Glacier Credit Card Trust is issuing Glacier Credit Card Trust (Series 2024-1) fixed-rate notes backed by an ownership interest in a revolving pool of Canadian dollar-denominated Mastercard and retail credit card receivables, according to S&P Global Ratings.
The card accounts are originated by Canadian Tire Bank, a subsidiary of Canadian Tire (rated BBB/Stable/A-2 by S&P). Canadian Tire's retail segment is one of Canada's largest general merchandise retailers, operating through multiple platforms including Canadian Tire, Mark's, and SportChek. These collectively sell merchandise such as auto parts and accessories, sports and leisure products, apparel, and home products. Canadian Tire is also one of Canada's largest independent gasoline retailers. The bank contributes significantly to Canadian Tire's operating income, according to S&P.
CTB currently manages approximately 7.3 million accounts with an aggregate balance exceeding CA$6.8 billion (US$4.97 billion). Approximately 50% of the total managed accounts, representing 53% of the aggregate managed balance, have been designated to the trust. CTB is the seller, servicer and administrative agent for the pool.
The sale of GCCT 2024-1 credit card asset-backed fixed-rate senior and subordinated notes aims to raise CA$550 million (US$401 million). Glacier issued one series per year for 2020, 2022 and
The Bank of New York Mellon Trust Company is the indenture trustee, and Stikeman Elliott is the manager legal advisor.
The closing date was June 18, 2024, the expected repayment date for Series 2024-1 is September 20, 2026, and the legal final maturity date is September 20, 2029.
The deal benefits from excess spread, overcollateralization, and senior/subordinate enhancements.
According to Morningstar DBRS, the portfolio is generally higher credit risk and comprises more revolvers than other Morningstar DBRS-rated credit card securitization portfolios, as evidenced by the portfolio's historically higher loss rates and lower payment rates compared with other Canadian issuers. Also, payment rates have come down from their peak and net loss rates have returned to historical levels prior to the pandemic.
However, overall performance of the portfolio continues to remain strong, and risk is mitigated by CTB's strong credit risk management, servicing experience, and appropriately sized credit enhancement levels, Morningstar DBRS says.
Certain key macroeconomic factors, including high household debt levels and higher unemployment, could contribute to deterioration in credit card collateral performance, according to S&P.
S&P has assigned an AAA rating to the credit card asset-backed senior notes, and A to the subordinated notes. Morningstar DBRS's final ratings are identical.
