OREANDA-NEWS. Fitch Ratings affirms the ratings of notes issued by The New Zealand Guardian Trust Company Limited in its capacity as trustee of the Q Card Trust. The transaction is a securitisation of New Zealand credit card receivables. The transaction is a revolving, asset backed note programme featuring a multi-class structure that will purchase eligible receivables from the seller on a revolving basis.

The rating actions are as follows:

NZD10.0m, VFN affirmed at 'AAAsf'; Outlook Stable

NZD89.5m, Series A 2014-1 affirmed at 'AAAsf'; Outlook Stable

NZD89.0m, Series A 2014-2 affirmed at 'AAAsf'; Outlook Stable

NZD58.0m, Series A 2014-3 affirmed at 'AAAsf'; Outlook Stable

NZD37.5m, Series B 2014-1 affirmed at 'AAsf'; Outlook Stable

NZD26.3m, Series C 2014-1 affirmed at 'Asf'; Outlook Stable

NZD18.8m, Series D 2014-1 affirmed at 'BBBsf'; Outlook Stable

NZD20.8m, Series E 2014-1 affirmed at 'BBsf'; Outlook Stable

NZD7.3m, Series F 2014-1 affirmed at 'Bsf'; Outlook Stable.

KEY RATING DRIVERS

The affirmation reflects Fitch's view that available credit enhancement is sufficient to support the notes' current rating and the agency's expectations of New Zealand's economic conditions. Credit quality and the performance of underlying receivables remain within the agency's expectations.

The transaction was modelled with a base case gross yield rate of 17.3%, a base case monthly payment rate (MPR) of 6.8% and a base case charge-off rate of 4.5%. The transaction has performed better than Fitch expected, with an average gross yield of 18.7%, an average MPR of 8.0% and an average charge-off rate of 2.6% during the year to June 2016.

Arrears greater than 120 days are low, at 3.98% at end-June 2016. Arrears greater than 120 days have been stable in the 3%-4% range, well below the excess spread trapping trigger of 8%.

Fitch has revised its steady case assumption for the charge-off rate to 4.5% from 5.0%, reflecting the better-than-historical performance of the asset in the trust since closing. The steady cases for the MPR and yield remain unchanged.

RATING SENSITIVITIES

The transaction can withstand multiples of the current charge-off rates, ranging from 5.56x in a 'AAAsf' scenario to 2.69x in a 'Bsf' scenario at the base case of the gross yield rate, MPR and revised charge-off rate.

The transaction can withstand higher multiples of the current charge-off rates, ranging from 13.47x in a 'AAAsf' scenario to 6.38x in a 'Bsf' scenario, at the average gross yield rate, MPR and charge-off rate during the year to June 2016.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

DATA ADEQUACY

Fitch conducted a review of 10 sample loan files, focusing on the underwriting procedures conducted by Fisher & Paykel Finance Limited compared with its credit policy at the time of underwriting. Fitch checked the consistency and plausibility of the information and no material discrepancies were noted that would affect Fitch's rating analysis.