(Repeat for additional subscribers)
July 9 (The following statement was released by the rating agency)
Fitch Ratings has affirmed DCS Asset Funding Pte Ltd.
(DCS) - a securitisation of credit card and charge card receivables in Singapore
originated by Diners Club (Singapore) Private Limited (Diners Singapore). The
rating actions are as follows:
SGD10m working capital facility due Sept 2016 affirmed at 'A-sf'; Outlook Stable
SGD100m class A1 fixed-rate notes due Sept 2018 affirmed at 'A-sf', Outlook
SGD35.5m class A2 floating-rate notes due Sept 2018 affirmed at 'A-sf', Outlook
SGD10.7m class B floating-rate notes due Sept 2018 affirmed at 'BBBsf', Outlook
SGD8.9m class C floating-rate notes due Sept 2018 affirmed at 'BBsf', Outlook
KEY RATING DRIVERS
The affirmation reflects Fitch's view that the performance of the underlying
assets has remained well within expectations, and that credit enhancement (CE)
is sufficient to support the current ratings. The transaction benefits from the
continued strength of the Singapore economy and the tight labour market.
Monthly payment rates have been stable at above 20%, and the default ratio has
been tracking consistently below 1.0%.
Fitch expects delinquencies to remain stable as the portfolio's product mix is
expected to remain consistent going forward. The credit card and charge card
products comprise 87.5% and 12.5% of the portfolio, respectively, as of end-May
2014. The eligibility criteria Fitch uses to assess the underlying pool and the
agency's conservative base-case assumptions show the transaction has sufficient
protection for the current rating. This is reflected in the Stable Outlook.
According to the June 2014 servicer report, the three-month rolling average
delinquency ratio was 0.8%, well below the transaction's 3% early amortisation
The three-month average monthly net yield was 1.6%. The three-month average
payment rate was 20.6%, above the transaction's early amortisation trigger of
Fitch considers the possibility of upgrade unlikely over the next 12 months.
Based on Fitch's model, assuming the average payment rate of 20.6% and the
average annualised gross yield of 23.3% in the past 12 months to June 2014, the
ratings on the working capital facility, Class A1 and A2 notes would have been
able to withstand at least a 2.5x increase of the average annualised default
rate to 25.0% over the same period.
The ratings on the Class B and C notes would be able to withstand increases in
the average annualised default rate of at least 2.7x and 2.9x, respectively,
over the same period.
The initial key rating drivers and rating sensitivities are explained in the New
Issue report dated 6 September 2011, available at www.fitchratings.com.