With deterioration continuing among U.K. credit card trusts, market players are expecting more deals to follow Barclaycard's GBP111.8 million ($211.8 million) subordinated multi-tranche issue that supports its GBP8.2 billion Gracechurch Card Funding Trust, the first publicly rated double-B U.K. credit card ABS. Capital One executed a similar transaction earlier this year, but the double-B tranche was privately placed. The Barclays financing will provide an additional 2% hard credit enhancement to outstanding Barclaycard notes.

Moody's Investors Service released U.K. credit card indices for May 2006. The rating agency noted the continuing deteriorating trend throughout the various U.K. credit card securitization trusts since the beginning of the year. The high level of charge-offs continues to have a negative effect on excess spread, which showed a significant deterioration from the relatively stable levels observed in 2005.

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