Moving one step closer to placing the recently government-seized NextCard credit card portfolio, Banc One Capital Markets has accepted bids and narrowed the field to a reported four to six potential suitors for both the securitized and unsecuritized portions, including servicing rights. An announcement is expected by the end of April.
As previously reported, the Federal Deposit Insurance Corp., appointed by the Office of the Comptroller of the Currency to run the bank in the interim, has retained the services of key staffers that were laid off when the bank went into receivership. Also, Automated Management Services Co. has been hired as backup servicer, in order to prevent any disruptions in servicing once a buyer is found.
Additionally, the governing body has reportedly asked the rating agencies for permission to exchange approximately $105 million of underperforming receivables for a similar amount of accounts with higher FICO scores. The agencies have yet to unilaterally sign off on the proposal.
The Dallas field operations unit of the FDIC, it was learned, is offering approximately 900 loans originated by NextBank N.A., totaling just over $1.1 million. Of the total, the majority, 786, are classified as performing loans, while 110 are non-performing or charged off.
Bids must be submitted to The Debt Exchange (DebtX), on or before Thursday April 4. The Debt Exchange, Inc. is the largest dedicated loan-sale company in the country, according to its website.
Commenting on the possibility of a potential exchange, Barclays Capital consumer analyst Juliet Jones theorizes in an upcoming Barclays U.S. Credit Card Performance Indicators, "The saving grace is the payment rate, which has been stable in the 10% range."
"Continued usage of the cards and the trapping of principal collections to build up the trust excess funding account has enabled the trust to stay in compliance with its minimum seller's interest and minimum principal receivables requirements," she adds.
The FDIC had previously been given permission to access any aspects of the NextCard proprietary databases for a period of three months - long enough to sell the portfolio.