NEW YORK--(BUSINESS WIRE)--Fitch Ratings has issued a presale for Discover Card Execution Note Trust, Class A (2014-5), which Fitch expects to rate as follows:
--$500 million class A (2014-5) 'AAAsf'; Outlook Stable.
KEY RATING DRIVERS
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 will be the same as Class A (2014-4), with credit enhancement totaling 24.50% for class A.
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).
Decreasing purchase rate alone has the least impact on rating migration even in the most severe scenario of a 100% decrease in purchase rate. The rating sensitivity to an increase in defaults also has no impact on rating migration. The harshest scenario assumes both stresses to defaults and MPR to occur simultaneously. The ratings would only be downgraded under the severe stress of a 75% increase in defaults and 35% reduction in MPR.
To date, the transactions have exhibited strong performance with all performance metrics within Fitch's initial expectations. For further discussion of 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 report is 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 'email@example.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Global Credit Card ABS Rating Criteria' (May 2014);
--'Global Structured Finance Rating Criteria' (August 2014).
Applicable Criteria and Related Research: Discover Card Execution Note Trust, Class A (2014-5), DiscoverSeries Notes (US ABS)
Global Structured Finance Rating Criteria
Global Credit Card ABS Rating Criteria