All your credit card balances are bundled up and sold as "bonds." Sears gets cash which they can use for further cc purchases, or any other purpose...
Thursday May 31, 3:15 pm Eastern Time
Sears prices $700 mln credit card bonds
NEW YORK, May 31 (Reuters) - Sears, Roebuck and Co. (NYSE:S - news), the No. 2 U.S. retailer, priced $700 million in asset-backed securities (ABS), supported by receivables from its credit card program, syndicate sources said on Thursday.
The deal size was increased from $500 million initially, syndicate sources said.
The issue's $700 million floating-rate AAA-rated single class, with a three-year average life, was sold at 11 basis points over the one-month London Interbank Offered Rate (Libor), which was fixed at 4.06 percent Thursday.
Merrill Lynch headed the deal's underwriting team, which included Bear Stearns, Credit Suisse First Boston, Deutsche Banc Alex. Brown, Lehman Brothers and Morgan Stanley.
The deal was expected to settle on June 15.
http://biz.yahoo.com/rf/010531/n31514277_2.html
Fair use for educational purposes!
[ 05-31-2001: Message edited by: Dennis Olson ]
Thursday May 31, 3:15 pm Eastern Time
Sears prices $700 mln credit card bonds
NEW YORK, May 31 (Reuters) - Sears, Roebuck and Co. (NYSE:S - news), the No. 2 U.S. retailer, priced $700 million in asset-backed securities (ABS), supported by receivables from its credit card program, syndicate sources said on Thursday.
The deal size was increased from $500 million initially, syndicate sources said.
The issue's $700 million floating-rate AAA-rated single class, with a three-year average life, was sold at 11 basis points over the one-month London Interbank Offered Rate (Libor), which was fixed at 4.06 percent Thursday.
Merrill Lynch headed the deal's underwriting team, which included Bear Stearns, Credit Suisse First Boston, Deutsche Banc Alex. Brown, Lehman Brothers and Morgan Stanley.
The deal was expected to settle on June 15.
http://biz.yahoo.com/rf/010531/n31514277_2.html
Fair use for educational purposes!
[ 05-31-2001: Message edited by: Dennis Olson ]