The credit card sector looks to be springing back to life after a rather quiet 2010. DBRS said that it was rating a 1st Financial Bank USA credit card deal, 1st Financial Credit Card Master Note Trust II Series 2010-D.

The deal comes after news that Citibank this week filed an S-3 with the Securities Exchange Commission for a credit card securitization deal.

After the  initial transaction is issued, there will be five series outstanding in Trust II. The series 2010-D notes will be issued in four classes of notes - Classes A, B, C and D.

The series will also have a funded cash collateral account. Initial Class A credit support of 40.0% will include Class B Notes (11.25%), Class C Notes (9.50%), Class D Notes (12.75%) and three cash collateral accounts (CCA’s), funded at close to equal 6.50% of the initial note balance). If an early amortization event occurs, enhancement will build as it mostly consists of subordinate notes that are locked out and the CCA.

The primary assets in the master trust include a pool of receivables originated in revolving credit card accounts.

"1st Financial funds nearly 100% of its credit card portfolio via the securitization market," reported analysts at DBRS. "The lack of access to this market could hamper liquidity in the future. The sponsor’s main sources of funding are the securitization market and time deposits. A prolonged inability to access the securitization market or a significant reduction in time deposits could hamper the sponsor’s ability to grow its credit card portfolio."


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