MAJOR ABS DEAL

The largest ever single issuance of credit card asset-backed notes into the Canadian term market has closed. Royal Bank of Canada has securitized CD$1 billion of credit card receivables via the Golden Credit Card Trust. The senior notes of CD$950 million carried a yield of 4.2% while the subordinated notes of CD$50 million carried a yield of 5.1%. Standard & Poor’s has rated the senior notes “AAA” and the subordinated notes “BBB.”
The dealer syndicate for the senior and subordinated notes was led by RBC Dominion Securities.

CIBC Launches Basic VISA Card for Small Business

CIBC has launched a stripped-down small business credit card offering a super low interest rate. The new “CIBC bizline VISA,” available to firms with less than 10 employees, offers an interest rate as low as prime +1.5%. The card carries no annual fee and a credit limit between $5,000 and $50,000. The card does offer some built-in benefits, including access to a “Small Business Saving Program”; $1 million of travel accident insurance; and a year-end statement summary. The card offers optional benefits including “CIBC Hot Line Service”; extra travel insurance; and trip cancellation/trip interruption insurance. Business applicants must have been in business for 3 months or more and have annual revenue between $35,000 and $5 million. CIBC will issue up to 9 additional cards.

Optimal Robotics Acquires RBA

Optimal Robotics has acquired the services business of RBA Inc., a privately held company based in Montreal. RBA is the largest independent Canadian provider of multi-vendor hardware maintenance outsourcing services, with over 350,000 sites being serviced and annual revenues of approximately CN$41 million. RBA delivers its maintenance services through various business segments, including Interac/Credit Card POS systems, Video Lottery and Bring-In Centers. RBA provides its services through a network of approximately 35 branches and 550 employees. The net cost of the RBA transaction is approximately CN$10 million.

Alliance Data Systems Launches Online Canadian Mall

Alliance Data Systems’ The Loyalty Group subsidiary has launched an online shopping destination. YourShops.ca combines North
American retail brands with the appeal of the “AIR MILES” reward program. Open to all Canadians, YourShops.ca also represents a new shopping channel through which consumer participants in the “AIR MILES” reward program can collect reward miles for their purchases. Currently, more than 60% of Canadian households — representing more than 14.6 million Canadians — actively collect AIR MILES reward miles, which can be redeemed for more than 500 different rewards, such as travel, movie passes, entertainment attractions, electronic merchandise and more.

Points International and American Airlines Contract Approved

Points International has received regulatory approval for a contract with American Airlines. The existing relationship between Points and
American Airlines includes the “AAdvantage” program’s involvement as a founding participant in “pointsxchange.” Subsequently, Points has developed a suite of marketing solutions to enhance the “AAdvantage” program, which has 45 million members. The agreement extends a number of existing short-term agreements through December 31, 2007, including those for “pointsxchange,” “pointspurchase” and “pointstransfer.”

SureFire Commerce Becomes Terra Payments

Montreal-based SureFire Commerce has received the blessing of its shareholders to change its name to Terra Payments Inc.
The vote for the name change took place at the company’s annual and special shareholders’ meeting held in Montreal and is
intended to better reflect its diverse and expanding role as an international payments company. Shareholders also elected Michelle Cormier to the Board of Directors, replacing Markus Braun, a former director appointed by ebs Holding AG. Ms. Cormier was a director of the Corporation
from April 2002 until March 2003. Ms. Cormier is currently EVP/CFO of TNG Capital Inc., a privately held investment company and prior to January 2001, was VP/CFO of Repap Enterprises Inc. Messrs Tommy Boman, Mitchell Garber, Brahm Gelfand, Joel Leonoff,
Klaus Rehnig and Steve Shaper were also re-appointed to the board.

Desjardins Group Selects Elix for Voice System Services

Desjardins Group has selected Elix for the implementation of its “AccesD” and VISA Desjardins voice system services. Desjardins will use the “Elix IVS VoiceXML for Windows 2000” interactive voice response platform. Elix’s expertise is used by VISA, Duke Power, ABN-AMRO, IKEA, and Air Canada. The platform also allows the integration of an automated speech recognition system that will facilitate telephone banking transactions for Desjardins’ members.

MBNA Canada Bank Sued for Cash Advance APR

A class action lawsuit has been filed against MBNA Canada Bank in Ontario Superior Court of Justice in Toronto for damages arising from interest rates charged by MBNA on cash advance transactions on MBNA credit cards. The claim alleges that the rates of interest charged by MBNA on cash advances exceed the 60% rate allowed by the Criminal Code. The claim alleges that MBNA charged an interest rate at the rate of 94% per year. An application has benn made to the Ontario Superior Court of Justice to certify the action as a class action.

Celero Solutions and NYCE Create Everlink Payment Services

NYCE and Celero Solutions have formed a company to provide Canadian financial institutions with ATM and POS transaction switching, ATM terminal driving and connections to other networks. NYCE will own 51% of Everlink Payment Services and Celero will own 49%. Celero currently provides products and services to 244 credit unions in western Canada. Data center operations will be located in Calgary, Alberta. Credit Union Central of Canada, the national trade association and central finance facility for credit unions in Canada, has signed an exclusive, five-year agreement for Everlink to provide EFT services for the Canadian national credit union system.

Credit and Debit Card Retail Spending in Toronto Down 7%

Based on debit and credit card activity for July and August, Toronto merchants suffered significant declines when compared to the previous summer and moderate declines when compared to the rest of Canada. Processor Moneris Solutions says the data show the travel and entertainment sector declined by 18%; restaurants experienced a 25% decrease in dollar volume spending; department stores were down 27%; grocery stores and supermarkets declined 19%; and, total dollar volume spending across all retail categories decreased 7%.

HOLT RENFREW CARD

The first specially designed “Holt Renfrew Card from American Express” was unveiled yesterday in Toronto. Holt Renfrew and American Express announced in early August plans to develop a suite of co-branded credit cards to replace Holt Renfrew’s store credit card. The first card was designed by Italian fashion designer Roberto Cavalli. The card displays a one of a kind silk gown created by Cavalli’, with an estimated value of US$4,000. Cavalli is known for his eclectic and highly original designs. The card includes the new “Holt Renfrew Rewards” program that allows customers to collect one “Holt Renfrew” point for virtually every dollar spent anywhere. Plus, when the card is used at any Holt Renfrew location, cardholders receive 40% more points for every dollar charged.