Although the notes are supported by non-prime assets, Banco Santander sits at the top of the transaction's ownership chain and has a stable long-term, senior unsecured debt rating of A2.

Kobalt's notes benefit from an overcollateralization level of 35%, and a debt service reserve account initially sized to cover six months of fees and interest on the notes.

Mortgage application activity had its largest decline in a year, according to the Mortgage Bankers Association.

The latest securitization coincides with the company announcing a partnership with U.S. Bank to provide personal loans to borrowers.

The blockbuster merger proposal will be reviewed at a time when the Biden administration is expressing skepticism about consolidation. Its analysis will have to account for markets dominated by both big banks and the likes of Visa and Mastercard.

: A1 notes are expected to price at par, with a 13 basis-point spread over the 3-month, I-curve, and 44-77 basis points on the A2 through A4 notes, according to Asset Securitization Report's deal database.

The median interest rate that large credit card issuers charged consumers with good credit in the first half of 2023 was 28.2%, compared with 18.15% at smaller banks and credit unions, according to a study by the Consumer Financial Protection Bureau, which is on a campaign against excessive fees.

DBRS assumes a base-case net cash flow of $15.8 million on the portfolio, about 28% lower than the issuer underwritten net cash flow amount of $21.9 million.

Federal Reserve Vice Chair for Supervision Michael Barr said Friday that Fed supervisors continue to draw on lessons learned from last March's bank failures—including heightened scrutiny—addressing risks banks currently face including firm asset growth, liquidity pressures and plummeting commercial real estate values.

Investors have hammered the New Jersey-based lender following the turmoil at New York Community Bancorp. But Valley executives say there are key differences between the two real estate-focused banks, and they express confidence that the bank's underwriting will hold up again this cycle.

The deal has a relatively high exposure to commercial and industrial customers. Non-residential ratepayers account for 55% of its customers and about 47% of its revenue.

Financially stressed consumers nearing their credit limit use buy now/pay later loans to finance smaller purchases, while wealthier households want to avoid paying interest or carrying a balance on credit cards for bigger-ticket items, according to the New York Fed.