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Banks (Finance)

Fitch Ratings Assigns Ratings to Synchrony Card Issuance Trust

Strategic Insights

— 1 min read

Fitch Ratings has issued a comprehensive analysis of the Synchrony Card Issuance Trust, SynchronySeries class A(2025-2) notes, backed by a securitized pool of receivables arising under the revolving credit card accounts generated through Synchrony Bank's private-label, co-branded, and general-purpose credit card programs. The Rating Outlook for the class A(2025-2) notes is Stable.

Key Takeaways:

  • The underlying collateral characteristics play a vital role in the performance of a credit card ABS transaction, with Fitch closely examining metrics such as credit quality, seasoning, geographic concentration, delinquencies, and the utilization rate on the credit cards.
  • As of the March 2025 collection period, trust charge-off performance metrics had risen over the prior 12-month figure and remained above pre-pandemic levels, while the monthly payment rate (MPR) softened during the same period.
  • The modelled loss multiples in line with the ratings and Fitch's applicable criteria provide adequate credit enhancement for the notes.
  • Synchrony Bank, the originator and servicer, is considered an effective and capable entity, with historical delinquency and loss performance of securitized receivables indicating operational stability.
  • The transaction structure relies on counterparties' effective performance in their respective roles, and Fitch believes this risk is adequately mitigated, evidenced by contractual minimum ratings of the applicable counterparties to the transaction.
  • The available credit enhancement currently mitigates interest rate risk, with interest rate mismatch in line with the market.
  • The principal sources of information used in the analysis are described in the Applicable Criteria, including the Structured Finance and Covered Bonds Counterparty Rating Criteria, Credit Card ABS Rating Criteria, and Global Structured Finance Rating Criteria.

Statistics:

  • 60+ Day Delinquencies: 2.23% (as of March 2025)
  • Gross Charge-Offs: 6.48% (as of March 2025)
  • Monthly Payment Rate (MPR): 25.03% (as of March 2025)
  • Credit Enhancement (CE) for SynchronySeries class A(2025-2) notes: 26.00%
  • Steady-State Assumptions:

+ Annualized Charge-offs: 9.00%

+ MPR: 17.00%

+ Annualized Gross Yield: 23.00%

+ Purchase Rate: 100.00%

Sources:

  • Structured Finance and Covered Bonds Counterparty Rating Criteria (pub. 29 Nov 2023)
  • Credit Card ABS Rating Criteria (pub. 20 Mar 2024)
  • Global Structured Finance Rating Criteria (pub. 18 Nov 2024)
  • Fitch's ESG Relevance Scores: https://www.fitchratings.com/topics/esg/products#esg-relevance-scores
  • Fitch's Applicable Criteria: https://www.fitchratings.com/understandingcreditratings

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