AMEX credit account floats $571.4 million in ABS
American Express Credit Account Master Trust (AECAMT), 2022-1, is preparing to raise $500 million in credit card asset-backed securities (ABS) in the capital markets.
FitchRatings plans to assign ratings to Class A certificates, will be issued publicly. Some $21.4 million in Class B certificates will not be rated, according to a pre-sale report.
Barclays Capital, MUFG Securities Americas, RBS Capital Markets and Wells Fargo Securities are acting as underwriters to the deal, Fitch said. The first series notes are structured with a revolving period, then a controlled accumulation period. In the first case, Noteholders will receive interest payments at a fixed rate. The controlled accumulation phase will begin on the last business day of the February 2024 period. When the agreement is reached, the repairer could choose to shorten the controlled accumulation period, Fitch said.
Notes benefit from several forms of support. There is a reserve account, which will mitigate the likelihood of a shortfall and facilitate the subsequent distribution of interest on the certificates during the controlled accumulation period, as well as the first payment date during the early amortization period.
The credit enhancement on class A certificates totals 12.5%. This is supported by the subordination levels of 3.75% and 8.75% on Class B and collateral interests, respectively.
Fitch plans to assign “AAA” ratings to class A certificates, none of which are exposed to Libor. All assets and liabilities are linked to fixed rate assets. In another level of protection, the Notes are subject to multiple payment events, such as an insolvency involving any transferor or other holder of the original transferor certificate, or if AECAMT becomes an investment company, such as defined by the law on investment companies.
The notes are scheduled to mature on March 17, 2025, while the series ends two years later on March 15, 2027.