Fitch: U.S. Credit Card ABS To Continue To Ride Bank M&A Wave in 2004.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 5, 2004 The recent cycle of bank consolidation will continue to have significant repercussions repercussions npl → répercussions fpl repercussions npl → Auswirkungen pl for the U.S. credit card asset-backed securities Asset-backed security A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate. asset-backed security A debt security collateralized by specific assets. (ABS) sector in 2004, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a special report by Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. . The mega-merger of J.P. Morgan Chase and Bank One Corporation last month creates the second largest credit card issuer in the country, and in the process may create a logjam log·jam n. 1. An immovable mass of floating logs crowded together. 2. A deadlock, as in negotiations; an impasse. Noun 1. among other prime credit card ABS players. 'While Citibank, as the largest credit card issuer, will be relatively unaffected by the J.P. Morgan-Bank One merger from a volume standpoint, competitively they may feel some heat as the top five credit card issuers fight for wallet space among prime borrowers,' said Richard Drason, Director, Fitch Ratings. 'While future consolidation and portfolio sales will likely be limited going forward, its effects will be more drastic on smaller issuers as they will have a difficult time competing.' Compounding problems for the beleaguered be·lea·guer tr.v. be·lea·guered, be·lea·guer·ing, be·lea·guers 1. To harass; beset: We are beleaguered by problems. 2. To surround with troops; besiege. subprime credit ABS sector is, ironically, its larger, more established prime counterparts such as Capital One and Household, who have delved into the subprime foray, forcing subprime participants down the credit spectrum. In the process, the vacuum left by the problems of the weaker subprime players has left the door open for stronger industry participants to seriously examine the risk/reward dynamics of the subprime segment. Despite their myriad of troubles, Fitch sees a light at the end of the tunnel, albeit a flickering one, for the subprime credit card ABS sector. Several subprime issuers have taken various corrective actions such as selling a portion of their portfolios, repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. their acquisition strategies, and changing their account retention and account management policies. 'These remedies by the subprime market to help troubleshoot future problems will help to improve overall credit performance in 2004, albeit marginally,' said Drason. 'Credit card ABS: 2003 Review and 2004 Outlook' is available on the Fitch Ratings web site at 'www.fitchratings.com'. |
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