July 17, 2013 / 7:03 AM / 4 years ago

RPT-Fitch affirms DCS Asset Funding

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July 17 (Reuters) - (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:

SGD6m working capital facility (WCF) due March 2014 affirmed at ‘A-sf’; Outlook Stable

SGD100m class A1 fixed-rate notes due March 2016 affirmed at ‘A-sf’, Outlook Stable

SGD42.1m class A2 floating-rate notes due March 2016 affirmed at ‘A-sf’, Outlook Stable

SGD11.2m class B floating-rate notes due March 2016 affirmed at ‘BBBsf’, Outlook Stable

SGD9.4m class C floating-rate notes due March 2016 affirmed at ‘BBsf’, Outlook Stable

Key Rating Drivers

The affirmations reflect the stable performance of the underlying assets which has been well within Fitch’s expectations, and adequate credit enhancement. The tight labor market in Singapore continues to support the underlying assets’ performance.

The three-month average delinquent ratio has been stable at 0.8% since October 2012, well below the transaction trigger of 3%. The three-month average default ratio was at 0.6% in June 2013, versus the transaction trigger of 2%. The three-month average payment rate has been around 18%-21% since July 2012 and was at 18.7% in June 2013, above the transaction trigger of 15%. The three-month average excess spread, after the absorption of defaults, has been healthy at an average of 0.9% in the past 12 months to June 2013.

Rating Sensitivities

Fitch considers the possibility of downgrade unlikely over the next 12 months. Base on Fitch’s model, assuming the average payment rate of 21.3% and the average annualised gross yield of 22.3% in the past 12 months to June 2013, the rating of each rated class would be able to withstand at least a 3.9x increase of the average annualised default rate to 30% 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.

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