Following the recent acquisition of most of Signature Card Inc.'s Dining a la Card assets, Transmedia Network Inc. will securitize its growing portfolio in the asset-backed market after a three-year absence via Chase Manhattan Bank.
In fact, an overall financing plan calls for the consolidation of Transmedia's receivables with those purchased in the new Dining a la Card deal, creating one "supersized arrangement" that would manage funding for both portfolios.
According to a company official, that could result in a marked increase in securitization volume compared with Transmedia's past offering.
The deal will give Transmedia $60 million in receivables in addition to the $90 million in collateral the company already has on the books, making volume on a potentially consolidated deal in the $150 million to $200 million range.
Transmedia, a Miami-based company that offers credit cards to consumers for discounts on dining, travel, retail catalogs and long distance telephone calls, securitized $33 million of what it calls "rights to receive" collateral for the first and only time in 1996 via Structured Finance Advisors.
Though for the time being that program will continue to issue from the same trust, while the Dining a la Card debt will be housed in a separate trust, the pools will ultimately be combined, said Gene Henderson, president and CEO of Transmedia.
"Frankly, down the road somewhere, we'd like to have one pool of rights," he said. "If we consolidate the trusts, where one basically manages the funding for all the restaurants from both portfolios, [securitizations] would be significantly larger."
The upcoming Chase-led deal should be larger than the company's $33 million transaction, but not dramatically so, Henderson said. The deal will replace a $35 million senior secured revolving bridge loan Transmedia received from Chase in order to buy the Dining a la Card assets. Additionally, Signature received $3.2 million in Transmedia stock and stock options in the deal.
The Dining a la Card deal gives Transmedia access to a network of dining members affiliated with airline frequent-flyer programs, such as those at American Airlines, Delta Airlines, and United Airlines.
Typically, cash advances in the form of food and beverage credits are paid by Transmedia to various restaurants at a deep discount. Then a portion of the savings is passed on to Transmedia customers. - SK