Aug 13 (Reuters) - Moody's:
* MOODY'S SAYS REDUCTION IN INTERCHANGE FEE IS CREDIT NEGATIVE FOR CANADIAN BANKS AND CREDIT CARD ABS
* MOODY'S SAYS INTERCHANGE FEES CONTRIBUTE SIGNIFICANTLY TO VERY STRONG RETURNS THAT CANADIAN BANKS EARN FROM THEIR DOMESTIC PERSONAL & COMMERCIAL BANKING OPERATIONS
* MOODY'S SAYS LOWER INTERCHANGE FEES ARE CREDIT NEGATIVE FOR CREDIT CARD ASSET-BACKED SECURITIZATIONS BECAUSE OF THE REDUCTION TO YIELD & EXCESS SPREAD