Concern over rising chargeoffs has made it more difficult - and a little more expensive - for two big credit card issuers to obtain the top rating from Moody's Investors Service Inc.

MBNA America Bank and AT&T Universal Card Services Corp. each had to ante up 2% more in senior credit support to obtain Moody's Aaa rating on nearly $2 billion of credit card-backed securities.

Although the rating agency's actions primarily reflect concerns about these particular loan pools, they also highlight a growing concern about consumer credit in general.

Investors and analysts alike have become wary of growing competition among lenders that has exacerbated cyclical increases in consumer delinquencies. These concerns are fueled by the unabated growth of consumer debt, which increased to $12 billion in February alone, according to a recent report released by Merrill Lynch & Co.

"We realize there has been an overall degeneration in credit quality. But the analysis is performed on a case-by-case basis," said Mark Douglass, the senior analyst working on Moody's rating of the AT&T issue.

The actions on MBNA and AT&T issues mark the second time in the last six months Moody's has responded to the decline of credit quality in the card sector.

In November, the agency placed securities backed by a pool of credit card loans issued by Mercantile Bank on credit watch for possible downgrade. It was the first such action in the history of the market. The bank subsequently shored up the securities by adding loans to the pool.

In a public statement on MBNA's $1 billion, five-year issue, Moody's said the Newark, Del., card issuer had relied too heavily on unendorsed affinity programs for the loans placed in the company's Master Trust II. The trust holds the loans backing the securities.

MBNA has been a pioneer in affinity card marketing, in which the issuer taps into consumer loyalty to an organization, such as a trade group or alumni association, or to a cause, such as environmental activism.

Moody's is concerned with affinity programs that are not endorsed by a third party.

Deeming these loans more risky than those from endorsed affinity programs, the agency required the issuer to increase the size of the subordinated B-class certificates to 7.5% of the total offering from the 4.5% initially planned.

At the same time, the company was able to reduce the size of the collateral invested amount to 7.5% from 8.5%.

Ultimately, the shift in structure is expected to cost MBNA less than two-tenths of a basis point, and the bank considers it money well spent.

"There are a number of investors who would like to see a Moody's rating on the transaction," said Vernon Wright, vice chairman of MBNA America and the person responsible for structuring the company's offerings. "If we wanted to use the Moody's rating, we had to come up to the 15% credit enhancement levels."

Standard & Poor's Corp., Fitch Investors Service, and Duff & Phelps Credit Rating Co. were all prepared to give MBNA's senior class certificates their top ratings without the additional credit support.

MBNA's Mr. Wright said the bank uses the same underwriting standards for both the nonendorsed and endorsed programs.

He said investors showed their confidence in the company's underwriting standards. The offering size was increased to $1 billion from $750 million, and pricing of the five-year deal was a record 15 basis points over one- month Libor.

"I think the investing public spoke very loudly with the amount of orders placed for the bonds and with pricing being tightened," he said.

AT&T Universal Card's recent $930 million offering faced similar requirements from Moody's. The 15% credit enhancement, a 2% rise from previous issues, was needed to overcome Moody's concerns about a high chargeoff rate. According to the rating agency, the company has a chargeoff rate of approximately 7%, which is "significantly above industry averages."

Mr. Douglass said the issuer waited too long to offer teaser rates. As a result, he said the issuer was attracting a lower-rated clientele.

"By the time they got into the teaser game, they were not able to attract the more credit-worthy obligors," he said.

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