RPT-Fitch Affirms HyundaiCard Funding II at 'AAAsf'; Outlook Stable

Thu Apr 17, 2014 4:15am EDT

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April 17 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has affirmed the ratings on the floating-rate bonds from HyundaiCard Funding Limited II (HyundaiCard Funding II). This is a transaction backed by credit card receivables in South Korea originated by Hyundai Card Co., Ltd. (HCC; BBB/Stable/F3).

The rating action is as follows: USD133.3m floating-rate bonds due April 2015 affirmed at 'AAAsf'; Outlook Stable

KEY RATING DRIVERS

According to HCC, the scheduled bond payments on the expected maturity date of 22 April 2014 are fully cash collateralized. This and fact that the performance of the underlying assets remained well within expectations drove the affirmation of the notes. Credit enhancement increased to 50% as at end-February 2014 from 25% at the closing in January 2011 as the transaction has been in a controlled amortisation period since October 2013. The controlled amortisation period will end on 22 April 2014. Delinquencies have been low at an average of 1.7% and payment rates have remained stable at an average 64.2% since closing while the net yield has increased as the transaction deleveraged.

According to the February 2014 monthly servicer report, the transaction's performance is not in breach of early amortisation thresholds. The three-month rolling average delinquency ratio was 0.4%, well below the transaction's 3% trigger. The three-month average annualised net yield as at end-February 2014 was at 20.1%, comfortably higher than the trigger level of 0%. The three-month average payment rate was 60.3%, well above the trigger of 45.0%.

RATING SENSITIVITIES

Fitch believes it is unlikely that a downgrade will be considered for this transaction, given the transaction's net cash position to pay out the bonds in full, the short period to scheduled maturity and its sound performance. The initial key rating drivers and rating sensitivities are explained in the new issue report of each transaction, available at www.fitchratings.com.

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