Friday, May 23, 2008

Signs of life in Canadian ABCP market

(Globe & Mail Streetwise) The Canadian asset-backed securities market continued its comeback Friday, with Gloucester Credit Card Trust out marketing a financing for up to $600-million, based on credit card receivables.

Gloucester finances credit card balances owed to MBNA Bank Canada, which is in turn a unit of Bank of America. The latest ABS offering from Gloucester is for anything from $350-million to $600-million, and the financing is being led by TD Securities and RBC Dominion Securities.

Gloucester has $4.6-billion of debt outstanding, making it one of the larger players in the ABS market. Bank-sponsored Canadian asset backed commercial paper has continued to trade since last August, when the non-bank ABCP market froze up. However, there has been a dramatic decline in new issues of ABCP, as the cost of this kind of financing spiked up during the credit crunch.

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