DBRS Confirms Eagle Credit Card Trust, Series 2006-1

As part of DBRS’s continued effort to provide market participants with updates on an annual basis, DBRS has today confirmed the ratings on the following notes (collectively, the Notes) issued by Eagle Credit Card Trust (the Trust), in conjunction with the recent issuance of Series 2010-1 and 2010-2 on December 15, 2010:

– AAA (sf) for Credit Card Receivables-Backed Class A Notes, Series 2006-1
– A (sf) for Credit Card Receivables-Backed Class B Notes, Series 2006-1
– BBB (sf) for Credit Card Receivables-Backed Class C Notes, Series 2006-1

The ratings are based on the following factors:

(1) The Notes entered the accumulation period on December 1, 2010, and will accumulate $166.67 million each month over the next three months. Given the high monthly payment rates consistently above 40%, it is expected that the entire principal amount will be fully accumulated by the expected payment date of March 17, 2011.

(2) For the Class A Notes, credit enhancement is 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.

(3) For the Class B Notes, credit enhancement is 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.

(4) For the Class C Notes, credit enhancement is available through excess spread and the reserve account.

(5) Loss rates and delinquencies are currently declining and stabilizing after substantial increases over the past three years. A gradual increase in yield during the same period also helped mitigate the impact of the increase in loss rates.

(6) 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 to repay the Notes on a timely basis. The severity of the tests applied is commensurate with the respective ratings of the Notes.

The receivables in the Trust are originated and managed by President’s Choice Bank, a wholly owned subsidiary of Loblaw Companies Limited.

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