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JPMorgan sponsors first card ABS since 2018

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JPMorgan Chase has priced its first credit-card securitization in nearly two years, totaling $1 billion in a new Class A notes series with a fixed rate of 1.53%, according to a company regulatory filing Monday.

The notes are backed by receivables from its $14.7 billion portfolio of credit-card accounts serviced by JPMorgan.

JPMorgan’s card ABS issuance is the first U.S. bank deal for 2020, and the first priced from the trust since a $1.4 billion issuance in May 2018. (Bank of America and Citigroup have also been dormant for the past two years in securitizing credit-card receivables).

The notes are the first fixed-rate offerings through CHAIT since 2016, according to ratings agency presale reports.

With issuance expected Feb. 18, Chase will have eight outstanding tranches of Class A notes totaling $6.08 billion from the Chase Issuance Trust (CHAIT) entity, out of a total of $9.08 billion including subordinate Class B and C notes that have been periodically issued.

The JPMorgan managed portfolio maintains a stable performance with a 12-month average chargeoff rate of 2.58%, slightly lower than the 2.66% rate a year ago, according to S&P Global Ratings and Fitch Ratings.

The monthly payment rate, the percentage of accounts with fully paid balances each month – has increased on a 12-month average basis to 36.55%. The current 40.05% MPR level is “historically high” for the platform, according to Fitch.

Both Fitch and S&P assigned preliminary AAA ratings to the Class A notes.

The CHAIT Class A (2020-1) notes will have a weighted average life of 2.91 years.

The transaction is just the second credit-card ABS deal to price this year, following a US$489 million issuance from Bank of Nova Scotia’s Trillium Credit Card Trust II.

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Credit card ABS JPMorgan Chase