Capital One Financial Corp. gained a more diverse funding source to sustain its lending business when it bought North Fork Bancorporation last week, a purchase that will reduce its reliance on the securitization market. Even so, the bank will be able to sustain its credit card ABS volume by tapping into credit card receivables from its newly acquired unit, say capital market sources.

Although the deal will lessen Capital One's dependence on asset-backed securities as an overall proportion of its funding mix, according to market sources, it might not necessarily translate into dramatically less Capital One ABS paper in the market. Capital One, which is the fourth-largest issuer of credit-card ABS in the U.S., behind Citigroup, Banc of America and JPMorgan Chase, will be able to tap into North Fork's retail banking and mortgage customer bases to market its own card product, which has more brand recognition, and a portion of the incremental loans could be securitized as well. This would mitigate some of the reduction in ABS funding, said Mark Girolamo, managing director and corporate bond analyst at Barclays Capital.

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