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Comenity Bank Prices Upsized 3-Year Credit Card ABS

Comenity Bank priced an upsized securitization of credit card receivables from its World Financial Network Credit Card Master Note Trust.

The issuer sold an extra $60 million of notes for a total of $360 million. It priced the floating-rate three-year notes with an AAA rating from DBRS at 48 basis points over one-month Libor.

By comparison, on March 19 Capital One priced $1.2 billion of three-year, fixed-rate, triple-A rated credit card securities at swaps plus 51 basis points.

Comenity’s deal is backed accounts with an average balance of $1,299. The weighted average age was 75.72 months; most are older than 60 months.  

According to DBRS, the trust's 32.5% utilization rate is one of the highest among its peers. “In our view, this is largely due to the pool's $1,299 average credit limit, which is among the lowest in the private-label credit card sector,” the presale report states. “However, the pool's low credit lines are consistent with Comenity's niche among soft goods retailers, which tend to have lower credit limits than retailers offering bigger-ticketed items”.

BNP Paribas, Bank of America Merrill Lynch and Mitsubishi Securities are lead managers on the deal.

This is Comenity's first credit card securitization of 2015; it completed three deals in 2014.

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