Credit-card companies were shut out of the market for bonds backed by customer payments in October for the first time in more than 15 years, as investors shunned the debt amid the global credit freeze.
A weakening job market and a looming recession are making it harder for consumers to make monthly payments, eroding confidence among investors about the safety of credit-card-backed bonds. It’s the first month since April 1993 that there have been no sales, according to Wachovia data. Issuers sold $17.1 billion of the debt in October 2007, the data show.
Top-rated credit-card-backed securities maturing in three years traded at a spread of 475 basis points over the London interbank offered rate, or Libor, during the week ended Oct. 30, JPMorgan Chase data show, 25 basis points higher than the previous week. The debt was trading at 50 basis points more than Libor in January. The Associated Press
