The amount of securities backed by credit card receivables that mature is poised to decline rather significantly in the next few years, according to Fitch Ratings.
Some $50 billion of credit card ABS matured in 2013, but Fitch expects this figure to fall to roughly $41 billion in 2014 and then to just over $21 billion in 2016.
“Many credit card issuers pulled back on securitization and employed deposit funding during the credit crisis when rates were historically low, which is why maturities will drop substantially over the next few years,” managing director Michael Dean said in a report published Monday.
Though maturities are treading down, new credit card ABS issuance could hold at recent levels or trend higher as issuers securitize a larger portion of their portfolios. Fitch projects overall issuance to come in between $30 billion to $35 billion for 2014, consistent with levels seen in recent years.
The combination of falling maturities and rising issuance means outstandings could increase. Total prime credit card ABS outstandings rose $8 billion in 2013 to $122 billion.
“The rise in credit card ABS outstandings last year indicates issuers’ willingness to utilize securitization as a funding source once again,” said Dean.