Synchrony Bank, formerly GE Capital Retail bank, plans to issue $590 million in bonds backed by credit card receivables.
The bonds will be issued under Synchrony’s master trust, which was formerly the GE Capital Credit Card Master Note Trust.
Synchrony is currently 85% indirectly owned by General Electric Capital Corp. (GECC) through GECC's ownership of Synchrony Financial, the direct parent of Synchrony Bank. GECC intends to spin off its remaining ownership in Synchrony in late 2015.
Fitch Ratings and Moody’s Investors Service expect to assign AAA’/ Aaa’ ratings to the $500 million of class A notes. The three-years bonds have credit enhancement at 28%. The three-years, class B notes will be rated AA’/ Aa2’ and benefit from credit enhancement of 21%.
The three-year class C notes have credit enhancement of 15% and will be rated A’/ A2’.
GE Capital Retail Bank changed its name to Synchrony Bank on June 2, 2014. The bank offers mostly private-label credit card accounts. The private-label credit card account business consists of revolving consumer credit account programs established with retailers that have been approved by the bank. The bank currently originates co-branded credit cards for several retailers, including Wal-Mart, Sam's Club, JCPenney and Gap.
With the issuance of series 2014-1, there will be 23 series outstanding in the master note trust. Principal receivables totaled approximately $16.92 billion as of Aug. 21, 2014, according to Fitch The active accounts designated for the trust portfolio had an average account balance of $675 and an average credit limit of $3,318.