CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed the 'A-' ratings assigned to the series 2002-A certificates and series 2014-A notes issued by CIC Receivables Master Trust. The Rating Outlook is Stable. A full list of rating actions follows at the end of this release.
CIC Receivables Master Trust is backed by future flows due from Visa International Service Association (Visa) and MasterCard International Incorporated (MasterCard) related to international merchant vouchers originating in Costa Rica, Guatemala, El Salvador, Honduras and Nicaragua.
Fitch's ratings address timely payment of interest and principal on a quarterly basis.
KEY RATING DRIVERS
Strength of the Originator: On April 28, 2016, Fitch placed CIC's ratings on Rating Watch Negative following the placement of the ratings assigned to its parent, Banco de Bogota (Bogota) on Rating Watch Negative. The 'BBB+' rating assigned to CIC reflects the support it would receive from Bogota and the strength of CIC's financial franchises in the region. The group is the regional leader in the credit card acquiring and issuing businesses, with strong operating franchises in Costa Rica and other Central American countries. Fitch assigns CIC a going concern assessment score of 'GC2'.
Dominant and Growing Franchise: CIC boasts a market leading and profitable regional credit card business that drives group banking activities. CIC's regional credit card issuing and acquiring volumes each grew 14% CAGR from 2010 to 2015. Robust program flows supported an average quarterly debt service coverage ratio (DSCR) of approximately 13.3x during the last four quarterly payment periods. DSCRs consider total quarterly receivables and the maximum quarterly debt service over the life of the program.
Level of Future Flow Debt: Combined debt under both merchant voucher future programs represents approximately 6.1% of CIC's total liabilities and 37.2% of long-term funding. When also considering Banco BAC San Jose's DPR future flow program, these ratios are approximately 7.8% and 47.4%, respectively. Fitch considers this level of future flow debt commensurate to the current ratings assigned to the transaction.
Low Sovereign/Diversion Risks: The structure mitigates certain sovereign risks by collecting cash flows offshore until collection of periodic debt service. Fitch believes diversion risk is mitigated by the acknowledgment and consent agreements obligating Visa and MasterCard to make payments into a collection account controlled by the trustee.
RATING SENSITIVITIES
The transaction ratings could be sensitive to significant changes in the credit quality of CIC and its parent, Bogota, the credit quality of CIC's underlying subsidiaries, and to the credit quality of Visa and MC. While the transaction is sensitive to the ratings of CIC, its parent Bogota, and CIC's underlying subsidiaries, a one-notch downgrade of these entities would not automatically result in a downgrade of the future flow ratings. A decrease in program flows that results in reduced debt service coverage levels could also result in rating downgrades. Transaction ratings may also be sensitive to the ratings of the relevant sovereign environments.
Fitch has affirmed the following ratings:
CIC Receivables Master Trust
--Series 2002-A certificates at 'A-', Outlook Stable;
--Series 2014-A notes at 'A-', Outlook Stable.
Additional information is available at www.fitchratings.com.
Sources of Information:
In addition to the sources of information identified in Fitch's master criteria, this action was additionally informed by information from CIC.
Applicable Criteria
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158
Future Flow Securitization Rating Criteria (pub. 12 Aug 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868191
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1003708
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1003708
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.