The Synchrony Card Issuance Trust, series 2024-1 will sell $500 million in class A notes to investors, supported by a pool of private-label and co-branded credit card receivables accounts.
Synchrony Bank is the deal's sponsor and it originated the credit card accounts extended to consumers through major retail program partners including Sam's Club, TJX Dual Card, Lowe's Private Label Card, Amazon Private Label Credit Card, and PayPal Dual Card, according to analysts at S&P Global Ratings. Those programs account for 27.6%, 20.9%, 14.0%, 12.5% and 10.0% of the pool's total receivables, according to S&P analysts.
With a Dec. 31, 2023 cutoff date, the collateral pool has a total receivables balance of $9.1 billion. On average, the accounts have a principal balance of $1.2 billion, a credit limit of $6,281, and an age of 90 months. Also, a large majority of the pool, 76.2%, have credit scores of more than 660, and also 48.3% of receivables have a score of higher than 720.
S&P's base-case assumption is for the pool to see net losses of about 8.25%, and the AAA rating stress assumption is for a 36.0% loss, analysts said. The trust issues just one class A tranche of notes, which carried a rating of AAA. The notes have a required credit support of 26.00%, a legal final maturity date of March 15, 2030, and an expected maturity date of March 15, 2027.
Wile the series 2024-1 issues just one tranche, the SynchronySeries can issue up to four classes of notes—A, B, C and D—and repay pay principal and interest sequentially on a senior-subordinate basis. Each class of notes from the SynchronySeries can consist of one or more tranches.
The ratings analysts note that the performance of the trust's receivables has remained steady to date.
