DBRS Confirms the Ratings of Golden Credit Card Trust

DBRS has today confirmed the ratings of all the outstanding notes (the Notes) issued by Golden Credit Card Trust (the Trust). The confirmation is part of DBRS’s continued effort to provide timely credit rating opinions and increased transparency to market participants.

-- AAA (sf) on the Credit Card Receivables-Backed Senior Notes, Series 2010-1
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2010-1
-- AAA (sf) on the Credit Card Receivables-Backed Floating Rate Senior Notes, Series 2010-2
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2010-2
-- AAA (sf) on the Credit Card Receivables-Backed Senior Notes, Series 2011-1
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2011-1
-- AAA (sf) on the Credit Card Receivables-Backed Senior Floating Rate Notes, Series 2012-1
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2012-1
-- AAA (sf) on the Credit Card Receivables-Backed Senior Notes, Series 2012-2
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2012-2
-- AAA (sf) on the Credit Card Receivables-Backed Senior Floating Rate Notes, Series 2012-3
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2012-3
-- AAA (sf) on the Credit Card Receivables-Backed Senior Notes, Series 2012-4
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2012-4
-- AAA (sf ) on the Credit Card Receivables-Backed Senior Notes, Series 2012-5
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2012-5
-- AAA (sf) on the Credit Card Receivables-Backed Senior Floating Rate Notes, Series 2012-6
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2012-6
-- AAA (sf) on the Credit Card Receivables-Backed Senior Floating Rate Notes, Series 2013-1
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2013-1
-- AAA (sf) on the Credit Card Receivables-Backed Senior Floating Rate Notes, Series 2013-2
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2013-2
-- AAA (sf) on the Credit Card Receivables-Backed Senior Floating Rate Notes, Series 2014-1
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2014-1
-- AAA (sf) on the Credit Card Receivables-Backed Senior Floating Rate Notes, Series 2014-2
-- BBB (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2014-2

The rating confirmation is based on the following factors:

(1) For the AAA (sf)-rated senior notes, credit enhancement is available through subordination of 4.5%, excess spread, which is currently in the range of 17.2% to 19.1%, and series-specific cash accounts, which could build up to 5% of the Initial Invested Amount.

(2) For the BBB (high) (sf)-rated subordinated notes, credit enhancement is composed of excess spread and series-specific cash accounts.

(3) The performance of the Trust’s portfolio has been strong since inception and has demonstrated resilience throughout the recent economic downturn. The payment rate remains among the highest in Canada, averaging 48.9% over the last year, and the average loss rate remains among the lowest. While the one-month loss rate peaked at 4.2% in March 2010, it has since been steadily decreasing and stood at 2.0% at the end of September 2014. In addition, gross yield has averaged around 21.0% after the inclusion of interchange in October 2009.

(4) The custodial pool is a well-diversified and seasoned portfolio, composed of certain credit card accounts originated, managed and designated by Royal Bank of Canada (RBC). RBC is one of the largest financial institutions in Canada by assets and is rated AA and R-1 (high) by DBRS.

The performance and characteristics of the Trust pool and the Notes are available and updated each month in the Monthly Canadian ABS Report (see Related Research on the right of the screen). DBRS conducts monthly stress-testing of each rated class of the Notes and the results indicate 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.

For more detailed information on the transaction structure, please refer to the rating reports of the Trust at www.dbrs.com

Notes:
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodologies are Canadian Structured Finance Surveillance Methodology, DBRS Criteria for Canadian Credit Card Securitization, Derivatives Criteria for Canadian Structured Finance, and Legal Criteria for Canadian Structured Finance, which are available on our website under Methodologies.