Market Overview

Fitch: U.S. Credit Card ABS Remains Stable on Most Fronts

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NEW YORK--(BUSINESS WIRE)--

U.S. credit card ABS continues on a relatively steady trend, though chargeoffs show signs of ticking up, according to the latest monthly index results from Fitch Ratings.

The labor market remained on solid ground after the first quarter of 2016. Current four-week average jobless claims are 256,000, the lowest in 42 years, down 4,750 in the week and approximately 10,000 lower than last month. The Bureau of Labor Statistics reported that unemployment was little changed at 5% for the month of March, up slightly from 4.9% in February. However, GDP grew at its weakest pace in two years, posting 0.5% growth on an annualized basis, though growth in the first quarter has been slower for the past few years.

Fitch's Prime Credit Card Gross Yield Index improved this month to 19.37%, in line with seasonal trends. Fitch's Prime Credit Card Monthly Payment Rate (MPR) Index rebounded in April, increasing to 28.56%. The measure of 60+ day delinquencies decreased five basis points to 1.00%. The delinquency index is 3.85% below prior year levels and well below the historical high of 4.54% reached in December 2009. Fitch's Prime Credit Card Three-Month Excess Spread Index decreased slightly to 13.51% for the month of April.

Fitch's Prime Credit Card Chargeoff Index increased further this month for the second straight period to 2.86% while approaching a 20-month high. However, current performance remains 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 $217.7 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 Chargeoff Index decreased to 6.88% during this month with the index approximately 49% lower than its all-time high of 13.4% from March 2010. Fitch's Retail Credit Card 60+ Day Delinquency Index decreased for the second consecutive month to 2.39%. Three-Month Excess Spread Index improved as well, increasing 1.72% to 18.93%.

Meanwhile, Fitch's Retail Credit Card Gross Yield Index decreased to 28.84% for the month of April after registering a new historical high of 30.82% last month. Fitch's MPR Index fell for the third month in a row to 15.79% for the month of April. The index is 2.27% higher than the prior year.

Fitch's Retail Credit Card Index was established in 2004 and tracks approximately $20.2 billion of retail or private label credit card ABS backed by over $28.1 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
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:
Alyssa Castelli, +1-212-908-0540
alyssa.castelli@fitchratings.com
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

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