GE Capital Corp. has received regulatory approval to securitize up to $5 billion of the credit card receivables originated by its Monogram Bank unit. Its inaugural offering is expected shortly after the closing of the Bank One/J.P. Morgan Chase merger, sources said. JPMorgan Securities will reportedly underwrite the pending transaction. The first offering from the RFS Funding Trust will be a senior/sub floating rate offering of a yet-to-be determined tenor, according to records filed with the Securities and Exchange Commission (SEC).

With more than 100 million accounts, totaling roughly $60 billion in consumer debt, GECC is one of the leading private label credit card issuers in the world. Loss rates for the portfolio sat at 6.5% through 2002 and, using GE's 2003 year-to-date estimate, would average 6.3% since 2001. GECC also reports a steady 7% decline in cost-per-account since 1999, currently at $32.82 per account.

Monogram Bank is listed as originator/servicer with RFS Holding as the transferor. The receivables in the trust are presumably from GE Capital's retail and private label originations. GECC offers credit cards on behalf of home improvement chains Home Depot Inc. and Lowe's Co., as well as retail giant Wal-Mart, various units of The Gap and even the gas cards for ExxonMobil.

GE Capital officially stated its intention to sell credit card ABS from the RFS Trust last July, when it filed its initial S-3 shelf registration with the SEC (see ASR 8/4/03). As previously reported, this is just part of an effort for GECC to increase securitization activity, including selling wholesale dealer floorplan ABS and commercial loan ABS. Also, the finance giant is planning its inaugural CDO offering later this year.

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