A UK private-label credit-card issuer is sponsoring a £1.7 billion (US$2.32 billion) securitization of domestic MasterCard account receivables, in a transaction that will include a tranche of US-dollar denominated notes.
Presale reports issued Monday by DBRS Morningstar and Fitch Ratings state that monoline credit-card lender NewDay Cards is pooling accounts from near-prime borrowers, in a deal arranged by Banco Santander, BNP Paribas and NewDay.
The capital stack includes seven classes of notes. The senior A1 and A2 tranches will be split between British pound sterling and US-dollar notes. The UK and US notes will be priced to the SONIA interest-rate benchmark and the Secured Overnight Financing Rate (SOFR) respectively.
While NewDay is also active in the retail credit-card market, none of the accounts pooled in the transaction involve co-branded retail receivables, according to the presale reports. All of the MasterCards are issued NewDay's Aqua, Opus, Marbles and Fluid card brands.
The transaction marks the first time London-based NewDay has issued notes through a newly established master trust, through which subsequent series will be offered.
Like in the U.S., the impact of the coronavirus pandemic on credit-card asset performance has been mitigated by company payment deferrals, which peaked at over 16% of NewDay’s managed portfolio in June 2020, according to Fitch. By December, that rate had declined to 4.7%, which Fitch said “suggests that most customers who took deferrals have since resumed payments.”
