DBRS Finalizes Ratings of AAA (sf) and “A” (sf) for Glacier Credit Card Trust, Series 2010-1

DBRS has today finalized the ratings for the Credit Card Asset-Backed Notes, Series 2010-1 issued by Glacier Credit Card Trust (the Trust) as indicated below:

– AAA (sf) to the $250,000,000 Credit Card Asset-Backed Senior Notes, Series 2010-1 (the Senior Notes)
– “A” (sf) to the $14,551,000 Credit Card Asset-Backed Subordinated Notes, Series 2010-1 (the Subordinated Notes; collectively, with the Senior Notes, the Notes)

The Senior Notes have a coupon of 3.158% and the Subordinated Notes have a coupon of 4.128%. The Notes pay interest semi-annually and have an Expected Repayment Date of November 20, 2015. The ratings are based on the following factors:

(1) For the Senior Notes, credit enhancement is available through (i) subordination, providing preferential access to cash flows relative to the Subordinated Notes (5.5% of the Initial Invested Amount), (ii) overcollateralization (the Enhancement Amount), consisting of entitlement to additional receivables (5.5% of the Initial Invested Amount) and (iii) excess spread.

(2) For the Subordinated Notes, credit enhancement is available through (i) the Enhancement Amount of 5.5% and (ii) excess spread.

(3) Over the past three years, three-month average payment rates remained stable at around 25%. Although three-month average loss rates increased from 5.7% to a peak of 8.3% during the same period, loss rates and delinquencies are now declining and stabilizing. An increase in yield during this period also helped mitigate the impact of the increase in loss rates.

(4) The custodial pool is a well-diversified and seasoned portfolio. The number of accounts in the selected pool exceeded 4.5 million as of September 30, 2010.

DBRS’s stress testing indicates that simultaneous declines in yield and payment rates and increases in losses would not result in a failure of the Trust in repaying the Notes on a timely basis. The severity of the tests applied is commensurate with the respective ratings of the Notes.

The Trust has incorporated DBRS’s partial commingling policy, released on June 23, 2009. DBRS believes that the partial commingling provisions mitigate potential losses to the Noteholders and also provide clarification to market participants with respect to the collection process if the seller/servicer is financially weakened.

The net proceeds from the sale of the Notes were used by the Trust to finance the purchase of an undivided co-ownership interest (Series 2010-1) in the credit card receivables originated and managed by Canadian Tire Bank. Canadian Tire Bank is an indirect, wholly owned subsidiary of Canadian Tire Corporation, which is one of the largest retailers in Canada.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is DBRS Criteria for Canadian Credit Card Securitization, which can be found on our website under Methodologies.

MEDIA CONTACT:
Caroline Creighton
Senior Vice President,
Communications
Tel. +1 416 597 7317
ccreighton@dbrs.com