First USA prices $1.5 billion securitization of credit card receivables.DALLAS--(BUSINESS WIRE)-- Nov. 1, 1994--First USA, Inc. (NYSE NYSE See: New York Stock Exchange :FUS FUS feline urological syndrome. ) announced that it has priced a $1.5 billion securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. of credit card receivables in connection with the First USA Credit Card Master Trust. The securitization consists of a five-year average life $903.6 million series and a seven-year average life $602.4 million series of floating rate asset backed certificates, each with two classes of publicly traded securities (Class A and Class B) and a separate class of privately placed collateral invested amounts. Series 1994-7 consists of $750.0 million Class A Floating Rate Asset Backed Certificates, and $58.7 million Class B Floating Rate Asset Backed Certificates, each of which has an average life of approximately five years. Interest will accrue on such certificates at the rates of 0.18 percent and 0.40 percent, respectively, over the one-month London Interbank Offered Rate London Interbank Offered Rate A short-term interest rate often quoted as a 1,3,6-month rate for U.S.dollars. (LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). ). Series 1994-7 also consists of $94.9 million collateral invested amount, which will be subordinated to the Class A and Class B certificates and will provide credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing for the benefit of certificateholders. Series 1994-8 consists of $500.0 million Class A Floating Rate Asset Backed Certificates and $39.2 million Class B Floating Rate Asset Backed Certificates, with an average life of approximately seven years. Interest will accrue on such certificates at 0.24 percent and 0.45 percent, respectively, over three-month LIBOR. Series 1994-8 also consists of $63.2 million collateral invested amount, which will be subordinated to the Class A and Class B certificates and will provide credit enhancement for the benefit of certificateholders. First USA Bank, the principal operating unit operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon of First USA, Inc., services the receivables that are included in the securitization and will continue to service the accounts associated with such receivables following the securitization. The transaction, which is scheduled to close Nov. 8, 1994, is being underwritten by Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. & Co., Bear, Stearns & Co., Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc. and NationsBanc Capital Markets, Inc. First USA, Inc. is a financial services company specializing in the credit card business and is among the largest providers of Visa and MasterCard services in the nation. First USA, Inc.'s two principal operating units are First USA Bank and First USA Merchant Services, Inc. First USA Bank provides Visa and MasterCard services nationwide and had more than 7.7 million credit cards issued at Sept. 30, 1994. First USA Merchant Services, Inc. processed $17.3 billion in credit card sales during the 1994 fiscal year. CONTACT: First USA Inc. George A. McCane, 214/746-8547 |
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