Capital One is marketing $500 million of securities backed by credit card receivables from its Capital One Multi-Asset Execution Trust.
The Class A, 2014-5 notes have been assigned a preliminary AAA’ ratings by Standard & Poor’s. Credit Suisse Securities and RBC Capital Markets are the lead managers on the deal. Merrill Lynch, Pierce, Fenner & Smith, The Williams Group L.P., J.P. Morgan Securities, Wells Fargo Securities and Mischler Financial Group are co-managers on the transaction.
Series 2014-5 is structured similarly to the previous class A, 2014-4 notes issued in September. The notes benefit from credit enhancement of 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 diversife 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.
“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," stated S&P. "We consider the performance of mature accounts to be more predictable than that of newly originated accounts. “
The portfolio includes receivables from consumer accounts (approximately 89.4% of the receivables as of Aug. 7, 2014) and small business accounts (approximately 10.6% of the receivables as of Aug. 7, 2014).