NEW YORK – A record month in bankruptcy filings following the recent passage of the Bankruptcy Reform Act has done little to affect the stable credit trends for U.S. credit card asset-backed securities, according to Fitch Ratings in the latest edition of ‘Credit Card Movers & Shakers’.
‘Personal bankruptcy filings for March registered 165,459, the largest number in any one month on record and exactly in line with Fitch’s projections, as well as 8.5% over March 2004,’ said Richard Drason, Director, Fitch Ratings. ‘That said, Fitch maintains its stable outlook for the prime credit card sector and expects stable performance trends with some seasonal volatility in the short run, while subprime credit card ABS remains negative.’
In connection with the act’s passage, Fitch expects a wave of increased personal bankruptcy filings in the near term and full year results to be flat versus 2004. Bankruptcy filings for 2004 totaled 1,552,967, down 3.9% from 2003.
Prime chargeoffs climbed 21 bps to 5.97%, 78 bps below the same time last year, while subprime chargeoffs, with a 112 bp climb to 15.06%, was at its highest level since September 2004, though still 221 bps below year-ago levels. Excess spread completed the hat trick with an 8 bp increase to 6.22% for the February collection period, though the rate is still 19 bps below 2004.
The latest edition of ‘Credit Card Movers & Shakers,’ which covers the latest trends in the credit card ABS market, is available on the Fitch Ratings web site at www.fitchratings.com in the ‘ABS’ sector page under ‘Newsletters’.
