With Circuit City's $470 million deal and the $906 million deal from Sears, Roebuck and Co., private-label credit-card ABS has had a fair showing so far this year, yet the pipeline for potential deals continues to grow.
Most recently, Spiegel Inc. joined the ranks of Target Corp. (formerly Dayton Hudson) and Saks Credit Corp., filing for securitization with the Securities & Exchange Commission. Further, it's rumored that Neiman Marcus will consider the market sometime soon.
Unlike most bankcard issuers (Sears aside), private label issuers generally hit the market once every few years.
"They don't issue as frequently as bankcard issuers," said Bonnie Lee Tillen, director of the credit card securitization group at Standard & Poor's Ratings Service. "The last time a lot of these issuers hit the market was probably in 1994 and in 1995. The increased securitization activity for the private label sector this year is due to some receivables growth, but mainly as a result of having to refinance older deals that are hitting their scheduled payment date."
According to the Spiegel filing, deals from the Spiegel Credit Corp III trust will be senior/subordinate and structured in three parts, with A-class, B-class, and C-class notes. Though underwriter has yet to be named, the trust will likely be brought by Banc of America Securities, sources said.
Banc of America was also lead manager on Circuit City's deal in February.
In addition to the retailers in the pipeline, there's the possibility that financing companies such as Household International, Associates First Capital, or GE Capital will bring their private label portfolios market. GE owns the private label portfolio of JC Penny and Wal-Mart.
Associates, which has been stockpiling retail and gas cards over the last year and-a-half, currently funds in the private market, though just this month the company launched its first ever public bankcard deal, worth nearly $900 million.