Fitch Affirms Eagle Credit Card Trust

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the Long-Term ratings on Eagle Credit Card Trust. The Rating Outlook remains Stable. A detailed list of rating actions follows at the end of this release.

KEY RATING DRIVERS

The affirmation is based on continued positive trust performance and robust breakeven multiples in line with expectations. The Stable Outlook indicates that Fitch expects the ratings will remain stable for the next one to two years.

Monthly payment rate (MPR), a measure of how quickly consumers are paying off their debt, has improved over the past year. Currently the 12-month average is 56.35%, up from 53.27% at the July 2015 distribution period.

Net charge-offs have decreased slightly in the past year. Currently, the 12-month average is 3.36%, down from 3.84% as of the July 2015 distribution period. As of the July 2016 distribution period, the 12-month average 60+ day delinquencies were 1.02% compared to the 12-month average of 1.12% at this point last year. Fitch expects charge-off levels to remain stable in the near term given the high quality of the credit card portfolio.

The current 12-month average gross yield for Eagle Credit Card Trust is 24.36% as of the July 2016 distribution period, compared with a 12-month average of 25.11% as of July 2015.

Fitch runs cashflow breakeven analysis by applying stress scenarios to three-, six-, 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-offs, and purchase rates.

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 Eagle Credit Card Trust.

Criteria Variation

Under the Counterparty Criteria for Structured Finance and Covered Bonds, dated July 18, 2016, Fitch looks to its own ratings in analyzing counterparty risk and assessing a counterparty's creditworthiness. The definition of permitted investments for Eagle allows for the possibility of using investments not rated by Fitch, which represents a criteria variation. Since the only available funds to invest are monthly collections, and the funds can only be invested for a short duration of one month given the payment frequency of the notes, Fitch doesn't believe such variation has a measurable impact upon the ratings assigned.

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. Increasing the default rate alone has the least impact on rating migration even in the most severe scenario of a 75% increase in defaults. The rating sensitivity to a decrease in purchase rate is more pronounced with a severe stress of a 100% decrease, and would lead to possible downgrades across all classes. The harshest scenario assumes both increased defaults and reduced MPR stresses occur simultaneously. Similarly, the ratings would only be downgraded under the moderate stress of a 50% increase in defaults and 25% reduction in MPR; however, the severe stress could lead to more drastic downgrades to all classes. To date, the transactions have exhibited strong performance with all performance metrics within Fitch's initial expectations.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

Fitch has affirmed the following ratings:

Eagle Credit Card Trust, Series 2013-1:

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

--Class B notes at 'Asf; Outlook Stable;

--Class C notes at 'BBBsf; Outlook Stable.

Eagle Credit Card Trust, Series 2015-1:

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

--Class B notes at 'Asf; Outlook Stable;

--Class C notes at 'BBBsf; Outlook Stable.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 18 Jul 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=884963

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 17 May 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=879815

Criteria for Servicing Continuity Risk in Structured Finance (pub. 17 Dec 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875586

Global Credit Card ABS Rating Criteria (pub. 21 Jul 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=885146

Global Structured Finance Rating Criteria (pub. 27 Jun 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=883130

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1010409

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1010409

Endorsement Policy

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

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160815006191/en/

Fitch Ratings
Primary Analyst
Harry Kohl, +1-212-908-0837
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Stephanie Lobaccaro, +1-212-908-0769
Analyst
or
Committee Chairperson
Herman Poon, +1-212-908-0847
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Banzai launches $1M public offering of Class A common stock
• Basel Medical Group regains Nasdaq minimum bid price compliance
• Nu-Med Plus acquires Avid Gold, targets Canadian gold properties