Assuming the recently announced acquisition of the Fingerhut Inc. credit card portfolio by CompuCredit Corp. goes through, the subprime lender is likely to let the outstanding ABS wind down. the catalogue is being purchased by a firm headed by Fingerhut's former CEO, notes Barclays Capital ABS analyst Juliet Jones. While there is some risk of early amortization due to the fact that no new receivables may be added to the trust, Jones notes that enhancement should be sufficient.

"The 32% enhancement levels are sized so they offset a worse case scenario and should be more than sufficient, all else remaining equal. Disruptions to servicing are mitigated by the retention of the servicing staff," says Jones.

Fingerhut has only one ABS outstanding, 1998-2, which is scheduled to have its $450 million triple-A notes pay down in November 2003. By purchasing the trust at a presumably large discount, CompuCredit is seen just letting the deal pay off, collecting servicing fees along the way - having minimal impact on outstanding FMT ABS holders.

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