities as core subsidiaries. This is supported by CNHI's 100% direct and indirect ownership, shared branding, and the importance of CNHI Capital to CNHI's strategic objectives to provide financing across its agricultural and construction equipment businesses.

According to a keepwell agreement between CNHI and CNHI Capital, CNHI must maintain 51% ownership of CNHI Capital, CNHI Capital's net worth at no less than $50 million, and CNHI Capital's quarterly fixed-charge coverage at no less than 1.05x.

Shareholder Support: CNHI Capital's Shareholder Support Rating (SSR) of 'bbb' is aligned with the parent's Long-Term IDR and indicates the minimum level to which the captive finance company's IDR could fall if Fitch does not change its view on potential support from CNHI. An SSR of 'bbb' indicates a high probability of forthcoming support.

Asset Quality Normalizing: Asset-quality metrics remain solid, with delinquencies greater than 30 days past-due of 1.3% as of 1Q26, compared with 1.2% a year ago and a four-year average of 1.0% in 2022-2025. Net charge-offs on average managed receivables were 0.4% for the TTM ended 1Q26, compared with 0.3% a year prior. At 1Q26, the allowance for credit losses was 1.14% of total receivables, compared to 1.07% at YE 2025.

Stable Operating Performance: CNHI Capital reported pre-tax return on average assets of 1.9% for the TTM ended 1Q26, in line with a year ago and consistent with the 2022-2025 four-year average of 2.0%. Earnings reflect lower origination volumes in a pressured North American agricultural sector, offset by reduced interest expense due to a decline in gross debt. Fitch expects declining interest rates to provide some margin relief over the medium term, partially offsetting higher provisioning from modestly deteriorating asset quality.

Higher Leverage Relative to Peers: CNHI Capital's leverage, measured by debt-to-tangible equity, decreased to 9.2x at 1Q26 from 9.4x a year prior, driven by lower gross debt tied to reduced origination volumes. Leverage is higher than most Fitch-rated standalone finance and leasing companies but consistent with other captive finance peers. The company employs a flexible dividend policy with its parent to manage leverage at the captive. Fitch expects CNHI Capital to maintain leverage around the current level through variable dividends to the parent, with contraction in origination volume continuing to reduce total outstanding debt.

Primarily Secured Funded: CNHI Capital remains largely reliant on secured debt for a substantial portion of its funding in the form of asset-backed securitizations and revolving credit facilities. Secured debt was 60% of total debt as of 1Q26, which is high relative to captive peers. Fitch would view an increase in unsecured debt favorably from a credit perspective as it would enhance the firm's funding flexibility, particularly in times of market stress.

Adequate Liquidity: CNHI Capital's liquidity profile is adequate given consistent operating cash flow generation, $86.4 million of cash and $743.7 million in undrawn unsecured availability on credit facilities, as of 1Q26. As of March 31, 2026, CNHI Capital had over $887.0 million of unsecured debt maturing in 2026. Fitch believes CNHI Capital will refinance maturities with operating cash flows, debt issuance or available liquidity sources.

Ample Coverage: As part of the support agreement, CNHI will make cash capital contributions to CNHI Capital to ensure the ratio of net earnings available for fixed charges to fixed charges is at least 1.05x each fiscal quarter. Coverage, as calculated by the company, was in line with the YE 2025 level and above the minimum requirement.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

A change in the perceived relationship between CNHI and CNHI Capital, such that Fitch believes the captive has become less central to CNHI's strategic operations and/or adequate financial support is not provided to the captive finance company during challenging economic market conditions or times of stress;

Consistent operating losses, material and sustained increase in balance sheet leverage, deterioration in the company's liquidity profile, and/or alteration of CNHI Capital's risk profile.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

CNHI Capital's rating and Outlook is linked to that of its parent, CNHI. Fitch cannot envision a scenario where the captives would be rated higher than their parent.

The SSRs are sensitive to changes in CNHI's IDR, as well as to changes in Fitch's assessment of the probability of support being extended to CNHI Capital and CNHI Canada from CNHI.

The Short-Term IDR is primarily sensitive to changes in the Long-Term IDR and, by extension, to Fitch's view of shareholder support, also in addition to the funding and liquidity profiles of CNHI Capital and CNHI.

DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS

CNHI Capital's CP rating is equalized with its Short-Term IDR.

The senior unsecured debt rating is equalized with the Long-Term IDR, reflecting a sufficient proportion of unsecured funding in the capital structure and the unencumbered asset pool, which suggests average recovery prospects for debtholders under a stress scenario.

DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES

DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITES

The CP rating is equalized with the Short-Term IDR and would be expected to move in tandem.

The senior unsecured debt long-term rating is linked to the Long-term IDR and would be expected to move in tandem, although a meaningful decline in the proportion of unsecured debt could result in the debt being notched below the IDR.

SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES

CNHI Canada's ratings are linked to CNHI Capital's and, ultimately, CNHI's Long-Term IDR and would be expected to move in tandem. Fitch considers CNHI Canada a core subsidiary of CNHI Capital, which reflects the actual and potential support provided by CNHI, its role in providing financing to CNHI's products, shared branding and an unconditional guarantee on CNHI Canada's unsecured debt.

Sources of Information

The principal sources of information used in the analysis are described in the Applicable Criteria.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings

CNHI Capital's ratings and Outlook are equalized with CNHI, as Fitch considers CNHI Capital a core subsidiary of CNHI. This view is supported by CNHI's 100% ownership of CNHI Capital, shared branding between the entities and the importance of CNHI Capital to CNHI's strategic objectives of providing financing across its industrial businesses, which include agricultural and construction equipment.

CNHI Canada's ratings are directly linked to CNHI Capital's ratings, which are equalized with CNHI. Fitch considers CNHI Canada to be a core subsidiary of CNHI Capital, which reflects the actual and potential support provided by CNHI, its role in providing financing to CNHI's products, shared branding, and an unconditional guarantee on CNHI Canada's unsecured debt.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.

RATING ACTIONS

Entity / Debt

Rating Type

Rating

Rating Action

Prior

CNH Industrial Capital LLC

LT IDR

BBB

Affirmed

BBB

ST IDR

Affirmed

Shareholder Support

bbb

Affirmed

bbb

senior unsecured

BBB

Affirmed

BBB

senior unsecured

Affirmed

CNH Industrial Capital Canada Ltd.

LT IDR

BBB

Affirmed

BBB

Shareholder Support

bbb

Affirmed

bbb

senior unsecured

BBB

Affirmed

BBB

Page

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Non-Bank Financial Institutions Rating Criteria (pub. 01 Feb 2025) (including rating assumption sensitivity)

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