Fitch Rates Golden Credit Card Trust, Series 2016-3 and 2016-4

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has assigned the following ratings to Golden Credit Card Trust, series 2016-3 and 2016-4 asset-backed notes:

Golden Credit Card Trust Series 2016-3

--USD400,000,000 class A 'AAAsf'; Outlook Stable;

--CAD24,401,069 class B 'Asf'; Outlook Stable;

--CAD10,844,920 class C 'BBB+sf'; Outlook Stable.

Golden Credit Card Trust Series 2016-4

--USD400,000,000 class A 'AAAsf'; Outlook Stable;

--CAD24,401,069 class B 'Asf'; Outlook Stable;

--CAD10,844,920 class C '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 April 2016, Golden Credit Card Trust's (GCCT) collateral performance metrics were in line with the Fitch indices. Charge-offs, 60+ day delinquencies and monthly payment rate have remained relatively stable over the past 24 months. Gross yield has been robust over the past two years.

Adequate Credit Enhancement (CE): The class A notes of series 2016-3 and 2016-4 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% CE 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 affect the ratings.

DUE DILIGENCE USAGE

No third-party due diligence was provided or reviewed in relation to this rating action.

Additional information is available at www.fitchratings.com

Applicable Criteria

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

Exposure Draft: Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 Apr 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=878412

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 2016-3 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=880257

Golden Credit Card Trust, Series 2016-4 -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=880294

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1003525

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1003525

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/20160428006778/en/

Fitch Ratings
Primary Analyst
Jenny Ovalle
Associate Director
+1-212-908-0849
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Harry Kohl
Director
+1-212-908-0837
or
Committee Chairperson
Herman Poon
Senior Director
+1-212-908-0847
or
Media Relations:
Alyssa Castelli, +1-212-908-0540
[email protected]
Elizabeth Fogerty, +1-212-908-0526
[email protected]

Source: Fitch Ratings

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