Press Release

DBRS Morningstar Releases Commentary on the Impact of COVID-19 on Canadian Credit Card ABS

Consumer Loans & Credit Cards
June 17, 2020

DBRS Limited (DBRS Morningstar) released a commentary titled “Impact of COVID-19 on Canadian Credit Card ABS.” Following our April 9, 2020, publication “Impact of Payment Deferrals on Canadian ABS Transaction Interest Payments,” this commentary details the impact of the Coronavirus Disease (COVID-19) on the expected losses, payment rates, and yield of Canadian credit card asset-backed security (ABS) transactions and its potential impact on our ratings. A deterioration in performance is expected for each transaction based on a moderate macroeconomic scenario for unemployment and GDP through 2022 as published on June 1, 2020, in our commentary “Global Macroeconomic Scenarios: June Update.”

The macroeconomic outlook continues to be monitored by us, and we may update the scenarios as the situation unfolds. Similarly, the analysis presented in our commentary is also subject to change as more data becomes available and if an updated macroeconomic scenario assumes a materially worse impact on the Canadian economy. The impact of the coronavirus crisis on credit card ABS transactions includes increases in delinquencies and losses combined with a reduction in payment rates, purchases, and yield.

Notes:
The commentary is available at www.dbrsmorningstar.com.

For more information on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577