TEXT-S&P comments on Canadian consumer-related ABS ratings

Tue Dec 18, 2012 4:33pm EST
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Dec 18 - Standard & Poor's Ratings Services today said that its ratings on
outstanding Canadian-related asset-backed securities (ABS)--specifically auto
loan and credit card ABS--are mostly unaffected by the recent rating actions it
took on various Canadian financial institutions. Standard & Poor's maintains
ratings on more than C$10.5 billion of outstanding Canadian auto loan and credit
card ABS transactions.
When rating credit card securitizations, we consider the originator's ability 
to continue generating and transferring receivables to the trust (purchase 
rate assumption), which is partly reflected in the unsecured credit rating on 
the originator. However, we affirmed the 'AA-/A-1+' ratings on Royal Bank of 
Canada (originator for Golden Credit Card Trust) and Toronto-Dominion Bank 
(originator for Gloucester Credit Card Trust). In addition, although we did 
downgrade National Bank of Canada (originator for Canadian Credit Card Trust) 
by a notch to 'A-/A-2', the rating remained in the same rating category. As a 
result, there is no impact on our purchase rate assumptions or our Canadian 
credit card ABS ratings.

The downgrade of National Bank of Canada ('A-/A-2') triggered under the 
Canadian Credit Card Trust documents certain replacements requirements within 
a specified remedy period necessary to maintain 'AAA' ratings under our 
counterparty criteria as they relate to commingling risk and bank accounts. 
However, National Bank of Canada stated its intention to amend the transaction 
documents within a specified remedy period. Standard & Poor's will review any 
proposed amendments to ensure they are consistent with our counterparty 
criteria for 'AAA' rated securities.