Deutsche Bank

The 144A deals close within a week of each other and both have eight-year maturities. Series 2024-P3 has four class A tranches compared with 2024-N3's three class As.

Among the credit challenges, is the lack of amortization on the loans, and the loans are heavily concentrated among states and MSAs.

Yields on the notes are expected to range between 6.36% on the AA- and Aa2 notes--as rated by KBRA and Moody's Ratings, respectively–to 10.08% on the BB notes, as rated by KBRA.

The current transaction will sell the most in securitized bonds since the 2022-1 series came to market with $850 million in notes.

All four of the class A tranches benefit from total initial hard credit enhancement of 13.80%, while the B and C classes of notes are covered by 10.6% and 6.0% in initial hard credit enhancement.

Known for subprime financing, the sponsor has been making inroads lending to near-prime customers in the last couple of years.

There are four risk events that could stop cash flow into SMB 2024-R1's deal—missing overcollateralization targets, a stymied principal distribution and the deals do not exercise an optional clean-up call.

The average annual cash bonus fell 2% to $176,500 in 2023, the lowest since 2019. The drop was far less dramatic than it was in 2022, when the average bonus slumped 25%.

Rising card balances—and delinquencies—might be a matter of normalization post-COVID, but securitization remains an attractive option for banks extending revolving credit, say observers.

Stronger demand for auctions and the recent popularity of the 20-year could already be compelling the department to consider increasing the size the bank's strategists say.