Through the purchase of credit card giant MBNA Corp., Bank of America Corp. last week became the latest - and largest - in a string of national banks that have acquired U.S. credit card companies. While more such deals are widely expected to follow, some analysts are not predicting a dramatic slowdown in issuance of credit card-backed securities. "I'm looking for issuance to be pretty flat to what we saw in 2005," said Juliet Jones, an associate director at Barclay's Capital. Jones is projecting $60 billion of credit card ABS issuance this year, compared with last year's $58 billion. A Bank of America spokesman did not return a request for comment by press time.
It is true that some of the few remaining monolines have been absorbed into financially stronger, more diverse franchises, leaving these issuers potentially less reliant on securitization as a funding source, Jones said. The credit card ABS sector has been wounded by a combination of M&A activity and a lack of receivables growth, due in part to the appeal of home equity loan and line of credit products. But while monoline credit card issuers have slashed their cost of funds under more credit worthy parent companies, issuance will not necessarily dry up.