NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes to be issued by Mercury Financial Credit Card Master Trust, Series 2021-1 (“MFCCMT 2021-1”), an asset-backed security of credit card transaction. Ratings reflect initial credit enhancement levels ranging from 33.25% for Class A Notes to 5.00% for Class D Notes. Credit enhancement on the Notes consists of i) subordination (to the except for Class D notes) ii) excess margin generated by the pool of credit card receivables and iii) a reserve account (if funded after the balance sheet date).
MFCCMT 2021-1 tickets are guaranteed and reimbursed by a portfolio of general purpose revolving credit card accounts. The accounts were created through the Mercury Financial Program or were acquired from a Delaware banking company. MFCCMT 2021-1 will include a renewable two-year period during which no principal payment will be made on the Notes unless an Early Amortization Event occurs. Receivables in MFCCMT 2021-1 are generated by accounts held by First Bank & Trust. Wilmington Trust, National Association will be the Safeguard Agent.
As of the information date of January 31, 2021, the accounts of the MFCCMT 2021-1 transaction had a weighted average FICO score of 668, an APR of 22.4%, an active line of credit of $ 3,769, a seasoning of 79 months, an average balance on active accounts of approximately $ 2,428 and an average usage rate on all active accounts of 64.4%.
MFCCMT 2021-1, represents the inaugural securitization of Mercury Financial LLC (“Mercury Financial”) (formerly known as CreditShop LLC) issued under their Master Trust Program. Mercury Financial has previously issued four private securitizations issued by separate trusts. Mercury Financial intends to use the proceeds from the sale of the Series 2021-1 Notes to redeem the Notes from a previous securitization, CreditShop Credit Card Company 2019-1.
KBRA applied its Global Credit Card ABS rating methodology and Global Structured Finance Counterparty methodology as part of its analysis of the collateral pool underlying the transaction and the proposed capital structure. KBRA also conducted an operational assessment of Mercury Financial, as well as a review of the legal structure of the transaction and transaction documents. KBRA will also review the operational agreements and legal opinions of the transaction prior to closing.
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Further information on key credit considerations, sensitivity analyzes that examine the factors that may affect these credit ratings and how they might lead to an improvement or a downgrade, and ESG factors (when they are a factor). key to the change in credit rating or rating outlook) can be found in the full appraisal report referenced above.
A description of all substantially significant sources that were used to prepare the credit rating and information about the method (s) (including significant models and sensitivity analyzes of relevant key rating assumptions, if any) used to determine The credit rating is available in the Information Disclosure Form (s) located here.
Information on the meaning of each rating category can be found here.
Further information relating to this rating measure is available in the information disclosure form (s) referenced above. Additional information regarding KBRA’s policies, methodologies, rating scales and disclosures are available at www.kbra.com.
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the United States Securities and Exchange Commission as NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a credit rating agency with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a credit rating agency with the UK Financial Conduct Authority under the temporary registration regime. In addition, KBRA is appointed as the designated rating agency by the Ontario Securities Commission for issuers of asset-backed securities to file a simplified prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a credit rating provider.