The market saw further downgrades in U.K. credit card securitizations. According to data published by Barclays Capital, portfolio yields have increased in all U.K. credit card trusts in March, on average to 19.20% from 18.69%.

Charge-offs rose as well, to 7.84% from 7.24%. The March index does not include the Arran trust, its investor report was not available from public sources at the time when Barclays wrote the report. The performance figures are therefore not entirely comparable with the previous month’s figures.

Personal insolvencies increased in 1Q09 by 1.6% compared with 4Q08, and by
19% compared with 1Q08. Combined with increasing delinquencies in most trusts, this paves the way for further increases in charge-off rates in the following months.

Both Moody’s Investors Service and Fitch Ratings downgraded the class C notes in the Sherwood UK 2003-2 series.

The class A notes in that series have a fixed rate coupon of 5%, meaning the expense rate for the series remains high despite the recent decline in Libor. The excess spread in this transaction has therefore not benefited from the fall in Libor to the same extent as the other deals in the trust.

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