DBRS Confirms Ratings of Master Credit Card Trust II.
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Release date- 19082019 - DBRS Limited (DBRS) confirmed the ratings on the following outstanding notes (the Notes) issued by Master Credit Card Trust II (the Trust).
The confirmation is part of DBRS's continued effort to provide timely credit rating opinions and increased transparency to market participants.
Credit Card Receivables-Backed Class A Notes, Series 2018-2 at AAA (sf)
Credit Card Receivables-Backed Class B Notes, Series 2018-2 at AA (sf)
Credit Card Receivables-Backed Class C Notes, Series 2018-2 at BBB (sf)
Credit Card Receivables-Backed Class A Notes, Series 2018-4 at AAA (sf)
Credit Card Receivables-Backed Class B Notes, Series 2018-4 at AA (sf)
Credit Card Receivables-Backed Class C Notes, Series 2018-4 at BBB (sf)
The rating confirmations are based on the following factors as of June 2019:
(1) The Notes benefit from excess spread, which has ranged between 19.3 and 21.1% in the last 12 months, and series-specific cash accounts that could build up to 5.0% of the initial or Maximum Allocated Amount, as applicable. For the AAA (sf)-rated notes and the AA (sf)-rated notes, credit enhancement is also available through subordination of at least 5.5% and 3.5%, respectively.
(2) The gross yield and principal payment rate have been stable, averaging 25.8% and 49.5%, respectively, over the last 12 months.
(3) After reaching a peak of 5.6% in February 2010, the one-month loss rate has gradually decreased, averaging 3.4% since then. As of June 2019, it has averaged 2.9% over the last 12 months and is among one of the lowest rates in Canada.
(4) The Trust pool is a well-diversified and seasoned portfolio composed of certain Mastercard credit card accounts originated, managed and designated by Bank of Montreal (BMO). BMO is the fourth-largest bank in Canada by assets and is rated AA/R-1 (high) with Stable trends by DBRS.
The performance and characteristics of the Trust pool and the Notes are available and updated each month in the Monthly Canadian ABS Report, which is available at www.dbrs.com. DBRS conducts monthly stress testing of each rated class of the Notes. The results indicate that simultaneous declines in yield and payment rates and increases in losses would not result in a failure of the Trust to repay the Notes on a timely basis. The severity of the tests applied is commensurate with the respective ratings of the Notes.
For more detailed information on the transaction structure, please refer to the related rating reports at www.dbrs.com.
All figures are in Canadian dollars unless otherwise noted.
The principal methodology is the Master Canadian Structured Finance Surveillance Methodology (June 2019), which can be found on dbrs.com under Methodologies & Criteria.
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at email@example.com.
The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.
For more information on this credit or on this industry, visit www.dbrs.com or contact us at firstname.lastname@example.org.
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Toronto, ON M5H 3M7 Canada
Date Issued Debt Rated Action Rating Trend Issued
US = USA Issued, NRSRO
CA = Canada Issued, NRSRO
EU = EU Issued, NRSRO
E = EU endorsed
Unsolicited Participating With Access
Unsolicited Participating Without Access
19-Aug-19 Credit Card Receivables-Backed Class A Notes, Series 2018-2 Confirmed AAA (sf) -- CA
19-Aug-19 Credit Card Receivables-Backed Class A Notes, Series 2018-4 Confirmed AAA (sf) -- CA
19-Aug-19 Credit Card Receivables-Backed Class B Notes, Series 2018-2 Confirmed AA (sf) -- CA
19-Aug-19 Credit Card Receivables-Backed Class B Notes, Series 2018-4 Confirmed AA (sf) -- CA
19-Aug-19 Credit Card Receivables-Backed Class C Notes, Series 2018-2 Confirmed BBB (sf) -- CA
19-Aug-19 Credit Card Receivables-Backed Class C Notes, Series 2018-4 Confirmed BBB (sf) -- CA
ALL DBRS RATINGS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AND ADDITIONAL INFORMATION REGARDING DBRS RATINGS, INCLUDING DEFINITIONS, POLICIES, RATING SCALES AND METHODOLOGIES.
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|Date:||Aug 20, 2019|
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