The Credit Store Inc.'s credit-card program should carve out more of a presence in the asset-backed market as a three-fold jump in originations is expected to fall into company coffers over the next few months, and its largest deal yet is scheduled to land by the end of the year.
The Sioux Falls, S.D.-based company expects to launch a $50 million securitization based on the card debt it collects. An underwriter has not been disclosed yet by the company.
The Store buys nonperforming credit-card debt and gets it performing again. The company uses a "single-life event" method as a strategy for picking winners from losers, said Martin Burke, chairman and chief executive officer at The Store.
The company will search consumer credit histories for such a single dip in payments, perhaps due to temporary unemployment, and will buy the debt a few months following the event. That time is considered sufficient to alleviate payment problems triggered by the event.
The Store had accessed the capital markets previously by selling its debt to Miller Schroeder, a boutique financial-services company that syndicates its position out to numerous regional banks, allowing smaller lenders a start in the securitization business.
Burke said the company has sold $5 million to $8 million pieces of its card collateral to Miller Schroeder in the past.