While credit card issuance ran ahead of maturing deals in August, this trend is unlikely to hold for the rest of the year, said Wells Fargo analysts in a recent report.
This would make the rise in outstanding credit card securitizations during August a wrinkle in what has been a longer-term decline. Lending conditions remain restrictive, weighing on issuance, the analysts said.
Outstanding credit card ABS hit $119.2 billion in August from $117.6 billion in July. The increase was largely fueled by issuance from big banks, in particular Citibank. The analysts estimate that maturities for the rest of 2013 will total $10.4 billion and issuance will, again, fall behind.
This will eat into outstanding bonds through the end of the year.
At the end of Q2, outstanding credit card ABS accounted for 18.4% of all credit card loans. In 2007, the figure rose as high as 38.5%.
“A lack of receivables growth, a robust corporate debt market, and a higher regulatory burden for securitization have pushed credit card lenders away from ABS over time,” the Wells analysts said.