DBRS Places Gloucester Credit Card Trust Series 2008-1 Under Review with Negative Implications

DBRS has today placed Gloucester Credit Card Trust (Gloucester) Series 2008-1 (the Notes) Under Review with Negative Implications.

In June 2008, following the issuance of the Notes, the spread account deposit event (the Event) for the Notes was triggered when the excess spread fell below 6.5%, the first trigger for the Event. This can be partly attributed to the Notes’ higher costs of funds relative to other series of notes issued by Gloucester. Nevertheless, excess spread remained stable but below 6.5% and did not experience any further compression until December 2008, when loss rates started to increase. Payment rates and gross yield also began to deteriorate at around the same time, albeit to a lesser degree. Consequently, the three-month average excess spread for the Notes declined to 4.62% at the end of February 2009. However, no withdrawals from the spread account have been required by Gloucester to cover distributions in respect of the Notes so far.

While DBRS understands that MBNA Canada Bank, the originator and servicer, has taken actions to improve the portfolio quality, the Notes have been placed Under Review with Negative Implications as a result of DBRS’s revised expectations in light of the current performance.

Notes:
The applicable methodology is DBRS Criteria for Canadian Credit Card Securitization, which can be found on our website under Methodologies.

This is a Structured Finance rating.

Media Contact
Caroline Creighton
Senior Vice President
Communications
Tel. +1 416 597 7317
ccreighton@dbrs.com