Chase and CIBC ended a monthlong drought in issuance of notes backed by credit card receivables, launching three offerings this week totaling over $1 billion.

On Wednesday, Chase launched an offering of $1 billion of Class A floating-rate notes with a legal final maturity of April 2023. The notes, which benefit from 14% credit enhancement, are rated AAA by Fitch Ratings. The offering is Chase's first of the year, bringing the total amount of Class A notes outstanding from the master trust to approximately $20.68 billion, consisting of $16.18 billion of class A notes, $2.25 billion of class B notes and $2.25 billion of class C notes.

And Canadian Imperial Bank of Canada launched a pair of dual-currency credit card securitizations Thursday, ending a monthlong issuance drought in the sector.

CARDS II Trust, Series 2018-1 will issue two tranches of floating-rate two-year notes and CARDS II Trust, Series 2018-2 will issue two tranches of fixed-rate two-year notes, according to rating agency presale reports. Each offering consists of two tranches, a senior tranche denominated in U.S. dollars rated triple-A by Moody’s Investors Service, Fitch Ratings and DBRS, and a subordinate tranche denominated in Canadian dollars.

The two offerings, which are as-yet unsized, are CIBC’s first credit card offerings of the year.
They are the first offering in the U.S. by anyone since TD Bank issued $600 million of fixed-rate notes through its Evergreen Credit Card Trust platform at the end of March.

CIBC has been a frequent issuer of credit card ABS since 1998. Its latest offering is backed by prime-quality, Canadian credit card receivables. Among the strengths of the deal, according to Moody’s, are a highly rated sponsor bank, an experienced servicer, expected strong collateral performance in the event of a portfolio shutdown and CIBC's demonstrated commitment to the program.

About 53% of the balance of the CARDS II portfolio is represented by card accounts that have limits in excess of $20,000, which is high relative to other Canadian credit card trusts, although the 79% of the balance of CARDS II accounts represented by card accounts that have limits in excess of $10,000 is generally in line with most U.S. credit card master trusts. A higher average open-to-buy poses incremental credit risk to trust performance, as cardholders under financial duress tend to use up their unused credit lines.

Consumer debt in Canada is at a historic high, which makes Canadian consumer loan obligors increasingly vulnerable to higher market interest rates. A sudden interest rate shock could result in more personal bankruptcies and higher consumer credit losses.

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