(The following statement was released by the rating agency)
NEW YORK, January 26 (Fitch) Fitch Ratings assigns the following ratings to
Golden Credit Card Trust, series 2016-1:
--$625,000,000 USD class A asset-backed notes 'AAAsf'; Outlook Stable;
--$43,766,711 CAD class B asset-backed notes 'Asf'; Outlook Stable;
--$19,451,872 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 rates.
Strong Collateral Performance Metric: As of January 2016, 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 (CE): The class A notes of each existing series from
2016-1 will benefit from 6.50% CE derived through the subordination of both
class B and class C notes and the cash reserve account.
The class B notes will benefit from 2.00% credit enhancementCE derived through
the subordination of class C notes and the cash reserve account.
The class C notes CE 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.
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 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 classes A and B. The
rest of the stress scenarios are unlikely to impact the ratings.
DUE DILIGENCE USAGE
No third-party due diligence was provided or reviewed in relation to this rating
action.
The publication of a RW&Es appendix is not required for this transaction.
Contacts:
Primary Analyst
Jenny Ovalle
Associate Director
+1-212-908-0849
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
Secondary Analyst
Herman Poon
Director
+1-212-908-0847
Committee Chairperson
Kevin Corrigan
Senior Director
+1-212-908-9156
Media Relations: Sandro Scenga, New York, Tel: +1 212-908-0278, Email:
sandro.scenga@fitchratings.com.
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
Counterparty Criteria for Structured Finance and Covered Bonds: Derivative
Addendum (pub. 14 May 2014)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744175
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
Related Research
Golden Credit Card Trust - Series 2016-1 - Appendix
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=876763
Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr
_id=998397
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=998397
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&det
ail=31
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