Standard & Poor’s Ratings Services said it assigned its preliminary credit
ratings to the sterling- and euro-denominated asset-backed floating-rate
notes to be issued by Pillar Funding Series 2002-1 Plc (see list below).
The collateral backing the notes is made up of Visa Card receivables and,
potentially, MasterCard receivables on accounts owned by the originator,
Egg Banking PLC.
Egg was launched in 1996 as a banking subsidiary of Prudential PLC, the
U.K.-based financial services group. Egg is primarily focused on providing
Internet-based financial services to its customers. Egg offers deposit
accounts, credit cards, personal loans, and mortgages via the Internet and
“This issuance, backed by receivables on accounts owned by Egg, will be its
first securitization of U.K.-originated credit card receivables,” said
Christopher Such, director at Standard & Poor’s Structured Finance Ratings
group in London. “The transaction is exposed to prime credit card
receivables that are originated and serviced via the Internet.”
The preliminary credit ratings on the notes reflect the protection provided
by various early amortization triggers, the suitability of the servicer to
fulfill its role in this transaction, the sound legal and payment
structure, and cash flow mechanics of the transaction.
A further key consideration is the strong protection for the noteholders
provided by a combination of the subordination of the class B and C notes
to the class A notes, the subordination of the class C notes to the class B
notes, a deposit of 1.5% built up from excess spread from day one, plus the
spread capture mechanism for the class C notes, and the excess spread to
cover credit losses on all the notes. The spread capture mechanism traps
cash into an account with a bank with a short-term rating of ‘A-1+’ if the
quarterly available spread falls below a certain level.
The full presale report for this transaction can be found on RatingsDirect,
Standard & Poor’s Web-based credit analysis system, at
www.ratingsdirect.com. The report is also available on Standard & Poor’s
Web site at www.standardandpoors.com. In the new Web site, click “Fixed
Income” and find the article under “Presale Credit Reports”. In the
existing Web site, under Presale Reports, select “Structured Finance”, then