Hunting and fishing equipment retail chain Cabela’s is planning a $425 million securitization of customer credit-card receivables, according to a registration filing Monday.
The filing also confirms recently published reports the company is exploring a sale of the company and/or its credit-card operations, under pressure from activist investors such as hedge fund Elliott Management.
Cabela’s Credit Card Master Note Trust Series 2016-I will include two Class A notes structures split between fixed-rate and floating rate tranches. The sizes of the six-year Class A-1 and A-2 notes will be determined the day of pricing, according to the prospectus.
The Class A notes are expected to garner triple-A ratings from Standard & Poor’s, Fitch Ratings and DBRS.
The trust will also issue a series of Class B ($40 million), Class C ($21.25 million) and Class D ($13.75 million) that are part of the 2016-I, but will not be included in the public offering.
Wells Fargo Securities, Bank of America Merrill Lynch and RBC Capital Markets are underwriting the series. The issuer is WFB Funding, a banking subsidiary of Cabela’s.
The total amount of loans in Cabela’s Credit Card Master Note Trust is $4.86 billion, covering more than 3.1 million accounts.
The issuance comes as the Cabela’s confirms it is exploring a sale, the company outlined in its filing. Reports have circulated about potential buyers, such as rival recreational and outdoor retailer Bass Pro Shops, since the company announced a “strategic alternatives” review in December.
The sale could include Cabela’s itself, or just the credit-card portion of its business.