Fitch to Rate Chase Issuance Trust, Class A(2016-5); Presale Issued

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has issued a presale report for Chase Issuance Trust, class A(2016-5). Fitch expects to rate the transaction as follows:

--$500,000,000 class A(2016-5) 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

Fitch's ratings are based on the underlying receivables pool, available credit enhancement, Chase Bank USA's underwriting and servicing capabilities, and the transaction's legal and cash flow structures, which employ early redemption triggers.

The transaction structure is the same as class A(2016-4), with credit enhancement totalling 14% for class A.

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.

Increasing defaults alone has no impact on rating migration even in the most severe scenario of a 75% increase in defaults. The rating sensitivity to a reduction in purchase rate is more pronounced with a moderate stress, of a 75% reduction, leading to possible downgrades across all classes. The harshest scenario assumes that an increase in defaults and reduction in MPR occur simultaneously. Similarly, the ratings would only be downgraded under the severe stress of 75% increase in defaults and 35% reduction in MPR.

To date, the transactions have exhibited strong performance with all performance metrics within Fitch's initial expectations. For further discussion of our sensitivity analysis, please see the related presale report. For a discussion of the representations, warranties, and enforcement mechanisms available to investors in this transaction please see the related presale appendix.

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

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

Related Research

Chase Issuance Trust, Class A (2016-5) (US ABS)https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=886125

Chase Issuance Trust, Class A (2016-5) -- Appendixhttps://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=886129

Additional Disclosures

Dodd-Frank Rating Information Disclosure Formhttps://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1009986

Solicitation Statushttps://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1009986

Endorsement Policyhttps://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/20160804006304/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:
John Alberici, +1-212-908-0370
Associate Director
or
Committee Chairperson:
Herman Poon, +1-212-908-0847
Senior Director
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
New York
[email protected]
or
Media Relations:
Hannah James, +1-646-582-4947
New York
[email protected]

Source: Fitch Ratings

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