Slaughter and May advised NewDay Cards - Credit Card Master Trust Securitisation and Warehouse Facility
Slaughter and May advised NewDay Cards Ltd (NewDay Cards) and its affiliates in relation to its second public master trust securitisation of credit card receivables and a related warehouse facility.
The master trust securitisation involved the issuance of £282,900,000 of Series 2015-1 Floating Rate Asset Backed Notes by NewDay Funding 2015-1 Plc (the Series 2015-1 Notes), the issuance of a £250,000,000 Series 2015-VFN Floating Rate Asset Backed Variable Funding Loan Note by NewDay Funding Loan Note Issuer Ltd (the Senior VFN) and the issuance of an Originator VFN Asset Backed Variable Funding Loan Note by NewDay Funding Loan Note Issuer Ltd (the Originator VFN).
The Series 2015-1 Notes, the Senior VFN and the Originator VFN are each ultimately backed by income from a portfolio of credit card receivables beneficially owned by NewDay Funding Receivables Trustee Ltd (the Receivables Trustee).
The Series 2015-1 Notes have been listed on the London Stock Exchange and comprise £147,300,000 Class A Notes (rated AAA(sf)/AAAsf), £21,600,000 Class B Notes (rated AA(sf)/AA(high)sf), £31,800,000 Class C Notes (rated A(sf)/A(high)sf), £44,100,000 Class D Notes (rated BBB(sf)/BBB(high)sf), £22,800,000 Class E Notes (rated BB(sf)/BB(high)sf) and £15,300,000 Class F Notes (rated B(sf)/B(high)sf). The Class A, Class B and Class C and Class D Notes were privately placed, whilst the Class E and Class F Notes were retained by NewDay Funding Transferor Ltd (NFT), an affiliate of NewDay Cards.
The Senior VFN, which provides committed flexible funding for the securitisation structure, was issued to third party finance providers. The Originator VFN provides flexible funding for the securitisation and also provides credit enhancement and support for funding shortfalls for Series 2015-1 and the Senior VFN. The Originator VFN, which was issued to NFT, also acts as a retained “originator’s interest” for the purposes of Article 405 of the Capital Requirements Regulation and Article 51 of the Alternative Investment Fund Managers Regulation.
The transaction was co-arranged by Citigroup and NewDay Cards. Citigroup, Deutsche Bank AG, Lloyds Bank and The Royal Bank of Scotland acted as joint lead managers.
The warehouse facility involved the issuance of senior notes (the Senior Notes) and subordinated notes (the Subordinated Notes) by NewDay Secondary Funding Limited (the Warehouse Issuer).
The Senior Notes and the Subordinated Notes are each ultimately backed by income from a portfolio of credit card receivables beneficially owned by the Warehouse Issuer. The Senior Notes, which provide committed flexible funding for the warehouse structure, were issued to third party finance providers. The Subordinated Notes provide flexible funding for the warehouse and also provide credit enhancement and support for funding shortfalls for the Senior Notes. The Subordinated Notes, which were issued to NFT, also act as a retained "originator’s interest" for the purposes of Article 405 of the Capital Requirements Regulation and Article 51 of the Alternative Investment Fund Managers Regulation.
The Receivables Trustee and the Warehouse Issuer have each appointed NewDay Cards as servicer of their respective portfolios. Legal title to the receivables within the portfolios remains with NewDay Ltd, which is an authorised payment institution and a wholly-owned subsidiary of NewDay Cards.
Clifford Chance LLP provided English law advice to the joint lead managers and the co-arrangers of the master trust securitisation and the holders of the Senior VFN. Carey Olsen provided Jersey law advice to the Receivables Trustee.
Allen & Overy LLP provided English law advice to the holders of the Senior Notes.