A unit of Signet Banking Corp. issued $1.1 billion of asset-backed securities Wednesday.
The securities are backed by cash flows from credit card receivables issued by Signet's lead bank, Signet Bank/Virginia.
It is the bank's second round of securitization this year. It had securitized $1.19 billion of credit-card-backed receivables in September.
Signet's burgeoning credit card business has made the securitization necessary.
Creates a Source of Funds
At yearend 1992, the bank's credit card receivables were $2.2 billion. At Sept. 30, receivables had nearly doubled to $4.3 billion. Credit cards make up more than one-third of the banking company's total assets, which were $11.7 billion at the end of the third quarter.
By securitizing the assets, Signet creates a source of funds and removes the assets from its balance sheet, which protects capital levels from deteriorating.
The securities were issued in series of $400 million and $700 million. The bank expects parts of those issues to be rated Aaa by Moody's Investors Service and AAA by Standard & Poor's Corp. The other parts are expected to receive an A rating from both agencies.
J.P. Morgan & Co. led the underwriters.