Cabela’s Inc. said it was able to sell $50 million more in notes than initially planned at lower interest rates than just four months ago. The retailer will use the $300 million in proceeds from its latest securitization transaction to refinance asset-backed notes that matured this year. Proceeds will also help finance the growth of it banking subsidiary's credit card portfolio.
Cabela’s Credit Card Master Note Trust successfully completed the sale of $300 million of Asset-Backed Notes, Series 2011-IV. The securitization transaction will be used to refinance asset-backed notes that matured during 2011 and will help finance the growth of World’s Foremost Bank’s credit card portfolio.
The deal resulted in the issuance of $165 million of Class A-1 Notes, which accrue interest at a fixed rate of 1.90% per year, and $90 million of Class A-2 Notes, which accrue interest at a floating rate equal to one-month LIBOR plus 0.55% per year.
The transaction also included the issuance of three subordinated classes of notes in the aggregate principal amount of $45 million. World's Foremost Bank, Cabela’s wholly-owned subsidiary, purchased each of the subordinated classes of notes. Each class of notes issued in the securitization transaction has an expected life of approximately five years, with a legal maturity of approximately eight years.
“We are proud to complete our second term securitization during 2011, and the execution of this transaction speaks highly about the quality of the Cabela’s CLUB Visa portfolio,” said Joe Friebe, President and Chief Executive Officer of World’s Foremost Bank. “Despite the recent volatility in the credit markets, we were able to price the transaction at more favorable rates than the prior securitization we completed in June. In addition, based on investor demand for our notes, we were able to upsize the transaction by $50 million. We are extremely pleased with the outcome of this transaction.”
