Barclays has recently priced asset backed securities for U.S credit card receivables, signaling growth for both the issuer and for the previously moribund asset backed securities market.
The bank’s US$1bn Dryrock Issuance Trust Series 2012-1 and 2012-2, the sponsor/servicer of which is Barclays Bank Delaware, was the first Reg AB-compliant platform for Barclays, and the first credit card trust to be compliant with the Federal (SES: E1:F20.SI – news) Deposit Insurance Corporation (FDIC) Safe Harbor Rule.
Barclay’s U.S. operation has successfully diversified its US operations funding, including consumer deposits. This has helped the company grow both through acquisition and organic growth, estimated at $2 billion and $1 billion growth respectively. The company’s U.S. assets stand at approximately $13 billion.
Over a year ago, Barclays moved into the retail deposit business, and now has about US$1bn. “We said that we would add securitization to the mix when the time was right,” Pavelich said. “Now, between the mix of broker deposits, our online presence, and securitization, we like the look and feel of how we fund our business. We’re less reliant on intercompany fundings.”
Diversification in funding sources was a critical development due to UK regulatory restrictions, and the difficulty they posed for intercompany funding for Barclays.
Amid restrictions by the Financial Services Authority in the UK as to how large lending exposures can be, the only option for the US arm of the company was to avoid intercompany funding. “If we want to grow this business, we realized we had to diversify our funding sources,” said Deepash Jain, associate director of Barclays Treasury. “Moreover, the FDIC encourages this diversification.”
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