More than a year after Citibank's groundbreaking de-linked credit card master-note trust was introduced, two new companies are working on unveiling similar vehicles in the coming year, according to sources familiar with the developments. Company sources confirmed that in the coming months, top-tier issuers Capital One and First USA - which recently re-branded to Bank One - plan de-linked masternote trusts of their own.
This move was widely expected due to both trusts' sheer mass and the economic advantages available for opportunistic MTN-like tapping of the market for frequent issuers. The exact timing of the first offering from either issuer, however, is unclear at this time.
The structure debuted in September 2000 and Citibank subsequently sold over $6 billion of ABS in the fourth quarter alone, with MBNA following suit in May with its "MBNAseries" issuance vehicle.
So far this year, Citi has sold $9.5 billion of CCABS (including last week's combined $1.25 billion) and MBNA has brought approximately $8.5 billion. Meanwhile, Capital One has sold $8.3 billion this year of traditional senior/subordinated paper with First USA having sold only $3.8 billion, after a hiatus from the market in 2000.
These issuers collectively account for approximately $29.7 billion of the $63.4 billion that has priced year-to-date, or roughly 46% of the total sector volume, according to Thomson Financial.
On a related note, retailer Saks Inc. priced a simplified version of this structure in June, selling the subs a week prior to the senior class. While the de-linked feature is technically available to all credit card master-note trusts, it must be done on a deal-by-deal basis.
Sources also noted that a Saks-like offering is in the works from another off-the-run issuer near the beginning of next year. Although a name could not be disclosed, it is reportedly a similarly infrequent primary-market participant who would benefit from a simplified version of the structure rather than incurring the cost of setting up an entirely new de-linked issuance vehicle. Since the Saks deal was engineered by Banc of America Securities, it is likely the bank would lead the next offering as well, sources say.
