TEXT-S&P rates Discover Card Execution Note Trust class B(2012-3)
OVERVIEW -- Discover Card Execution Note Trust's class B(2012-3) note issuance is an ABS securitization backed by undivided investor interest in Discover Card Master Trust I's series 2007-CC collateral certificate, which, in turn, is collateralized by receivables generated from designated Discover Card accounts. -- We assigned our preliminary 'AA+ (sf)' rating to the class B(2012-3) notes. -- The preliminary 'AA+ (sf)' rating reflects our view of the transaction's credit support, timely interest and principal payments, and payment and legal structures, among other factors. NEW YORK (Standard & Poor's) Nov. 12, 2012--Standard & Poor's Ratings Services today assigned its preliminary 'AA+ (sf)' rating to Discover Card Execution Note Trust's $250 million class B(2012-3) DiscoverSeries notes. The note issuance is an asset-backed securities transaction backed by undivided investor interest in Discover Card Master Trust I's series 2007-CC collateral certificate, which, in turn, is collateralized by receivables generated from designated Discover Card accounts. The preliminary rating is based on information as of Nov. 12, 2012. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary 'AA+ (sf)' rating reflects our view of: -- The 19.0% credit support provided by the subordinated class B, C, and D notes, which we believe is likely sufficient to withstand the simultaneous stresses we apply to our 5.5%-7.5% base-case loss rate, 16.5%-18.5% base-case payment rate, 15.0%-17.0% base-case yield, and 1.5%-3.5% purchase rate assumptions for the notes. In addition, we used stressed excess spread and note interest rate assumptions to assess whether, in our opinion, sufficient credit support is available for the notes. All of the stress assumptions outlined above are based on our current criteria and assumptions (for more information, see "General Methodology And AssumptionsRELATED CRITERIA AND RESEARCH Related Criteria -- Counterparty Risk Framework Methodology And Assumptions, May 31, 2012 -- Revised Purchase And Payment Rate Assumptions For U.S. Credit Card ABS, Sept. 14, 2011 -- Principles Of Credit Ratings, Feb. 16, 2011 -- Methodology: Credit Stability Criteria, May 3, 2010 -- General Methodology And Assumptions For Rating U.S. ABS Credit Card Securitizations, April 19, 2010 Related Research -- Presale: Discover Card Execution Note Trust - Class B(2012-3), Nov. 12, 2012 -- U.S. Economic Forecast: Long Time No See, Oct. 15, 2012 -- U.S. Credit Card Quality Index: Overall Improvements Are Expected To Continue Throughout 2012, Oct. 1, 2012 -- Industry Economic And Ratings Outlook: U.S. Credit Card ABS Fundamentals Remain Strong And Charge-Offs Are Low, Aug. 9, 2012 -- Global Structured Finance Scenario And Sensitivity Analysis: The Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011 -- Discover Financial Services Inc., Oct. 18, 2011 -- Bulletin: Discover Financial Services Inc. Ratings Unchanged Following First-Quarter Results, March 23, 2011 -- Ratings On 950 North America Structured Finance Tranches On Watch Neg After Counterparty Criteria Update, Jan. 18, 2011
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