Mission Lane, a fintech founded in 2018, is preparing to issue $350 million in credit card asset-backed securities from the Mission Lane Credit Card Master Trust, series 2024-A.
The transaction is the program's largest deal by total receivables balance since 2022 and will issue notes to investors through six tranches of A, B, C, D and E notes, according to Kroll Bond Rating Agency. Expected to come to market on about June 25, the class A notes have an initial credit enhancement level of 39.5%.
The transaction includes a revolving period that will end on May 31, 2026, and during that time the notes will be shut out from principal payments—unless an early amortization event occurs. To avert that, and maintain the notes' credit strength, MLane 2024-A benefits from subordination, overcollateralization, a reserve account and excess spread.
Initially, the reserve account starts at 0.0%, but it will be funded to a specific target depending on the level of the notes' three-month average excess spread. Should the three-month average excess spread is less than or equal to 4.00%, 3.00% and 2.50%, then the reserve target will be 1.00%, 2.00% and 3.00%, respectively.
Aside from MLane 2024-A, the Mission Lane Credit Card Master Trust had issued ten series of notes. The current deal represents 2.4 million accounts with a total receivables balance of $2.2 trillion, according to the rating agency, and the notes have a legal final maturity of Aug. 15, 2029.
Mission Lane will also service the notes, with Vervent on the deal as backup servicer.
Receivables in the portfolio are generated by accounts owned by Transportation Alliance Bank and WebBank, both of which are Utah-chartered banks, KBRA said.
As of the deal's March 31 cutoff date, the assets had a weighted average (WA) age of 29 months and an average receivables balance of $1,170. Also on a WA basis, the assets have a FICO score of 624, an annual percentage rate of 32.8%. Cardholders might pay an annual membership fee of up to $75, and credit lines at origination ranged from $300 to $3,000.
KBRA assigns AA to the A1 and A2 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.
