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FINANCIAL MARKET COURSES

Securitization - Credit Card ABS

Asset-backed securities (ABS) are bonds backed by a pool of financial assets that cannot easily be traded individually. Since 1987, when credit card asset-backed securities were first issued, the credit card ABS market has become the primary funding vehicle of unsecured loans to consumers within the credit card industry.

 

The ABS market is a growing segment of the global capital markets. As of June 2005, nearly USD 1.85 trillion in ABS issues was outstanding - approximately 20% of this market is represented by securities backed by credit card receivables.

 

This course focuses on the functioning, importance, and performance evaluation of credit card ABS.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Explain the mechanics of credit cards and credit card ABS

    Identify the importance of credit enhancement in credit card ABS

    Describe how credit card ABS performance is rated and analyzed

  • COURSE OUTLINE

    Topic 1: Basics of Credit Card Receivable Securitization

    What is a Credit Card?

    Types of Credit Cards

    Securitization of Credit Card Recieveables

    Master Trust Structure

    Life Cycle of a Credit Card Securitization

    Topic 2: Credit Card ABS & Credit Enhancement

    Types of Credit Enhancement

    o Excess spread

    o Cash Collateral Account (CCA)

    o Collateral Invested Amount (CIA)

    o Subordination (trache structure)

    Trapping Excess Spread

    Credit Card ABS Structure – An Example

    Topic 3: Credit Card ABS Analysis & Ratings

    Analyzing Collateral Characteristics

    Analyzing Collateral Performance

    Rating Credit Card ABS

    o Stress Scenarios

    o Other Qualitative Factors

    Pricing Credit Card ABS Transactions

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    75 Minutes

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