In the wake of the harsh spotlight thrown on structured finance’s role in the 2007-2009 financial crisis, much of the securitization landscape has been altered. While many structured investments fell out of favor, particularly private label mortgage-backed securities and collateral debt obligations, credit card-backed securities avoided most of the severe credit and ratings downgrades. The AAA ratings for the senior tranches of the top five U.S. credit card issuers have been relatively stable to date. Based on Moody’s credit card index data, credit card excess spread (a good proxy for the overall health of a trust) remains healthy and improved.
Download the article (PDF)