NEW YORK--(BUSINESS WIRE)--Fitch Ratings expects to assign the following ratings to American Express Credit Account Master Trust and American Express Credit Account Secured Note Trust, series 2014-2:
--$500,000,000 class A fixed-rate asset backed certificates 'AAAsf'; Outlook Stable;
--$21,676,000 class B fixed-rate asset backed certificates 'A+sf'; Outlook Positive;
--$31,792,000 class 1 fixed-rate secured notes 'BBB+sf'; Outlook Positive.
KEY RATING DRIVERS
Fitch's expected ratings are based on the underlying receivables pool, available credit enhancement, American Express Centurion Bank (AECB) and American Express Bank, FSB's (FSB) underwriting, American Express Travel Related Services Company, Inc.'s (TRS) servicing capabilities, and the transaction's legal and cash flow structures, which employ early amortization triggers.
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 purchase rate, and 3) a combination stress of higher defaults and lower monthly payment rate (MPR).
Increasing defaults alone has no 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 also leads to no impact in rating migration even in the most severe scenario of a 100% reduction in purchase rate. The harshest scenario assumes that an increase in defaults and reduction in monthly payment rate occur simultaneously. In this scenario, the ratings could be downgraded under the severe stress of a 75% increase in defaults and 35% reduction in MPR.
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Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Credit Card ABS Rating Criteria' (May 30, 2014);
--'Global Structured Finance Rating Criteria' (May 20, 2014).
Applicable Criteria and Related Research: American Express Credit Account Master Trust, Series 2014-2 (US ABS)
Global Credit Card ABS Rating Criteria
Global Structured Finance Rating Criteria