American Express National Bank is preparing to issue $1.6 billion in securitization bonds, secured by payments on credit card accounts.
American Express Credit Account Master Trust, series 2024-1 and 2 will also issue notes repaid from revenue on and pay-over-time revolving credit features associated with certain credit card accounts that the sponsor bank also owns, according to ratings analysts from S&P Global Ratings.
Barclays, RBC Capital Markets, TD Securities and Wells Fargo Securities are listed as managers on both series of notes, according to the Asset Securitization Report's deal database, and the deals are slated to close on May 15.
Both series will sell to investors through two tranches of class A and B notes, according to the deal database, with the 2024-1 and 2024-2 series offering $571.4 million and $1 billion in notes, respectively. Although pricing guidance was not available on the series 2024-1, the database notes that the series 2024-2 class A notes are expected to price between 63 and 65 basis points over the three-month interpolated yield curve, and be virtually at par.
A senior-subordinate structure offers subordination to the notes, which are fixed-rate, says ratings analysts at S&P. Ratings analysts from S&P say the class A notes benefit from credit enhancement representing 12.5% of the pool balance, particularly on the 2024-1 series. For that series it also applied a 4.75% base-case loss rate, a 25% base-case payment rate, 18.0% base-case yield and a purchase rate assumption of 3.0%.
The underlying accounts in Series 2024-1 has an average account balance of $1,800. For accounts with a non-zero balance, that average was $4,437, the rating agency said. Also, accounts with credit limits of $10,000 or more generated a slight majority of the receivables, while the pay-over-time accounts with no present spending limit generated 41.86% of the collateral's receivables, the rating agency said.
S&P says the notes have a legal final maturity date of April 16, 2029, and expects to assign ratings of AAA to the class A notes on both series. Fitch Ratings, according to the deal database, also assigns AAA ratings to the class A notes, according to the deal database.
