Mission Lane Credit Card Master Trust is preparing to issue $325 million in asset-backed securities to investors, backed by revenues from a pool of credit cards extended to customers with moderate credit, specifically accounts owned by Transportation Alliance Bank.
As of July 31, 2023, known as the information date, the MLCCMT's collateral has a weighted average (WA) FICO score of 623 outside of credit balance, no balance, no FICO and closed accounts, according to the Kroll Bond Rating Agency. Proceeds from the sale of the notes will purchase receivables from Mission Lane, a general-purpose credit card program under the Visa brand.
On average the receivables have a balance of $971, a WA average percentage rate of 32.88%, and a WA age of 24 months on the accounts, the rating agency said. Also, cardholders might pay an annual membership of up to $75. At origination credit lines range from $300 to $3,000, while the average credit limit on active accounts is about $1,532, KBRA said.
The transaction, MLCCMT 2023-B, will issue notes through five classes, all of which have the same legal final maturity date, Nov. 15, 2028, according to KBRA. The class A notes have an initial enhancement level of 35.8%, while classes B, C, D and E have enhancement levels of 28%, 17.7%, 10.1% and 3.6%, respectively.
Other forms of credit enhancement include excess spread, overcollateralization and subordination—except for the class E notes—and a reserve account.
KBRA will assign ratings of 'AA' to the class A notes; 'A' to the class B notes; 'BBB' to the class C notes; 'BB' to the class D notes and 'B' to the class E notes.
