Fitch Affirms Synchrony Credit Card Master Note Trust

NEW YORK--()--Fitch Ratings has affirmed the long-term ratings and Rating Outlooks assigned to Synchrony Credit Card Master Note Trust. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

Gross yield has decreased slightly since last review. As of the September 2015 distribution date, the 12-month average gross yield was 26.98%, down from the 12-month average of 27.68 at the September 2014 distribution period.

Monthly payment rate (MPR), a measure of how quickly consumers pay down credit card debt, has remained relatively stable over the past year. Currently, the 12-month average is 15.31%, up from 15.26% at the September 2014 distribution period.

Gross charge-offs have improved since last review. Currently, the 12-month average is 6.56%, down from 6.84% at the September 2014 distribution period; 60+ day delinquencies have remained below 3% for over four years.

Fitch runs cash flow breakeven analysis by applying stress scenarios to 3-, 6-, and 12-month performance averages to evaluate the breakeven loss multiples at different rating levels. The performance variables that Fitch stresses are the gross yield, MPR, gross charge-off, and purchase rates. For further information, please review Fitch's U.S. Credit Card ABS Issuance updates published on a monthly basis.

Fitch's analysis included a comparison of observed performance trends over the past few months to Fitch's base case expectations for each outstanding rating category. As part of its ongoing surveillance efforts, Fitch will continue to monitor the performance of these trusts.

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 purchase rate, and 3) a combination stress of higher defaults and lower 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 will not result in any rating migration. The harshest scenario assumes stresses to defaults and MPR to occur simultaneously. In this scenario, the ratings could be downgraded under the severe stress of a 75% increase in defaults and a 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 Fitch's sensitivity analysis, please see the new issue report related to one of the transactions listed below.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed the following ratings:

Synchrony Credit Card Master Note Trust, Series 2015-2:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable;

--Class C at 'Asf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2015-1:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable;

--Class C at 'Asf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2014-1:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable;

--Class C at 'Asf'; Outlook Stable;

--Class D at 'BBB+sf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2013-1:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable;

--Class C at 'A-sf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2012-7:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable;

--Class C at 'A-sf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2012-6:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable;

--Class C at 'A-sf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2012-3:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable;

--Class C at 'A-sf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2012-2:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable;

--Class C at 'A-sf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2011-2:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable;

--Class C at 'A-sf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2010-2:

--Class A at 'AAAsf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2015-VFN1:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2014-VFN4:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2014-VFN2:

--Class A at 'AAsf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2014-VFN1:

--Class A at 'AAsf'; Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2010-VFN2:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf', Outlook Stable.

Synchrony Credit Card Master Note Trust, Series 2010-VFN1:

--Class A at 'AAAsf'; Outlook Stable;

--Class B at 'AAsf'; Outlook Stable.

Additional information is available at www.fitchratings.com.

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

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 19 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=838868

Global Credit Card ABS Rating Criteria (pub. 26 Jun 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867482

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=991923

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=991923

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Harry Kohl
Associate Director
+1-212-908-0837
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Jenny Ovalle
Associate Director
+1-212-908-0849
or
Committee Chairperson
Kevin Corrigan
Senior Director
+1-212-908-0156
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Harry Kohl
Associate Director
+1-212-908-0837
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Jenny Ovalle
Associate Director
+1-212-908-0849
or
Committee Chairperson
Kevin Corrigan
Senior Director
+1-212-908-0156
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com