The WF Card Issuance Trust is preparing to sell $500 million in asset-backed securities to investors, secured by a pool of receivables from revolving consumer credit card accounts.
Just one tranche of notes will be issued in the public deal, according to a Securities and Exchange Commission filing, and S&P Global Ratings and Fitch Ratings, which assessed the deal. The notes have an expected maturity date of May 15, 2030.
The class A notes benefit from credit support amounting to 20.0%, derived from the subordinated class B, C and D notes, S&P said. The rating agency added that the B, C and D tranches maintain minimum subordination percentages, 12.5%, 8.1% and 4.3%, respectively, of the class A notes' adjusted outstanding principal amount. This allows them to provide credit support for the class A notes.
It added that when expressed as a percentage of the entire capital structure, the credit support levels translate to 20.0%, 10.0% and 3.5% of the B, C and D notes, respectively.
Both S&P and Fitch assigned AAA ratings to the notes, which are slated to come to market on July 31, according to Asset Securitization Report's deal database.
The fixed-rate notes will repay investors on the 15th day of the month.
S&P based some of its ratings reasoning on its view that a 5.00% minimum transferor interest percentage will not be enough to absorb dilution or noncash reductions in the receivables in full. That gives the deal a 1.00% uncovered dilution.
In all, the receivables have a balance of $9.2 billion, and accounts have an average principal balance of $2,797, the rating agency said.
In its assessment, Fitch said, the underlying receivables in the collateral pool
had rising delinquencies and chargeoffs that were largely in line with prime credit card indices for the U.S. Sixty day-plus delinquency rates and chargeoffs, for instance, increased to 1.06% and 3.39%, respectively, from 0.74% and 0.73% the year before.
