NEW YORK--(BUSINESS WIRE)--Fitch Ratings expects to assign the following ratings to Golden Credit Card Trust, series 2015-3:
--$TBD USD class A asset-backed notes 'AAAsf'; Outlook Stable;
--$TBD CAD class B asset-backed notes 'Asf'; Outlook Stable;
--$TBD CAD class C asset-backed notes 'BBB+sf'; Outlook Stable.
KEY RATING DRIVERS
High Collateral Quality: The underlying collateral characteristics play a vital role in the performance of a credit card ABS transaction. Fitch closely examines such collateral characteristics as credit quality, seasoning, geographic concentration, delinquencies and utilization rate on the cards.
Strong Collateral Performance Metric: As of June 2015, Golden Credit Card Trust's (GCCT) collateral performance metrics were in line with the Fitch indices. Chargeoffs and 60+ day delinquencies have remained relatively stable over the past 24 months, and the monthly payment rate has remained consistent since the inception of the trust. Gross yield has been robust over the past two years.
Adequate Credit Enhancement: The class A notes of each existing series from 2015-2 will benefit from 6.50% credit enhancement derived through the subordination of both class B and class C notes.
The class B notes will benefit from 2.00% credit enhancement derived through the subordination of class C notes.
The class C notes credit enhancement is based solely on the cash reserve account.
Quality Servicing Capabilities: Royal Bank of Canada (RBC) is an effective servicer, as evidenced by historical delinquency and loss performance of securitized receivables. Deterioration in the credit quality of RBC may affect the performance of the collateral pool backing the notes.
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.
The harshest stress scenario of a combined 75% increase to defaults and a 35% reduction of MPR could lead to a two-notch downgrade for class A and B. The rest of the stress scenarios are unlikely to impact the ratings.
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'.
DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.
Additional information is available at www.fitchratings.com.
Golden Credit Card Trust, Series 2015-3
Global Credit Card ABS Rating Criteria (pub. 26 Jun 2015)
Global Structured Finance Rating Criteria (pub. 06 Jul 2015)
Golden Credit Card Trust, Series 2015-3 Appendix
Dodd-Frank Rating Information Disclosure Form