Fitch Affirms Discover Card ABS Following Spin-off Announcement.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- 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. affirms the current ratings on approximately $24.7 billion in outstanding credit cards 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 (Automatic Backup System) See backup program. ) issued by the Discover Card Master Trust I (DCMT DCMT Document DCMT Department of Combat Medic Training DCMT Diploma in Complete Mind Therapy DCMT Decrement DCMT Delay-Constrained Multicast Tree I). Transactions affected are listed below. This action comes as a result of Morgan Stanley's announcement of a planned spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of Discover Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. . This affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. is based on Fitch's belief that the stand alone Discover entity including Discover Bank will be structured to remain an investment grade rated institution, coupled with the quality of the receivables, collateral performance, available credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing , the transactions' legal and cash flow structures, and the servicing capabilities provided by Discover Bank. While details of its stand alone financial profile have yet to be finalized See finalization. and based on information provided, Fitch fitch: see polecat. anticipates the entity would remain at least investment grade. This is an important consideration from an ABS perspective, given the Discover Card proprietary payment network and structural features that benefit bondholders. With the available credit enhancement, the transactions are able to withstand considerable economic and credit stress scenarios consistent with the assigned ratings and still return full principal and timely interest to bondholders under early amortization. As of November 30, 2006, the DCMT I contained roughly $33.1 billion in principal receivables which supported approximately $24.7 billion in outstanding investor certificates. Collateral performance metrics Performance metrics are measures of an organizations activities and performance. Performance metrics should support a range of stakeholder needs from customers, shareholders to employees [1]. continue to be within Fitch's expectations. For the collection period ending November 30, 2006, yield, MPR (MultiProtocol Router) Software from Novell that provides router capabilities for its NetWare servers. It supports IPX, IP, AppleTalk and OSI protocols as well as all the major LANs and WANs. and charge offs registered 16.18%, 20.54%, and 4.70%, respectively. Excess spread, which can be used to gauge the overall health of the trust, has remained strong averaging 4.99% for the last 12-months. With respect to year-over-year performance, trust variables (yield, MPR, chargeoffs, 60+ delinquencies and three-month excess spread) continue to exhibit stability and perform similar to industry standards. For the 12-month period ended November 2006, yield, MPR, charge offs and three-month excess spread averaged 16.36%, 21.74%, 4.19% and 4.86% respectively. Today, Fitch affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the long- and short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. ratings of Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. ('AA-/F1+') but changed the Outlook to Negative from Stable. Fitch placed the ratings of Discover Bank ('AA-/F1+') on Rating Watch Negative. As seller/servicer, Discover Bank currently assumes the same long-term rating as Morgan Stanley. Morgan Stanley's stated intention, while subject to alteration, is to structure the divested company to be strong enough to issue debt on a stand alone basis. Fitch's Financial Institutions Group has indicated that Discover's stand alone financial profile would warrant the assignment of a lower, albeit investment grade, long-term debt Long-Term DebtLoans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. rating. Discover maintains a 'B/C' individual rating based on profitability, asset quality, funding and capital structure independent of Morgan Stanley. Future rating actions for Discover will depend on the funding and equity structure of the company. Fitch will also consider challenges such as scale, growth and product. Fitch will continue to monitor collateral pool performance and evaluate the impact to Discover Bank as a stand alone entity as it relates to DCMT I's outstanding ratings. For more information on the ratings of Morgan Stanley and Discover Bank please refer to the Fitch Ratings Press Release dated December 19, 2006 'Fitch Revises Morgan Stanley's Outlook to Negative; Places Discover on Watch Negative'. Fitch affirms the following Discover Card Master Trust I certificates: Series 1996-4 --$1,000,000,000 Class A asset-backed certificates at 'AAA'; --$52,632,000 Class B asset-backed certificates at 'A+'. Series 2000-4 --$650,000,000 Class A asset-backed certificates at 'AAA'; -- $34,211,000 Class B asset-backed certificates at 'A+'. Series 2000-7 --$850,000,000.00 Class A asset-backed certificates at 'AAA'; --$44,737,000.00 Class B asset-backed certificates at 'A+'. Series 2001-1 --$1,200,000,000 Class A asset-backed certificates at 'AAA'; --$63,158,000 Class B asset-backed certificates at 'A+'. Series 2002-2 --$750,000,000 Class A asset-backed certificates at 'AAA'; --$39,474,000 Class B asset-backed certificates at 'A+'. Series 2002-3 --$900,000,000 Class A asset-backed certificates at 'AAA'; --$47,369,000 Class B asset-backed certificates at 'A+'. Series 2003-1 Subseries 3 --$500,000,000 Class A asset-backed certificates at 'AAA'; --$26,316,000 Class B asset-backed certificates at 'A+'. Series 2003-2 --$1,000,000,000 Class A asset-backed certificates at 'AAA'; --$52,632,000 Class B asset-backed certificates at 'A+'. Series 2003-3 --$900,000,000 Class A asset-backed certificates at 'AAA'; --$47,369,000 Class B asset-backed certificates at 'A+'. Series 2003-4 Subseries 1 --$1,100,000,000 Class A asset-backed certificates at 'AAA'; --$57,895,000 Class B asset-backed certificates at 'A+'. Series 2003-4 Subseries 2 --$750,000,000 Class A asset-backed certificates at 'AAA'; --$39,474,000 Class B asset-backed certificates at 'A+'. Series 2004-1 --$1,250,000,000 Class A asset-backed certificates at 'AAA'; --$65,790,000 Class B asset-backed certificates at 'A+'. Series 2004-2 Subseries 1 --$1,250,000,000 Class A asset-backed certificates at 'AAA'; --$65,790,000 Class B asset-backed certificates at 'A+'. Series 2004-2 Subseries 2 --$500,000,000 Class A asset-backed certificates at 'AAA'; --$26,316,000 Class B asset-backed certificates at 'A+'. Series 2005-1 --$1,500,000,000 Class A asset-backed certificates at 'AAA'; --$78,948,000 Class B asset-backed certificates at 'A+'. Series 2005-2 --$800,000,000 Class A asset-backed certificates at 'AAA'; --$42,106,000 Class B asset-backed certificates at 'A+'. Series 2005-3 --$1,500,000,000 Class A asset-backed certificates at 'AAA'; --$78,948,000 Class B asset-backed certificates at 'A+'. Series 2005-4 Subseries 1 --$700,000,000 Class A asset-backed certificates at 'AAA'; --$36,843,000 Class B asset-backed certificates at 'A+'. Series 2005-4 Subseries 2 --$800,000,000 Class A asset-backed certificates at 'AAA'; --$42,106,000 Class B asset-backed certificates at 'A+'. Series 2006-1 Subseries 1 --$750,000,000 Class A asset-backed certificates at 'AAA'; --$39,474,000 Class B asset-backed certificates at 'A+'. Series 2006-1 Subseries 2 --$750,000,000 Class A asset-backed certificates at 'AAA'; --$39,474,000 Class B asset-backed certificates at 'A+'. Series 2006-2 Subseries 1 --$600,000,000 Class A asset-backed certificates at 'AAA'. --$31,579,000 Class B asset-backed certificates at 'A+'. Series 2006-2 Subseries 2 --$600,000,000 Class A asset-backed certificates at 'AAA'; --$31,579,000 Class B asset-backed certificates at 'A+'. Series 2006-2 Subseries 3 --$320,000,000 Class A asset-backed certificates at 'AAA'; --$16,843,000 Class B asset-backed certificates at 'A+'. Series 2006-3 --$500,000,000 Class A asset-backed certificates at 'AAA'; --$26,316,000 Class B asset-backed certificates at 'A+'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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