DBRS Assigns Provisional Ratings of AAA (sf), A (sf) and BBB (sf) to Eagle Credit Card Trust, Series 2010-1 and Series 2010-2

DBRS has today assigned provisional ratings to the Credit Card Receivables-Backed Notes, Series 2010-1 and Credit Card Receivables-Backed Notes, Series 2010-2 to be issued by Eagle Credit Card Trust (the Trust) as indicated below:

– AAA (sf) to the Credit Card Receivables-Backed Class A Notes, Series 2010-1,
– AAA (sf) to the Credit Card Receivables-Backed Class A Notes, Series 2010-2 (collectively with Series 2010-1, the Class A Notes);
– A (sf) to the Credit Card Receivables-Backed Class B Notes, Series 2010-1,
– A (sf) to the Credit Card Receivables-Backed Class B Notes, Series 2010-2 (collectively with Series 2010-1, the Class B Notes);
– BBB (sf) to the Credit Card Receivables-Backed Class C Notes, Series 2010-1,
– BBB (sf) to the Credit Card Receivables-Backed Class C Notes, Series 2010-2 (collectively with Series 2010-1, the Class C Notes; collectively with the Class A Notes and Class B Notes, the Notes).

Finalization of the ratings is contingent upon receipt of final documents conforming to information received by DBRS.

The ratings are based on the following factors:

(1) For the Class A Notes, credit enhancement will be available through (i) subordination of 7%, providing preferential access to cash flows relative to the Class B and Class C Notes, (ii) excess spread and (iii) the reserve account, which could build up to 5% of the invested amount.

(2) For the Class B Notes, credit enhancement will be available through (i) subordination of 3.5%, providing preferential access to cash flows relative to the Class C Notes, (ii) excess spread and (iii) the reserve account.

(3) For the Class C Notes, credit enhancement will be available through excess spread and the reserve account.

(4) Payment rates consistently above 40% are among the highest in Canada. While three-month average loss rates increased from 3.0% to a peak of 7.0% over the past three years, loss rates and delinquencies are currently declining and stabilizing. A gradual increase in yield during the same period also helped mitigate the impact of the increase in loss rates.

(5) The custodial pool is a well-diversified portfolio of prime quality obligors.

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.

DBRS’s partial commingling policy, released on June 23, 2009, has been incorporated for the Notes. 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.

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

The applicable methodologies are DBRS Criteria for Canadian Credit Card Securitization and Legal Criteria for Canadian Structured Finance, which can be found on our website under Methodologies.

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