ABSTRACT
Securitizations have been used for years in the mortgage lending business and serve as the primary source of funding for mortgage lenders throughout the world. Credit card securitizations are one form of what is more broadly termed 'asset-backed securitizations'. The spread account, sometimes referred to as 'excess spread', measures the difference between the revenue coming into the trust from the credit card accounts securitized and the return paid to investors, losses, and servicing costs associated with the trust accounts. A key player in the credit card securitization process is the group of rating agencies who monitor and observe the marketplace. As securities backed by credit card trusts are issued for specified periods of time, rating agencies concern themselves with the nature and structure of the card products contained within the trust. Securitized assets transfer the risk of ongoing performance and catastrophic loss from the originator to the investors.
