Alliance Data Systems Corp. , a leading provider of transaction services, credit services and marketing services, today announced that it has completed the issuance of $900 million aggregate principal amount of asset-backed notes. The notes were issued through the World Financial Network Credit Card Master Note Trust as part of the securitization program for its private label credit card banking subsidiary, World Financial Network National Bank (WFNNB).
The notes are rated AAA through BBB, or its equivalent, by each of Standard and Poor's, Moody's, and Fitch, and are secured by a beneficial interest in a pool of receivables that arise under WFNNB's private label revolving credit card accounts.
In addition to locking in long-term fixed rates, this transaction marked the completion of a three-year, $2.6 billion program that extended the maturities of the company's funding sources for several years. These funding activities have now effectively matched the company's fixed-rate assets (i.e., private label credit card balances) with long-term fixed-rate funding sources. As such, a rising rate environment should not negatively impact the profitability of the existing business.
Furthermore, Alliance Data's Chief Financial Officer, Ed Heffernan, commented that the majority of the funding activities occurring over the last few years included an added feature whereby funding rates would actually decline over the life of the deals. "These declining rates should nicely offset potentially higher funding costs associated with financing incremental new growth in the future," he said.
Heffernan continued, "The completion of this three-year effort for Alliance Data positions us to continue to absorb new growth while locking in long-term earnings visibility, despite a potentially rising macro rate environment."
Credit Suisse First Boston and J.P. Morgan were joint-lead book runners for the public note offering.
Credit Suisse First Boston Vice President Justin Tisler said, "There was significant demand from U.S. and European investors, many of which were new to the WFNNB name. The size and breadth of the syndicate book, and the historically tight pricing levels achieved are testament to the stable performance of WFNNB's receivables, conservative risk profile and experienced management team."
Co-managers for the public note offering were Barclays Capital, Deutsche Bank, SunTrust Robinson Humphrey and Wachovia Securities.
About Alliance Data Systems
Based in Dallas, Alliance Data Systems is a leading provider of transaction services, credit services and marketing services. The company assists retail, petroleum, utility and financial services clients in managing the critical interactions between them and their customers. Alliance Data manages approximately 95 million consumer relationships for some of North America's most recognizable companies and operates and markets the largest coalition loyalty program in Canada. Alliance Data Systems employs approximately 7,500 associates at more than 30 locations in the United States and Canada. For more information about the company, visit its web site, http://www.alliancedatasystems.com/.
Alliance Data Systems' Safe Harbor Statement/Forward-Looking Statements This news release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may use words such as "anticipate," "believe," "estimate," "expect," "intend," "predict," "project" and similar expressions as they relate to us or our management. When we make forward-looking statements, we are basing them on our management's beliefs and assumptions, using information currently available to us. Although we believe that the expectations reflected in the forward-looking statements are reasonable, these forward-looking statements are subject to risks, uncertainties and assumptions, including those discussed in our filings with the Securities and Exchange Commission.
If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements contained in this news release reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
Alliance Data Systems Corp.