American Express Credit Account Master Trust (AECAMT), 2022-1, is preparing to raise $500 million in credit card asset-backed securities (ABS) from the capital markets.
FitchRatings expects to assign ratings to the class A certificates, will be issued publicly. Some $21.4 million in the class B certificates will not be rated, according to a pre-sale report.
Barclays Capital, MUFG Securities Americas, RBS Capital Markets and Wells Fargo Securities are acting as underwriters on the deal, Fitch said. The notes in series one are structured with a revolving period, then a controlled-accumulation period. In the former, noteholders will receive fixed-rate interest payments. The controlled-accumulation phase will begin on the last business day of the February 2024 period. When the deal closes, the servicer could elect to shorten the controlled accumulation period, Fitch said.
The notes benefit from several forms of support. There is a reserve account, which will mitigate the likelihood of a shortfall and assist with the subsequent distribution of interest on the certificates during the controlled accumulation period, as well as the first payment date during the early amortization period.
Credit enhancement on the class A certificates totals 12.5%. This is supported by the 3.75% and 8.75% subordination levels on the B and collateral interest classes, respectively.
Fitch expects to assign ‘AAA’ ratings to the class A certificates, none of which have any exposure to Libor. All of the assets and liabilities are pegged to fixed-rate assets. In another layer of protection, the notes are subject to several payout events, such as an insolvency involving any transferor or other holder of the original transferor certificate, or if AECAMT becomes an investment company, as defined by the Investment Company Act.
The notes are expected to mature on March 17, 2025, while the series terminates two years later, on March 15, 2027.
