Slaughter and May advised NewDay on the establishment of a new master issuer asset-backed notes programme and the first issuance of £380,000,000-equivalent of sterling and US dollar notes under the programme

Slaughter and May advised NewDay Cards Ltd (NewDay) and its affiliates in relation to the establishment of a new master issuer asset-backed notes programme within NewDay’s existing own-brand master trust structure and the first issuance of a series of notes under the new programme. The master issuer structure streamlines NewDay’s route to market by providing a single base prospectus under which note series can be offered with a variety of innovative features, such as class resets (which extend the maturity of a specified class of notes and reset the interest rate on those notes, whilst providing investors with a corresponding put right) and class-by-class extension (allowing NewDay to extend the maturity of its subordinated notes but not its senior notes). The structure also allows NewDay flexibility as to the currency of notes issued under the programme and a choice as to the interest rate benchmark applicable to floating rate notes (including a full range of risk-free rate options).

The first issuance of notes under the programme comprised £380,000,000-equivalent of Series 2021-1 Floating Rate Asset Backed Notes (the Series 2021-1 Notes) by NewDay Funding Master Issuer plc (the Issuer). The sterling classes of the Series 2021-1 Notes use compounded daily SONIA as the reference rate and the US dollar class uses compounded daily SOFR as the interest reference rate (in the same manner as NewDay’s other recent securitisation issuances). This reflects the broader transition away from LIBOR to risk-free rates as the primary interest rate benchmarks in the financial markets.

The Series 2021-1 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 2021-1 Notes have been listed on the London Stock Exchange and comprise £100,000,000 Class A1 Notes (rated AAAsf (Fitch)/AAA(sf) (DBRS)), $135,000,000 Class A2 Notes (rated AAAsf/AAA(sf)), £30,400,000 Class B Notes (rated AAsf/AA(sf)), £45,200,000 Class C Notes (rated Asf/A(low)(sf)), £56,400,000 Class D Notes (rated BBBsf/BBB(low)(sf)), £31,600,000 Class E Notes (rated BBsf/BB(low)(sf)) and £17,600,000 Class F Notes (rated B+sf/B(high)(sf)). The Class A1, Class A2, Class B, Class C, Class D and Class E Notes were publicly issued, whilst the Class F Notes were retained by Newday Funding Transferor Ltd, an affiliate of NewDay Cards Ltd.

Under the securitisation structure, the Receivables Trustee has appointed NewDay Cards Ltd 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 Ltd.

The master issuance programme is arranged by Banco Santander, S.A. and the issuance was arranged by Banco Santander, S.A. and BNP Paribas. Banco Santander S.A., BNP Paribas, Merrill Lynch International and Société Générale S.A. acted as joint lead managers.

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

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

Financing
Richard Jones Partner
Christopher McCabe Associate
Paul Duncan Associate
Financial Regulation
Ben Kingsley Partner
Elizabeth George Associate
Tax
Gareth Miles Partner
Alex Sim Associate