Tag Archives: bofa

Moody’s Rates BofA and Target Card ABS

Moody’s Investors Service has assigned a definitive rating of Baa1 to
the “Bank of America Class
C” credit card notes and has placed under review for possible downgrade
the Aaa ratings of the senior classes of
asset-backed notes issued by “Target Credit Card Master Trust”. The
Bank of America rating is based on the quality of the underlying credit
card receivables, the transaction’s structural protections, the
expertise of FIA Card Services, National Association as servicer, and the
credit enhancement from subordinate classes of notes in the series of
which the notes are a part. On March 2 2009, BAC added
credit enhancement for the benefit of all classes of currently
outstanding Trust securities (classes A, B and C) by creating a
subordinated, Class D interest sized at approximately 8%. The Target
review is primarily driven by substantial deterioration in some of
the Trust’s key performance metrics such as the Trust’s charge-off rate
which has increased substantially over the last 12 months,
nearly doubling from a rate of 8.7% in April of last year to reach an
all-time high of 15.7% in April 2009. This pace of deterioration exceeds
that of the industry as measured by Moody’s Credit Card Index. In
addition, the Trust’s principal payment rate, a measure of the
principal payments that obligors make on their balances each month, has
been falling consistently since early 2007.