DBRS Rates World Financial Network Credit Card Master Trust III Series 2009-VFC1

DBRS has rated World Financial Network Credit Card Master Trust III 2009-VFC1 (WFNCCMT III 2009-VFC1). The WFNCCMT III 2009-VFC1 transaction represents the first publicly issued securitization of World Financial Network National Bank’s credit card receivables through this master trust in 2010.

The WFNCCMT III 2009-VFC1 transaction is currently funded in various asset-backed commercial paper conduits. Initial Class A credit support of 31.0% will include Class M Notes (6.0%), Class B Notes (6.50%), a cash collateral account and a dedicated spread account.

World Financial Network National Bank, the originator, is one of two wholly-owned bank subsidiaries of Alliance Data Systems Corp. (ADS), one of the largest providers of private label credit card solutions in the U.S. The originator and ADS maintain a very experienced management team, and have had relatively consistent revenue and net income over the last three to four years.

The receivables are serviced by ADS Alliance Data Systems, Inc. (ADSI), which is also a wholly-owned subsidiary of ADS and operates a sophisticated, proprietary processing platform. The servicer has imported and exported portfolios from and to companies that use systems that are very ingrained in the credit card market (e,g, TSYS, operated by Total System Services, Inc., and FDR, operated by First Data Corp.) While not directly compatible to the ADSI system, these other servicing systems can import the trust portfolio if needed.

ADSI acts as a sub-servicer. The sub-servicer uses a proprietary servicing platform. Therefore, in the event the portfolio must be transferred to another servicer, a conversion of the accounts to another platform, while possible, could take several weeks to complete. To manage this risk, a separate contract with TSYS provides back-up servicing capabilities for the WFN portfolio. The servicer follows an aggressive testing and disaster recovery plan and maintains four active locations where loans are serviced.

WFNCCMT III has been in existence since 1998 and is comprised of credit card receivables from 21 different retailers.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating U.S. Credit Card Securitizations, which can be found on our website under Methodologies.

This is a Structured Finance rating.