Barclays Pooling $632M in Co-Branded Card Receivables

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Barclays’ U.S. credit card master trust is issuing $632.9 million in new notes backed by a revolving pool of primarily co-branded card receivables.

Barclays Dryrock Issuance Trust Series 2017-1 will issue two tranches of notes, including $500 million of Class A notes that S&P Global Ratings has assigned a triple-A rating.

There will also be an unrated $132.91 million tranche of Class B notes.

The Class A notes in ave 21% credit support in the latest pool.

Unlike Barclays Dryrock’s fixed-rate issuance through the 2016-1 series, the new series will have floating rate notes based on the one-month Libor rate.

As of March 31, according to S&P, Barclays’ trust managed about $8.3 billion in credit-card receivables from 3.9 million designated accounts. Nearly 93% of receivables were co-branded with 18 partnering companies with LL Bean (19.81% of the pool) and Apple (20.17%) having the largest number of accounts.

Also utilizing Barclays for co-branded credit-card efforts are American Airlines, Upromise and Carnival Cruise Lines. About $580 million of the receivables are non co-branded.

The trust has yet to acquire all of the collateral for the notes, which means that there is likely to be relatively higher amount of accounts with less seasoning, according to S&P.

The weighted average age of the accounts was about 78.5 months, up from 72.2 months for the prior series (accounts older than 60 months generated 61.8% of the receivables in the new series).

The average principal receivables balance of $2,112 is in line with Series 2016-1, as is the average credit limit of $10,581. The average utilization rate is 20.2%.

Over 90% of the borrowers have FICO credit-score profiles of 720 or above.

The average yield of receivables in the trust is 19.5%, with net losses averaging 3.5%. S&P has a base-case loss assumption rate of 7% assigned to the issuance.  

The 30-plus-day delinquency rate is 2.3%, above S&P’s credit card quality index rate of 1.6%.

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