Fitch Rates Chase Issuance Trust, Class A(2016-1); Outlook Stable
OREANDA-NEWS. Fitch Ratings rates Chase Issuance Trust, class A(2016-1) as follows:
--$1,500,000,000 class A(2016-1) '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(2015-7), with credit enhancement totalling 14% for class A.
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.