Citibank plans to issue a follow up to its early May issue according to a deal prospectus filed with US Securities and Exchange Commission yesterday.
The size of the deal was not indicated in the prosectus. With this latest deal, Citibank Credit Card Issuance Trust Floating Rate Class 2013-A2 notes, the banks will have 32 subclasses of notes of the Citiseries outstanding.
Citibank priced the 1.97-year, class A notes rated ‘AAA’ by Fitch Ratings at 10 basis points over the one month Libor.
Lenders Build Accounts
Moody’s Investors Service noted in a report today that credit card balances are still 16.5% below their 2008 peak. Balances per dollar of spending are down nearly 30% from their peak.
But record low credit card delinquency rates and charge-off rates are likely to support a boost in the origination of new credit card accounts.
A lack of alternatives is also likely to support credit card borrowing. Prior to the financial crisis, most homeowners had ready access to lower-cost home equity loans and lines of credit, explained the Moody’s report. Today home equity is very difficult to access so consumers are more likely to use their credit cards to finance desired purchases than they were a decade ago.
“Given these drivers, a period of rapid growth in credit card balances seems inevitable,” said Moody’s analysts in the report. “The most difficult question is when it will occur; our forecast calls for this to begin late this year, kicked off by an improvement in economic growth that comes from the waning impact of federal fiscal restraint.”