Citibank is issuing its third offering of the year from its Citiseries Credit Card Issuance Trust, according to Moody’s Investors Service.

The transaction consists of a single $825 million tranche of class A notes with an expected maturity of December 2021 and a legal final maturity of December 2023. It is rated ‘AAA’ by Moody’s Investors Service.

It has been assigned a coupon of Libor plus 49 basis points. There is no indication in the presale report of how the deal priced; if investors pay less than face value, their effective yield would be higher; conversely, if they pay more than face value, their effective yield would be lower.

Among the transaction strengths, according to Moody’s, are iits highly rated sponsor bank, experienced servicer. Citibank has securitized credit card receivables since 1988. As of September 2016, it managed a portfolio of approximately $125.3 billion, of which it sold approximately $42.9 billion to the Citibank Credit Card Issuance Trust.

The portfolio is also highly seasoned As of September 2016, 85% of the trust receivables are tied to card accounts which Citibank originated more than five years ago. “Cardholders who have been making payments on their cards for a long period of time are less likely to default in the future,” the presale report notes.

Challenges include a relatively high average account balance and high average credit lines. The pool’s weighted average account balance (excluding accounts with no balance) was $3,900 as of the end of September 2016, higher than that of most peers.  A higher balance requires a higher minimum payment, making it harder for cardholders to stay current.

The pool’s weighted average credit line was $19,761 as of September 2016, also high relative to its peers. This poses incremental credit risk, according to Moody’s, because cardholders under financial duress tend to use up their unused credit lines.

Unlike most if its peers, which have not added new accounts to their trusts in recent years, Citibank has added approximately 7.7 million accounts with a receivables balance of approximately $22.8 billion since September 2013. Moody’s sees this as a risk because, If Citibank adds receivables from accounts of lower credit quality, the average credit quality of the receivables will deteriorate.

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