Fitch Rates American Express Issuance Trust II, Series 2013-1
NEW YORK -- March 21, 2013
Fitch Ratings assigns the following ratings to American Express Issuance Trust
II's asset-backed notes, series 2013-1:
--$500,000,000 class A floating-rate 'AAAsf'; Outlook Stable;
--$22,222,000 class B floating-rate 'A+sf'; Outlook Stable;
--$33,334,000 class C floating-rate 'BBBsf'; Outlook Stable.
KEY RATING DRIVERS:
Fitch's ratings are based on the underlying receivables pool, available credit
enhancement, American Express Centurion Bank (AECB) and American Express Bank,
FSB's (FSB) underwriting, American Express Travel Related Services Company,
Inc.'s (TRS) servicing capabilities, and the transaction's legal and cash flow
structures, which employ early amortization triggers.
Fitch models three different scenarios when evaluating the rating sensitivity
compared to expected performance for credit card asset-backed securities
transactions: 1) increased defaults; 2) a reduction in monthly payment rate
(MPR), and 3) a combination stress of higher defaults and lower MPR.
Increasing defaults and reducing MPR alone have the least impact on rating
migration even in the most severe scenario of a 75% increase in defaults. The
harshest scenario assumes both stresses in increased chargeoffs and reduction
to MPR to occur simultaneously. As such, the ratings would only be migrated
downward under the severe stress of a 50% increase in defaults and 20%
reduction in MPR.
To date, the transactions have exhibited strong performance with all
performance metrics within Fitch's initial expectations. For further
discussion of Fitch's sensitivity analysis, please see the related presale
report. For a discussion of the representations, warranties, and enforcement
mechanisms available to investors in this transaction please see the related
Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Global Credit Card ABS Rating Criteria' (June 2012);
--'Global Structured Finance Rating Criteria' (June 2012);
--'Representations, Warranties, and Enforcement Mechanisms in Global
Structured Finance Transactions' (April 2012).
Applicable Criteria and Related Research
Global Credit Card ABS Rating Criteria
Global Structured Finance Rating Criteria
Representations, Warranties, and Enforcement Mechanisms in Global Structured
Finance Transactions -- Amended
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Herman C. Poon, +1 212-908-0847
Fitch Ratings, Inc.
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Steven Stubbs, +1 212-908-0676
Sandro Scenga, +1 212-908-0278
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