Glacier Credit Card Trust receives provisional ratings for Series 2026-2 notes

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Glacier Credit Card 2026-2 ratings

Highlights

DBRS Limited assigned provisional (P) AAA (sf) and (P) A (sf) ratings to Glacier Credit Card Trust’s Series 2026-2 senior and subordinated notes, pending final documents.
The receivables pool was over 3.7 million accounts with 92.4% at least five years old as of March 31, 2026, reflecting portfolio seasoning.
Three-month average payment rates and gross yield stayed elevated at 31.2% and 22.2%, while net loss rates normalized to 6.1% as of April 30, 2026.

Provisional ratings and transaction structure

As reported by Morningstar DBRS, DBRS Limited assigned provisional ratings of (P) AAA (sf) to the Credit Card Asset-Backed Senior Notes, Series 2026-2, and (P) A (sf) to the Credit Card Asset-Backed Subordinated Notes, Series 2026-2, to be issued by Glacier Credit Card Trust.

The rating agency says the final ratings remain subject to receipt of final documents that conform to the information already reviewed. For the senior notes, credit enhancement is expected to come from 6.5% subordination, a dynamic overcollateralization enhancement amount equal to 7.0% of the unadjusted invested amount, and excess spread. For the subordinated notes, support is expected from the 7.0% enhancement amount and excess spread.

Morningstar DBRS also says its stress testing shows that simultaneous declines in yield and payment rates, together with higher losses, would not prevent the trust from repaying the notes on a timely basis. It says the severity of those tests is aligned with the respective ratings assigned to the securities.

Portfolio performance and Canadian market considerations

The agency says the receivables pool remains diversified and seasoned, with 92.4% of receivables tied to accounts at least five years old as of March 31, 2026. The selected pool contained more than 3.7 million accounts at that date.

Over the past three years, three-month average payment rates and gross yield averaged about 31.2% and 22.2%, respectively, while the three-month average net loss rate stood at 6.1% as of April 30, 2026. Morningstar DBRS says payment rates and gross yields remain elevated against historical levels, while net losses have returned to within pre-pandemic levels.

The agency notes the portfolio carries higher credit risk and includes more revolving borrowers than other Morningstar DBRS-rated Canadian credit card securitization portfolios, contributing to historically higher loss rates and lower payment rates than other Canadian issuers. It says that risk is mitigated by Canadian Tire Bank's servicing experience, credit risk management and the transaction's credit enhancement levels.

Morningstar DBRS also highlights a servicing structure that allows partial commingling to continue while Canadian Tire Bank remains servicer, supported by a servicer performance guarantee from Canadian Tire Corporation, Limited. If Canadian Tire Corporation, Limited falls below investment grade and a servicer termination event occurs, subject to certain conditions, collections are to be remitted to a trust account within two business days.

Our earlier report on KBRA’s surveillance review of 1345 Trust 2025-AOA explained that the agency affirmed all ratings despite a modest decline in net cash flow since securitization. We noted that the $650 million single-asset CMBS exposure is backed by the 1345 Avenue of the Americas office tower, with leverage edging higher and performance analysis focused on tenant income durability, including the largest tenant’s free-rent period through July 2027.

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