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���������ֳ� - London - 02 May 2025: ���������ֳ� has downgraded NewDay Funding's Series VFN-F1 V1 class A notes to 'BBBsf' from 'BBB+sf', following an amendment to the class A notes' advance rate. The Outlook remains Stable.

Transaction Summary

The debt issued by NewDay Funding is collateralised by a pool of non-prime UK credit card receivables originated by NewDay Limited (NewDay). NewDay is one of the largest specialist credit card companies in the UK and offers cards both under its own brands and in partnership with individual retailers. Only the cards branded by NewDay, which are targeted at higher-risk borrowers on average, are included in this transaction. The cards co-branded with retailers are financed through a separate securitisation.

Series VFN-F1 V1 provides funding flexibility, which is essential to credit card trusts.

KEY RATING DRIVERS

Amended Advance Rate: NewDay Funding's VFN-F1 V1 class A notes ratings reflect an increase in the advance rate to 86% from 83.7%. The amendment will lead to a decline in credit enhancement.

Asset Assumptions Unchanged: The rating actions only address the impact of the amendments to the structure, meaning that our asset assumptions are unchanged. ���������ֳ� maintains a steady-state charge-off rate of 17%, a steady-state monthly payment rate (MPR) of 11% and a steady-state yield of 30% for the trust. Charge-off and MPR stresses are unchanged and remain at the low end of the criteria range (3.5x and 45% at the 'AAAsf' rating case, respectively). This considers the high absolute level of the steady-state charge-off rate, the low volatility in the historical data and the low payment rates typical of the non-prime credit card sector.

The levels were changed earlier this year to reflect (i) NewDay's increasing strategic focus on acquiring and retaining slightly lower-risk borrowers, (ii) the strength and stability of portfolio performance metrics during challenging macroeconomic conditions, and (iii) continued refinements to NewDay's automated credit scoring process.

Sound Performance: The recent performance of the transaction remains below ���������ֳ�'s steady-state charge-off rate. Over the last year, charge-offs and the MPR have averaged 12.3% and 14.2%, respectively. We expect performance metrics to fluctuate around our steady-states through the economic cycle.

Variable Funding Notes Add Flexibility: The structure includes a separate originator variable funding note (VFN), purchased and held by NewDay Funding Transferor Ltd, in addition to series VFN-F1, VFN-F2 and VFN-F3, providing the funding flexibility typical of and necessary for credit card trusts. It provides credit enhancement to the rated notes, adds protection against dilutions by way of a separate functional transferor interest and meets UK and US risk-retention requirements.

Risks from Seller/Servicer Mitigated: The NewDay group acts in several capacities through its various entities, most prominently as originator, servicer and cash manager. The reliance on the group is mitigated by the transferable operations, agreements with established card service providers, a back-up cash management agreement and a series-specific liquidity reserve. A back-up servicer has been in place since October 2024. Upon the occurrence of a servicer termination event, the back-up servicer will replace the existing servicer within 30 days.

As of April 2025, the minimum transferor interest percentage has been reduced to 1.2% from 1.65%, given the historically low dilutions experienced by the pool. ���������ֳ� deems that the minimum transferor interest remains adequately sized to cover dilution risk.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

Rating sensitivity to increased charge-off rate

Increase steady state by 25%/ 50%/ 75%:

VFN F1 V1 Class A: 'BB+sf'/ 'BBsf'/ 'BB-sf'

VFN F1 V1 Class E: 'BB-sf'/ 'B+sf'/ 'Bsf'

VFN F1 V1 Class F: 'Bsf'/ N.A./ N.A.

Rating sensitivity to reduced MPR

Reduce steady state by 15%/ 25%/ 35%:

VFN F1 V1 Class A: 'BBB-sf'/ 'BB+sf'/ 'BBsf'

VFN F1 V1 Class E: 'BBsf'/ 'BB-sf'/ 'BB-sf'

VFN F1 V1 Class F: 'B+sf'/ 'B+sf'/ 'B+sf'

Rating sensitivity to reduced purchase rate

Reduce steady state by 50%/ 75%/ 100%:

VFN F1 V1 Class A: 'BBBsf'/ 'BBB-sf'/ 'BBB-sf'

VFN F1 V1 Class E: 'BBsf'/ 'BBsf'/ 'BBsf'

VFN F1 V1 Class F: 'BB-sf'/ 'B+sf'/ 'B+sf'

Rating sensitivity to increased charge-off rate and reduced MPR

Increase steady-state charge-offs by 25% / 50% / 75% and reduce steady-state MPR by 15% / 25% / 35%:

VFN F1 V1 Class A: 'BB+sf'/ 'BB-sf'/ 'Bsf'

VFN F1 V1 Class E: 'B+sf'/ 'Bsf'/ N.A.

VFN F1 V1 Class F: 'Bsf'/ N.A./ N.A.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

Rating sensitivity to reduced charge-off rate

Reduce steady-state charge-offs by 25%:

VFN F1 V1 Class A: 'A-sf'

VFN F1 V1 Class E: 'BBBsf'

VFN F1 V1 Class F: 'BB+sf'

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10

Form ABS Due Diligence-15E was not provided to, or reviewed by, ���������ֳ� in relation to this rating action.

DATA ADEQUACY

���������ֳ� has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. ���������ֳ� has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring.

Prior to the transaction's closing, ���������ֳ� reviewed the results of a third-party assessment conducted on the asset portfolio information and concluded that there were no findings that affected the rating analysis.

Overall, and together with any assumptions referred to above, ���������ֳ�'s assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS

A description of the transaction's representations, warranties and enforcement mechanisms (RW&Es) that are disclosed in the offering document and which relate to the underlying asset pool is available by clicking the link to the Appendix. The appendix also contains a comparison of these RW&Es to those ���������ֳ� considers typical for the asset class as detailed in the Special Report titled 'Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions'.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ���������ֳ�'s ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on ���������ֳ�'s ESG Relevance Scores, visit /topics/esg/products#esg-relevance-scores.

Additional information is available on

APPLICABLE MODELS

Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).

• Global Credit Card Cash Flow Model, v1.12.0 (1)

ADDITIONAL DISCLOSURES

• Dodd-Frank Rating Information Disclosure Form
• Solicitation Status
• Endorsement Policy

ENDORSEMENT STATUS