General Electric Capital Corp. priced $900 million of notes backed by credit card notes backed by credit card receivables on Tuesday afternoon, according to a U.S. Securities and Exchange Commission filing.
The deal's class A notes, rated 'Aaa'/'AAA' by Moody’s Investors Service and Fitch Ratings, priced at 40 basis points over interpolated swaps curve with a fixed rate coupon of 1.35%. The tranche was upsized to $800 million from $600 million.
The $100.9 million, class B, ‘A2’/ ‘A+’, 4.97-year notes were retained by the issuer. The capital structure also marketed a $51.1 million class C tranche that was not included in Tuesday’s pricing document.
The GE Capital deal, brings year to date issuance in the sector to around $6.8 billion, and ahead of the $5.5 billion issued during Q1 2012. This year’s 9 transactions include GE Capital, American Express, Cabela, RBC, 2 JP Morgan Chase deals, World Financial Network Bank, Discover Financial and Capital One.
However analysts at Wells Fargo said in a report on Tuesday that this year's credit card ABS issuance is likely to be driven by the refinancing activity from the six largest credit card ABS issuers—American Express, Bank of America, JP Morgan, Citibank, Capital One and Discover -- which account for about 80% of outstanding credit card ABS at the beginning of 2013.
Unless these issuers have a need to refinance maturing ABS deals in a greater proportion than they did in 2012, Wells Fargo said, it’s likely that the credit card ABS new issue volume in 2013 will be limited to $35 billion.
“The largest credit card lenders have about $30 billion of ABS coming due in 2013, with BACCT and CHAIT accounting for more than half of it,” said the analysts. “CHAIT was relatively active in ABS during 2012, so we would not be surprised to see additional refinancing activity from that trust. However, there has been no issuance from BACCT since May 2010. Furthermore, COMET and CCCIT have been largely absent from the ABS market until fairly recently.”