Royal Bank of Canada announced Friday that it has structured an asset-backed commercial paper program that will enable it to sell a $1.1 billion ownership interest in its VISA credit card receivables.
The transaction involves the creation of a special purpose trust, Luna Credit Card Trust, which will hold a $1.1 billion ownership interest in the bank’s credit card receivables. The Trust will fund its purchases of the ownership interest by issuing commercial paper. The commercial paper program is being managed by RBC Dominion Securities, Royal Bank’s investment banking arm. The Dominion Bond Rating Service has given the commercial paper a rating of R-1 (high).
“This transaction is similar to the $1.5 billion credit card securitization we announced last October and reflects our continuing emphasis on the efficient management of the bank’s balance sheet and capital,” noted Suzanne Labarge, executive vice-president of Royal Bank’s Corporate Treasury Group.
Royal Bank of Canada is Canada’s premier global financial services group with leading market shares in personal and business banking, corporate and investment banking and wealth management. As one of North America’s largest financial institutions, Royal Bank and its key subsidiaries Royal Trust, RBC Dominion Securities, RBC Insurance and Royal Bank Action Direct have 55,000 employees who serve 10 million clients through 1,600 branches and offices in 36 countries.Details