DBRS Confirms Ratings of Golden Credit Card Trust

DBRS Limited (DBRS) 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 Floating Rate Notes, Series 2014-2
-- A (high) (sf) on the Credit Card Receivables-Backed Subordinated Notes, Series 2014-2

-- AAA (sf) on the Credit Card Receivables-Backed Class A Notes, Series 2015-2
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2015-2
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2015-2

-- AAA (sf) on the Credit Card Receivables-Backed Class A Floating Rate Notes, Series 2016-3
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2016-3
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2016-3

-- AAA (sf) on the Credit Card Receivables-Backed Class A Floating Rate Notes, Series 2016-4
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2016-4
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2016-4

-- AAA (sf) on the Credit Card Receivables-Backed Class A Notes, Series 2016-5
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2016-5
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2016-5

-- AAA (sf) on the Credit Card Receivables-Backed Class A Floating Rate Notes, Series 2017-1
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2017-1
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2017-1

-- AAA (sf) on the Credit Card Receivables-Backed Class A Notes, Series 2017-2
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2017-2
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2017-2

-- AAA (sf) on the Credit Card Receivables-Backed Class A Floating Rate Notes, Series 2017-4
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2017-4
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2017-4

-- AAA (sf) on the Credit Card Receivables-Backed Class A Notes, Series 2018-1
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2018-1
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2018-1

-- AAA (sf) on the Credit Card Receivables-Backed Class A Notes, Series 2018-2
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2018-2
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2018-2

-- AAA (sf) on the Credit Card Receivables-Backed Class A Floating Rate Notes, Series 2018-3
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2018-3
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2018-3

-- AAA (sf) on the Credit Card Receivables-Backed Class A Notes, Series 2018-4
-- A (high) (sf) on the Credit Card Receivables-Backed Class B Notes, Series 2018-4
-- BBB (high) (sf) on the Credit Card Receivables-Backed Class C Notes, Series 2018-4

-- BBB (high) (sf) on the Credit Card Receivables-Backed Series Enhancement Notes

The rating confirmations are based on the following factors:

(1) For the AAA (sf)-rated notes, credit enhancement is available through subordination of 6.5%, excess spread, which currently ranges between 17.3% and 19.5% for the Notes (three-month average), and series-specific cash accounts, which could build up to 5.0% of the Initial Invested Amount.

(2) For the A (high) (sf)-rated notes, credit enhancement is available through subordination of 2.0%, excess spread and series-specific cash accounts. For the BBB (high) (sf)-rated 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 economic downturn. The principal payment rate remains among one of the highest in Canada and as of August 2018 has averaged 48.3% over the last 12-months.

(4) The one-month loss rate also remains low. While the rate peaked at 4.2% in March 2010, it has since been steadily decreasing and stood at 2.3% at the end of August 2018. In addition, gross yield has averaged around 21.8% after the inclusion of interchange in October 2009.

(5) 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 market capitalization and is rated AA with a Positive Trend and R-1 (high) with a Stable trend 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 available at www.dbrs.com. 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:
All figures are in Canadian dollars unless otherwise noted

The principal methodologies are Master Canadian Structured Finance Surveillance (May 2018), Rating Canadian Credit Card and Personal Line of Credit Securitizations (November 2017), Derivatives Criteria for Canadian Structured Finance (July 2018) and Legal Criteria for Canadian Structured Finance (July 2018) which are available on dbrs.com under Methodologies.

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 under Related Documents or by contacting us at info@dbrs.com.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the rating process.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.