Recent news from bankrupt retailer Spiegel Inc. did not bode well for holders of the issuer's outstanding ABS, as an agreement reached with Dallas-based Alliance Data Systems sealed the fate of the private label and bank card trusts. Reports surfaced that a buyer could not be found, even with an increased servicing fee that federal regulators hoped would make the portfolios more attractive.
Alliance, which owns ABS issuer World Financial Network National Bank, signed three separate agreements for Alliance to originate, service and manage the credit card accounts for Spiegel's three main distribution channels: Eddie Bauer, Newport News and the Spiegel Catalog. Each of the deals are for 10-years each and make logistics less complicated should the entities be split up during bankruptcy. Reports surfaced last week that rival catalog retailer L.L. Bean was the leading bidder for just the Eddie Bauer unit.