News Column

Fitch: U.S. Credit Card Delinquencies Will Hit New Low

July 17, 2014



NEW YORK--(BUSINESS WIRE)-- Prime credit card ABS collateral performance metrics will break records in the next reporting period, says Fitch Ratings. The slow but steady improvement in unemployment rates and the strong credits underlying the trusts are driving these metrics and creating powerful support for credit card ABS.

We expect Fitch's Prime Chargeoff Index to decline to a new low. We also believe the Prime 60+ Day Delinquency Index will reach an all-time low. We believe that the highly seasoned accounts and high borrower FICO scores of the obligors in these trusts are combining to push performance metrics to new records. We expect Fitch's Prime Gross Yield Index to rise modestly. It also rose slightly in the May reporting period but remains in a healthy range. We believe Fitch's Prime Monthly Payment Rate (MPR) Index will decline, but not at a rate that suggests risk to ABS pools.

Fitch's retail indices are also expected to improve, but not reach to new records. Fitch's Retail Chargeoff index should decrease a few basis points. We expect a small rise in Retail 60+ Day Delinquencies will indicate normalization from the records set in the May reporting period. Gross yield and MPR will decline slightly but also remain in range of their records.

Over the longer run we expect some normalization of most of these indices as some economic indicators have been improved inconsistently. Consumer spending climbed just 0.2% in May. It was nearly flat in April.

Actual results will be available in early August.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

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

Jenny Ovalle

Associate Director

U.S. Structured Finance

+1 212 908-0849

33 Whitehall Street

New York, NY

or

Rob Rowan

Senior Director

Fitch Wire

+1 212 908-9159

or

Media Relations

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com

Source: Fitch Ratings


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