Capital One Bank is offering $500 million of notes backed by credit card receivables from its Multi-Asset Execution Trust, according to a presale report published by Standard & Poor’s.
S&P has assigned a preliminary AAA’ rating to the 2014-4 series of Class A notes, which have an expected maturity of August 2019.
Barclays Capital, Credit Suisse Securities, RBC Capital Markets, Bank of America Merrill Lynch, Goldman Sachs, J.P. Morgan Securities, and Wells Fargo Securities are the underwriters.
The latest tranche of Class A notes benefit from credit enhancement f 17% provided by the class B, C, and D notes outstanding, which are subordinate.
In its presale report, S&P stated that the receivables designated to the master trust reflect a well-seasoned, geographically diversified prime portfolio with high FICO scores, long performance histories, and a high percentage of accounts making full payments. Also, the balances and credit limits are higher in 2014 than they were in 2007, before the financial crisis.
“We believe that the increase in balances and credit limits is attributable to the high concentration of mature accounts, which tend to have high credit limits and balances, and fewer newly originated accounts, which typically start out with lower limits and balances than mature accounts,” the report states. “We consider the performance of mature accounts to be more predictable than that of newly originated accounts.”
Capital One was last in the market with a credit card deal in April, when it sold $750 million of class A notes in two tranches, a three-year tranche and a five-year tranche.
