Fitch Refines U.S. Credit Card ABS Criteria.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 -- The constant eye on consumer confidence, coupled with recent regulatory and industry developments, has prompted 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. to enhance its rating methodology for U.S. credit card asset-backed securities (ABS). While the key analytical considerations of Fitch's criteria remain in place, refinements include new USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). scenarios, and compensation for basis risk between the prime rate used to price most variable credit card lending and USD LIBOR. 'Fitch has also placed more focus on purchase rate and servicing fee levels in light of regulatory developments,' said Managing Director Claire Mezzanotte. Fitch has also validated the rating stresses used in its credit card ABS model following a study of more than 38,000 observations per performance variable from 123 trusts between 1989-2006. While Fitch's valuations remain consistent historically, Director Cynthia Ullrich said that, 'macroeconomic conditions have the potential to be more severe than those observed in the course of this analysis, so Fitch will conduct similar studies periodically going forward.' Additionally, the new criteria piece includes a discussion about the Fitch seller/servicer rating process and how it is being implemented for credit card ABS. Although Fitch has always evaluated the seller/servicer associated with credit card ABS, Managing Director Stephanie Petosa explained that 'the process has been formalized and will augment Fitch's credit card collateral analysis and cash flow modeling when determining 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 .' Fitch will discuss the refinements to its methodology in more detail during a conference call to be held on August 1, 2006 (separate press release to follow) 'U.S. Credit Card ABS Criteria and Validation Study' is available on the Fitch Ratings web site at 'www.fitchratings.com'. 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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