While securitization of residential mortgages that lack government backing remains moribund, credit card and other consumer lenders have issued about the same amount of ABS this year as they did in 2008 thanks to a federal rescue.

That has kept open one of the more interesting sources of information on the industry.
Prospectus data appears to confirm American Express Co.'s widely recognized grip on affluent cardholders. But competitors' prospectuses show that Amex is far from alone among major issuers in relying heavily on big spenders.

In fact, while high-limit accounts appear to have made up a far greater proportion of Amex's portfolio than at any of its five biggest U.S. competitors, the numbers indicate that lending to customers who run large balances makes up bigger pieces of the business in dollar terms at Bank of America Corp. and Citigroup.

At Amex, of course, the relative disconnect between high-limit customers and heavily indebted customers reflects its focus on charge accounts that generate fees because of high transaction volume. In the third quarter, the annual pace of transactions on Amex's U.S. cards was 6.6 times larger than receivables, compared with 1.3 at BofA and 1.9 at Citi.

And prospectuses do offer an imperfect vantage: about half of U.S. receivables have not been packaged into bonds, and issuers can move accounts in and out of the trusts that back them. Comparisons are also complicated because issuers sell bonds at different times, so snapshots of portfolios on the same date are not available.

Still, the prospectuses provide sweeping perspectives on the composition of portfolios — including data that segments loan portfolios by credit limits and account balances, for example — that is generally not available elsewhere. And they show that, while the giant credit card companies clash over much of the same consumer territory, they retain sharp differences in strategy and focus.
By and large, people with no balances made up half or more of account rosters in securitizations at large issuers, while cardholders who had taken out more than $10,000 each made up about half of receivables.

But while 36.8% of Amex's accounts had limits above $20,000, compared with 18.6% at B of A and 18.9% at Citi, customers at B of A and Citi who had run up debts of more than $10,000 made up slightly bigger fractions of receivables than at Amex.

Use of high-limit cards at Citi also illustrates the importance of the sector to the company. Accounts with limits of more than $20,000 made up 51.2% of receivables at Citi, roughly the same as Amex's 52%.

Bulges in lending to people who carry large balances can imply risks associated with exposure to heavily indebted consumers, or simply the importance to the industry of people who can sustain such debt.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.