CT-based VantageScore Solutions reports nearly one billion VantageScore credit scores were used in 2014, by over 2,000 lenders and other industry participants, including six of the 10 largest banks. This represents a 24% increase in the number of users of the VantageScore models and a nearly 600% increase in the number of scores used as compared with 2013.
Moody’s Investors Service confirms the ratings on the two outstanding classes of Credit Card Receivables-Backed Notes issued by SCORE Credit Card Trust. These notes are backed by an undivided co-ownership interest in a $529 million revolving pool of consumer credit card receivables generated by holders of the Sears Card. Moody’s confirmation of the ratings is primarily driven by stabilization of the SCORE’s charge-off and delinquency rates following the addition to the pool of eligible accounts in March. From 2007 into late 2009, charge-offs rose steadily from under 4.0% to 7.0%. In March 2010, the Seller completed an addition of highly seasoned accounts to the existing pool. The new accounts added approximately $100
million in receivables balances to the existing $475 million pool. The credit card receivables in the Trust are originated and serviced by JPMorgan Chase Bank N.A. (Toronto Branch) which is rated Aa1/P-1.
Moody’s Investors Service has assigned definitive
ratings to the Class A and Class B Floating Rate Series 2010-1 Notes and the Class A and Class B Fixed Rate Series
2010-2 Notes issued by Cards II Trust.
The ratings are based on the quality of the underlying pool of credit
card receivables, the expertise of the seller/servicer, Canadian
Imperial Bank of Commerce (Aa2/P-1), the transaction’s legal and
structural protections, including early amortization triggers, and credit
enhancement in the form of excess spread. The Floating Rate Series 2010-1 Class A Notes constitute 89.75% of the
total invested amount and are enhanced by a subordinate Class B Note
which constitutes 10.25% of the total invested amount. The Series 2010-1
Notes have a May 15, 2012 expected principal payment date.
The Fixed Rate Series 2010-2 Class A Notes constitute 92.75% of the total
invested amount and are enhanced by a subordinate Class B Note which
constitutes 7.25% of the total invested amount. The Series 2010-2 Notes
have a May 15, 2013 expected principal payment date.
Moody’s expects performance in the range of 4.5%-6.5% for net
charge-offs, 20.0%-23.0% for yield and 33.0%-39.0% for the payment rate.
Moody’s Investors Service has assigned definitive ratings to the Senior and Subordinated Fixed Rate Series 2010-1 Notes and the Senior Floating Rate and Subordinated Fixed Rate Series 2010-2 Notes issued by Golden Credit Card Trust. The ratings are based on the quality of the underlying pool of credit
card receivables, the expertise of the seller/servicer, Royal Bank of Canada (Aaa/P-1), the transaction’s legal and structural protections, including early amortization triggers, and credit enhancement in the form of excess spread. For each of the Series 2010-1 and 2010-2 Notes, the Senior Notes constitute 95.5% of the total invested amount and are enhanced by the Subordinated Notes which constitute 4.5% of the total invested amount. For the Series 2010-2 Notes, the credit enhancement is sufficient for a fixed rate deal, as the floating interest rate exposure is managed with an interest rate swap, the counterparty for which is Royal Bank of Canada (Aaa/P-1). Moody’s expects performance in the range of 3.0%-4.0% for net charge-offs, 19.0%-22.0% for yield and 33.0%-39.0% for the payment rate. Moody’s performance expectations for a given variable indicate Moody’s forward-looking view of the likely range of performance over the medium term. From time to time, Moody’s may, if warranted, change these expectations. In rating Canadian Credit Card ABS, the payment rate, charge-off rate, purchase rate, yield and certain other inputs are used to calculate the median expected loss and the Aaa enhancement.
Moody’s Investors Service has placed on review
for possible downgrade seven classes of asset-backed securities issued
out of the First National Master Note Trust.
These securities are backed by $2.7 billion of consumer credit card
receivables originated and serviced by First National Bank of Omaha
and its affiliates. On February 9, 2010, Moody’s downgraded FNBO’s long-term deposit rating
to Baa1 from A3, and reduced its bank financial strength rating (“BFSR”)
to C- from C. Following the downgrade, Moody’s left FNBO’s outlook
negative. The downgrades were driven by the company’s
weaker-than-anticipated asset quality, as well as concerns about its
capital position in light of the losses Moody’s expects on its loan
portfolio. Moody’s review will assess FNBO’s efforts to mitigate charge-offs,
increase yield or take any other action to increase excess spread and
maintain FNMNT as an ongoing financing vehicle for its credit card
portfolio. Furthermore, in light of the recent downgrade of FNBO’s
deposit and BSFR ratings, Moody’s will reassess whether FNBO’s
willingness and ability to maintain card utility under stressed scenarios
are consistent with the current credit enhancement and ratings on the
Moody’s has placed on review for possible downgrade 36 classes of asset-backed securities of the “Discover Card Execution Note Trust,” “DiscoverSeries” and the “Discover Card Master Trust.” The review of the asset-backed ratings is driven by deterioration in some of the Trust’s key collateral performance metrics as well as June 1, 2009
downgrade of Discover, the seller/servicer of the Trust. The
annualized gross charge-off rate reached a record-high 9.11% in April
2009 and the delinquency rate was 5.55%, much higher than 4.10% a year ago. The Trust’s average principal payment rate has fallen to about 16.5% from 18.8% a year ago. Meanwhile, Fitch Ratings has downgraded the ratings on the senior notes and has also placed the subordinate notes and cash collateral accounts issued by “1st Financial Credit Card Master Note Trust,” “1st Financial Credit Card Master Note Trust II” and “1st Financial Credit Card Master Note Trust III” on “Rating Watch Negative.”
The rating actions are a result of weaker than expected actual charge-off and delinquency rates reported on all three trusts since the beginning of the year.
Charge-offs among prime and sub-prime credit card-backed securities set
a new record in April coming in just shy of double digits. ABS 30-day+
delinquency continues to hover at record levels, but did edge down
slightly in April thanks to tax-refund season. According to Moody’s
“Credit Card Index” the charge-off rate was 9.97% for April, almost 60%
higher than a year ago. After a steady rise from the 4.45%
level in June of 2008, to last month’s 6.40% level, the delinquency rate
actually declined to 6.34%. The payment rate for April decreased to
16.18%, the result of lower purchase volumes among convenience users as
well as the diminished ability of revolvers to make payments. The yield
index went in a negative direction during April, dropping to 16.18%.
Moody’s noted that the magnitude of the pull-back in yield for April was
unexpected and bears close watching in the months ahead. The combined
rise in charge-offs and slide in yield drove the monthly excess spread
index below 5%, with practically every issuer experiencing substantial
declines. With the April decline, the three-month average for the index
is now 5.32%.
Fitch Ratings has affirmed the Discover Bank’s “ABS Credit Card Seller/Servicer Rating” at ‘Proficient Plus’.
A new report says that U.S. ABS credit card seller/servicers are taking proactive steps to mitigate risk exposure in the face of rising delinquencies and losses. The Fitch Ratings study found that some of these steps include using third-party data to identify emerging trends, tightening origination standards and evaluating loss mitigation tools to help customers through difficult times. In response to the recent increase in charge-offs, issuers have taken steps to re-price and manage risks in their portfolio which has allowed excess spread levels to remain fairly robust. Fitch expects charge-offs to continue to rise into 2009.
Fitch Ratings has upgraded Washington Mutual Bank credit card seller/servicer rating to ‘Proficient Plus’ from ‘Proficient’. The rating is based on the management team’s extensive industry experience, improvements made to its collection strategies and the company’s ability to cross-sell general purpose credit cards to existing bank customers. WMB has a managed credit card portfolio of $27.2 billion and 12.4 million customers as of Dec. 31, 2007. Fitch expects to publish a full report detailing the qualities of WMB that support the assigned ratings.
MA-based Salem Five Bank has introduced “Cash-Back Debit Rewards” program offering 0.25% back for PIN debit transactions and 0.50% back for signature debit transactions. For each debit card transaction, Salem awards customers a percentage of their monthly debit card purchases. The percentage paid is doubled for signature-based transactions when the customer chooses “credit” at the point of sale. The cash rewards appear automatically on customers’ monthly statements. The “Salem Five Cash-Back Debit Rewards” program requires either a Star Checking or Gold Star Checking account. New accounts and existing Star Checking and Gold Star Checking customers are automatically enrolled. The Bank has also enhanced its ATM Reimbursement offering. Through the Bank’s new Unlimited ATM Reimbursement program, customers can use any ATM in the world and Salem Five will reimburse the fees charged by the bank that owns the ATM. There is no limit to the amount or the number of ATM reimbursements. Salem Five operates 17 branches in Massachusetts with $2.4 billion in assets.
Fitch Ratings announced it is changing its rating methodology for U.S. credit card asset-backed securities due to consumer confidence coupled with recent regulatory and industry developments. Refinements include new USD LIBOR scenarios, and compensation for basis risk between the prime rate used to price most variable credit card lending and USD LIBOR. The firm will also place more focus on purchase rate and servicing fee levels. Although Fitch has always evaluated the seller/servicer associated with credit card ABS, the process has been formalized and will augment its credit card collateral analysis and cash flow modeling when determining credit enhancement.