Slaughter and May advised NewDay Cards on its second US dollar 144A debt issue under its own-brand credit card master trust securitisation

19 Nov 2018

Slaughter and May advised NewDay Cards Ltd (NewDay Cards) and its affiliates in relation to a public debt issue under its own-brand credit card securitisation.

The transaction involved the issuance, through a master trust structure, of $150 million and £176.1 million of Series 2018-2 Floating Rate Asset Backed Notes (the Series 2018-2 Notes) by NewDay Funding 2018-2 Plc (the Issuer). The issuance was the second dollar issuance by NewDay Cards, following its first issuance under Rule 144A under the US Securities Act in July 2018, on which the firm also advised.

The Series 2018-2 Notes are ultimately backed by income from a portfolio of credit card receivables beneficially owned by NewDay Funding Receivables Trustee Ltd (the Receivables Trustee).

The Series 2018-2 Notes have been listed on the London Stock Exchange and comprise $150 million Class A1 Notes (rated Fitch:AAAsf/DBRS:AAA(sf)), £33.3 million Class A2 Notes (rated AAAsf/AAA(sf)), £23.1 million Class B Notes (rated AAsf/AA(high)(sf)), £33.9 million Class C Notes (rated Asf/A(sf)), £42.3 million Class D Notes (rated BBBsf/BBB(sf)), £23.7 million Class E Notes (rated BBsf/BB(low)(sf)) and £19.8 million Class F Notes (rated Bsf/B(high)(sf)). The Class A1, Class A2, Class B, Class C and Class D Notes were publicly issued, whilst the Class E and Class F Notes were retained by Newday Funding Transferor Ltd, an affiliate of NewDay Cards.

The Class A1 Notes have an innovative “reset” feature which allows the Issuer to reset the scheduled redemption date and rate of interest for the Class A1 Notes.  If the Issuer exercises its reset option, the Class A1 Noteholders have a corresponding put option.

Merrill Lynch International, HSBC Bank plc, HSBC Securities (USA) Inc., Lloyds Bank Corporate Markets plc, Lloyds Securities Inc. and Banco Santander, S.A. acted as joint lead managers.

Under the securitisation structure, the Receivables Trustee has appointed NewDay Cards as servicer in respect of the portfolio. Legal title to the receivables within the portfolio remains with NewDay Ltd, which is an authorised payment institution and a wholly-owned subsidiary of NewDay Cards.

The transaction was co-arranged by Bank of America Merrill Lynch, Lloyds Bank Corporate Markets and NewDay Cards.

Morgan, Lewis & Bockius UK LLP provided US law advice to NewDay Cards and its affiliates.

Clifford Chance provided English and US law advice to the joint lead managers and the co-arrangers.

Contacts

Financing: Richard Jones (partner), David Thomas (associate), Christopher McCabe (associate), Ian Luby (associate); Tax: Gareth Miles (partner), Alex Sim (associate); Financial Regulation: Ben Kingsley (partner), Kristina Locmele (senior counsel), Emily Bradley (associate).


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