Market Overview

Fitch: U.S. Credit Card ABS Ends 1Q'16 Strong

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NEW YORK--(BUSINESS WIRE)--

U.S. credit card ABS continued to exhibit strong performance through the first quarter of 2016, according to the latest monthly index results from Fitch Ratings.

The labor market remained positive through the first quarter of 2016, which bodes well for U.S. credit card ABS. The Bureau of Labor Statistics reported that unemployment has remained steady at 4.9% for the month of February, decreasing 0.6 from February of 2015. For the week of March 19, four-week average jobless claims held steady, ticking up just 250 to 259,750. Consumer confidence also improved this month reaching 96.2 for the month of March, up from 92.2 in February.

Fitch's Prime Credit Card Gross Yield Index improved this month to 19.24%, in line with seasonal trends. Fitch's Prime Credit Card Three-Month Excess Spread Index held steady at 13.69% for the month of March. The index is 2.78% higher year-over-year (YOY). The measure of 60+ day delinquencies remained flat this month, decreasing one basis point to 1.05%. The delinquency index is 7.08% below prior year levels and well below the historical high of 4.54% reached in December 2009.

Fitch's Prime Credit Card Monthly Payment Rate (MPR) Index decreased in March, in line with seasonal trends, to 26.96%. Fitch's Prime Credit Card Chargeoff Index increased to 2.69%, the index is roughly 3.24% lower year-over-year (YOY) and well below the 2009 peak of 11.52%.

Fitch's Prime Credit Card Index was established in 1991 and tracks approximately $135.3 billion of prime credit card ABS backed by over $223.8 billion of principal receivables. The index is primarily composed of general purpose portfolios originated by institutions such as Bank of America, Citibank, Chase, Capital One, Discover, etc.

Fitch's Retail Credit Card Gross Yield Index improved to 30.82% for the month of March and registered a new historical high. Fitch's Retail Three-Month Excess Spread Index also improved this month, increasing 3.10% to 18.61%. Fitch's Retail Credit Card 60+ Day Delinquency Index decreased this month to 2.51%.

Fitch's Retail Chargeoff Index increased to 6.97% during this month with the index approximately 47% lower than its all-time high of 13.4% from March 2010. Fitch's MPR Index fell to 16.02% for the month of March. The index is 18 basis points higher than the prior year.

Fitch's Retail Credit Card Index was established in 2004 and tracks approximately $20.7 billion of retail or private label credit card ABS backed by over $28.5 billion of principal receivables. The index is primarily composed of private label portfolios originated and serviced by Citibank (South Dakota) N.A, Synchrony Financial (Formerly GE Capital Retail Bank), and Comenity Bank (formerly World Financial Network National Bank). More than 165 retailers are incorporated including Walmart, Sears, Home Depot, Federated, Lowes, J.C. Penney, L Brands, Bon Ton, and Dillard's, among others.

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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 ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Fitch Ratings, Inc.
Stephanie Lobaccaro
Analyst
+1-212-908-0769
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Herman C. Poon
Senior Director
+1-212-908-0847
or
Media Relations
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

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