Prospectus

$875,000,000

Series 2024-3 Asset Backed Notes

Verizon Master Trust
Issuing Entity or Trust

(CIK Number: 0001844964)

 

Before you purchase any notes, be sure you understand the structure and the risks.  You should review carefully the risk factors beginning on page 37 of this prospectus.

The issuing entity’s assets consist primarily of an interest in a revolving pool of device payment plan agreements originated by Cellco Partnership d/b/a Verizon Wireless and certain other affiliates of Verizon Communications Inc.  The notes are secured by all of the issuing entity’s assets and will be paid from collections on and proceeds of the issuing entity’s device payment plan agreements designated to “group 1” that are allocated to the notes under the transaction documents.  The issuing entity has issued eighteen other series of notes and has entered into two series of loans, and expects to issue or enter into in the future other series of notes and loans. The notes and loans of any series are only entitled to the portion of collections on and proceeds of the device payment plan agreements designated to the related group that are allocated to it under the transaction documents. The assets of the issuing entity may also include device payment plan agreements that are designated to groups other than group 1, but collections on or proceeds of any device payment plan agreements designated to a group other than group 1 will not be available to the notes except in the limited circumstances described under “Description of the Notes—Events of Default—Remedies Following Event of Default.”  The notes will be obligations of the issuing entity only and will not be obligations of or interests in the sponsor, the originators, the servicer, the depositor, the parent support provider, the marketing agent or any of their respective affiliates.  The issuing entity has also issued certificates representing the equity interest in the issuing entity.  The certificates will be retained by the depositor and by Verizon DPPA True-up Trust.  The issuing entity will issue the notes in the table below as part of Series 2024-3 and only these notes are offered by this prospectus.

 

Notes(1)	Initial Note Balance				Interest Rate		Accrual Method		Anticipated Redemption Date			Final Maturity Date
Class A-1a notes		$604,635,000			5.34%(2)		30/360		April 20, 2027			April 22, 2030
Class A-1b notes		$175,000,000			Compounded SOFR + 0.58%(2)(3)(4)		Actual/360		April 20, 2027			April 22, 2030
Class B notes		$59,605,000			5.54%(2)		30/360		April 20, 2027			April 22, 2030
Class C notes		$35,760,000			5.73%(2)		30/360		April 20, 2027			April 22, 2030
Total		$875,000,000
	Initial Public Offering Price				Underwriting Discounts and Commissions				Net Proceeds(5)
Class A-1a notes		$604,501,133.81			0.25000%					$602,989,546.31
Class A-1b notes		$175,000,000.00			0.25000%					$174,562,500.00
Class B notes		$59,599,188.51			0.35000%					$59,390,571.01
Class C notes		$35,751,263.83			0.45000%					$35,590,343.83
Total		$874,851,586.15								$872,532,961.15

 

 

 

 

⁽⁵⁾ Before deducting expenses estimated to be $1,170,919.

 

 

 

 

 

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

 

The issuing entity is not registered or required to be registered as an “investment company” under the Investment Company Act of 1940, as amended, and in making this determination, the issuing entity will be relying on the exemption from the definition of “investment company” set forth in Section 3(c)(5) of the Investment Company Act of 1940, as amended, although there may be additional exemptions or exclusions available to the issuing entity.  The issuing entity is being structured so as not to constitute a “covered fund” for purposes of the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The notes will be delivered in book-entry form through the facilities of The Depository Trust Company to purchasers on or about April 23, 2024, which is the “closing date.”

JOINT BOOKRUNNERS

CO-MANAGERS

________________

The date of this prospectus is April 16, 2024

IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS

 

This prospectus has been prepared by Verizon ABS II LLC, as depositor, and Cellco Partnership d/b/a Verizon Wireless, as sponsor. The U.S. Securities and Exchange Commission (the “SEC”) allows us to “incorporate by reference” information filed with it by the issuing entity or by the depositor on behalf of the issuing entity, which means that we can disclose important information to you by referring you to those documents.  Verizon ABS II LLC has met the registrant requirements of General Instruction I.A.1 of Form SF-3.  The information incorporated by reference is considered to be part of this prospectus.  Information that we file later with the SEC will automatically update the information in this prospectus.  In all cases, you should rely on the later information over different information included in this prospectus.  We will incorporate by reference the issuing entity’s latest annual report on Form 10-K that contains financial statements for the issuing entity’s latest fiscal year for which a Form 10-K was required to be filed.  We note however that the issuing entity does not expect to include financial statements in its reports on Form 10-K.  We also incorporate by reference any current reports on Form 8-K or any distribution reports on Form 10-D filed with the SEC by or on behalf of the issuing entity pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), before the termination of the offering of the notes.

 

In making your investment decision, you should rely only on the information contained or incorporated by reference in this prospectus.  We and the underwriters have not authorized anyone to provide you with any other information.  If you receive any other information, you should not rely on it.

 

We and the underwriters are offering to sell the notes only in places where offers and sales are permitted.

 

You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than the date of such information.

 

 

READING THIS PROSPECTUS

 

This prospectus begins with the following brief introductory sections:

 

 

 

 

 

 

 

The other sections of this prospectus contain more detailed descriptions of the parties to this securitization transaction, the assets of the issuing entity and the servicing of the assets, the notes and the structure of this securitization transaction.  Cross-references refer you to more detailed descriptions of a

 

particular topic or related information elsewhere in this prospectus.  The Table of Contents contains references to key topics.  The information set forth in any Schedule attached to this prospectus and in Annex A, Annex B and Annex C is deemed to be a part of and is incorporated into this prospectus.

 

Capitalized terms used in this prospectus, if not defined when first used, will have the meanings ascribed thereto in “Schedule I—Glossary of Defined Terms.”

 

 

FORWARD-LOOKING STATEMENTS

 

This prospectus, including the documents that we incorporate by reference, contains both historical and forward-looking statements. These forward-looking statements are not historical facts, but only predictions and generally can be identified by use of statements that include phrases such as “will,” “may,” “should,” “continue,” “anticipate,” “believe,” “expect,” “plan,” “appear,” “project,” “estimate,” “intend,” or other words or phrases of similar import. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. These forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Factors that could materially affect these forward-looking statements can be found in this prospectus and our periodic reports filed with the SEC.

 

Potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included in this prospectus are made only as of the date of this prospectus, and we undertake no obligation to update publicly these forward-looking statements to reflect new information, future events or otherwise, except as and to the extent required by the federal securities laws. In light of these risks, uncertainties and assumptions, the forward-looking events might or might not occur. We cannot assure you that projected results or events will be achieved.

 

 

COPIES OF THE DOCUMENTS

 

If you have received a copy of this prospectus, you may request a copy of any information that we have incorporated by reference in this prospectus, excluding any exhibit to that information unless the exhibit is specifically incorporated by reference in that information, at no cost by contacting Verizon ABS II LLC at the following address or telephone number:

 

Verizon ABS II LLC

One Verizon Way

Basking Ridge, New Jersey 07920

Telephone number: 212-395-1525
Attention: Investor Relations

 

You may also read these materials through the SEC’s EDGAR system at http://www.sec.gov.

 

 

NOTE LEGEND

 

Each note will bear the following legend:

 

“EACH HOLDER OF THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE) THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR A FEDERAL, STATE, LOCAL OR NON-U.S. LAW OR REGULATION THAT IS SUBSTANTIALLY SIMILAR TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (A “SIMILAR LAW”), AND ANY FIDUCIARY ACTING ON BEHALF OF THE HOLDER, BY ACCEPTING THIS NOTE (OR

 

AN INTEREST OR PARTICIPATION IN THIS NOTE), IS DEEMED TO REPRESENT THAT ITS ACQUISITION, HOLDING AND DISPOSITION OF THIS NOTE (OR AN INTEREST OR PARTICIPATION IN THIS NOTE) DOES NOT AND WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE (OR, IF THE HOLDER IS SUBJECT TO ANY SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION DOES NOT AND WILL NOT RESULT IN A VIOLATION OF ANY SIMILAR LAW).”

 

NOTICE TO INVESTORS: UNITED KINGDOM

THIS PROSPECTUS MAY ONLY BE COMMUNICATED OR CAUSED TO BE COMMUNICATED IN THE UNITED KINGDOM (THE “UK”) TO PERSONS (I) HAVING PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND QUALIFYING AS INVESTMENT PROFESSIONALS UNDER ARTICLE 19(5) (INVESTMENT PROFESSIONALS) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE “ORDER”), OR (II) FALLING WITHIN ARTICLE 49(2) (A)-(D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC.) OF THE ORDER OR (III) TO WHOM THIS PROSPECTUS MAY OTHERWISE LAWFULLY BE COMMUNICATED OR CAUSED TO BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). NEITHER THIS PROSPECTUS NOR THE NOTES ARE OR WILL BE AVAILABLE TO PERSONS IN THE UK WHO ARE NOT RELEVANT PERSONS AND THIS PROSPECTUS MUST NOT BE ACTED ON OR RELIED ON IN THE UK BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS PROSPECTUS RELATES, INCLUDING THE NOTES, IS AVAILABLE IN THE UK ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN, IN THE UK, ONLY WITH RELEVANT PERSONS.  THE COMMUNICATION OF THIS PROSPECTUS TO ANY PERSON IN THE UK WHO IS NOT A RELEVANT PERSON IS UNAUTHORIZED AND MAY CONTRAVENE THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED, THE “FSMA”).

THE NOTES ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY UK RETAIL INVESTOR IN THE UK. FOR THESE PURPOSES, A “UK RETAIL INVESTOR” MEANS A PERSON WHO IS ONE (OR MORE) OF: (I) A RETAIL CLIENT, AS DEFINED IN POINT (8) OF ARTICLE 2 OF COMMISSION DELEGATED REGULATION (EU) 2017/565 AS IT FORMS PART OF THE DOMESTIC LAW OF THE UK BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED, THE “EUWA”), AND AS AMENDED; OR (II) A CUSTOMER WITHIN THE MEANING OF THE PROVISIONS OF THE FSMA AND ANY RULES OR REGULATIONS MADE UNDER THE FSMA TO IMPLEMENT DIRECTIVE (EU) 2016/97 (SUCH RULES AND REGULATIONS, AS AMENDED), WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT, AS DEFINED IN POINT (8) OF ARTICLE 2(1) OF REGULATION (EU) NO 600/2014 AS IT FORMS PART OF THE DOMESTIC LAW OF THE UK BY VIRTUE OF THE EUWA AND AS AMENDED; OR (III) NOT A QUALIFIED INVESTOR AS DEFINED IN ARTICLE 2 OF REGULATION (EU) 2017/1129 AS IT FORMS PART OF THE DOMESTIC LAW OF THE UK BY VIRTUE OF THE EUWA (AS AMENDED, THE “UK PROSPECTUS REGULATION”). CONSEQUENTLY NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014 AS IT FORMS PART OF THE DOMESTIC LAW OF THE UK BY VIRTUE OF THE EUWA (AS AMENDED, THE “UK PRIIPS REGULATION”) FOR OFFERING OR SELLING THE NOTES OR OTHERWISE MAKING THEM AVAILABLE TO UK RETAIL INVESTORS IN THE UK HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE NOTES OR OTHERWISE MAKING THEM AVAILABLE TO ANY UK RETAIL INVESTOR IN THE UK MAY BE UNLAWFUL UNDER THE UK PRIIPS REGULATION.

THIS PROSPECTUS IS NOT A PROSPECTUS FOR THE PURPOSES OF THE UK PROSPECTUS REGULATION.

NOTICE TO INVESTORS: EUROPEAN ECONOMIC AREA

THE NOTES ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY EU RETAIL INVESTOR IN THE EUROPEAN ECONOMIC AREA (THE “EEA”). FOR THESE PURPOSES, AN “EU RETAIL INVESTOR” MEANS A PERSON WHO IS ONE (OR MORE) OF: (I) A RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF DIRECTIVE 2014/65/EU (AS AMENDED, “MIFID II”); OR (II) A CUSTOMER WITHIN THE MEANING OF DIRECTIVE (EU) 2016/97 (AS AMENDED) WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE 4(1) OF MIFID II; OR (III) NOT A QUALIFIED INVESTOR AS DEFINED IN ARTICLE 2 OF REGULATION (EU) 2017/1129 (AS AMENDED, THE “EU PROSPECTUS REGULATION”). CONSEQUENTLY NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014 (AS AMENDED, THE “EU PRIIPS REGULATION”) FOR OFFERING OR SELLING THE NOTES OR OTHERWISE MAKING THEM AVAILABLE TO EU RETAIL INVESTORS IN THE EEA HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE NOTES OR OTHERWISE MAKING THEM AVAILABLE TO ANY EU RETAIL INVESTOR IN THE EEA MAY BE UNLAWFUL UNDER THE EU PRIIPS REGULATION.

THIS PROSPECTUS IS NOT A PROSPECTUS FOR THE PURPOSES OF THE EU PROSPECTUS REGULATION.

 

 

TRUST AND TRANSACTION STRUCTURE DIAGRAM

 

The following diagram provides a simplified overview of the structure of the Trust, this securitization transaction and the credit and payment enhancement available for the Notes.  You should read this prospectus in its entirety for a more detailed description of this securitization transaction.

TRANSACTION CREDIT AND PAYMENT ENHANCEMENT DIAGRAM

 

This diagram is a simplified overview of the credit and payment enhancement available for the Notes on the Closing Date and how credit and payment enhancement is used to absorb losses on the Receivables.  If losses on the Receivables and other shortfalls in cash flows exceed the amount of available credit and payment enhancement, the amount available to make payments on the Notes will be reduced to the extent of these losses.  The risk of loss will be borne first by the Class C Notes, then the Class B Notes, and finally, the Class A Notes, pro rata, based on the Note Balance of the Class A-1a Notes and Class A-1b Notes on the applicable Payment Date.  You should read this prospectus completely, including “Credit and Payment Enhancement,” for more details about the credit and payment enhancement available for the Notes.

 

 

TRANSACTION PARTIES AND DOCUMENTS DIAGRAM

 

The following diagram shows the role of each transaction party and the obligations that are governed by each transaction document relating to the Notes.

 

TRANSACTION PAYMENTS DIAGRAM

 

This diagram shows how Series 2024-3 Available Funds will be paid on each Payment Date.  The priority of payments shown in this diagram will apply unless the Notes are accelerated after an Event of Default.  You should read this prospectus completely, including “Description of the Notes—Priority of Payments” and “—Post-Acceleration Priority of Payments,” for more details about the priority of payments for the Notes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GLOSSARY

 

Capitalized terms used in this prospectus, if not defined when first used, will have the meanings ascribed thereto in “Schedule I—Glossary of Defined Terms.”

 

 

RISK FACTORS

 

Investing in the Notes involves risks.  You should carefully consider the following risk factors in deciding whether to purchase any of the Notes.

 

Summary of Principal Risk Factors

 

The following is a summary of the principal risk factors applicable to an investment in the Notes:

 

Risks Related to the Structure of the Notes and the Trust

 

 

 

 

 

 

 

Risks Related to the Issuance of Floating Rate Notes Based on Compounded SOFR

 

 

 

 

 

 

Risks Related to the Receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risks Related to Transaction Parties

 

 

 

 

 

 

Legal and Regulatory Risks

 

 

 

Risks Related to Credit Ratings

 

 

 

General Risk Factors

 

 

 

 

Risk Factors

 

DESCRIPTIONS OF THE TRANSACTION DOCUMENTS

 

The following sections of this prospectus contain summaries of certain material terms of the transaction documents, including the Trust Agreement, the Administration Agreement, the Master Collateral Agreement, the Transfer and Servicing Agreement, the Receivables Transfer Agreements, the Asset Representations Review Agreement and the Indenture, but these summaries are not complete descriptions of these transaction documents.  For more details about the transaction documents, you should read the Trust Agreement, the Administration Agreement, the Master Collateral Agreement, the Transfer and Servicing Agreement, the Receivables Transfer Agreements, the Asset Representations Review Agreement and the form of Indenture that are included as exhibits to the registration statement filed with the SEC that includes this prospectus.  In addition, a copy of the Indenture will be filed with the SEC upon the filing of this prospectus.

 

 

THE TRUST

 

The Trust is a Delaware statutory trust governed by the Trust Agreement.  The Trust’s fiscal year is the calendar year.  The Trust acquired prior to the Closing Date, and may acquire in the future, Device Payment Plan Agreements originated by the Originators.

 

Each Series of Credit Extensions will be secured by all Trust DPPAs.  For purposes of allocations of cash flows to a particular Series, the Trust may designate Trust DPPAs to particular Groups.  Initially, all Trust DPPAs will be designated to Group 1. In the future, for purposes of allocations of cash flows, Trust DPPAs may be designated to different Groups. The Notes are secured by all of the Trust DPPAs and will be paid from Collections on and proceeds of the Receivables that are allocated to the Notes under the Transaction Documents.  The Trust, as a master trust, has issued eighteen other Group 1 Series of notes and has entered into two other Group 1 Series of loans. The Trust expects to issue or enter into in the future other Group 1 Series which also will be secured by all of the Trust DPPAs and will be paid from Collections on and proceeds of the Receivables that are allocated to such Group 1 Series under the Transaction Documents. The Notes will not be entitled to receive collections on or proceeds of any Trust DPPAs other than the Receivables, expect in the limited circumstances described under “Description of the Notes—Events of Default—Remedies Following Event of Default.”

 

Trust DPPAs may be designated to Groups other than Group 1, and the Trust may issue or enter into Credit Extensions, other than the Group 1 Credit Extensions, that will be secured by all Trust DPPAs and allocated cash flows from the Trust DPPAs designated to such other Group.  No Credit Extensions that are allocated cash flows from Trust DPPAs designated to any Group (including the Group 1 Credit Extensions with respect to Group 1) will be entitled to receive collections on or proceeds of, any assets of the Trust other than the assets designated to that Group, except to the extent Trust DPPAs designated to any other Group are sold upon the occurrence of an Event of Default and an acceleration of the Notes in the limited circumstances described under “Description of the Notes—Events of Default—Remedies Following Event of Default.”  No information is provided in this prospectus with respect to any Trust DPPAs other than the Receivables, other than as specifically set forth under “Servicing the Receivables and the Securitization Transaction” or any Credit Extensions other than the Notes, except for certain information with respect to prior securitized pools of the Sponsor set forth in Annex B and the Group 1 Credit Extensions Outstanding set forth in Annex C.

 

The purposes of the Trust will be to:

 

 

 

 

 

 

 

 

The Trust may not engage in any other activities and may not invest in any other securities (other than permitted investments) or make loans to any Persons.  The Trust has no employees and does not conduct unrelated business activities.

 

The Trust Agreement may be amended by the Depositor and the Owner Trustee without the consent of any Creditors, Creditor Representatives or Certificateholders, for any of the following purposes:

 

 

 

The Depositor and the Owner Trustee may, with the consent of the Certificateholders, but without the consent of any Creditors or Creditor Representatives, enter into an amendment or amendments to the Trust Agreement for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Trust Agreement or modifying in any manner the rights of the Creditors under the Trust Agreement if (A) the Trust or the Administrator shall have delivered to the Master Collateral Agent and the Owner Trustee an officer’s certificate, dated the date of any such action, stating that the Trust or the Administrator, as applicable, reasonably believes that such action will not have a material adverse effect on the interest of any Creditor or (B) the Rating Agency Condition has been satisfied for all Credit Extensions then rated by a rating agency.  The Depositor and the Owner Trustee, with the consent of the Certificateholders and the Majority Trust Creditor Representatives of each Group adversely affected thereby, may, with prior written notice to the rating agencies (if any Credit Extensions of an affected Group are then rated by a rating agency), enter into an amendment or amendments to the Trust Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Trust Agreement or of modifying in any manner the rights of the Creditors or Certificateholders under the Trust Agreement.  No amendment to the Trust Agreement, without the consent of the Certificateholders and each Creditor Representative representing each Series in each Group adversely affected by the amendment, may modify the percentage of Creditor Representatives or Creditors, or the percentage interest of Certificates, required to consent to any action.  The consent of the Master Collateral Agent will be required for any amendment described in this paragraph that has a material adverse effect on the rights, duties, obligations, immunities or indemnities of the Master Collateral Agent.

 

Any Creditor Representative consenting to any amendment will be deemed to agree that the amendment does not have a material adverse effect on it or on the related Creditors.  For any amendment, the Depositor or the Administrator will be required to deliver to the Owner Trustee an opinion of counsel stating that the amendment is authorized and permitted by the transaction documents and other applicable Series Related Documents and that all conditions precedent to the amendment have been satisfied.

 

The Trust may not consolidate or merge with or into any other Person or convey or transfer substantially all of its assets unless except as permitted by the Master Collateral Agreement.  The Trust may not permit the lien of (i) the Master Collateral Agreement to not constitute a valid and perfected first priority lien on the Receivables, the other Trust DPPAs and other assets of the Trust designated to a Group, subject to no adverse claims and (ii) the Indenture to not constitute a valid and perfected first priority lien on the assets of the Trust specifically designated to Series 2024-3, subject to no adverse claims.

 

The Servicer will indemnify the Trust for liabilities and damages caused by the Servicer’s willful misconduct, bad faith or gross negligence in the performance of its duties as Servicer.

 

The Administrator will perform additional administrative services for the Trust and the Owner Trustee pursuant to the Administration Agreement, as further described under “Sponsor, Servicer, Custodian, Marketing Agent and Administrator.”

 

In addition to the Notes, Series 2024-3 will also include the Class R Interests, which will not have a principal balance, will not accrue interest and will only be entitled to all Series 2024-3 Available Funds on any Payment Date not needed to pay fees, expenses and indemnities of the Trust allocated to or otherwise payable by Series 2024-3 or to make interest and principal payments on the Notes, payments, if any, required to reimburse any Letter of Credit Provider for any amounts drawn under the Letter of Credit together with interest accrued on the drawn amount, any required deposits into the Reserve Account or the Principal Funding Account, any Additional Interest Amounts and Make-Whole Payments payable on that Payment Date.  The undivided ownership interests in the Trust will be evidenced collectively by the Certificates, which are entitled to (i) distributions of the Transferor’s Allocation on each Payment Date, (ii) any collections on or proceeds of any Trust DPPAs allocated to any other Series not needed to make payments on the related Credit Extensions, or to make any other required payments or deposits according to the priority of payments for such Series and (iii) investment earnings on amounts held in the Collection Account or any Series Bank Accounts.  The Certificates will be issued pursuant to the terms of the Trust Agreement and are governed by and shall be construed in accordance with the laws of the State of Delaware applicable to agreements made in and to be performed wholly within that jurisdiction.  The Certificates and the Class R Interests are not being offered pursuant to this prospectus and all information presented regarding the Certificates and the Class R Interests is given to further a better understanding of the Notes.  For a general description of the Certificates and the Class R Interests, see “U.S. Credit Risk Retention.”

 

Addition of Receivables

 

From time to time, on each Acquisition Date, the Originators will transfer Device Payment Plan Agreements and related property to the Depositor, who will subsequently transfer such Device Payment Plan Agreements and related property to the Trust.  The Administrator, with the assistance of each Originator, will select each pool of Device Payment Plan Agreements to be transferred and assigned by each Originator and acquired by the Depositor (and subsequently the Trust) on each such Acquisition Date.  In connection with each such transfer, the Trust (or the Administrator, on behalf of the Trust) will also select the Group to which such Trust DPPAs shall be designated.  The Administrator has selected the Receivables to be designated to Group 1.

 

The transfers of Device Payment Plan Agreements and the designation of such Device Payment Plan Agreements as Receivables on each Acquisition Date will be subject to the satisfaction of the following conditions on or before such Acquisition Date:

 

 

 

(B)  each of such Originator’s representations and warranties in the Originator Receivables Transfer Agreement (solely with respect to the related Device Payment Plan Agreements) will be true and correct as of the Acquisition Date; and

 

 

The Administrator shall deliver to the Depositor, the Trust and the Master Collateral Agent, no later than each Payment Date an acquisition notice for the Device Payment Plan Agreements transferred to the Trust on each Acquisition Date occurring during the calendar month preceding the month in which such Payment

 

Date occurs (to the extent not included on any previously delivered acquisition notice), which acquisition notice will set forth (i) the Pool Balance, (ii) the Required Pool Balance, (iii) the Excess Concentration Amount for each Group 1 Series for which Group 1 Credit Extensions are Outstanding as of the related Acquisition Date and (iv) the Ineligible Amount for each Group 1 Series for which Group 1 Credit Extensions are Outstanding as of the related Acquisition Date, in each case as of such Acquisition Date and after giving effect to the acquisition of Receivables on each such Acquisition Date; provided that if such acquisition notice is delivered on the related Acquisition Date, the acquisition notice for the Device Payment Plan Agreements transferred to the Trust on that Acquisition Date will include the information set forth above solely with respect to the Device Payment Plan Agreements transferred on such Acquisition Date).

 

On any Acquisition Date, the Trust (or the Servicer on its behalf) may use Collections in respect of the Receivables to pay the Receivables Transfer Amount for the Device Payment Plan Agreements to be acquired by the Trust and designated to Group 1; provided, that neither the Trust nor the Servicer shall make any such payment unless, in either such case:

 

 

 

 

 

In addition, after the related Acquisition Date, on any Designation Date, from time to time the Trust (or the Administrator, on behalf of the Trust), with the consent of the Servicer, may re-designate Trust DPPAs previously designated to a Group that does not relate to any Outstanding Credit Extensions to Group 1.  The Servicer shall represent and warrant that any Trust DPPAs re-designated to Group 1 on any Designation Date are Eligible Receivables as of the related Cutoff Date.  The Administrator shall deliver to the Depositor, the Trust and the Master Collateral Agent, no later than each Payment Date, a designation notice for the Device Payment Plan Agreements re-designated to Group 1 on each Designation Date occurring during the calendar month preceding the month in which such Payment Date occurs, which designation notice will set forth (i) the Pool Balance, (ii) the Required Pool Balance, (iii) the Excess Concentration Amount for each Group 1 Series for which Group 1 Credit Extensions are Outstanding as of the related Designation Date and (iv) the Ineligible Amount for each Group 1 Series for which Group 1 Credit Extensions are Outstanding as of the related Designation Date, in each case as of such Designation Date and after giving effect to the designation of Receivables on each such Designation Date. In no event may Receivables be re-designated from Group 1 to another Group while any Credit Extensions related to Group 1 remain Outstanding.

 

Release of Receivables

 

The Master Collateral Agent shall release Receivables from the lien of the Master Collateral Agreement upon receipt of a Trust order and an officer’s certificate of the Administrator certifying that the following conditions have been satisfied as of the date of release (each date of transfer, a “Release Date”):

 

 

 

 

 

The Trust may collect, liquidate, sell or otherwise dispose of Receivables released in accordance with the foregoing.

 

In addition to the foregoing, upon the occurrence of an event of default and an acceleration of the Credit Extensions for any Group other than Group 1, in the limited circumstances described under “Description of the Notes—Events of Default—Remedies Following Event of Default,” the Master Collateral Agent may cause the Trust to sell a portion of the Receivables and other assets of the Trust designated to Group 1, so long as such sale will not result in an Event of Default or Pool Balance Deficit for Group 1, or an Amortization Event for any Group 1 Series (or an event that with the giving of notice or the passage of time would constitute such an Event of Default or Amortization Event).  The Receivables sold in any such sale described above may not be selected in a manner materially adverse to the interests of the Group 1 Creditors.

 

Issuance of Additional Group 1 Series

 

The Trust has issued eighteen other Group 1 Series of notes and has entered into two other Group 1 Series of loans.  The main terms of each such Group 1 Series Outstanding are summarized in Annex C.

 

The Trust is a master trust that may from time to time issue or enter into additional Group 1 Series which are also entitled to receive Collections on and proceeds of the Receivables.  The following conditions must be satisfied prior to the Trust, in its sole discretion, issuing or entering into any additional Group 1 Series:

 

 

 

 

 

 

 

 

 

 

 

 

 

No Group 1 Series (or any Group 1 Creditor Representative with respect thereto) or Group 1 Creditor (including any Noteholder) will have the right to consent to the Trust issuing or entering into any additional Group 1 Series if the conditions set forth above are satisfied.  For the avoidance of doubt, borrowings and increases in the principal amount of “variable funding” Group 1 Credit Extensions up to an applicable existing maximum commitment amount will not constitute the Trust issuing or entering into an additional Group 1 Series that separately needs to satisfy the requirements above.  The Group 1 Credit Extensions of all Group 1 Series Outstanding shall be equally and ratably entitled to the benefits of the Master Collateral Agreement without preference, priority or distinction.  Each Group 1 Series will only be entitled to a portion of the Collections on the Receivables based on the Series Allocation Percentage for such Group 1 Series, as described under “Description of the Notes—Allocation of Group 1 Available Funds.”

 

 

DEPOSITOR

 

Verizon ABS II LLC is a Delaware limited liability company created in August 2016.  Cellco is the sole member of the Depositor.  The Depositor has the limited purpose of acquiring Device Payment Plan Agreements and all payments on or under and all proceeds of the Device Payment Plan Agreements from the Originators and transferring the Device Payment Plan Agreements and all payments on or under and all proceeds of the Device Payment Plan Agreements to the Trust, and other issuing entities substantially similar to the Trust, for securitization transactions.

 

The Depositor must enforce each Originator’s reacquisition obligation described under “The Originators” and the Servicer’s acquisition obligation described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”  The Depositor will have no other ongoing duties with respect to the Trust.

 

 

OWNER TRUSTEE

 

Wilmington Trust, National Association will act as Owner Trustee under the Trust Agreement. WTNA is a national banking association with trust powers incorporated in 1995. The Owner Trustee’s principal place of business is located at 1100 North Market Street, Wilmington, Delaware 19890.  WTNA is an affiliate of Wilmington Trust Company and both WTNA and Wilmington Trust Company are subsidiaries of Wilmington

 

Trust Corporation. Since 1998, Wilmington Trust Company has served as trustee in numerous asset-backed securities transactions.

 

WTNA is subject to various legal proceedings that arise from time to time in the ordinary course of business. WTNA does not believe that the ultimate resolution of any of these proceedings will have a materially adverse effect on its services as Owner Trustee.

 

WTNA has provided the above information for purposes of complying with Regulation AB.  Other than the information above, WTNA has not participated in the preparation of, and is not responsible for, any other information contained in this prospectus.

 

 The Owner Trustee’s main duties will be:

 

 

 

The Owner Trustee will not be liable for any action, omission or error in judgment unless it is caused by the willful misconduct, bad faith or gross negligence of the Owner Trustee.  The Owner Trustee will not be required to (i) take any action under a transaction document if the Owner Trustee reasonably determines, or is advised by counsel, that the action is likely to result in liability on the part of the Owner Trustee, is contrary to a transaction document or is not permitted by applicable law or (ii) pay or risk funds or incur any financial liability in the performance of its rights or powers under a transaction document if the Owner Trustee has reasonable grounds for believing that payment of such funds or adequate indemnity against the risk or liability is not reasonably assured or given to it.  The Owner Trustee will not have any obligation or responsibility to monitor or enforce the Sponsor’s compliance with any risk retention requirements and shall not be charged with knowledge of the U.S. Risk Retention Rules, nor shall it be liable to any Group 1 Creditor, Certificateholder or other party for violation of the U.S. Risk Retention Rules now or hereafter in effect, except as otherwise may be explicitly required by law, rule or regulation.

 

Each of the Servicer and the Marketing Agent will indemnify the Owner Trustee for liabilities and damages caused by its willful misconduct, bad faith or gross negligence in the performance of its duties as Servicer or Marketing Agent, as applicable.  The Trust will indemnify the Owner Trustee for all liabilities and damages arising out of the Owner Trustee’s performance of its duties under the Trust Agreement unless caused by the willful misconduct, bad faith or gross negligence of the Owner Trustee or as a result of any breach of representations made by the Owner Trustee in the Trust Agreement.

 

The Owner Trustee will be entitled to a fee in connection with the performance of its duties under the transaction documents.  The Trust will pay the fees of the Owner Trustee, reimburse the Owner Trustee for expenses incurred in performing its duties, and pay any indemnities due to the Owner Trustee, in each case, in connection with the performance of its duties under the transaction documents.  The Trust will pay the Series 2024-3 Group Allocated Percentage of such amounts from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Priority of Payments.” If the Notes have been accelerated after the occurrence of an Event of Default, the Trust will pay the Series 2024-3 Group Allocated Percentage of such amounts from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Post-Acceleration Priority of Payments.”

 

The Owner Trustee may resign at any time by notifying the Depositor and the Administrator at least thirty (30) days in advance.  The Administrator may remove the Owner Trustee at any time and for any reason with at least thirty (30) days’ notice, and must remove the Owner Trustee if the Owner Trustee becomes legally unable to act, becomes subject to a bankruptcy or is no longer eligible to act as Owner Trustee under the Trust Agreement because of changes in its legal status, financial condition or specific rating conditions.  No resignation or removal of the Owner Trustee will be effective until a successor owner trustee is in place.  If not paid by the Trust, the Administrator will reimburse the Owner Trustee and the successor owner trustee for any expenses associated with the replacement of the Owner Trustee.

 

The Trust Agreement will terminate on the later of the date when:

 

 

 

Upon termination of the Trust Agreement, any remaining Trust assets will be distributed to the Certificateholders and the Trust will be terminated.

 

 

MASTER COLLATERAL AGENT AND INDENTURE TRUSTEE

 

U.S. Bank Trust Company, National Association, a national banking association, will act as Master Collateral Agent under the Master Collateral Agreement and as Indenture Trustee and Paying Agent under the Indenture.

 

U.S. Bank N.A. has made a strategic decision to reposition its corporate trust business by transferring substantially all of its corporate trust business to its affiliate, U.S. Bank Trust Co., a non-depository trust company (U.S. Bank N.A. and U.S. Bank Trust Co. are collectively referred to herein as “U.S. Bank”).  Upon U.S. Bank Trust Co.’s succession to the business of U.S. Bank N.A., it has become a wholly owned subsidiary of U.S. Bank N.A.  The Master Collateral Agent will maintain the Collection Account in the name of the Master Collateral Agent and the Indenture Trustee will maintain the Series Bank Accounts in the name of the Indenture Trustee, in each case, at U.S. Bank N.A.

 

U.S. Bancorp, with total assets exceeding $668 billion as of December 31, 2023, is the parent company of U.S. Bank, the fifth largest commercial bank in the United States.  As of December 31, 2023, U.S. Bancorp operated over 2,200 branch offices in 26 states. A network of specialized U.S. Bancorp offices across the nation provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses, and institutions.

 

U.S. Bank has one of the largest corporate trust businesses in the country with office locations in 48 domestic and 2 international cities.  The Indenture will be administered from U.S. Bank’s corporate trust office located at 190 South LaSalle Street, 7th floor, Mail code MK-IL-SL7C, Chicago, IL 60603, and its office for certificate transfer purposes is at 111 Fillmore Avenue, St. Paul, Minnesota 55107, Attention: Bondholder Services – Verizon Master Trust.

 

U.S. Bank has provided corporate trust services since 1924.  As of December 31, 2023, U.S. Bank was acting as trustee with respect to over 130,000 issuances of securities with an aggregate outstanding principal balance of over $5.9 trillion.  This portfolio includes corporate and municipal bonds, mortgage-backed and asset-backed securities and collateralized debt obligations.

 

The Indenture Trustee shall make each monthly statement available to the holders via the Indenture Trustee’s internet website at https://pivot.usbank.com.  Holders with questions may direct them to the Indenture Trustee’s bondholder services group at (800) 934-6802.

 

As of December 31, 2023, U.S. Bank (and its affiliate U.S. Bank Trust National Association) was acting as indenture trustee on 18 issuances of device payment plan asset-backed securities with an outstanding aggregate principal balance of approximately $11,681,628,436.95.

 

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 vigorously.  However, U.S. Bank cannot assure you as to the outcome of any of the litigation, or the possible impact of these litigations on the trustee or the RMBS trusts.

 

On March 9, 2018, a law firm purporting to represent fifteen Delaware statutory trusts (the “DSTs”) that issued securities backed by student loans (the “Student Loans”) filed a lawsuit in the Delaware Court of Chancery against U.S. Bank N.A. in its capacities as indenture trustee and successor special servicer, and three other institutions in their respective transaction capacities, with respect to the DSTs and the Student Loans.  This lawsuit is captioned The National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al., C.A. No. 2018-0167-JRS (Del. Ch.) (the “NCMSLT Action”).  The complaint, as amended on June 15, 2018, alleged that the DSTs have been harmed as a result of purported misconduct or omissions by the defendants concerning administration of the trusts and special servicing of the Student Loans.  Since the filing of the NCMSLT Action, certain Student Loan borrowers have made assertions against U.S. Bank N.A. concerning special servicing that appear to be based on certain allegations made on behalf of the DSTs in the NCMSLT Action.

 

U.S. Bank N.A. has filed a motion seeking dismissal of the operative complaint in its entirety with prejudice pursuant to Chancery Court Rules 12(b)(1) and 12(b)(6) or, in the alternative, a stay of the case while other prior filed disputes involving the DSTs and the Student Loans are litigated.  On November 7, 2018, the Court ruled that the case should be stayed in its entirety pending resolution of the first-filed cases.  On January 21, 2020, the Court entered an order consolidating for pretrial purposes the NCMSLT Action and three other lawsuits pending in the Delaware Court of Chancery concerning the DSTs and the Student Loans, which remains pending.

 

U.S. Bank N.A. denies liability in the NCMSLT Action and believes it has performed its obligations as indenture trustee and special servicer in good faith and in compliance in all material respects with the terms of the agreements governing the DSTs and that it has meritorious defenses.  It has contested and intends to continue contesting the plaintiffs’ claims vigorously.

 

Master Collateral Agent

 

As further set forth in the Master Collateral Agreement, the Master Collateral Agent’s main duties with respect to Group 1 will be:

 

 

 

 

 

The Master Collateral Agent will not have the authority to, and will not, exercise any remedies upon the occurrence of an Event of Default unless directed in writing by the relevant Group 1 Creditor Representatives in accordance with the terms of the Master Collateral Agreement, and provided further that the Master Collateral Agent will not have the authority to, and will not, cause the Trust to sell the Receivables and other assets of the Trust designated to Group 1 (and, in the limited circumstances described under “Description of the Notes—Events of Default—Remedies Following Event of Default,” other Trust DPPAs designated to any other Group) unless the conditions set forth under “Description of the Notes—Events of Default—Remedies Following Event of Default” have been satisfied.

 

The Master Collateral Agent shall not be charged with knowledge of an Event of Default, amortization event under any Group 1 Series or Servicer Termination Event, or any event that with the giving of notice or passage of time would constitute an Event of Default, amortization event under any Group 1 Series or Servicer Termination Event, unless a responsible person of the Master Collateral Agent obtains actual knowledge of such event or the Master Collateral Agent receives written notice of such event from the Trust, the Servicer or a Group 1 Creditor Representative, as applicable.

 

For a description of the rights and duties of the Master Collateral Agent after an Event of Default and upon acceleration of the Notes you should read “Description of the Notes—Events of Default.”

 

The Master Collateral Agent is only obligated to perform such duties as are specifically set forth in the Master Collateral Agreement.  Under the Master Collateral Agreement, the Master Collateral Agent shall solely be liable for its own grossly negligent action, its own grossly negligent failure to act, its grossly negligent action or failure to act in the handling of funds or its own willful misconduct; provided that the Master Collateral Agent will not be liable (i) for any error of judgment made in good faith by an officer or employee of the Master Collateral Agent unless it is proved that the Master Collateral Agent was grossly negligent in determining the relevant facts and (ii) with respect to any action taken or not taken in good faith in accordance with a direction received by it pursuant to the Master Collateral Agreement.

 

The Master Collateral Agent will not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties under the Master Collateral Agreement or in the exercise of any of its rights or powers thereunder if it reasonably believes that repayments of such funds or adequate indemnity satisfactory to it against any loss, liability or expense is not reasonably assured to it.  The Master Collateral Agent also will not be required to take action in response to requests or directions of any Group 1 Creditors, other than requests or directions from Public Group 1 Noteholders with respect to forwarding notices set forth under the dispute resolution procedures described under “Receivables—Dispute Resolution,” the Asset Representations Review procedures described under “Receivables—Asset Representations Review” and the Noteholder communication procedures described under “Description of the Notes—Noteholder Communications,” unless those Group 1 Creditors have offered reasonable security or indemnity satisfactory to the Master Collateral Agent to protect it against the reasonable costs and expenses that it may incur in complying with the request or direction.  The Master Collateral Agent may exercise its rights or powers under the Master Collateral Agreement or perform its obligations thereunder either directly or by or through agents or attorneys or a custodian or nominee.  The Master Collateral Agent will not have any obligation or responsibility to monitor or enforce the Sponsor’s compliance with any risk retention requirements and shall not be charged with knowledge of the U.S. Risk Retention Rules, nor shall it be liable to any Group 1 Creditor, Certificateholder or other party for violation of the U.S. Risk Retention Rules now or hereafter in effect, except as otherwise may be explicitly required by law, rule or regulation.

 

The Trust will indemnify the Master Collateral Agent and its officers, directors, employees, agents, successors and assigns against any and all losses, liabilities, claims, damages, actions, suits, stamp or similar taxes, fees, penalties, disbursements and reasonable and documented out-of-pocket costs or expenses (including, but not limited to, reasonable attorneys’ fees and expenses, including reasonable legal fees and expenses in connection with the enforcement of its rights (including rights of indemnification) under the Master Collateral Agreement) of whatever kind or nature regardless of merit, demanded, asserted or claimed against or incurred by them to the extent related to or arising out of the administration of the Master Collateral Agreement and the performance of its duties thereunder or under the transaction

 

documents, including the costs and expenses of enforcing the Master Collateral Agreement against the Trust and defending itself against or investigating any claims (whether asserted by the Trust, any Creditor or any other Person), not resulting from the gross negligence, bad faith or willful misconduct by the Person seeking indemnification.

 

The Administrator will indemnify U.S. Bank Trust Co., in its capacity as Master Collateral Agent and each of its other capacities under the transaction documents for any amounts not paid by the Trust; provided that U.S. Bank Trust Co. will reimburse the Administrator for any indemnified amounts paid to it by the Administrator to the extent that it subsequently receives payment or reimbursement of those amounts from the Trust.  Each of the Servicer and the Marketing Agent will indemnify U.S. Bank Trust Co., in its capacity as Master Collateral Agent and each of its other capacities under the transaction documents for damages caused by that party’s willful misconduct, bad faith or gross negligence in the performance of its duties as Servicer or Marketing Agent, as applicable.

 

The Master Collateral Agent will be entitled to a fee in connection with the performance of its duties under the transaction documents.  The Trust will pay the fees of the Master Collateral Agent, reimburse the Master Collateral Agent for expenses incurred in performing its duties, and pay any indemnities due to the Master Collateral Agent, in each case, in connection with the performance of its duties under the transaction documents.  The Trust will pay the Series 2024-3 Group Allocated Percentage of such amounts from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Priority of Payments.”  If the Notes have been accelerated after the occurrence of an Event of Default, the Trust will pay the Series 2024-3 Group Allocated Percentage of such amounts from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Post-Acceleration Priority of Payments.”

 

The Master Collateral Agent may resign at any time by giving ninety (90) days written notice to the Trust and each Creditor Representative. The Majority Trust Creditor Representatives may remove the Master Collateral Agent by so notifying the Master Collateral Agent in writing and may appoint a successor Master Collateral Agent (and, so long as no Servicer Termination Event or Event of Default exists at such time, with the consent of the Trust, such consent not to be unreasonably withheld, delayed or conditioned).  The Trust shall remove the Master Collateral Agent if: (i) the Master Collateral Agent fails to satisfy the eligibility requirements under the Master Collateral Agreement; (ii) the Master Collateral Agent is subject to an insolvency event; (iii) a receiver or other public officer takes charge of the Master Collateral Agent or its property; or (iv) the Master Collateral Agent otherwise becomes incapable of acting or it becomes unlawful for it to do so.

 

If the Master Collateral Agent resigns or is removed or if a vacancy exists in the office of the Master Collateral Agent for any reason, the Trust or Majority Trust Creditor Representatives shall promptly appoint a successor master collateral agent.

 

No resignation or removal of the Master Collateral Agent will be effective until a successor master collateral agent is in place; provided, however, that if no successor master collateral agent has been appointed within sixty (60) days after the Master Collateral Agent resigns or is removed, the retiring Master Collateral Agent, the Trust or Majority Trust Creditor Representatives may petition a court of competent jurisdiction to appoint a successor master collateral agent.

 

Indenture Trustee

 

As further set forth in the Indenture, the Indenture Trustee’s main duties will be:

 

 

 

 

 

 

 

 

Except in limited circumstances, if an officer in the corporate trust office of the Indenture Trustee having direct responsibility for the administration of the transaction documents has actual knowledge of or receives written notice of an event that with notice or the lapse of time or both would become an Event of Default, it must provide written notice to the Noteholders within ninety (90) days.  If an officer in the corporate trust office of the Indenture Trustee having direct responsibility for the administration of the transaction documents has actual knowledge of an Event of Default, it must notify the Noteholders within five (5) Business Days.  If the Notes have been accelerated, the Indenture Trustee may, and at the direction of the holders of a majority of the Note Balance of the Controlling Class must, begin proceedings for the collection of amounts payable on the Notes and enforce any judgment obtained and, in some circumstances, direct the Master Collateral Agent to sell the Receivables and other assets of the Trust designated to Group 1 (and, in the limited circumstances described under “Description of the Notes—Events of Default—Remedies Following Event of Default,” other Trust DPPAs designated to any other Group).

 

The Indenture Trustee’s standard of care changes depending on whether an Event of Default has occurred.  Prior to an Event of Default, the Indenture Trustee will not be liable for any action or omission unless that act or omission constitutes willful misconduct, bad faith or negligence by the Indenture Trustee.  The Indenture Trustee will not be liable for an error of judgment made in good faith unless it is proved that the Indenture Trustee was negligent in determining the relevant facts.  Following an Event of Default, the Indenture Trustee must exercise its rights and powers under the Indenture using the same degree of care and skill that a prudent person would use under the circumstances in conducting his or her own affairs.  Following an Event of Default, the Indenture Trustee may assert claims on behalf of the Trust and the Noteholders against the Depositor, any Originator or the Servicer.

 

For a description of the rights and duties of the Indenture Trustee after an Event of Default and upon acceleration of the Notes you should read “Description of the Notes—Events of Default.”

 

The Indenture Trustee will transmit an annual report to the Noteholders if certain events identified in the Trust Indenture Act have occurred during the prior year, including a change to the Indenture Trustee’s eligibility under the Trust Indenture Act, a conflict of interest under the Trust Indenture Act and any action taken by the Indenture Trustee that has a material adverse effect on the Notes.

 

The Indenture Trustee will not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties under the Indenture or in the exercise of any of its rights or powers thereunder if it reasonably believes that repayments of such funds or adequate indemnity satisfactory to it against any loss, liability or expense is not reasonably assured to it.  The Indenture Trustee also will not be required to take action in response to requests or directions of any Noteholders unless those Noteholders have offered reasonable security or indemnity satisfactory to the Indenture Trustee to protect it against the reasonable costs and expenses that it may incur in complying with the request or direction.  The Indenture Trustee may exercise its rights or powers under the Indenture or perform its obligations

 

thereunder either directly or by or through agents or attorneys or a custodian or nominee.  The Indenture Trustee will not have any obligation or responsibility to monitor or enforce the Sponsor’s compliance with any risk retention requirements and shall not be charged with knowledge of the U.S. Risk Retention Rules, nor shall it be liable to any Noteholder or other party for violation of the U.S. Risk Retention Rules now or hereafter in effect, except as otherwise may be explicitly required by law, rule or regulation.

 

The Trust will indemnify U.S. Bank Trust Co., in its capacity as Indenture Trustee and each of its other capacities under the transaction documents, and its officers, directors, employees and agents for all losses, liabilities, expenses (including reasonable attorney’s fees and expenses), damages, costs and disbursements incurred in connection with, arising out of or resulting from the administration of Notes issued under the Indenture and the performance of its obligations under the Indenture and the other transaction documents (including any amounts incurred by the Indenture Trustee in connection with (x) defending itself against any claim, legal action or proceeding, or (y) the enforcement of any indemnification or other obligation of the Trust, the Servicer or any other transaction party) unless caused by the willful misconduct, bad faith or negligence of the Indenture Trustee or as a result of any breach of representations made by the Indenture Trustee in the Indenture.  The Administrator will indemnify U.S. Bank Trust Co., in its capacity as Indenture Trustee and each of its other capacities under the transaction documents for any amounts not paid by the Trust; provided that U.S. Bank Trust Co. will reimburse the Administrator for any indemnified amounts paid to it by the Administrator to the extent that it subsequently receives payment or reimbursement of those amounts from the Trust.  Each of the Servicer and the Marketing Agent will indemnify U.S. Bank Trust Co., in its capacity as Indenture Trustee and each of its other capacities under the transaction documents for damages caused by that party’s willful misconduct, bad faith or gross negligence in the performance of its duties as Servicer or Marketing Agent, as applicable.

 

The Indenture Trustee will be entitled to a fee in connection with the performance of its duties under the Indenture.  The Trust will pay the fees of the Indenture Trustee, reimburse the Indenture Trustee for expenses incurred in performing its duties, and pay any indemnities due to the Indenture Trustee, in each case, in connection with the performance of its duties under the Indenture.  The Trust will pay these amounts from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Priority of Payments.” If the Notes have been accelerated after the occurrence of an Event of Default, the Trust will pay such amounts from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Post-Acceleration Priority of Payments.”

 

The Indenture Trustee may resign at any time by providing thirty (30) days’ prior written notice to the Trust and the Administrator.  The holders of a majority of the Note Balance of the Controlling Class may remove the Indenture Trustee upon thirty (30) days’ prior written notice for any reason by notifying the Indenture Trustee and the Trust.  The Trust must remove the Indenture Trustee if the Indenture Trustee becomes legally unable to act or becomes subject to a bankruptcy or is no longer eligible to act as Indenture Trustee under the Indenture because of changes in its legal status, financial condition or specific rating conditions.  If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture Trustee, the Trust or the holders of a majority of the Note Balance of the Controlling Class are required to appoint a successor indenture trustee promptly.  No resignation or removal of the Indenture Trustee will be effective until a successor indenture trustee is in place; provided, however, that if no successor indenture trustee has been appointed within sixty (60) days after the Indenture Trustee resigns or is removed, the Indenture Trustee, the Trust or the holders of a majority of the Note Balance of the Controlling Class may petition a court of competent jurisdiction to appoint a successor indenture trustee.  If not paid by the Trust, the Administrator will reimburse the Indenture Trustee and the successor indenture trustee for any expenses associated with the replacement of the Indenture Trustee.

 

Under the Trust Indenture Act, the Indenture Trustee may be considered to have a conflict of interest and be required to resign as Indenture Trustee for the Notes or any class of Notes if a default occurs under the Indenture.  In these circumstances, separate successor indenture trustees will be appointed for each class of Notes.  Even if separate indenture trustees are appointed, only the Indenture Trustee acting on behalf of the Controlling Class will have the right to exercise remedies and only the Controlling Class will have the right to direct or consent to any action to be taken, including a sale of the Receivables and other assets of the Trust designated to Group 1 (and, in the limited circumstances described under “Description of the Notes—Events of Default—Remedies Following Event of Default,” other Trust DPPAs designated to any other Group).

 

ASSET REPRESENTATIONS REVIEWER

 

Pentalpha Surveillance LLC (“Pentalpha”), a Delaware limited liability company, will serve as the Asset Representations Reviewer pursuant to the terms of an Asset Representations Review Agreement.

 

Pentalpha is a privately held firm founded in 2005 that is primarily dedicated to providing independent oversight of loan securitization trusts’ ongoing operations. Pentalpha and its affiliates have been engaged by individual securitization trusts, financial institutions, institutional investors as well as agencies of the U.S. government. In performing its duties, Pentalpha specialists utilize compliance checking software and focus on loan origination and servicing practices, with engagements in surveillance, valuation, collections optimization, representation and warranty failures, and other consulting assignments.

 

As of December 31, 2023, Pentalpha has been engaged as the asset representations reviewer or independent reviewer on more than 600 asset-backed and commercial and residential mortgage securitization transactions since 2010.

 

Pentalpha satisfies each of the eligibility requirements for the asset representations reviewer set forth in the Asset Representations Review Agreement.  The Asset Representations Reviewer is not and will not be affiliated with any of the Transaction Parties, any Letter of Credit Provider, if applicable, or any of their respective affiliates, and may not be an affiliate of any Person that was engaged by Cellco or any underwriter of the Notes to perform any due diligence on the Receivables prior to the Closing Date.

 

The Asset Representations Reviewer’s main obligations will be to:

 

 

 

For a description of the review to be performed by the Asset Representations Reviewer, you should read “Receivables — Asset Representations Review.”

 

The Asset Representations Reviewer will be entitled to a fee in connection with the performance of its duties under the Asset Representations Review Agreement.  The Trust will pay the fees of the Asset Representations Reviewer, reimburse the Asset Representations Reviewer for expenses incurred in performing its duties, and pay any indemnities due to the Asset Representations Reviewer, in each case, in connection with the performance of its duties under the Asset Representations Review Agreement.  The Trust will pay (i) the Series 2024-3 ARR Series Allocation Percentage of such amounts (other than the Supplemental ARR Fee) and (ii) the Series 2024-3 Supplemental ARR Series Allocation Percentage of the Supplemental ARR Fee, in each case, from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Priority of Payments.” If the Notes have been accelerated after the occurrence of an Event of Default, the Trust will pay (i) the Series 2024-3 ARR Series Allocation Percentage of such amounts (other than the Supplemental ARR Fee) and (ii) the Series 2024-3 Supplemental ARR Series Allocation Percentage of the Supplemental ARR Fee, in each case, from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Post-Acceleration Priority of Payments.”

 

In the event an Asset Representations Review occurs, the Asset Representations Reviewer will be entitled to a fee equal of $50,000.  With respect to Series 2024-3, the Trust will pay the Series 2024-3 ARR Series Allocation Percentage of such amounts from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Priority of Payments.”  If the Notes have been accelerated after the occurrence of an Event of Default, the Trust will pay the Series 2024-3 ARR Series Allocation Percentage of such amounts from Series 2024-3 Available Funds on each Payment Date in accordance with the priorities set forth under “Description of the Notes—Post-Acceleration Priority of Payments.”

 

Except as described below, the Asset Representations Reviewer may not resign unless it determines, in its sole discretion that (a) it is legally unable to perform its obligations under the Asset Representations Review Agreement and (b) there is no reasonable action that it could take to make the performance of its obligations under the Asset Representations Review Agreement permitted under applicable law.  If the Asset Representations Reviewer breaches any of its representations, warranties, covenants or obligations under the Asset Representations Review Agreement, becomes the subject of a bankruptcy or similar proceeding, or no longer satisfies the applicable eligibility criteria, the Trust may remove the Asset Representations Reviewer and terminate its obligations under the Asset Representations Review Agreement. In addition, the Asset Representations Reviewer may resign for any reason on or after May 25, 2027, upon ninety (90) days’ prior written notice to the Trust and the Servicer; provided that such notice may not be delivered (i) while an Asset Representations Review is ongoing, (ii) on a date that is ninety (90) or fewer days after the filing of a monthly report filed on Form 10-D reporting that a Delinquency Trigger has occurred, (iii) when the Master Collateral Agent is conducting a vote of Public Group 1 Noteholders to commence an Asset Representations Review or (iv) when the Delinquency Rate for the immediately preceding calendar month is equal to or greater than 80% of the Delinquency Trigger Rate.  The Trust will be obligated to engage a successor asset representations reviewer after any resignation or removal.  No resignation or removal of the Asset Representations Reviewer will be effective, and the Asset Representations Reviewer will continue to perform its obligations under the Asset Representations Review Agreement, until a successor asset representations reviewer has accepted its engagement.

 

The Asset Representations Reviewer is not contractually obligated to pay the reasonable expenses incurred in the transfer of its rights and obligations under the Asset Representations Review Agreement.  To the extent expenses incurred in connection with the replacement of the Asset Representations Reviewer are not paid by the Asset Representations Reviewer that is being replaced, the Trust will be responsible for the payment of those expenses.  If not paid by the Trust, the Administrator will reimburse the Asset Representations Reviewer and the successor asset representations reviewer for any expenses associated with the replacement of the Asset Representations Reviewer.  Any resignation, removal, replacement or substitution of the Asset Representations Reviewer, or the appointment of a new asset representations reviewer, will be reported by the Administrator in the Form 10-D related to the Collection Period in which the change occurs, together with a description of the circumstances surrounding the change and, if applicable, information regarding the new asset representations reviewer.

 

The Asset Representations Reviewer will not be liable to any Person or entity for any action taken, or not taken, in good faith under the Asset Representations Review Agreement or for errors in judgment.  However, the Asset Representations Reviewer will be liable for its willful misconduct, bad faith or gross negligence in performing its obligations under the Asset Representations Review Agreement.  The Asset Representations Reviewer and its officers, directors, employees and agents will be indemnified by the Trust for fees, expenses, losses, damages, liabilities, reasonable attorney’s fees and other related legal costs resulting from the performance of its obligations under the Asset Representations Review Agreement (including the fees and expenses of defending itself against any loss, damage or liability), but excluding any fee, expense, loss, damage or liability resulting from (i) the Asset Representations Reviewer’s willful misconduct, bad faith or gross negligence or (ii) the Asset Representations Reviewer’s breach of any of its representations or warranties in the Asset Representations Review Agreement.  The Asset Representations Reviewer will indemnify each of the Trust, the Depositor, the Administrator, the Servicer, the Owner Trustee and the Master Collateral Agent and their respective directors, officers, employees and agents for all fees, expenses, losses, damages, liabilities, reasonable attorney’s fees and other related legal costs resulting from (a) the willful misconduct, bad faith or gross negligence of the Asset Representations Reviewer in performing its obligations under the Asset Representations Review Agreement or (b) the Asset Representations Reviewer’s breach of any of its representations or warranties in the Asset Representations Review Agreement.

 

 

SPONSOR, SERVICER, CUSTODIAN, MARKETING AGENT AND ADMINISTRATOR

 

General

 

Verizon Communications is a holding company that, acting through its subsidiaries, is one of the world’s leading providers of technology, communications, information and entertainment products and services to consumers, businesses and government entities.  Verizon has two reportable segments that it operates

 

and manages as strategic business units, Verizon Consumer Group and Verizon Business Group, and Verizon offers wireless services and equipment to customers of both.  Verizon’s wireless services are provided across one of the most extensive wireless networks in the United States.  As of December 31, 2023, the Verizon Consumer Group had approximately 93.9 million wireless retail postpaid connections and the Verizon Business Group had approximately 29.8 million wireless retail postpaid connections.  Verizon had consolidated revenues of $134.0 billion for the year ended December 31, 2023.  As of December 31, 2023, Verizon had approximately 105,400 employees.

 

Cellco is an indirect wholly-owned subsidiary of Verizon Communications.  Cellco is a Delaware general partnership formed on October 4, 1994.  The address of Cellco’s principal executive office is One Verizon Way, Basking Ridge, New Jersey 07920.  Cellco services all of Cellco’s and other Verizon Communications subsidiary originators’ wireless accounts, including the Device Payment Plan Agreements.

 

Sponsor

 

As the Sponsor of the securitization transaction in which the Notes will be issued, Cellco will be responsible for structuring the securitization transaction and selecting the transaction parties.  Cellco and its affiliates will be responsible for paying the costs and expenses of issuing the Notes, legal fees of some transaction parties, rating agency fees for rating the Notes and other transaction expenses.  The Sponsor and the other Originators have transferred prior to the Closing Date Device Payment Plan Agreements to the Depositor and from time to time after the Closing Date, the Sponsor and the other Originators will transfer additional Device Payment Plan Agreements to the Depositor.

 

Cellco has had an active securitization program since 2016.  The Notes are the sixteenth Group 1 Series of Publicly Registered Notes issued by the Trust.  In addition to the fifteen Group 1 Series of Publicly Registered Notes previously issued by the Trust, the Trust has also issued three Group 1 Series of unregistered notes and has entered into two Group 1 Series of loans (Loan Series 2021-A and Loan Series 2021-B).  Cellco also has sponsored 13 term securitization trusts, including 7 public term securitization trusts, backed by Device Payment Plan Agreements.  None of the asset-backed securities offered in this securitization program have experienced any losses or events of default and none of Cellco, the other Originators or the Servicer has ever taken any action out of the ordinary in any transaction to prevent losses or events of default.  During the three-year period ended December 31, 2023, none of Cellco, the other Originators or the Servicer has ever received a demand for any Device Payment Plan Agreement backing asset-backed securities offered in a securitization program sponsored by the Sponsor to be acquired or reacquired, as applicable, due to a breach of representations made about the related Device Payment Plan Agreements.  Cellco, as the sponsor and securitizer, discloses all reacquisition and acquisition demands and related activity on SEC Form ABS-15G.  Cellco filed its most recent Form ABS-15G with the SEC on January 31, 2024.  Cellco’s CIK number is 0001175215.

 

U.S. Credit Risk Retention

 

The U.S. Risk Retention Rules require the Sponsor, either directly or through one or more of its majority-owned affiliates, to retain an economic interest of at least 5% in the credit risk of the Receivables.

 

The Sponsor, the other Originators and the True-up Trust are under the common control of Verizon Communications, and therefore, the True-up Trust is a majority-owned affiliate of the Sponsor.

 

The True-up Trust, as a majority-owned affiliate of the Sponsor, will retain the required economic interest in the credit risk of the Receivables in satisfaction of the Sponsor’s obligations under the U.S. Risk Retention Rules, in the form of a qualifying “seller’s interest” consisting of the Transferor’s Interest (which, among other things, is represented by the Certificates), as wholly offset by an “eligible horizontal residual interest” in Series 2024-3 consisting of the Class R Interest.  The amount of the Transferor’s Interest on the Closing Date and at each subsequent monthly measurement date is required to equal not less than 5% of the aggregate unpaid principal balance of all outstanding investor ABS interests in Group 1, as wholly offset by the percentage represented by the fair value of the Class R Interest, as Series EHRI, of the fair value of all outstanding ABS interests in Series 2024-3 on the Closing Date.  The Certificates represent the interest in each Group not represented by any Series of that Group and are entitled to, among other things, with respect to Group 1, distributions in respect of the Transferor’s Interest on each Payment Date.  In general, the Class R Interest represents the right to all Series 2024-3 Available Funds on any Payment Date not

 

needed to pay fees, expenses and indemnities of the Trust allocated to or otherwise payable by Series 2024-3 or to make interest and principal payments on the Notes, payments, if any, required to reimburse any Letter of Credit Provider for any amounts drawn under the related Letter of Credit together with interest accrued on the drawn amount, any required deposits into the Reserve Account or the Principal Funding Account, any Additional Interest Amounts and Make-Whole Payments payable on that Payment Date.

 

None of the Sponsor, the Depositor, the Originators, the True-up Trust or any of their affiliates may hedge, sell or transfer the required retention except to the extent permitted by the U.S. Risk Retention Rules.

 

The Master Collateral Agent, the Indenture Trustee and the Owner Trustee will not have any obligation or responsibility to monitor or enforce the Sponsor’s compliance with any risk retention requirements and shall not be charged with knowledge of the U.S. Risk Retention Rules, nor shall they be liable to any Noteholder, other Creditor or other party for violation of the U.S. Risk Retention Rules now or hereafter in effect, except as otherwise may be explicitly required by law, rule or regulation.

 

For more information regarding the risk retention regulations and the Sponsor’s method of compliance with those regulations, see “U.S. Credit Risk Retention.”

 

Servicer, Custodian, Marketing Agent and Administrator

 

Cellco is the Servicer of the Receivables under the Transfer and Servicing Agreement, as further described under “Servicing the Receivables and the Securitization Transaction.”  So long as Cellco is the Servicer, the Servicer is permitted to contract with others, which may be affiliates of Cellco or third-parties, to perform all or a portion of its servicing obligations at the Servicer’s expense.  No such delegation or contracting will relieve the Servicer of its obligations or liability for servicing and administering the Receivables in accordance with the provisions of the Transfer and Servicing Agreement.  Cellco has been the servicer for its securitization program since its inception in 2016 and has acted as servicer in 13 term securitization transactions backed by Device Payment Plan Agreements.  The following table shows the size and growth of Cellco’s managed portfolio of Device Payment Plan Agreements since December 31, 2019.

 

 

 

The tables under “Servicing the Receivables and the Securitization Transaction—Delinquency and Write-Off Experience” and on Annex A and Annex B show Cellco’s servicing experience for (1) the entire portfolio of Device Payment Plan Agreements that Cellco services, (2) the Receivables (as such term is defined in Annex A) and (3) prior securitized pools of Device Payment Plan Agreements for Consumer Obligors, as applicable.  Cellco has not had any material instances of noncompliance with the servicing criteria in its public securitization program.

 

Cellco is the Custodian for the Trust and will maintain electronically a Receivable file for each Receivable.  A Receivable file will include originals or copies of the Device Payment Plan Agreement.  For more information on Cellco’s obligations as Custodian, see “Servicing the Receivables and the Securitization Transaction—Custodial Obligations of Cellco.”

 

Cellco is the Marketing Agent and in this capacity, will be required to remit, or to cause the related Originators to remit, certain payments to the Trust or take certain actions with respect to the Receivables,

 

as described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”  Any fees and expenses incurred by the Marketing Agent will be paid by the Originators.

 

Cellco is the Administrator of the Trust under the Administration Agreement.  From time to time, the Administrator may (on behalf of the Trust) identify (i) Device Payment Plan Agreements to be transferred by each Originator to the Depositor and by the Depositor to the Trust, (ii) Trust DPPAs to be designated to a Group and (iii) with the consent of the Servicer, Trust DPPAs previously designated to a Group that does not relate to any Outstanding Credit Extensions to be re-designated to another Group. In addition, the Administrator will provide notices on behalf of the Trust and perform all administrative obligations of the Trust under the Indenture and the other transaction documents.  These obligations include obtaining and preserving the Trust’s qualification to do business where necessary, providing required notices, performing inspections of the transaction parties on behalf of the Trust, monitoring the Trust’s obligations for the satisfaction and discharge of the Indenture, causing the Servicer to comply with its duties and obligations under the Transfer and Servicing Agreement, causing the Indenture Trustee to notify the Noteholders of the redemption of the Notes, filing any required income tax returns for the Trust, and preparing and filing the documents necessary to perfect and maintain the security interest of the Master Collateral Agent and the Indenture Trustee, as applicable, and to release property from the lien of the Master Collateral Agreement or the Indenture, as applicable.  Any fees of the Administrator will be paid by the Servicer.

 

The Administrator may not resign at any time unless it determines it is legally unable to perform its duties under the Administration Agreement. In specific circumstances, the Owner Trustee, with the consent of the Majority Trust Creditor Representatives, may terminate the Administrator.  No resignation or termination of the Administrator will become effective until (i) a successor administrator has executed and delivered to the Trust an agreement accepting its engagement and agreeing to perform the obligations of the Administrator under an agreement on substantially the same terms as the Administration Agreement in a form acceptable to the Trust and (ii) the Rating Agency Condition with respect to all Credit Extensions then rated by a rating agency shall have been satisfied with respect to the appointment of such successor administrator.

 

Although Cellco is responsible for the performance of its obligations as Servicer, Custodian, Marketing Agent and Administrator, certain of its affiliates or third parties may undertake the actual performance of those obligations.  This appointment does not relieve Cellco of its obligations as Servicer, Custodian and Marketing Agent with respect to the Receivables or as Administrator with respect to the Trust.

 

 

PARENT SUPPORT PROVIDER

 

Verizon Communications will act as Parent Support Provider pursuant to the Parent Support Agreement under which it will guarantee the payment obligations of the Originators and Cellco, as the Marketing Agent and the Servicer.  The Parent Support Provider will not guarantee any payments on the Notes or any payments on the Receivables.  The Parent Support Provider’s payment obligations under the Parent Support Agreement will be of equal priority with all other senior unsecured obligations of the Parent Support Provider.

 

Formerly known as Bell Atlantic Corporation, Verizon Communications was incorporated in 1983 under the laws of the State of Delaware and began doing business as Verizon Communications on June 30, 2000 following a merger with GTE Corporation.  Verizon Communications’ principal executive offices are located at 1095 Avenue of the Americas, New York, New York 10036.

 

The Parent Support Provider will be obligated to guarantee the payment obligations of the Originators, the Marketing Agent and the Servicer (for so long as Cellco is the Servicer) under the transaction documents to which an Originator, the Marketing Agent or the Servicer, as applicable, is a party. Specifically, to the extent an Originator or the Servicer (in the case of Receivables transferred by the Additional Transferor or designated to Group 1 on a Designation Date), as applicable, does not reacquire or acquire, as applicable, (i) a Receivable upon the breach of a related representation or warranty or (ii) a secured Receivable (that is not a Written-Off Receivable) if the related Obligor becomes the subject of a bankruptcy proceeding and Verizon Wireless accepts the surrender of the related wireless device in satisfaction of the Receivable, in each case, under the circumstances described under “Receivables—Obligation to Acquire or Reacquire

 

Receivables; Obligation to Make Credit Payments and Upgrade Prepayments,” the Parent Support Provider will be required to remit the Reconveyance Amount for that Receivable into the Collection Account or will be required to cause the related Originator or the Servicer (in the case of Receivables transferred by the Additional Transferor or designated to Group 1 on a Designation Date), as applicable, to reacquire or acquire, as applicable, that Receivable.

 

In addition, as further described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments,” if the Marketing Agent does not remit, or does not cause the related Originator to remit, prepayment amounts due, after the acceptance and compliance with all of the terms and conditions of an Upgrade Offer by an Obligor, the Parent Support Provider will be required to deposit, or to cause the Marketing Agent or related Originator to deposit, the prepayment amounts into the Collection Account.  The failure by the Marketing Agent, the related Originator or the Parent Support Provider to remit the amounts as set forth in the immediately preceding sentence within five (5) Business Days after receipt of written notice from the Master Collateral Agent, or a responsible person of the Marketing Agent or the Parent Support Provider obtains actual knowledge, that these payments are required will cause a Servicer Termination Event so long as Cellco is the Servicer, and, as a result, an Amortization Event.  See “Description of the Notes—Amortization Period” for additional information about Amortization Events.

 

Moreover, as further described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments,” if the Marketing Agent does not remit, or does not cause the related Originator to remit, amounts related to credits granted to Obligors, to the extent those credits reduced any payment on a Receivable, the Parent Support Provider will be required to remit, or to cause the Marketing Agent or the related Originator to remit, the related Credit Payment into the Collection Account.  Further, as described under “Servicing the Receivables and the Securitization Transaction—Servicer Modifications and Obligation to Acquire Receivables,” if Verizon Wireless allows a Receivable to be transferred to a different Obligor, the Marketing Agent will be required to acquire, or to cause the related Originator to acquire, from the Trust any Receivable so transferred.  The failure by the Marketing Agent, the related Originator or the Parent Support Provider to remit the amounts as set forth in this paragraph within ten (10) Business Days after receipt of written notice from the Master Collateral Agent, or a responsible person of the Marketing Agent or the Parent Support Provider obtains actual knowledge, that those payments are required will cause a Servicer Termination Event so long as Cellco is the Servicer, and, as a result, an Amortization Event.  See “Description of the Notes—Amortization Period” for additional information about Amortization Events.

 

In addition, as further described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments,” if the Servicer does not remit Collections on the Receivables by the relevant due date as further described under “Servicing the Receivables and the Securitization Transaction—Deposit of Collections,” the Parent Support Provider will be required to deposit an amount equal to the Collections directly into the Collection Account, or cause the Servicer to remit these amounts.

 

Lastly, if the Servicer or the Marketing Agent, as applicable, does not acquire a Receivable under the circumstances set forth under “Servicing the Receivables and the Securitization Transaction—Servicer Modifications and Obligation to Acquire Receivables” and “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments,” the Parent Support Provider will be required to remit into the Collection Account the Reconveyance Amount for that Receivable.  The failure by the Servicer or the Parent Support Provider to remit Collections or to deposit a Reconveyance Amount, in each case as set forth in the immediately preceding two sentences, within five (5) Business Days or ninety (90) days, respectively, after receipt of written notice from the Master Collateral Agent or the Majority Trust Creditor Representatives, as applicable, or a responsible person of the Servicer, the Marketing Agent or the Parent Support Provider obtains actual knowledge, that those payments or deposits are required will cause a Servicer Termination Event, and, as a result, an Amortization Event.  For additional information on Servicer Termination Events, see “Servicing the Receivables and the Securitization Transaction—Resignation and Termination of Servicer.”  For additional information on Amortization Events, see “Description of the Notes—Amortization Period.”

 

THE ORIGINATORS

 

The Originators originated the Receivables pursuant to the origination practices and policies set forth under “Origination and Description of Device Payment Plan Agreement Receivables—Underwriting Criteria,” and have or will originate future Receivables pursuant to the origination practices and policies set forth under “Origination and Description of Device Payment Plan Agreement Receivables—Underwriting Criteria,” as in effect at the time such Receivables are originated.  The origination practices and policies may be updated in the normal course of Verizon Wireless’ business as Verizon Wireless continually analyzes, validates and manages its credit and other origination policies based on costs and economic and other factors, and adjusts the policies as necessary to meet the needs of the business.  Any changes to the policies will be applied to all Device Payment Plan Agreements originated by the Originators from and after the date that the changes are implemented, which may follow a trial change with respect to a limited number of customers.  Any material changes in the origination practices and policies used to originate Device Payment Plan Agreements will be disclosed on the Form 10-D filed with respect to the first Collection Period in which Device Payment Plan Agreements subject to the changes are transferred to the Trust and such Trust DPPAs are designated to Group 1.  Each Series 2024-3 Eligible Receivable will be required to satisfy the eligibility criteria set forth under “Receivables—Criteria for Selecting the Receivables.”

 

The Originators originated or will originate the Receivables under Device Payment Plan Agreements entered into by Verizon Wireless Services or another affiliate of Verizon Communications, as agent of each Originator.  Each Originator is a wholly-owned or majority-owned subsidiary of Verizon Communications and an affiliate of Verizon Communications, and originates Device Payment Plan Agreements under the same underwriting guidelines as determined by the Sponsor, as described under “Origination and Description of Device Payment Plan Agreement Receivables.”  Each Originator (including Cellco) will be covered by the Parent Support Agreement provided by the Parent Support Provider.  Each Originator has transferred prior to the Closing Date its rights in certain of these Device Payment Plan Agreements to the Depositor and is expected to transfer additional Device Payment Plan Agreements to the Depositor from time to time after the Closing Date.

 

Each Originator will severally represent to the Depositor that the Receivables transferred by it are Eligible Receivables, though such Receivables may not constitute Series 2024-3 Eligible Receivables.  The Depositor will assign the right to enforce this representation to the Trust, and the Trust will assign the right to enforce this representation to the Master Collateral Agent, for the benefit of the Group 1 Creditors. If this representation is later discovered to have been untrue when made and such breach is a Material Breach, then the related Originator will have the option to cure that breach.  If the breach is not cured in all material respects by the end of the applicable grace period, then the related Originator will be required to reacquire all Receivables for which the representation has been breached, other than as set forth under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”  Notwithstanding the foregoing, no breach of the foregoing eligibility representation will be deemed to have occurred with respect to a Receivable based on the inaccuracy of such representation if such inaccuracy does not affect the ability of the Trust to receive and retain payment in full on such Receivable on the terms and conditions and within the timeframe set forth in the underlying Device Payment Plan Agreement.  In addition, the related Originator will be required to reacquire any Receivable that is a secured Receivable (that is not a Written-Off Receivable) if the related Obligor becomes the subject of a bankruptcy proceeding and Verizon Wireless accepts the surrender of the related wireless device in satisfaction of the Receivable, subject to certain limitations set forth under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”  For more information about the representations, bankruptcy surrendered devices and reacquisition obligations, see “Receivables—Representations About the Receivables,” “Origination and Description of Device Payment Plan Agreement Receivables—Bankruptcy Surrendered Devices” and “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”

 

 

ADDITIONAL TRANSFEROR

 

Verizon DPPA Master Trust was a Delaware statutory trust created in September 2016 that was terminated in December 2023.  Prior to its termination, the Additional Transferor acquired Device Payment Plan Agreements originated by the Originators from the Originators or Verizon Business DPPA Master Trust

 

in connection with the financing facility for Device Payment Plan Agreements under which it was formed.  Prior to the Closing Date, the Additional Transferor transferred its rights in certain of these Device Payment Plan Agreements to the Depositor.  As of the date of this prospectus, only a de minimis amount of the aggregate principal balance of the Receivables held by the Trust are Device Payment Plan Agreements that were transferred by the Additional Transferor to the Depositor and by the Depositor to the Trust.

 

The Servicer has represented that the Receivables transferred by the Additional Transferor to the Depositor are Eligible Receivables, though such Receivables may not constitute Series 2024-3 Eligible Receivables.  The Depositor has assigned the right to enforce this representation to the Trust, and the Trust has assigned the right to enforce this representation to the Master Collateral Agent, for the benefit of the Group 1 Creditors.  If this representation is later discovered to have been untrue when made and such breach is a Material Breach, then the Servicer will have the option to cure that breach.  If the breach is not cured in all material respects by the end of the applicable grace period, then the Servicer will be required to acquire all Receivables for which the representation has been breached, other than as set forth under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”  Notwithstanding the foregoing, no breach of the foregoing eligibility representation will be deemed to have occurred with respect to a Receivable based on the inaccuracy of such representation if such inaccuracy does not affect the ability of the Trust to receive and retain payment in full on such Receivable on the terms and conditions and within the timeframe set forth in the underlying Device Payment Plan Agreement.  In addition, the Servicer will be required to acquire any Receivable that is a secured Receivable (that is not a Written-Off Receivable) if the related Obligor becomes the subject of a bankruptcy proceeding and Verizon Wireless accepts the surrender of the related wireless device in satisfaction of the Receivable, subject to certain limitations set forth under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”  For more information about the representations and acquisition obligations, see “Receivables—Representations About the Receivables” and “—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”

 

Notwithstanding the termination of the Additional Transferor in December 2023, all of the obligations of the Servicer (or if Cellco is no longer the Servicer, then Cellco in its individual capacity) described in this prospectus with respect to any Device Payment Plan Agreement that was transferred by the Additional Transferor to the Depositor and by the Depositor to the Trust will remain enforceable against the Servicer (or if Cellco is no longer the Servicer, then Cellco in its individual capacity) until all such Receivables have been paid in full.

 

 

ORIGINATION AND DESCRIPTION OF DEVICE PAYMENT PLAN AGREEMENT RECEIVABLES

 

Cellco and the other Originators originate Device Payment Plan Agreements in accordance with Verizon Wireless’ requirements as set forth under “—Underwriting Criteria” below.

 

Wireless Equipment and Distribution

 

Verizon offers several categories of wireless equipment to consumer customers and business customers, including a variety of new or certified pre-owned smartphones and other handsets, wireless-enabled internet devices, such as tablets and other wireless-enabled connected devices, such as smart watches.

 

Verizon purchases a substantial majority of the wireless devices it sells from Apple, Samsung, Alphabet, Motorola Mobility and LG Electronics.

 

Verizon uses a combination of direct, indirect and alternative distribution channels to market and distribute its products and services to customers. 

 

The direct channel includes stores operated by Verizon and staffed by Verizon retail employees.  Verizon’s sales and service centers and business direct sales teams also represent significant distribution channels.  Verizon also has a digital channel and omni-channel for its customers.

 

The indirect/digital partners channel includes agents that sell Verizon wireless products and services at retail locations operated and staffed by the agents throughout the United States, as well as through the Internet.  The majority of these sales are made under exclusive selling arrangements with Verizon. Also included in the indirect sales channel are certain high-profile, national retailers, including Best Buy, that sell Verizon wireless products and services on a nonexclusive basis.

 

Prior to July 2019, wireless devices sold by Verizon were generally “unlocked,” and, therefore, a customer was free, subject to the limitations of the device, to use the wireless device on another wireless provider’s network.  On June 25, 2019, the Federal Communications Commission approved Verizon’s request to extend the lock period for sixty (60) days after the sale of the device for new smartphones.  In July 2019, Verizon began implementing a sixty (60) day lock period on smartphones after the customer purchases the device, in order to reduce theft and fraud.   After the sixty (60) days, the smartphones unlock automatically, and the customer is free, subject to the limitations of the device, to use the smartphone on another wireless provider’s network.

 

Wireless Device Payment Plan Agreements

 

Historically, Verizon Wireless customers purchased their wireless devices at subsidized prices and paid for their wireless service pursuant to a fixed-term two year service plan, which required the payment of an early termination fee if service was cancelled during the two year term. As of January 2017, Verizon Wireless no longer offers consumer customers new fixed-term, subsidized service plans for devices; however, Verizon Wireless continues to offer subsidized plans to its business customers.

 

In August 2013, Verizon Wireless introduced a new national program referred to as “Edge,” under which it offered eligible customers the option to purchase their wireless devices at unsubsidized prices on an installment basis over the course of a specified period of time and the ability to upgrade their device after a minimum of thirty (30) days, subject to certain conditions, including the repayment of a specified percentage of the total amount due under the installment agreement and the return of the original device in good working condition.  The Edge program was revised in February 2014 to provide that customers who purchased a device under the program also received discounted monthly service fees as compared to those under the historical fixed-term service plans. Verizon Wireless continued to revise the terms of the Edge program over the next two years, adjusting the specified repayment periods and percentage required to be paid before allowing for an upgrade.

 

In June 2015, the Edge program was further revised to remove the contractual option to upgrade, and in July 2015, the program was renamed the Device Payment Program, which is the program currently offered by Verizon Wireless.  Initially, the Device Payment Program only applied to cell phones and then was expanded to cover tablets and subsequently watches and other wearables and other devices that utilize a wireless connection. In 2016, Verizon began offering the Device Payment Program to business customers. Under the Device Payment Program, customers purchase their devices (including certified pre-owned devices) at unsubsidized prices under a Device Payment Plan Agreement, which currently includes the following terms:

 

 

 

 

 

 

 

 

 

 

In order to be eligible to participate in the Device Payment Program, customers must meet certain threshold requirements, which generally include that any past due or written-off balances on a prior account with Verizon Wireless must be paid in full, and there cannot be any past due balance of $25.00 or greater outstanding for more than thirty (30) days or any usage threshold breaches on the current account.  Larger business customers may be subject to higher thresholds.

 

Certain small businesses may sign the consumer customer form of Device Payment Plan Agreement.

 

Device Payment Plan Agreements may be unsecured or secured by the related wireless device.

 

Any of the terms and conditions of the Device Payment Program, including, without limitation, with respect to the charging of interest, the original term, the amount of the monthly payment and the Obligor’s ability to prepay the related Device Payment Plan Agreement, may be changed by Verizon Wireless at any time.

 

Insurance on Wireless Devices

 

Verizon Wireless offers, but does not require, property insurance, under a policy issued by a third party insurance provider, covering customers’ wireless devices for loss, theft or accidental damage.  Insurance is available for a single mobile number associated with a specific wireless device or on a tiered “account-based” structure.

 

For a consumer account, account-based coverage is available if the account has at least two but not more than twenty lines with eligible devices. Under the account-based insurance options, a consumer customer will have coverage for the account-based tier (either 2 lines, 3 lines or 4-20 lines, all with eligible devices), applicable to their account in the event of loss, theft or damage. With account-based coverage, a customer is not required to specify which lines (up to the limit applicable to that customer’s account) are covered at the time of enrollment. Instead, a customer registers the line at the time of claim filing when an incident occurs to the device associated with that line.

 

For a business account, account-based coverage is available if the account has at least three but not more than forty-nine lines with eligible devices. Under the account-based insurance options, a business customer will have coverage for the account-based tier (either 3 lines, 11 lines or 25 lines, all with eligible devices), applicable to their account in the event of loss, theft or damage.

 

With both consumer customer and business customer account-based coverage, a customer is not required to specify which lines (up to the limit applicable to that customer’s account) are covered at the time of enrollment. Instead, a customer registers the line at the time of claim filing when an incident occurs to the device associated with that line. At such time as the customer has registered the maximum number of lines (applicable to the tier for that customer’s account) when claims were filed with respect to those associated devices, the customer’s remaining wireless devices will not be eligible for coverage, unless: (a) the customer is a consumer, enrolled in the account-based 4-20 tier and has also enrolled in additional coverage (up to a maximum of 3 more registrations, for a maximum of 6 registrations) that will provide an additional registration for the other lines/devices on the account to use in the event of an incident, or (b) for either a consumer customer or business customer, it has been at least twelve months since the last claim was filed on a line, in which case the registration re-opens. Customers who purchase wireless devices under a Device Payment Plan Agreement remain obligated for the total number of payments even if the wireless device is lost, stolen or damaged. Verizon Wireless recommends that customers obtain property insurance on wireless devices.

 

Underwriting Criteria

 

Consumer Customers.  The following discussion is applicable only to consumer customers.

 

All point of sale systems that generate Device Payment Plan Agreements for Verizon Wireless utilize a standard credit decision and scoring system.  All credit applications go through an electronic decision process, which expedites the review, promotes consistent decisions, and provides an automated, instant and efficient credit decision.  Verizon Wireless does not use a manual or judgmental credit decision process, and Verizon Wireless’ policy is not to override automated credit decisions.

 

When originating Consumer Device Payment Plan Agreements, Verizon Wireless uses the customer’s name, address, date of birth and social security number to perform a credit screening function, utilizing internal and external data sources to measure credit quality of the customer and determine eligibility for the Device Payment Program.  If a customer is either new to Verizon Wireless or is a Consumer Obligor that has forty-five (45) or less days of Customer Tenure with Verizon Wireless, the credit decision process relies more heavily on external data sources.  If the Obligor has more than forty-five (45) days of Customer Tenure with Verizon Wireless, the credit decision process relies on a combination of internal and external data sources.  External data sources include obtaining a credit report from a national consumer credit reporting agency, if available.

 

Verizon Wireless uses its internal data and/or the credit data obtained from the credit reporting agencies to create a custom credit risk score.  The custom credit risk score is generated automatically from the customer’s credit data using Verizon Wireless’ proprietary custom credit models, which are empirically derived, demonstrably and statistically sound.  The custom credit risk score measures the likelihood that the potential customer will become severely delinquent and be disconnected for non-payment.  Verizon Wireless’ proprietary custom credit models have been developed based on credit reports belonging to anonymous consumers who have applied for service and Device Payment Plan Agreements with Verizon Wireless. Since the models are derived from Verizon Wireless’ own application and account base, Verizon Wireless believes the predictive power of the model is enhanced compared to other non-custom generic credit scoring models. Verizon Wireless’ proprietary custom credit models use inputs that are contained within the customer’s credit file, including, but not limited to, trade line age, high credit limits, high balances, delinquencies, inquiries, collection items and public record items.

 

Approximately 1% of credit screenings for Device Payment Plan Agreements require manual intervention before an automated credit decision can be generated.  In these instances, the personal identifying information (e.g. name, address, date of birth or social security number) provided by the customer cannot be confidently matched with credit data.  This may be as a result of, for example, a name change, use of a nickname or a generation designation, such as Jr. or Sr., or a data entry error.  Once the discrepancy is resolved, the application continues through the electronic decision process, resulting in an automated credit decision.  For approximately 5-8% of new customer credit screenings, a traditional credit report is not available from one of the national consumer credit reporting agencies because the potential customer does not have sufficient credit history.  In those instances, alternative credit data is used to automatically create custom credit scores that are vendor-sourced alternative scores and that differ from the standard Verizon proprietary credit score.  Alternative credit data includes financial data from non-traditional lenders and non-financial data, such as information from public records regarding property ownership, bankruptcies and liens, education attributes, residential stability and payment information regarding telecommunications, pay TV and utility bills, which are used to predict the creditworthiness of underserved applicants who do not have traditional credit files.

 

Based on the custom credit risk score, Verizon Wireless assigns each customer to a credit class, each of which has specified offers of credit including an account level spending limit and a maximum amount of credit allowed per wireless device.  During the fourth quarter of 2018, Verizon Wireless moved all customers, new and existing, from a required down payment percentage, between zero and 100%, to a maximum amount of credit per account and/or device, as applicable.

 

In February 2017, Verizon Wireless implemented, on a test basis, and in April 2017, Verizon Wireless fully implemented, the use of alternative credit data from NCTUE as an input into its proprietary custom credit model.  NCTUE is a consumer credit reporting agency that maintains data, such as payment and account history, reported by telecommunications, pay TV and utility service providers that are members of

 

NCTUE.  Experiential data from like industries has proven to be extremely valuable in credit model development and risk assessment, and the data provides greater insight into the credit of underserved emerging youth and multicultural segments.

 

In September 2017, following a trial change earlier in the year, Verizon Wireless implemented a recalibration of its credit policy for new customers to better reflect recent device payment plan performance, macroeconomic conditions and the competitive landscape.  As a result of the credit policy recalibration, the down payment requirements for some new customers decreased or were eliminated, and the requirements for other new customers increased.  Since 2014, customers with less than two-hundred ten (210) days of Customer Tenure with Verizon Wireless have represented an average of less than 20% of customers.

 

Business Customers.  The following discussion is applicable only to business customers.

 

Some of the Device Payment Plan Agreements originated by Verizon Wireless are for entities who enter into the Device Payment Plan Agreement in connection with a business.  No single business customer has entered into Device Payment Plan Agreements representing more than 1% of the principal balance of Verizon Wireless’ portfolio of Device Payment Plan Agreements.

 

When originating Business Device Payment Plan Agreements, Verizon Wireless uses the business’ name, address, and tax identification number to perform a credit screening function. Generally, for business customers that are new to Verizon Wireless or have less than seven (7) months of Customer Tenure with Verizon Wireless, the credit decision process relies more heavily on external data, including a commercial credit bureau score and other supplemental business data, such as bankruptcy status, years in business, and number of employees.  For Business Obligors who have seven (7) months or more of Customer Tenure with Verizon Wireless, the credit decision process relies on internal data sources.  Business customers also have the opportunity to voluntarily provide personal identifying information on the business principal or another authorized company individual.  The personal identifying information may be used in conjunction with the business identifying information in a blended score approach.  The personal identifying information may also be used to determine if the individual has an existing relationship with Verizon, or to collect credit data from data sources containing personal credit payment history.  As of August 2021, Persons providing (or otherwise identified in) such personal identifying information may enter into a Cosign Agreement and in such case, except as otherwise set forth in the related Cosign Agreement, the related Cosign Party shall be obligated to make payments under the related Device Payment Plan Agreement if the business customer fails to make such payments when due.  As of July 2022, business customers may elect for the credit decision process to be determined solely using personal identifying information on the business principal or another authorized company individual by entering into an Individual Sign Agreement and in such case, except as otherwise set forth in the related Individual Sign Agreement, the related Individual Sign Party shall be obligated to make payments under the related Device Payment Plan Agreement. Such personal identifying information may include the customer’s name, address, date of birth and social security number to enable Verizon Wireless to perform a credit screening function, utilizing internal and external data sources to measure credit quality of the related individual.  If a business customer does not have a score from any of the commercial credit bureaus and is not registered with the applicable secretary of state in such business customer’s jurisdiction of organization, Verizon Wireless will manually review the business’ corporate documentation to conduct its risk assessment.   

 

Verizon Wireless uses its internal data and/or the external data to assign each business customer specified line and account level credit limits.  Business Obligors may request an increase to these limits, which request is reviewed by an analyst team based on the Business Obligor’s payment history and Customer Tenure with Verizon Wireless and external data, including reports from commercial credit bureaus.

 

 

Exceptions to Underwriting Criteria.  Verizon Wireless does not consider any of the existing Receivables to have been originated pursuant to exceptions to its underwriting criteria.

 

Upgrade Offers

 

From time to time, Verizon Wireless offers certain Upgrade Offers, subject to the terms and conditions therein, under its Upgrade Program.  Verizon Wireless began offering its Current Upgrade Program and related Current Upgrade Offers in September 2015 with respect to the newest models of certain manufacturers’ wireless devices.  Generally, the terms and conditions of the Current Upgrade Program include that (i) a specified minimum percent of the retail price of the related device (currently 50%) has been paid by the Obligor, (ii) the eligible device is returned in good working condition, as determined by Verizon Wireless, and if not so returned, the remaining balance under such Obligor’s original Device Payment Plan Agreement will be due on such Obligor’s next bill, (iii) the Obligor’s account is in good standing, and (iv) the Obligor is required to purchase a new qualifying device under a new Device Payment Plan Agreement.  Upon satisfaction of these terms and conditions, Verizon Wireless will agree, for the benefit of the Obligor and for the express benefit of any assignee of the Obligor’s original Device Payment Plan Agreement, to acquire such eligible device for the remaining balance of the related Obligor’s original Device Payment Plan Agreement and pay off and settle that remaining balance.

 

The terms and conditions of the Current Upgrade Program and any other Upgrade Program may be modified or terminated by Verizon Wireless at any time.  In addition, new Upgrade Programs may be offered at any time by Verizon Wireless, with terms and conditions to be determined at the time of the offer, and any Upgrade Offers may be terminated at any time at the sole option of Verizon Wireless.

 

If Verizon Wireless continues to offer Upgrade Programs, the related Upgrade Offer has not been terminated, and an Obligor accepts an Upgrade Offer and satisfies all of the terms and conditions of the resulting Upgrade Contract, the Marketing Agent will be required to make, or to cause the related Originator to make, an Upgrade Prepayment, as described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.” See “Risk Factors—Verizon Wireless’ Upgrade Offers may adversely impact Collections on the Receivables and the timing of principal payments, which may result in reinvestment risk.” See also “Some Important Legal Considerations—Bankruptcy Proceedings of Cellco or Other Originators and Impact on Upgrade Offers.”

 

Account Credits

 

From time to time, Verizon Wireless may grant credits to an Obligor’s account under various circumstances, including as an incentive for new customers to establish an account with Verizon Wireless or for existing customers to continue service with Verizon Wireless, upgrade their wireless devices or establish additional lines of service.  One of the types of credits currently granted by Verizon Wireless is a contingent, recurring credit that may arise pursuant to, among other things, a customer promotion offered by Verizon Wireless from time to time.  These promotions provide that if the Obligor enters into a Device Payment Plan Agreement for the purchase of a new wireless device and complies with the other conditions of the promotion, which may include that the Obligor trades in another wireless device in good condition, Verizon Wireless will apply credits to the Obligor’s account.  Verizon also offers Obligors a rewards credit card on which Obligors accrue credits that may be applied to amounts due.  Credits may be in amounts up to the full purchase price of the new wireless device and may be applied over multiple billing cycles.  We refer to these credits herein as “contingent, recurring credits” because if the Obligor takes certain actions, including termination of their service with Verizon Wireless, they will lose their rights to some or all of the credits.

 

Any credits would be applied to the Obligor’s account in the order set forth under “Servicing the Receivables and the Securitization Transaction—Collections and Other Servicing Procedures.”  To the extent any credits are applied against any payments due under a Receivable, the Marketing Agent will be required to make, or to cause the related Originator to make, certain payments to the Trust, as described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”

 

For a further discussion of risks associated with the application of credits, see “Risk Factors—The application of credits to Obligor accounts may reduce payments received on the Receivables, which may

 

delay payments on the Notes or result in losses on the Notes.”  For more information on Verizon Wireless’ activity history with respect to credits, see “Servicing the Receivables and the Securitization Transaction—Delinquency and Write-Off Experience.”

 

Transfer of Service

 

The Originators and the Servicer permit the transfer of Device Payment Plan Agreements from one Obligor to another Obligor.  Following the transfer of the Device Payment Plan Agreement to the new Obligor, the transferee will become the Obligor under and have all financial liability for the Device Payment Plan Agreement.  To the extent the original Device Payment Plan Agreement is a Receivable and the Device Payment Plan Agreement is transferred to a new Obligor, the Marketing Agent will be required to acquire, or to cause the related Originator to acquire, that Receivable from the Trust, as described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”

 

Bankruptcy Surrendered Devices

 

If a Device Payment Plan Agreement is secured by the related wireless device and the related Obligor becomes the subject of a bankruptcy proceeding, in certain limited circumstances, Verizon Wireless may accept the surrender of such wireless device in satisfaction of the Device Payment Plan Agreement.  To the extent the secured Device Payment Plan Agreement is a Receivable and is not a Written-Off Receivable, if Verizon Wireless accepts the surrender of the related wireless device in satisfaction of the Receivable, the related Originator or the Servicer (in the case of Receivables transferred by the Additional Transferor, as applicable) must reacquire or acquire, as applicable, that Receivable from the Trust, subject to the limitations set forth under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments.”

 

Origination Characteristics

 

The number of Device Payment Plan Agreements originated by the Originators and other subsidiaries of Verizon Communications is correlated to wireless device sales and is influenced by market conditions and competitive pressures.  A substantial number of Device Payment Plan Agreements are originated in connection with the launch of the newest models of certain manufacturers’ wireless devices and during holidays, graduation season and other celebration seasons that occur during the calendar year.  Therefore, there have been and will likely continue to be fluctuations in origination volumes at these times.  See also “Risk Factors—Noteholders will bear all reinvestment risk resulting from principal payments on the Notes occurring earlier than expected” and “—Noteholders will bear all interest rate risk resulting from principal payments on the Notes occurring later than expected.”

 

The following table contains information about Device Payment Plan Agreements originated by the Originators and other subsidiaries of Verizon Communications during each of the periods indicated.  There can be no assurance that future originations of Device Payment Plan Agreements will be similar to the historical origination characteristics shown below for Device Payment Plan Agreements or that any trends shown in the tables will continue for any period.

 

Origination Characteristics

 

_________________________

 

 

SERVICING THE RECEIVABLES AND THE SECURITIZATION TRANSACTION

 

General

 

Verizon Wireless’ consumer finance operations include accounting, finance operations, fraud monitoring, and payment, credit and collections strategy and operations.  Collections transaction work is supported by internal and third-party call centers.  The third-party vendors that Cellco engages to perform certain receivable servicing processes in the name of Verizon and under Cellco’s management and control.  Cellco requires all vendors to follow processes set by Cellco or agreed to between Verizon and the vendor.  Cellco regularly monitors its vendors and processes for compliance.  Vendors do not have the discretion to make decisions that would materially affect agreed-upon processes, amounts collected or the timing for amounts applied to Obligor accounts.

 

Cellco’s servicing and collection systems maintain records for all Receivables, track application of payments and maintain relevant information on Obligors and their account status.  Cellco maintains backup data as part of its disaster recovery process at centers in multiple domestic locations.  All databases and application file changes are replicated to a disaster recovery center, and tests of the disaster recovery systems are conducted annually.

 

Servicing Duties

 

The Servicer will service the Receivables under the Transfer and Servicing Agreement.  Under the Transfer and Servicing Agreement, the Servicer’s main duties with respect to Group 1 will be:

 

 

 

 

 

 

 

 

 

The Servicer will not be required to, and is not expected to, make advances of payments on the Receivables.

 

Collections and Other Servicing Procedures

 

Customers receive one bill for each Verizon Wireless account, which includes billing for both wireless service and any Device Payment Plan Agreements under that account.  Customers may have multiple accounts.  All payments remitted by an Obligor to Verizon Wireless, any release of a security deposit, and any application of a credit granted to an Obligor by Verizon Wireless (other than credits applied directly to a Device Payment Plan Agreement, including in connection with an Upgrade Contract as described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments”) currently are applied to the related account based on invoice aging, with the oldest invoiced balance being relieved first, followed by the second oldest invoiced balance, etc., up to current billing amounts.  Credits granted in respect of cancellations, prepayments, invoicing errors or in connection with upgrades may be applied directly to a Device Payment Plan Agreement.

 

Within each invoice aging status, payments and credits currently are applied in the following order:

 

 

 

 

The process for application of payments, releases of security deposits and applications of credits described in the bullet points above (other than credits granted in connection with an upgrade) may be changed at any time in the sole discretion of Cellco so long as such change (i) is also applicable to any Device Payment Plan Agreements that the Servicer services for itself and others and (ii) so long as Cellco is the Servicer, does not have a material adverse effect on the Creditors.  See also “Risk Factors—Payments on the Trust DPPAs will be subordinated to certain other payments by the Obligors, and payments on your Notes may be delayed or you may incur losses on your Notes.”

 

Generally, Verizon Wireless bills are currently due 20 - 23 days after the end of the monthly bill cycle, and the due date is displayed on the customer’s bill.   Some business customers may have extended payment terms.  The Servicer considers an account to be delinquent if there are unpaid charges remaining on the account on the day after the bill’s due date and currently calculates delinquency assuming a due date that is 22 or 30 days after the end of the monthly bill cycle for consumer customers and business customers, respectively.  Verizon Wireless charges late fees on late payments for service charges and other charges as set forth in the second bullet above, which currently are in an amount of up to 1.5% per month (18% per year) on the unpaid balance, or $7 per month, whichever is greater, if the fee is allowed by law in the state of an Obligor’s billing address.  Under the Device Payment Plan Agreements, Verizon Wireless currently has the right to charge Obligors a late fee equal to the lesser of 5% of the unpaid balance on the Obligor’s bill or $5 if payment is not received within fifteen (15) days after the date due, but does not currently do so.

 

Payments on an account can be made by a variety of methods, including check, credit or debit card, ACH or cash.  Customers and other Obligors can make payment at a Verizon retail location, or initiate a payment via the Verizon website, the My Verizon or My Business Mobile Application or by phone with a Verizon customer or financial services representative.  Customers and other Obligors can also make

 

payments through authorized third-party agents.  Checks typically are processed through a Verizon managed lockbox process.

 

Verizon Wireless’ collection efforts with respect to a particular Obligor are generally based on the results of proprietary custom empirically-derived internal behavioral scoring models that analyze the Obligor’s past performance to predict the likelihood of the Obligor falling further delinquent.

 

Verizon Wireless’ custom scoring models assess a number of variables, including origination characteristics, customer account history, and payment patterns.  An external scoring model is used with respect to certain larger Business Obligors.  Based on the score derived from these models, accounts are grouped by risk category to determine the collection strategy to be applied to those accounts.  These risk categories determine how soon an Obligor will be contacted after a bill becomes delinquent and generally include how often the Obligor will be contacted during the delinquency, and how long the account will remain in collections before the Obligor’s outbound calls are redirected to a Verizon Wireless collections representative.  The collections timeline and strategy may vary based on whether the Obligor is a Consumer Obligor or Business Obligor, as well as based on the size of the Business Obligor.

 

Generally, as an Obligor’s risk profile increases (including due to an Obligor having a shorter Customer Tenure with Verizon Wireless), the period before service interruption is shortened.  The focus of Verizon Wireless’ collection efforts is on both customer retention and loss mitigation.

 

Although most Device Payment Plan Agreements are paid without any additional servicing or collections efforts, if an account becomes delinquent, Verizon Wireless will attempt to contact the Obligor to determine the reason for the delinquency and identify the Obligor’s plan to resolve the delinquency.  Once an Obligor is delinquent, Verizon Wireless will proceed with collection efforts, which may include: (1) contacting Obligors via email, text message, notifications to the My Verizon or My Business Mobile Application, phone calls to their wireless device or their account point of contact and letters, (2) following-up with Obligors to notify them of a pending service interruption, (3) redirecting outgoing calls from a Consumer Obligor’s mobile device to a collections representative while also suspending the related data plan if the device is a smartphone, (4) following-up with Obligors to notify them of pending suspension of the related account, and (5) suspending the account.  Of the Obligors that initially become delinquent, Verizon Wireless’ experience has been that these delinquencies drop significantly after Verizon Wireless begins its targeted collection efforts.  Service is disconnected on average between forty-three (43) and forty-six (46) days after an account is suspended.  Beginning April 13, 2022, following such collection efforts and service disconnection, Verizon Wireless reserves the right to resolve past due balances of an Obligor using the credit card or debit card, if any, designated by such Obligor during the related original device order transaction.

 

Verizon Wireless may offer Obligors revised payment arrangement plans over the course of the Device Payment Plan Agreement.  Payment arrangement plans are based on specific servicing procedures and controls within the Verizon Wireless collection system.  Obligors with payment arrangement plans generally receive automatic reminder notifications on the day the promised payment is due.  Verizon Wireless may offer multiple revised payment arrangements over the term of the same Device Payment Plan Agreement, but revised payment arrangement plans will not alter the final maturity date or reduce the remaining amount due under that Device Payment Plan Agreement.

 

A business customer may enter into an Associated Account Agreement to obtain pricing discounts for all Device Payment Plan Agreements entered into by or on behalf of such business customer pursuant to the terms of such Associated Account Agreement. If a business customer has entered into an Associated Account Agreement, such business customer may also authorize its parent company and/or affiliates (or in the case of a business customer that has entered into an Individual Sign Agreement, other authorized individuals) to become an Affiliated Party for Device Payment Plan Agreements entered into by such parent company and/or affiliate (or such other authorized individuals, as applicable). In such case, (x) such Device Payment Plan Agreements will be eligible for the pricing discounts described in this paragraph and (y) except as otherwise set forth in the related Associated Account Agreement, the related Associated Account Agreement Party shall be obligated to make payments under such Device Payment Plan Agreement if such Affiliated Party fails to make such payments when due.

 

After standard collection efforts are exhausted, Verizon Wireless writes off any remaining balance on an account.  On average, Verizon Wireless writes off an account when it is between one-hundred forty-three (143) and one-hundred forty-five (145) days past its bill date, but it may write-off an account earlier or later depending on the risk of the account and other circumstances.

 

After an account has been “written-off,” Verizon Wireless continues efforts to recover the unpaid charges.  Generally, recovery efforts are pursued based on a proprietary scoring method that assesses the likelihood of repayment by the related Obligor.  After several cycles of collection activity on written-off accounts, Verizon Wireless typically sells the account as a final effort to realize value.  Any recoveries after write-off, including any proceeds from the sale of a wireless device securing a Receivable, will not be assets of the Trust, but will instead be paid to the Servicer as additional servicing compensation.  See also “Risk Factors—Conflicts of interest may exist among the Servicer, the Marketing Agent, the Parent Support Provider and the Trust, which may result in losses on your Notes.”

 

Verizon Wireless continuously monitors performance results against expected outcomes and may, from time to time, test new collection strategies.  If a test strategy shows improved yield, Verizon Wireless may adopt the strategy.  Therefore, Verizon Wireless’ servicing policies and procedures may change over time.

 

During March and July 2019, in connection with the transition to a new form of Device Payment Plan Agreement for Consumer Obligors that includes a purchase money security interest in the related device, Verizon Wireless changed its servicing procedures with respect to Obligors who filed for bankruptcy after the effective date of the change.  The March 2019 change resulted in an increase in losses resulting from bankruptcies, which increase is expected to be temporary and to be mitigated by the July 2019 changes as an increasing number of outstanding Device Payment Plan Agreements include a purchase money security interest in the related device.  As of the Statistical Calculation Date, the vast majority of Consumer Receivables include a purchase money security interest in the related device.

 

Delinquency and Write-Off Experience

 

Subsequent to origination, Verizon Wireless monitors delinquency and write-off experience as key credit quality indicators for its portfolio of Device Payment Plan Agreements.  The following tables show Verizon Wireless’ delinquency and write-off experience for its portfolio of Device Payment Plan Agreements.  The tables include all Device Payment Plan Agreements serviced by Cellco.  Delinquency and write-off experience may be influenced by a variety of economic, social, geographic and other factors beyond the control of Verizon Wireless.  There can be no assurance that the delinquency or write-off experience of the pool of Receivables described in this prospectus will be similar to the historical experience shown below for Device Payment Plan Agreements serviced by Cellco or that any trends shown in the tables will continue for any period.

 

Delinquency and Write-Off Experience

 

Delinquencies

 

 

 

Write-Offs

 

 

________________________

Servicing Fees

 

On each Payment Date, the Trust will pay the Servicer the Servicing Fee with respect to that Payment Date.  On each Payment Date, the Trust will pay the Series 2024-3 Allocation Percentage of the Servicing Fee from Series 2024-3 Available Funds in accordance with the priorities set forth under “Description of the Notes—Priority of Payments” or “—Post-Acceleration Priority of Payments,” as applicable.  In addition, the Servicer will be entitled to retain as a supplemental servicing fee any net recoveries on Written-Off Receivables (including any proceeds from the sale of a wireless device securing a Receivable), late fees, if any, and certain other administrative and similar fees and charges on the Receivables.  The Servicer may net these fees and expenses from Collections deposited into the Collection Account.

 

Servicer Modifications and Obligation to Acquire Receivables

 

The Servicer is generally obligated to manage, service, administer and make collections on the Receivables with reasonable care, in accordance with its Customary Servicing Practices.  As part of its normal collection efforts, the Servicer may, subject to the restrictions set forth in the following paragraph, waive late payment charges or other fees that may be collected in the ordinary course of servicing a Receivable or grant extensions, refunds, rebates or adjustments on any Receivable or amend any Receivable.  In response to the COVID-19 Pandemic, the Servicer implemented certain relief programs, and may implement additional programs in the future.

 

If the Servicer (A) makes certain modifications, including if it (i) cancels a Receivable or reduces or waives (including with respect to an Upgrade Offer) the remaining Principal Balance under a Receivable or any portion thereof and/or as a result, the monthly payments due thereunder, (ii) modifies, supplements, amends or revises a Receivable to grant the Obligor under that Receivable a contractual right to upgrade the related wireless device or (iii) grants payment extensions resulting in the final payment date of a Receivable being later than the Collection Period immediately preceding the final maturity date for the latest maturing Group 1 Credit Extension or (B) fails to maintain perfection of the Trust’s and the Master Collateral Agent’s security interest in the Receivables or otherwise impairs in any material respect the rights of the Trust or the Group 1 Creditors in the Receivable (other than as permitted by the terms of the Transfer and Servicing Agreement), and the Servicer fails to correct that failure or impairment in all material respects by the end of the second month following the month that the Servicer was notified in writing of the impairment, the Servicer will be required to acquire all affected Receivables from the Trust by remitting the related Reconveyance Amount into the Collection Account on or prior to the second Business Day before the Payment Date related to the Collection Period in which such Receivable was acquired by the Servicer.  However, the Servicer will not be required to acquire any modified Receivable if the modification was required by law or court order, including by a bankruptcy court.  In addition, if the Servicer, in its sole discretion, determines that as a result of a systems error or limitation or other reason, the Servicer is unable to service a Receivable in accordance with its Customary Servicing Practices, the Servicer may acquire the relevant Receivable.

 

In addition, if an Originator or the Servicer allows a Device Payment Plan Agreement that is a Receivable to be transferred to a different Obligor, the Marketing Agent will be required to acquire, or to cause the related Originator to acquire, that Receivable from the Trust for the Reconveyance Amount.

 

Under the Parent Support Agreement, to the extent the Servicer, the Marketing Agent or an Originator, as applicable, does not acquire or reacquire, as applicable, a Receivable under the circumstances set forth above, the Parent Support Provider will be required to remit into the Collection Account the Reconveyance Amount for that Receivable.  See “Parent Support Provider” for additional information about the Parent Support Agreement.

 

Under the terms of the Servicemembers Civil Relief Act and similar state laws, an Obligor who enters military service after the origination of a Device Payment Plan Agreement, has a device and receives orders to relocate to a location where Verizon Wireless service is unavailable, can (i) terminate his or her service without paying an early termination fee or (ii) request that the Obligor’s account be suspended.  The Servicer will not have to make any payments to the Trust with respect to any account terminated or suspended pursuant to the terms of the Servicemembers Civil Relief Act.  See also “Some Important Legal Considerations—Servicemembers Civil Relief Act.”

 

For more information about the Servicer’s policies and procedures for servicing the Receivables, you should read “—Servicing Duties” and “—Collections and Other Servicing Procedures” above.

 

Bank Accounts

 

The Servicer will establish the Collection Account with the Master Collateral Agent and the Series Bank Accounts with the Paying Agent.  The Collection Account will be pledged to the Master Collateral Agent to secure the Group 1 Credit Extensions.  The Series Bank Accounts will be pledged to the Indenture Trustee to secure the Notes.

 

For so long as Cellco is the Servicer and no Event of Default (or event that, with the giving of notice or the passage of time, would constitute an Event of Default) has occurred and is continuing, funds in the Collection Account and the Series Bank Accounts may be invested in highly-rated, short-term investments that mature, in the case of the Collection Account, no later than the Business Day immediately preceding the next Payment Date; provided that the Servicer is able to maintain records on a daily basis with respect to the amounts realized from these investments.  Investment earnings, if any, on funds in the Collection Account and the Series Bank Accounts will not be included in Group 1 Available Funds or Series 2024-3 Available Funds but instead will be distributed directly to the Certificateholders on each Payment Date.  The Servicer will direct the investments unless the Master Collateral Agent instructs the bank holding the account otherwise after an Event of Default (or an event that, with the giving of notice or the passage of time, would constitute an Event of Default).  The Trust may invest the funds in Collection Account and the Series Bank Accounts in obligations issued by the Servicer or its affiliates.  If Cellco is no longer the Servicer, funds on deposit in the Collection Account and all Series Bank Accounts will remain uninvested.

 

The Servicer will have no access to the funds in the Series Bank Accounts.  Only the Paying Agent may withdraw funds from these accounts to make payments, including payments to the Noteholders.  The Paying Agent will make payments from the Series Bank Accounts to the Noteholders and others based on information provided by the Servicer.

 

Deposit of Collections

 

The Servicer will deposit all Collections into the Collection Account within two (2) Business Days after identification of receipt of good funds.  However, if the Monthly Remittance Condition is satisfied, Cellco, as Servicer, may deposit Collections into the Collection Account on the second Business Day immediately preceding each Payment Date.  Until deposited into the Collection Account, Collections may be used by the Servicer for its own benefit and will not be segregated from its own funds.

 

The deposit obligation of the Servicer set forth in the immediately preceding paragraph will be guaranteed by the Parent Support Provider.  Upon the receipt by the Parent Support Provider of written notice from the Master Collateral Agent, based on information provided by the Servicer, that any Collections have not been deposited into the Collection Account as required, the Parent Support Provider will be required to make the applicable deposit.

 

For administrative convenience, the Servicer may deposit Collections and other amounts into the Collection Account net of the Servicing Fee payable to the Servicer for the month, but must account for all transactions individually.  If amounts are deposited in error, they will be returned to the Servicer or netted from subsequent deposits.

 

For as long as the Servicer or the Marketing Agent, as applicable, is depositing Collections and any required Upgrade Prepayments within two (2) Business Days after identification of receipt of good funds or identification that all of the terms and conditions related to the relevant Upgrade Contract have been satisfied, respectively, the Servicer is required to provide a written report to the Master Collateral Agent and the Paying Agent on each deposit date setting forth, among other things, (x) the aggregate dollar amount of Collections deposited by the Servicer on that date, (y) the aggregate number of Upgrade Offers accepted since the deposit date immediately preceding the current deposit date, and (z) the aggregate amount of Upgrade Prepayments remitted by the Marketing Agent or the applicable Originators on that date.

 

Custodial Obligations of Cellco

 

Cellco will act as Custodian for the Trust and will maintain electronically a Receivable file for each Receivable.  A Receivable file will include originals or copies of the Device Payment Plan Agreement. Copies typically will be electronically imaged copies.  Imaged copies of the documents will be accessible as “read only.”  Each Receivable file is maintained separately, but will not be segregated from other similar Receivable files or stamped or marked to reflect the transfer to the Trust while Cellco is servicing the Receivables.

 

Generally, Device Payment Plan Agreements that are originated electronically are stored electronically and are available to Obligors using the My Verizon or My Business Mobile Application document archive portal. If any Device Payment Plan Agreements are originated by paper execution, copies of such Device Payment Plan Agreements are scanned or otherwise electronically transmitted from the related retail location to a central repository where they are imaged so they, too, can be stored electronically.

 

Although Cellco is responsible for the performance of its obligations as Custodian, certain of its affiliates may undertake the actual performance of those obligations.  The performance by its affiliates does not relieve Cellco of its obligations as Custodian with respect to the Receivables.

 

Servicing Obligations of Cellco

 

As set forth in the Transfer and Servicing Agreement, the Servicer is generally obligated to manage, service, administer and make collections on the Receivables in accordance with its Customary Servicing Practices.  As part of its Customary Servicing Practices, the Servicer may implement new programs, whether on an intermediate, pilot or permanent basis, or on a regional or nationwide basis, or modify its standards, policies and procedures as long as, in each case, the Servicer implements any new programs or modifies its standards, policies and procedures in respect of comparable assets serviced for itself or its affiliates.  Cellco will agree in the transaction documents that so long as Cellco is Servicer, the Servicer shall not change the process for the application of payments, releases of security deposits and applications of credits described under “Servicing the Receivables and the Securitization Transaction—Collections and Other Servicing Procedures” unless the change (i) is also applicable to any Device Payment Plan Agreement that the Servicer services for itself and others and (ii) does not have a material adverse effect on the Group 1 Creditors.

 

As Servicer, Cellco will be authorized to exercise certain discretionary activity with regard to the servicing of the Receivables, including delaying disconnection of a device post account suspension if an Obligor begins to cure the delinquency on its account.  Verizon Wireless uses operating procedures, system controls, and management reporting in an effort to measure the effectiveness of this activity.

 

If an Obligor accepts an Upgrade Offer with respect to a Receivable but fails to satisfy the required terms and conditions related to such Upgrade Offer, the Servicer will not waive any amounts due by such Obligor under the related Receivable and will pursue its applicable Customary Servicing Practices against such Obligor in respect of the related Receivable until all amounts due under the related Receivable are received. The terms and conditions for the Current Upgrade Program state that if an Obligor fails to return the applicable wireless device within thirty (30) days of receiving the new wireless device or the returned device is not in good working condition, all payments due under the original Device Payment Plan Agreement will be accelerated and become immediately due and owing by the related Obligor.

 

If none of the Marketing Agent, the related Originator or the Parent Support Provider makes the required Upgrade Prepayments as described under “Receivables—Obligation to Acquire or Reacquire Receivables; Obligation to Make Credit Payments and Upgrade Prepayments,” the Servicer will be required to deliver notice to certain Obligors as described under “—Notice Obligations of Cellco” below and, if Cellco is still the Servicer, give a monthly credit to the related Obligor against amounts owing with respect to the new Device Payment Plan Agreement resulting from the related Upgrade Offer, in an amount equal to the amount due that month under the original Device Payment Plan Agreement that is a Receivable.  If Cellco is no longer the Servicer, Cellco will be required to apply these credits upon receipt of notice from the successor servicer that the Obligor has made the requisite payment under the original Device Payment Plan Agreement.  Any monthly credit granted to an Obligor is required to be applied directly against the monthly payment due on the related Device Payment Plan Agreement that is a Receivable and not in

 

accordance with the Servicer’s customary payment application pursuant to its Servicing Procedures.  See “Risk Factors—Verizon Wireless’ Upgrade Offers may adversely impact Collections on the Receivables and the timing of principal payments, which may result in reinvestment risk.”

 

Limitations on Liability

 

The Servicer will only be liable under the Transfer and Servicing Agreement for its specific obligations thereunder, and in such case only for its own willful misconduct, bad faith or gross negligence in performing its obligations under the Transfer and Servicing Agreement.  The Servicer will not be required to start, pursue or participate in any legal proceeding that is not incidental or related to its obligations to service the Receivables under the Transfer and Servicing Agreement and that in its opinion may result in liability or cause it to pay or risk funds or incur financial liability.  The Servicer will indemnify the Trust, the Owner Trustee, each Creditor Representative (including the Indenture Trustee) and the Master Collateral Agent (in each of its capacities under the transaction documents) and their officers, directors, employees and agents for damages caused by the Servicer’s willful misconduct, bad faith or gross negligence in the performance of its duties as Servicer.

 

Amendments to Transfer and Servicing Agreement

 

The Transfer and Servicing Agreement may be amended by the Trust, the Depositor and the Servicer, without the consent of any Creditor Representatives or Creditors, to cure any ambiguity, to correct an error or to correct or supplement any provision of the Transfer and Servicing Agreement that may be defective or inconsistent with the other terms of the Transfer and Servicing Agreement.

 

The Trust, the Depositor and the Servicer may, also without the consent of any Creditor Representatives or Creditors, enter into an amendment or amendments to the Transfer and Servicing Agreement for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Transfer and Servicing Agreement or modifying in any manner the rights of the Creditors under the Transfer and Servicing Agreement, if (A) the Trust or the Administrator shall have delivered to the Master Collateral Agent and the Owner Trustee an officer’s certificate, dated the date of any such action, stating that the Trust or the Administrator, as applicable, reasonably believes that such action will not have a material adverse effect on the interest of any Creditor or (B) the Rating Agency Condition has been satisfied for all Credit Extensions then rated by a rating agency.  The Trust, the Depositor and the Servicer, with the consent of the Majority Trust Creditor Representatives of each Group adversely affected thereby, may, with prior written notice to the rating agencies (if any Credit Extensions of an affected Group are then rated by a rating agency) and the Master Collateral Agent, enter into an amendment or amendments to the Transfer and Servicing Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Transfer and Servicing Agreement or of modifying in any manner the rights of the Creditors under the Transfer and Servicing Agreement.  The consent of the Master Collateral Agent will be required for any amendment described in this paragraph that has a material adverse effect on the rights, duties, obligations, immunities or indemnities of the Master Collateral Agent.  The consent of the Owner Trustee will be required for any amendment described in this paragraph that has a material adverse effect on the rights, obligations, immunities or indemnities of the Owner Trustee, which consent will not be unreasonably withheld.

 

Any Creditor Representative consenting to any amendment will be deemed to agree that the amendment does not have a material adverse effect on it or on the related Creditors.  For any amendment, the Depositor or the Administrator will be required to deliver to the Master Collateral Agent and the Owner Trustee an opinion of counsel stating that the amendment is authorized and permitted by the Transfer and Servicing Agreement and that all conditions precedent to the amendment have been satisfied.

 

Resignation and Termination of Servicer

 

Cellco may not resign as Servicer unless it determines it is legally unable to perform its obligations under the Transfer and Servicing Agreement.  No resignation will become effective until the earlier of (x) the date on which a successor servicer has assumed Cellco’s servicing obligations or (y) the date on which the Servicer is legally unable to act as Servicer.

 

Each of the following events will be a “Servicer Termination Event” under the Transfer and Servicing Agreement:

 

 

 

 

 

provided, however, that a delay or failure of performance referred to under the first, second or third bullet point above for an additional period of sixty (60) days will not constitute a Servicer Termination Event if that delay or failure was caused by force majeure or other similar occurrence.

 

In accordance with the Master Collateral Agreement, the Majority Trust Creditor Representatives may direct the Master Collateral Agent to waive a Servicer Termination Event, except with respect to a failure to make required deposits to or payments, and the consequences thereof.  Upon the waiver, the Servicer Termination Event will be deemed not to have occurred.

 

If a Servicer Termination Event occurs and is continuing, the Master Collateral Agent, if directed to do so by the Majority Trust Creditor Representatives, and in accordance with the Master Collateral Agreement, will remove the Servicer and terminate its rights and obligations under the Transfer and Servicing Agreement. If the Servicer resigns or is terminated upon a Servicer Termination Event, the Master Collateral Agent will promptly engage an institution having a net worth of not less than $50,000,000 whose regular business and operations includes the servicing of receivables and can accommodate the servicing of Device Payment Plan Agreements, as the successor to the Servicer under the Transfer and Servicing Agreement and successor to the Administrator under the Administration Agreement.  If no Person has accepted the engagement as successor servicer when the Servicer stops performing its obligations, the Master Collateral Agent, without further action, will be automatically appointed the successor servicer to perform the obligations of the Servicer (other than any obligations specifically excluded) until such time as another successor servicer shall accept engagement as successor servicer.  If the Master Collateral Agent is unwilling or legally unable to act as successor servicer, it will appoint, or petition a court of competent

 

jurisdiction to appoint, an institution having a net worth of not less than $50,000,000 whose regular business and operations includes the servicing of accounts and can accommodate the servicing of Device Payment Plan Agreements, as successor to the Servicer under the Transfer and Servicing Agreement.

 

The Master Collateral Agent may make arrangements for the compensation of the successor servicer out of Collections and amounts collected on the other Trust DPPAs as it and the successor servicer may agree.  In addition to the Servicing Fee, any successor servicer is entitled to (i) a one-time successor servicer engagement fee of $150,000, payable on the first Payment Date after it assumes its duties as successor servicer and (ii) a monthly supplemental successor servicing fee equal to the product of the Series 2024-3 Group Allocated Percentage and the excess, if any, of $425,000 over the Servicing Fee.   The Trust will pay the Series 2024-3 Group Allocated Percentage of such amounts from Series 2024-3 Available Funds in accordance with the priorities set forth under “Description of the Notes—Priority of Payments” or “—Post-Acceleration Priority of Payments,” as applicable.

 

If a bankruptcy trustee or similar official is appointed for the Servicer and no other Servicer Termination Event has occurred, the bankruptcy trustee or official may have the power to prevent the Master Collateral Agent or the Creditors from terminating the Servicer.

 

The Servicer will agree to cooperate to effect a servicing transfer and make available those of its records relating to payments on the Trust DPPAs and the related files.  The Servicer will not be obligated to provide, license or assign its processes, procedures, models, servicing software or other applications to any successor servicer or any third party, or provide anything covered by a restriction on transfer or assignment or a confidentiality agreement or otherwise restricted by legal, regulatory, privacy or data protection policies.  Any successor servicer will agree to provide to Cellco any information relating to payments received from Obligors, delinquencies in payments by Obligors, any Written-Off Receivables or written-off Trust DPPAs and any other information related to the Obligors and the Trust DPPAs required by Cellco to service the accounts of which any Trust DPPAs are a part.

 

Notice Obligations of Cellco

 

Within ten (10) days following the earlier to occur of (i) a ratings downgrade by each of Fitch, Moody’s and S&P of Verizon Communications to below investment grade or (ii) a Servicer Termination Event, the Servicer will be required to send a notice to all Obligors under the Receivables indicating (a) that their Device Payment Plan Agreements have been assigned to the Trust and designated to Group 1, and (b)(x) if Cellco has not been removed as Servicer, that the Obligors shall continue to make their payments as they had previously, or (y) if Cellco has been removed as Servicer, the name of the new servicer and any new instructions with respect to their payments.  In addition, if the Servicer Termination Event was as a result of the failure by the Marketing Agent, an Originator or the Parent Support Provider to deposit any prepayments with respect to the Receivables related to an Upgrade Program that continues for five (5) Business Days after the Marketing Agent or the Parent Support Provider, as applicable, receives written notice of the failure from the Master Collateral Agent or a responsible person of the Marketing Agent or Parent Support Provider obtains actual knowledge of the failure, then Cellco shall also send a notice to (i) all Obligors who are or may become eligible for an upgrade, indicating that Cellco has recently failed to make the necessary prepayments with respect to one or more of its Obligors in connection with an Upgrade Offer, and that if any Obligor chooses to upgrade and Cellco fails to make the Upgrade Prepayment with respect to them, that Obligor will still be required to make payments on his or her original Device Payment Plan Agreement, but may deduct a corresponding amount from his or her new Device Payment Plan Agreement with Verizon Wireless, and (ii) all Obligors who had initiated upgrades under an Upgrade Offer, indicating that Cellco had failed to make the relevant Upgrade Prepayment, and stating that those Obligors will continue to have an obligation to make payments on their original Device Payment Plan Agreements, but may deduct a corresponding amount from their new Device Payment Plan Agreements with Verizon Wireless.

 

RECEIVABLES

 

Receivables, Group 1 Assets and Series 2024-3 Assets

 

The primary assets of the Trust will be a revolving pool of Device Payment Plan Agreements for wireless devices originated by the Originators described under “The Originators.”  The Originators and the Additional Transferor have transferred and assigned prior to the Closing Date and the Originators will transfer and assign from time to time after the Closing Date, all of their respective right, title and interest in Device Payment Plan Agreements, including all amounts received and applied on those Device Payment Plan Agreements on or after the related Cutoff Date, and all payments on or under and all proceeds of the Device Payment Plan Agreements, to the Depositor, and the Depositor has transferred and assigned prior to the Closing Date and will transfer and assign from time to time after the Closing Date, all of its right, title and interest in these Device Payment Plan Agreements to the Trust.  In addition, on any Designation Date, from time to time the Trust (or the Administrator, on behalf of the Trust), with the consent of the Servicer, may re-designate Trust DPPAs previously designated to a Group that does not relate to any Outstanding Credit Extensions to Group 1.

 

The assets of the Trust designated to Group 1 consist of:

 

 

 

 

 

 

The foregoing Trust assets will be pledged by the Trust to the Master Collateral Agent for the benefit of the Group 1 Creditors.  See also “Some Important Legal Considerations—Security Interests in Receivables.”

 

Certain assets will be specifically designated to Series 2024-3, and no other Series will have an interest in such assets.  These assets will consist of:

 

 

 

The foregoing assets will be pledged by the Trust to the Indenture Trustee for the benefit of the Noteholders.

 

Description of the Receivables

 

Each of the Receivables was and will be originated by one of the Originators using the origination procedures described under “Origination and Description of Device Payment Plan Agreement Receivables—Underwriting Criteria” as in effect at the time the Receivables were originated.  The origination practices and policies may be updated in the normal course of Verizon Wireless’ business as Verizon Wireless continually analyzes, validates and manages its credit and other origination policies based on costs and economic and other factors, and adjusts the policies as necessary to meet the needs of the business.  Any changes to the policies will be applied to all Device Payment Plan Agreements originated by the Originators from and after the date that the changes are implemented, which may follow a trial change with respect to a limited number of Obligors.  Any material changes in the origination practices and policies used to originate Device Payment Plan Agreements will be disclosed on the Form 10-D filed with respect to the first Collection Period in which Device Payment Plan Agreements subject to the changes are transferred to the Trust and such Trust DPPAs are designated to Group 1.  See “Risk Factors—The addition or removal of Receivables may decrease the credit quality of the Group 1 assets securing the Notes and may result in accelerated, reduced or delayed payments on the Notes.”

 

Each Receivable will be the subject of a stand-alone Device Payment Plan Agreement and will be an Eligible Receivable, as described below under “—Criteria for Selecting the Receivables.”

 

Each existing Receivable has a 0.00% APR, but Receivables transferred to the Trust and designated to Group 1 in the future may have an APR greater than 0.00%.  As of the related Cutoff Date for each Receivable, the related Obligor’s account will have wireless service with Verizon Wireless.  Each Obligor receives one bill for the related account, which includes billing for late fees (if any), wireless service and other charges, including accessories and insurance, and any amounts due under Device Payment Plan Agreements.  Payments remitted by an Obligor to Cellco are applied to the related account as described under “Servicing the Receivables and the Securitization Transaction—Collections and Other Servicing Procedures.”

 

Criteria for Selecting the Receivables

 

The Receivables (i) have been selected by the Trust (or the Administrator, on behalf of the Trust) from time to time from the portfolio of Device Payment Plan Agreements transferred by the Originators and the Additional Transferor to the Depositor and by the Depositor to the Trust that are Eligible Receivables and (ii) will be selected by the Trust (or the Administrator, on behalf of the Trust) from time to time from the portfolio of Device Payment Plan Agreements transferred by the Originators to the Depositor and by the Depositor to the Trust that are Eligible Receivables.  The Administrator did not use and will not use selection procedures in selecting the Receivables from the portfolio of Device Payment Plan Agreements transferred by the Originators and the Additional Transferor to the Depositor and by the Depositor to the Trust that it believes to be adverse to the Group 1 Creditors.

 

Each Originator will severally represent and warrant that the Receivables originated by it and transferred by it to the Depositor and by the Depositor to the Trust for designation to Group 1 are Eligible Receivables as of the related Cutoff Date, though the Originators will not be required to make any representation that such Receivables constitute Series 2024-3 Eligible Receivables.  In addition, the Servicer has represented and warranted that the Receivables transferred by the Additional Transferor to the Depositor and by the Depositor to the Trust for designation to Group 1 were Eligible Receivables as of the related Cutoff Date, though the Servicer was not required to make any representation that such Receivables constitute Series 2024-3 Eligible Receivables.  In addition, in the event that any Trust DPPAs are designated to Group 1 on a Designation Date, the Servicer will represent and warrant that such Receivables are Eligible Receivables as of the related Cutoff Date, though the Servicer will not be required to make any representation that such Receivables constitute Series 2024-3 Eligible Receivables.  The Depositor has assigned and will assign its rights to these representations to the Trust, and the Trust has assigned and will assign its rights to these representations to the Master Collateral Agent, for the benefit of the Group 1 Creditors.  Receivables that constitute “Series 2024-3 Eligible Receivables” are required to have the following characteristics:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The eligibility criteria for Series 2024-3 described above are solely for the purposes of determining the Ineligible Amount for Series 2024-3, which is used to calculate the Series 2024-3 Allocation Percentage.  Series 2024-3 will be entitled to Collections, and exposed to delinquencies and defaults, on Receivables that do not qualify as Series 2024-3 Eligible Receivables.  Other Group 1 Series may have different, and less-stringent, eligibility criteria than Series 2024-3, and the Receivables eligible for such other Group 1 Series may not be of the same credit quality as the Series 2024-3 Eligible Receivables.

 

Composition of the Receivables

 

As of the Statistical Calculation Date, the aggregate Principal Balance of the Receivables was $25,750,551,033.90.

 

Each Receivable has a 0.00% APR.

 

The information concerning the Receivables presented throughout this prospectus is based on the Receivables as of the Statistical Calculation Date.  The pool of Receivables on the Closing Date may (i) not

 

include certain Receivables designated to Group 1 as of the Statistical Calculation Date as a result of payments in full or delinquencies on certain Device Payment Plan Agreements after the Statistical Calculation Date and other reasons for which the Device Payment Plan Agreements would not constitute Eligible Receivables for Group 1 as of the Cutoff Date related to the Closing Date and (ii) include other Receivables designated to Group 1 after the Statistical Calculation Date.

 

The following tables, together with the characteristics of the Receivables presented throughout this prospectus, show the characteristics or distributions of some characteristics of the Receivables solely as of the Statistical Calculation Date. Because the future composition of the Receivables may change over time, these tables are not necessarily indicative of the composition of the Receivables at any time subsequent to the Statistical Calculation Date.  The values and percentages in the following tables may not sum to total due to rounding.  All percentages and averages are based on the aggregate Principal Balance of the Receivables as of the Statistical Calculation Date unless otherwise stated.

 

___________________

Geographic Concentration of the Receivables⁽¹⁾

 

___________________

Distribution of the FICO^® Score of the Consumer Receivables⁽¹⁾

 

___________________