Bank credit card charge-off rates declined in May 2002 among both credit card bonds and issuer-owned receivables. April charge-offs for receivables held in trusts of rated credit card-backed securities declined to 7.40% from 7.60%, while the figure for non-securitized receivables dropped from 6.63% to 6.59%. According to Standard & Poor’s, the decrease in the index loss rate among credit card bonds was attributable to a marked decline in MBNA Master Card Trust II’s loss numbers. MBNA’s loss numbers declined by 150 bps to 5.5% from 6.9% in March. MBNA’s March loss number was artificially high as a result of the company’s policy to waive delinquency status following the events of September 11th. The loss trends for the other trusts in the indexes were mixed. One-half of the trusts reported increases. The delinquency rates dropped 15 bps in April compared with March. Three quarters of the trusts reported an improvement in the 30-plus and 60-plus day delinquency buckets. For the 90-plus day delinquencies, over 85% reported a relative decline compared with a month ago.
CREDIT CARD-BACKED SECURITIES PERFORMANCE
Performance month Apr 00 Apr 01 Feb 02 Mar 02 Apr 02
Yield (%) 18.9 19.8 18.4 19.5 18.3
Charge-offs (%) 5.6 6.6 6.7 7.6 7.4
Delinquencies (%) 4.2 4.9 5.5 5.3 5.2
Payment rate (%) 15.4 15.5 14.9 16.2 15.6
SOURCE: Standard & Poor’s