S&P: Chase Issuance Trust $1.1 Billion Class A(2016-7) Notes Assigned 'AAA (sf)' Rating
The note issuance is an asset-backed securities transaction backed by credit card receivables that are generated by revolving credit card accounts owned by Chase Bank USA N. A. or one of its affiliates.
The rating reflects: The 14.0% credit support that the subordinated class B and C notes provide, which we believe is sufficient to withstand the simultaneous stresses we apply to our 5.5% base-case loss rate, 20.0% base-case payment rate, 15.0% base-case yield, and 3.0% purchase rate assumptions for the notes. In addition, we used stressed excess spread and note interest rate assumptions to assess whether, in our opinion, sufficient credit support is available for the notes. We base all of the above stress assumptions on our current criteria and assumptions (for more information, see "General Methodology And Assumptions For Rating U. S. ABS Credit Card Securitizations," published April 19, 2010, and "Revised Purchase And Payment Rate Assumptions For U. S. Credit Card ABS," published Sept. 14, 2011).Our view that the 5% minimum seller's interest is sufficient in our stress scenarios to absorb dilutions, or noncash reductions, in the receivables. Our expectation that under a moderate ('BBB') stress scenario, all else being equal, our rating on the class A(2016-7) notes will remain within one rating category of the assigned 'AAA (sf)' rating during the next 12 months, which is in line with our credit stability criteria (see "Methodology: Credit Stability Criteria," published May 3, 2010).The inherent credit risk in the collateral loan pool based on our economic forecast, the master trust portfolio's historical performance, the collateral characteristics, and vintage performance data. Chase Bank USA N. A.'s (A+/Stable/A-1) servicing experience and our opinion of its account origination, underwriting, account management, collections, and general operational practices. Our expectation for timely interest and ultimate principal payments by the legal final maturity date based on stressed cash flow modeling scenarios using assumptions that are commensurate with the assigned 'AAA (sf)' rating. Our view of the notes' underlying payment structure, cash flow mechanics, and legal structure.
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