Last week Capital One Financial Corp. announced plans to acquire New Orleans-based retail bank Hibernia Corp. for $5.3 billion, and though the move will undoubtedly give Capital One more liquidity and funding access, there is doubt as to what the future holds for the company's credit card ABS issuance volume.

Merrill Lynch researcher Theresa O'Neill, noted that the acquisition is not likely to seriously affect Capital One's securitization program, but, if anything may decrease it. "Once the acquisition is complete, we expect Capital One to utilize the funding advantages offered by Hibernia, possibly reducing the size of Capital One's securitization programs. Nevertheless, management indicated its intent to securitize some of Hibernia's assets, its $15.7 billion loan portfolio consists of 21% small business loans, 25% commercial loans and 54% consumer loans," writes O'Neill.

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