Market Overview

Fitch: U.S. Credit Card ABS Stable as Retail Sales Surge

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NEW YORK--(BUSINESS WIRE)--

U.S. credit card ABS continue to move in line with seasonal trends amid a recent boost in retail sales, according to the latest monthly index results from Fitch Ratings.

The Bureau of Labor Statistics reported that current four-week average jobless ticked up slightly this month to 279,000. Four-week average claims are slightly higher year-over-year (YOY) but remain in a healthy range. The Bureau of Economic Analysis reported that retail sales improved for the month of April, increasing 1.3% after shrinking 0.3% for the month of March. Excluding autos, retail sales grew a healthy 0.6%. Personal income increased 0.4% from last month, and consumer spending surged 1% for the largest monthly jump of the economic cycle since August 2009.

The measure of 60+ day delinquencies decreased for the second month in a row to 0.97%. The delinquency index is 3.97% 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 improved for the month of May, increasing to 13.78%. Fitch's Prime Credit Card Chargeoff Index decreased this month to 2.78%, after rising for two straight periods. The index is 1.07% lower YOY and current performance remains well below the 2009 peak of 11.52%.

Gross yield and MPR moved in line with seasonal trends for the month of April. Fitch's Prime Credit Card Gross Yield Index decreased this month to 18.87%, in line with seasonal trends. Fitch's Prime Credit Card Monthly Payment Rate (MPR) Index also fell, decreasing to 27.19%.

Fitch's Prime Credit Card Index was established in 1991 and tracks approximately $133.5 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 Credit Card 60+ Day Delinquency Index decreased for the third consecutive month to 2.31%. Fitch's MPR Index held steady this month, improving to 15.81 for the month of May. Three-Month Excess Spread Index improved as well, increasing 18.97%.

Meanwhile, Fitch's Retail Credit Card Gross Yield Index decreased to 28.81% for the second month in a row. Fitch's Retail Chargeoff Index increased to 7.20% for the month of May.

Fitch's Retail Credit Card Index was established in 2004 and tracks approximately $21.4 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, +1-212-908-0769
Analyst
33 Whitehall Street
New York, NY 10004
or
Herman C. Poon, +1-212-908-0847
Senior Director
or
Media Relations, New York
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

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