OREANDA-NEWS. Fitch Ratings has affirmed DCS Asset Funding Pte. Ltd. (DCS). The transaction is a securitisation of credit card and charge card receivables in Singapore originated by Diners Club (Singapore) Private Limited (Diners Singapore).

The rating actions are as follows (balance as of 8 June 2015):

SGD9m (outstanding balance out of SGD10m facility) working capital facility due September 2016 affirmed at 'A-sf'; Outlook Stable
SGD100m class A1 fixed-rate notes due September 2018 affirmed at 'A-sf'; Outlook Stable
SGD34.8m class A2 floating-rate notes due September 2018 affirmed at 'A-sf'; Outlook Stable
SGD10.6m class B floating-rate notes due September 2018 affirmed at 'BBBsf'; Outlook Stable
SGD8.9m class C floating-rate notes due September 2018 affirmed at 'BBsf'; Outlook Stable

KEY RATING DRIVERS
The affirmation reflects Fitch's view that the performance of the underlying assets has remained within expectations, and that credit enhancement (CE) is sufficient to support the current ratings. The transaction benefits from the strength of the Singapore economy.

Singapore's economy continues to perform well with the economy growing by 2.9% in 2014. Fitch forecasts real GDP growth at 3.2% in 2015 and 3% in 2016 due to its strong fundamentals, including a high-income economy, respect for the rule of law, high-quality core public institutions, and a business-friendly environment. The external finances, policy framework and investment climate are important buffers that insulate the economy during shocks; this is despite a high degree of vulnerability because it is a small and open economy. The unemployment rate has been fairly low, dropping to 1.8% in 1Q15. The combination of steady economic expansion and low unemployment rate should support the growing credit-card industry.

Delinquencies, defaults, payment rates and excess spreads of the transaction have been at stable levels since the last review. Payment rates have tracked upward in the last 12 months as the portion of charge cards increased, which tend to have higher payment rates. In terms of the excess spreads, the transaction's monthly net yields were in the range of 0.7%-1.8% during the period July 2014-May 2015 with an average of 1.4%, and the most recent three-month average annualised net yield reported at 1.54% (May 2015). No losses have been realised since closing.

According to the May 2015 servicer report, the three-month rolling average delinquency ratio was 0.92%, well below the transaction's 3% early amortisation trigger. At the same time, the three-month rolling default rate was 0.67%, well below the transaction's 2% early amortisation trigger. Fitch expects delinquencies and defaults to remain stable given the strength of Singapore economy.

RATING SENSITIVITIES
Fitch considers an upgrade to be unlikely over the next 12 months given there is a 14-month revolving period remaining.

The ratings on the working capital facility, and class A1 and A2 notes would be lowered by one notch to 'BBB+sf' if the base case default rate increases by 42%, keeping all other factors constant.

The rating on the class B notes would be lowered by one notch to 'BBB-sf' if the base case default rate increases by 18%, keeping all other factors constant.

The Class C notes' rating would be lowered by one notch to 'BB-sf' if the base case default rate increases by 4%, keep all the other factors constant.

DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action

DATA ADEQUACY
Fitch conducted a file review of 20 sample loan files focusing on the underwriting procedures conducted by Diners Singapore compared to Diners Singapore's credit policy at the time of underwriting. Fitch has checked the consistency and plausibility of the information and no material discrepancies were noted that would impact Fitch's rating analysis.

Initial Key Rating Drivers and Rating Sensitivities are described further in the New Issue report dated 6 September 2011.