Fitch Rates Discover Card Execution Note Trust, Class A (2014-1); Outlook Stable

NEW YORK--()--Fitch Ratings rates Discover Card Execution Note Trust, Class A (2014-1) as follows:

--$800,000,000 class A (2014-1) 'AAAsf'; Outlook Stable.

Fitch's ratings are based on the underlying receivables pool, available credit enhancement, Discover Bank's underwriting and servicing capabilities, and the transaction's legal and cash flow structures, which employ early redemption triggers.

The transaction structure is the same as Class A (2013-6), with credit enhancement totaling 24.50% for class A.

RATING SENSITIVITIES

Fitch models three different scenarios when evaluating the rating sensitivity compared to expected performance for credit card asset-backed securities transactions: 1) increased defaults; 2) a reduction in monthly payment rate (MPR), and 3) a combination stress of higher defaults and lower MPR.

Increasing defaults alone has little impact on rating migration even in the most severe scenario of a 75% increase in defaults. The rating sensitivity to a reduction in purchase rate is less pronounced with a severe stress, of a 100% reduction, leading to possible downgrades across all classes. The harshest scenario assumes that an increase in defaults and reduction in monthly payment rate occur simultaneously. Similarly, the ratings could be downgraded under the moderate stress of a 50% increase in defaults and 25% reduction in MPR; however, the severe stress could lead to more drastic downgrades to all classes.

To date, the transactions have exhibited strong performance with all performance metrics within Fitch's initial expectations. For further discussion of our sensitivity analysis, please see the related presale report. For a discussion of the representations, warranties, and enforcement mechanisms available to investors in this transaction please see the related presale appendix.

The presale reports are available to all investors on Fitch's website at 'www.fitchratings.com'. For more information about Fitch's comprehensive subscription service FitchResearch, which includes all presale reports, surveillance, and credit reports on more than 20 asset classes, contact product sales at +1-212-908-0800 or at 'webmaster@fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Credit Card ABS Rating Criteria' (June 2013);

--'Global Structured Finance Rating Criteria' (May 2013).

Applicable Criteria and Related Research:

Global Credit Card ABS Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709356

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=817293

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Contacts

Fitch Ratings
Primary Analyst
Jared Kirsch
Analyst
+1-212-908-0646
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Lauren Tierney
Associate Director
+1-212-908-9168
or
Committee Chairperson
Steven Stubbs
Senior Director
+1-212-908-0676
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Jared Kirsch
Analyst
+1-212-908-0646
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Lauren Tierney
Associate Director
+1-212-908-9168
or
Committee Chairperson
Steven Stubbs
Senior Director
+1-212-908-0676
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com