BOCA RATON, FLA. - The ABS research roundtable discussion at Information Management Network's ABS East conference last week centered primarily on the valuation of triple-B credit card ABS versus comparably rated corporate unsecured debt. The precise valuations, researchers opined, depend upon an investor's view of corporate risk. Other dynamics do come into play. However, what drives valuation is the vantage point - what someone thinks of the placement of a securitized revenue stream in an issuer's capital structure compared with senior unsecured debt holders.
The corporate market, being more transparent and liquid, is more volatile than ABS, although some argued whether this should be the case. The cases in point of choice for the panel of eight sell-side researchers were monoline credit card issuers Capital One Financial and MBNA America Bank - both of which sport triple-B unsecured debt ratings.