Evergreen Credit Card Trust, 2022-CRT1, is preparing an issuance of asset-backed securities (ABS) notes, with two classes of notes to be issued to U.S. investors via the rule 144A and Reg S.
The deal's senior class of notes will be denominated in Canadian dollars, according to Fitch Ratings. Canadian dollar-denominated Visa and Mastercard credit card receivables from personal and business accounts provides the collateral for the deal, according to S&P Global Ratings.
Evergreen is a credit risk transfer transaction to reduce the risk-weighting of credit card assets on TD Bank's balance sheet, according to Fitch.
While the amount that the trust would issue to investors was unclear, previous Evergreen Credit transactions have issued amounts ranging from $428 million to $1,070 billion. The trust's two previous deals both issued $535 million in notes, according to, Finsight a capital markets data provider.
The class A notes benefit from enhancement through 8.5% subordination of class B and C notes, and the class B notes receive 2.5% subordination of the class C notes. Class C benefits from excess spread, according to Fitch Ratings. This represents an increase of 200 basis points, compared with enhancement of 6.5% on the class A series 2021-1 certificates, the rating agency said.
Fitch expects to assign 'AAA' ratings to the class A notes, and 'A' and 'BBB' to classes B and C notes, which have a legal maturity date of July 15, 2026. S&P expects to assign similar ratings, except that the class B notes will receive a rating of 'A+', and the rating agency says the deal is slated to close on August 15.
TD Securities and J.P. Morgan Securities are lead underwriters on the transaction, according to Fitch. Toronto-Dominion Bank will act as the receivables seller, the servicer and swap counterparty on the deal. Computershare Trust Co. of Canada is the issuer trustee, according to Fitch.
On average, the credit cards accounts have an account balance of C$1,935 ($1,501.13) The accounts have an average credit limit of C$29,664, and 100% of the accounts in the pool have been seasoned for at least five years, according to Fitch.
