Fitch Ratings Assigns Expected Ratings to Chase Issuance Trust Class A Notes

Strategic Insights -

Fitch Ratings, a global credit rating agency, has recently issued a commentary on the expected ratings for the Chase Issuance Trust class A (2025-1) notes. These notes are a part of a securitization transaction involving receivables from a pool of revolving consumer credit card accounts originated by JPMorgan Chase Bank, N.A. The transaction's Rating Outlook for the class A notes is Stable, indicating a stable credit profile with minimal credit risk.

The commentary highlights the significance of receivables' performance and collateral characteristics in a credit card ABS transaction. Fitch examines the trust's performance history and collateral characteristics, including credit quality, seasoning, geographic concentration, delinquencies, and utilization rates on the cards. As of the May 2025 collection period, the collateral performance metrics were in line with Fitch indices, showing slight weakness through the TTM period but remaining within Fitch's steady-state assumptions for the trust.

Key Takeaways:

  • The underlying collateral performance and characteristics play a crucial role in a credit card ABS transaction, with Fitch closely examining the trust's performance history and such collateral characteristics as credit quality, seasoning, geographic concentration, delinquencies, and utilization rates on the cards.
  • As of the May 2025 collection period, the collateral performance metrics were in line with Fitch indices, showing slight weakness through the TTM period but remaining within Fitch's steady-state assumptions for the trust.
  • Delinquencies of 60+ days increased to 0.62%, from 0.59% one year prior, while monthly payment rates (MPRs) dropped marginally to reach 52.46% in June 2025, in comparison to 53.77% one year prior.
  • Charge-offs increased to 2.17%, up from 1.75% one year ago, while gross yield dropped to 23.91%, from 25.50% as of June 2024.
  • The notes' Stable Rating Outlook reflects Fitch's expectation that performance will remain supportive of the ratings.
  • Originator and servicer quality, with JPMorgan Chase Bank, N.A. (JPM; AA/F1+/Stable) regarded as an effective and capable originator and servicer, as evidenced by historical delinquency and loss performance for the trust's receivables.
  • Counterparty risk, which is mitigated by the ratings of the applicable counterparties to the transactions and contractual remedial provisions in the transaction documents.
  • Interest rate risk, with the available credit enhancement (CE) mitigating interest rate risk, with CE supporting class A notes totaling 14%, supported by 7% subordination from class B and notes and 7% from class C notes.

Statistics:

  • The underlying collateral performance metrics were in line with Fitch indices, with delinquencies of 60+ days increasing to 0.62% as of May 2025.
  • Monthly payment rates (MPRs) dropped marginally to reach 52.46% in June 2025, in comparison to 53.77% one year prior.
  • Charge-offs increased to 2.17%, up from 1.75% one year ago.
  • Gross yield dropped to 23.91%, from 25.50% as of June 2024.
  • Credit enhancement (CE) supporting class A notes totals 14%, supported by 7% subordination from class B and notes and 7% from class C notes.

Sources:

  • Fitch's commentary on Chase Issuance Trust class A (2025-1) notes
  • JPMorgan Chase Bank, N.A. (JPM; AA/F1+/Stable)
  • Fitch's Structured Finance and Covered Bonds Counterparty Rating Criteria (pub. 29 Nov 2023)
  • Fitch's Credit Card ABS Rating Criteria (pub. 20 Mar 2024)
  • Fitch's Structured Finance and Covered Bonds Interest Rate Stresses Rating Criteria (pub. 24 Oct 2024)
  • Fitch's Global Structured Finance Rating Criteria (pub. 18 Nov 2024)