Fitch Rates CIBC's CARDS II Trust, Series 2022-1 Notes.
ENPNewswire-January 28, 2022--Fitch Rates CIBC's CARDS II Trust, Series 2022-1 Notes
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Release date- 27012022 - Fitch Ratings has assigned ratings to CARDS II Trust 2022-1's CAD, fixed-rate class A, B and C notes.
The transaction is a securitization of credit card receivables and is sponsored by Canadian Imperial Bank of Commerce (CIBC, AA-/F1+/Stable). The Rating Outlooks for all classes are Stable.
RATING ACTIONS
Entity / Debt
Rating
Prior
CARDS II Trust 2022-1
Class A
LT
AAAsf
New Rating
AAA(EXP)sf
Class B
LT
Asf
New Rating
A(EXP)sf
Class C
LT
BBBsf
New Rating
BBB(EXP)sf
Page
of 1
VIEW ADDITIONAL RATING DETAILS
KEY RATING DRIVERS
Receivables Performance and Collateral Characteristics: The underlying collateral characteristics play a vital role in the performance of a credit card ABS transaction. Fitch closely examines such collateral characteristics as credit quality, seasoning, geographic concentration, delinquencies and the utilization rate on the cards. Performance for the trust has improved over the last 12 months despite the negative economic impacts from the pandemic and has remained within Fitch's steady state assumptions.
As of the December 2021 collection period, net charge-offs had remained low at 0.98%. 60+ day delinquencies were near historical trust lows at 0.64%. Monthly payment rate (MPR) remained near historical trust highs at 56.00% compared to 49.72% in December 2020.
Credit enhancement (CE) continues to be sufficient with robust loss multiples that are in line with the current ratings. The Stable Rating Outlook on the notes reflects Fitch's expectation that performance will remain supportive of these ratings.
Account Originator and Servicer Quality: Fitch believes CIBC is an effective and capable originator and servicer given its track record, as evidenced by historical delinquency and loss performance of securitized receivables.
Counterparty Risk: Fitch's ratings of the notes are dependent on the financial strength of certain counterparties. Fitch believes this risk is currently mitigated, as evidenced by the ratings of the applicable counterparties to the transaction.
Interest Rate Risk: Interest rate risk is currently mitigated by the available CE. CE supporting the class A notes is derived from 7.25% subordination of class B and C notes, excess spread and a cash reserve account (CRA) to be funded by the trust when excess spread falls to, or below, 4.00%. Class B...
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