Citicorp Cuts Price on Card Receivables
Citicorp reduced the price Friday on $1.7 billion in securities backed by credit card receivables, in response to market declines that similar issues suffered after the Senate voted last week to cap credit card interest rates.
The price adjustment will boost current yield on the issue by five basis points.
"Citicorp wants to make sure the buyers are compensated for their inconvenience," said Nelson Soares, a director at lead underwriter First Boston Corp. However, an asset-backed-securities trader at another firm said he believed investors had been pulling out of the deal, forcing Citicorp to sweeten terms.
Citicorp could not be reached for comment. Meanwhile, the market for securities backed by credit card receivables stabilized after the Bush administration spoke out against card rate caps.