Comenity Bank, formerly World Financial Network Bank, plans to issue $416.6 million credit card securitization deal backed by receivables from the issuer’s private-label credit card accounts, according to Fitch Ratings.
Fitch plans to rate the class A notes AAA’; the class M notes AA’; the class B notes A+’; and the class C notes BBB’. The class D notes will not be rated. The class A notes of series 2014-A will be publicly offered and the class M, B, C and D notes will be retained by the originator. The credit enhancement supporting class A notes totals 28.00%.
JP Morgan is lead underwriter on the deal called World Financial Network Credit Card Master Note Trust’s (WFNCCMNT), Series 2014-A,
Comenity Bank is a wholly owned subsidiary of Alliance Data Systems, Inc. (ADS). The issuer’s master trust, with this latest deal, will have 11 term series outstanding, with principal receivables totaling approximately $5.41 billion as of Dec. 31, 2013, according to the Fitch pre-sale.
The active accounts that make up the trust portfolio had an average principal receivables balance of $379 and an average credit limit of $1,232. The average utilization rate for all accounts was 8.7%.
Fitch noted in the presale report that charge-offs on accounts included in the trust have picked up in recent periods, although they continue to be well below crisis levels. As of the January 2014 distribution period, gross charge-offs were 7.41%, compared with the 12-month average of 6.95% for the same period and an average of 8.73% since 2004.