KBRA Assigns Preliminary Ratings to Continental Finance Credit Card ABS Master Trust, Series 2024-A
21 Nov 2024 | New York
KBRA assigns preliminary ratings to five classes of notes issued by Continental Finance Credit Card ABS Master Trust, Series 2024-A (“CFCCMT Series 2024-A”), a credit card asset-backed securitization.
CFCCMT Series 2024-A, represents Continental Finance Company’s (“CFC”) seventh term ABS and sixth master trust issuance. The Notes are collateralized and repaid by a portfolio of revolving general-purpose credit card accounts. CFCCMT Series 2024-A include a three-year revolving period where no principal payments will be made on the notes unless an Early Amortization Event occurs.
The transaction has initial credit enhancement levels ranging from 50.00% for the Class A notes to 8.00% for the Class E notes. Credit enhancement is comprised of overcollateralization, subordination of junior note classes, the reserve account (if funded after closing), and excess spread. The reserve account is initially 0% and the target is 1.00% of the current aggregate receivables amount.
CFC is a privately held consumer finance company established in 2005 that provides services to support their general-purpose credit cards program under the Mastercard brand. These services include marketing, underwriting and servicing credit card accounts. CFC has provided these services since March 2006, however, CFC achieved meaningful scale starting in 2016. CFC is owned directly or indirectly by its founders.
KBRA applied its Global Credit Card ABS Rating Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology as part of its analysis of the portfolio pool data, underlying collateral pool and capital structure. KBRA considered its operational reviews of CFC, as well as periodic update calls with CFC. Operative agreements and legal opinions will be reviewed prior to closing.
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