DBRS Comments on Broadway Credit Card Trust

DBRS has today commented on Broadway Credit Card Trust (the Trust), following the announcement on June 14, 2010, that $2.1 billion in MasterCard receivables (the Portfolio) of Citi Cards Canada Inc. (Citi), an affiliate company of Citigroup Inc., will be sold to Canadian Imperial Bank of Commerce (CIBC) (the Sale). The closing of the Sale is subject to certain conditions, including regulatory approvals, noteholder consent and other usual closing conditions for such Sale for the benefit of Citi and CIBC.

The Portfolio consists of a material portion of Citi’s Canadian credit card receivables but excludes certain accounts, including some non-performing accounts. After the closing of the Sale, which is expected to occur on or before October 31, 2010, CIBC will replace Citi as the seller and servicer for the securitized pool and will assume associated responsibilities with respect to the Trust. CIBC will also acquire all of the outstanding subordinated notes issued by the Trust, including the Series Enhancement Notes. Citi will remain as subservicer of the Portfolio during a transition period following the closing of the Sale to assist with transition to CIBC.

Subject to the closing of the Sale, it is expected that several amendments will be made to the transaction documents, including the incorporation of DBRS’s updated legal criteria, such as partial commingling conditions published on June 23, 2009. These changes will strengthen the transaction structure of the Trust.

While the size of the Portfolio is manageable for CIBC, which has the largest credit card portfolio in Canada of more than $14 billion, there may be a risk of temporary disruptions in servicing up to and after the conversion. This risk is largely mitigated by Citi continuing to service the Portfolio until the conversion date. In addition, the Portfolio may pose challenges for CIBC due to the different account characteristics, as the Portfolio is experiencing the highest loss rates in Canada.

In spite of some potential challenges in the near term, overall DBRS considers the Sale as positive for the performance of the Trust.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is DBRS Criteria for Canadian Credit Card Securitization, which can be found on our website under Methodologies.

This is a Structured Finance rating.

Media Contact
Caroline Creighton
Senior Vice President
Communications
Tel. +1 416 597 7317
ccreighton@dbrs.com