Fitch rates Synchrony BBB-

Fitch Ratings said it assigned long-term issuer default ratings of BBB- and short-term issuer default ratings of F3 to Synchrony Financial and Synchrony Bank.

The outlook is stable.

The ratings reflect the initial public offering of Synchrony and Synchrony Bank by General Electric as the first step in GE’s exit from Synchrony’s business, Fitch said.

The ratings reflect Synchrony’s market leading position in the U.S. private-label credit card industry, seasoned management team, stable operating performance through previous market cycles, appropriate capitalization and liquidity levels as a stand-alone entity and improving funding diversity as a result of the growing bank deposit platform, Fitch said.

Rating constraints include the monoline nature of the business model, concentrated partner profile with a high exposure to retailers, higher-than-average mix of subprime borrowers, heightened regulatory, legal and litigation risk, sensitivity of the deposit base to rising interest rates and the lack of a track record operating as a stand-alone entity, the agency said.

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