Toronto, July 22, 2022 — Moody’s Traders Service (Moody’s) has assigned a definitive Aaa (sf) ranking to the Collection 2022-Three Class A Notes issued by Golden Credit score Card Belief (Golden), sponsored by Royal Financial institution of Canada (RBC, long-term deposits/long-term senior unsecured Aa1, steady, long-term CR evaluation Aa1 (cr), BCA a2, and quick time period deposit P-1). Moody’s additionally introduced at the moment that the issuance of the Collection 2022-Three Notes wouldn’t, in and of itself and as of this time, consequence within the downgrade or withdrawal of the scores assigned to any class of excellent securities issued by Golden.
Moody’s ranking motion is as follows:
Issuer: Golden Credit score Card Belief, Collection 2022-3
$1,000,000,000 Class A Notes, Definitive Score Assigned Aaa (sf)
RATINGS RATIONALE
The ranking relies on the standard of the underlying bank card receivables, the experience of RBC as servicer, the transaction’s authorized and structural protections together with early amortization set off occasions, the credit score enhancement supplied by the subordinate Class B and Class C Notes within the 2022-Three sequence, and the probability of the sponsor turning into bancrupt and shutting down its bank card portfolio. Moody’s assesses this probability from the sponsor’s counterparty threat evaluation (CR evaluation).
The Class A Notes symbolize 93.50% of the entire issuance, the Class B Notes symbolize 4.50% and the Class C Notes symbolize the remaining 2.00%. Class A Notes had been issued in US {dollars} and can have a floating fee coupon listed to compounded SOFR plus 1.20%. The Class B and Class C Notes had been issued in Canadian {dollars} and can have fastened fee coupons of 5.793% and 6.843%, respectively. Golden has minimized the danger of an rate of interest and foreign money mismatch by getting into right into a cross-currency and rate of interest swap settlement associated to the Class A Notes, with RBC as swap counterparty.
The anticipated maturity date of the securities is 16 July 2029, and the authorized maturity date is 15 July 2031.
The property of Golden encompass co-ownership pursuits in bank card receivables originated and serviced by RBC.
Abstract of Analytical Outputs
Moody’s Aaa LGSD and the Aaa CE are 20.3% and 4.7%, respectively for this transaction. The Aaa LGSD displays Moody’s expectation of the belief’s efficiency following a sponsor default and portfolio shutdown. The Aaa CE displays the extent of credit score enhancement in step with a Aaa (sf) ranking by haircutting the Aaa LGSD primarily based on the CR evaluation of the sponsor.
Methodology Underlying the Score Motion:
The principal methodology used on this ranking was “Moody’s Strategy to Score Credit score Card Receivables-Backed Securities” revealed in July 2022 and accessible at https://scores.moodys.com/api/rmc-documents/390486. Alternatively, please see the Score Methodologies web page on https://scores.moodys.com for a replica of this technique.
Elements that might result in an improve or downgrade of the ranking:
Moody’s may downgrade the ranking of the Class A Notes if our expectation of the belief’s efficiency following a sponsor default and portfolio shutdown (i.e., Aaa LGSD) deteriorates materially, particularly, if the charge-off fee rises or the fee fee or yield falls. A downgrade to the sponsor’s CR evaluation may additionally result in a downgrade to the ranking of the Class A Notes.
REGULATORY DISCLOSURES
For additional specification of Moody’s key ranking assumptions and sensitivity evaluation, see the sections Methodology Assumptions and Sensitivity to Assumptions within the disclosure type. Moody’s Score Symbols and Definitions could be discovered on https://scores.moodys.com/rating-definitions.
Moody’s both didn’t obtain or consider a number of third-party due diligence evaluation(s) relating to the underlying property or monetary devices (the “Due Diligence Evaluation(s)”) on this credit standing motion.
The Due Diligence Evaluation(s) referenced herein had been ready and produced solely by events aside from Moody’s. Whereas Moody’s makes use of Due Diligence Evaluation(s) solely to the extent that Moody’s believes them to be dependable for functions of the meant use, Moody’s doesn’t independently audit or confirm the knowledge or procedures utilized by third-party due-diligence suppliers within the preparation of the Due Diligence Evaluation(s) and makes no illustration or guarantee, categorical or implied, as to the accuracy, timeliness, completeness, merchantability or health for any specific goal of the Due Diligence Evaluation(s).
Additional data on the representations and warranties and enforcement mechanisms accessible to buyers can be found on https://scores.moodys.com/paperwork/PBS_1337006.
In ranking this transaction, Moody’s makes use of a money circulate mannequin to find out the collateral loss in a most stress situation. As a second step, Moody’s haircuts this collateral loss primarily based on the sponsor’s credit score high quality. Lastly, Moody’s compares the accessible credit score enhancement with the haircut collateral loss, considering loss allocation and different structural options, to find out the model-indicated ranking for every instrument.
Moody’s quantitative evaluation entails an analysis of situations that stress components contributing to sensitivity of scores and consider the probability of extreme collateral losses or impaired money flows.
For scores issued on a program, sequence, class/class of debt or safety this announcement offers sure regulatory disclosures in relation to every ranking of a subsequently issued bond or observe of the identical sequence, class/class of debt, safety or pursuant to a program for which the scores are derived completely from current scores in accordance with Moody’s ranking practices. For scores issued on a help supplier, this announcement offers sure regulatory disclosures in relation to the credit standing motion on the help supplier and in relation to every specific credit standing motion for securities that derive their credit score scores from the help supplier’s credit standing. For provisional scores, this announcement offers sure regulatory disclosures in relation to the provisional ranking assigned, and in relation to a definitive ranking which may be assigned subsequent to the ultimate issuance of the debt, in every case the place the transaction construction and phrases haven’t modified previous to the task of the definitive ranking in a fashion that might have affected the ranking. For additional data please see the issuer/deal web page for the respective issuer on https://scores.moodys.com.
For any affected securities or rated entities receiving direct credit score help from the first entity(ies) of this credit standing motion, and whose scores could change because of this credit standing motion, the related regulatory disclosures will probably be these of the guarantor entity. Exceptions to this strategy exist for the next disclosures, if relevant to jurisdiction: Ancillary Providers, Disclosure to rated entity, Disclosure from rated entity.
The ranking has been disclosed to the rated entity or its designated agent(s) and issued with no modification ensuing from that disclosure.
This ranking is solicited. Please discuss with Moody’s Coverage for Designating and Assigning Unsolicited Credit score Rankings accessible on its web site https://scores.moodys.com.
Regulatory disclosures contained on this press launch apply to the credit standing and, if relevant, the associated ranking outlook or ranking evaluate.
Moody’s normal rules for assessing environmental, social and governance (ESG) dangers in our credit score evaluation could be discovered at https://scores.moodys.com/paperwork/PBC_1288235.
The World Scale Credit score Score on this Credit score Score Announcement was issued by one in all Moody’s associates exterior the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Important 60322, Germany, in accordance with Artwork.Four paragraph Three of the Regulation (EC) No 1060/2009 on Credit score Score Companies. Additional data on the EU endorsement standing and on the Moody’s workplace that issued the credit standing is out there on https://scores.moodys.com.
The World Scale Credit score Score on this Credit score Score Announcement was issued by one in all Moody’s associates exterior the UK and is endorsed by Moody’s Traders Service Restricted, One Canada Sq., Canary Wharf, London E14 5FA beneath the legislation relevant to credit standing companies within the UK. Additional data on the UK endorsement standing and on the Moody’s workplace that issued the credit standing is out there on https://scores.moodys.com.
Please see https://scores.moodys.com for any updates on adjustments to the lead ranking analyst and to the Moody’s authorized entity that has issued the ranking.
Please see the issuer/deal web page on https://scores.moodys.com for added regulatory disclosures for every credit standing.
Aliya Ehmar
Asst Vice President – Analyst
Structured Finance Group
Moody’s Canada Inc.
70 York Road
Suite 1400
Toronto, ON M5J 1S9
Canada
JOURNALISTS: 1 212 553 0376
Shopper Service: 1 212 553 1653
Richard Hunt
Senior Vice President/Supervisor
Structured Finance Group
JOURNALISTS: 1 212 553 0376
Shopper Service: 1 212 553 1653
Releasing Workplace:
Moody’s Canada Inc.
70 York Road
Suite 1400
Toronto, ON M5J 1S9
Canada
JOURNALISTS: 1 212 553 0376
Shopper Service: 1 212 553 1653
