Moody's Assigns Provisional Aaa Rating to Citibank Credit Card Issuance Trust Notes

Strategic Insights -

Moody's Investors Service has assigned a provisional Aaa rating to the Citiseries Class 2025-A1 and Class 2025-A2 Notes to be issued by Citibank Credit Card Issuance Trust. The ratings are based on the quality of the underlying credit card receivables, Citibank's expertise as servicer, and the transaction's legal and structural protections. The notes will have a fixed rate coupon and expected maturity dates of June 21, 2028, and June 18, 2030, respectively.

Key Takeaways:

  • Moody's has assigned a provisional Aaa rating to the Citiseries Class 2025-A1 and Class 2025-A2 Notes, citing the quality of the underlying credit card receivables and Citibank's expertise as servicer.
  • The ratings are based on the transaction's legal and structural protections, including early amortization trigger events, subordinate notes, and the likelihood of the sponsor becoming insolvent and shutting down its credit card portfolio.
  • The Citiseries Class 2025-A1 and 2025-A2 Notes will have a fixed rate coupon and expected maturity dates of June 21, 2028, and June 18, 2030, respectively.
  • The assets of the trust consist of receivables arising in unsecured consumer revolving credit card accounts owned and serviced by Citibank.
  • Citibank's long-term deposit rating is Aa3, long-term senior unsecured Aa3, long-term CR Assessment Aa3(cr), short-term deposits P-1, and BCA baa1.
  • A comprehensive review of all credit ratings in all the rated series in this master trust was conducted, and no actions were taken on the tranches from the other rated series.
  • The developer's rating could be impacted by the likelihood of Citibank becoming insolvent and shutting down its credit card portfolio, which would lead to a significant increase in charge-offs.

Statistics:

  • Aaa LGSD: 38.77% (Our expectation of the trust's performance following a sponsor default and portfolio shutdown)
  • Aaa CE: 12.41% (The level of credit enhancement consistent with a Aaa (sf) rating by haircutting the Aaa LGSD based on the CR Assessment of the sponsor)
  • Aa3 is the long-term deposit rating of Citibank
  • Aa3 is the long-term senior unsecured rating of Citibank
  • Aa3 is the long-term CR Assessment rating of Citibank
  • P-1 is the short-term deposits rating of Citibank
  • BCA baa1 is the Bank Credit Assessment rating of Citibank

Sources:

  • Moody's Ratings (Moody's) - Provisional Aaa Rating to Citibank Credit Card Issuance Trust Notes
  • "Credit Card Receivables Securitizations" published in June 2024 - available at https://ratings.moodys.com/rmc-documents/423538
  • Rating Methodologies page on https://ratings.moodys.com - for a copy of the methodology