I called FCNB customer to find out why my card hasn't been arrived. They told me due to the companies problems and they're looking for the buyers for Visa/MC portfolio. Th're not going to renew all FCNB Visa/MC cards and they're going to sent out notices to all cardjolders next week. Ron.
FCNBâ??S CARD BONDS LIKELY TO REPAY EARLY Two issues of First Consumers National Bank securities backed by bank card receivables are expected to go into early amortization in March because of poor performance, Spiegel Inc., the bankâ??s owner, said today in a filing with the U.S. Securities and Exchange Commission. Moodyâ??s Investors Service last week put the $850 million in card bonds on review for possible downgrade because of the likelihood of an early payout. Spiegel originally said that it expected that it would be several months before the card bonds would fall below minimum requirements. Spiegel revised its forecast, however, after reviewing data for the period that will end Feb. 28. Card bonds typically go into an automatic early amortization when excess spread, the difference between a card bondâ??s revenues and expenses, falls below 0% for three consecutive months. A third issue backed by Spiegelâ??s private-label cards also may go into an early payout, Spiegel said. If the performance of the card bonds triggers early amortization, newly generated receivables will be used to repay principal to investors on an accelerated basis. That means there would be a shortfall in cash to fund operations, Spiegel said. Itâ??s also unlikely that Spiegel will able to obtain alternative financing since it has been in default on its existing revolving credit facility since 200l, according to the SEC filing. Under an agreement with the Office of the Comptroller of the Currency, FCNB must sell or liquidate its card portfolio by April 30. If FCNB is unable to sell the portfolio, it will be liquidated. According to the SEC filing, Spiegel is continuing discussions with potential buyers, but there is no guarantee the portfolio will be sold before the OCC deadline. Spiegel plans to remain in the private-label credit business, which accounted for about 41% of net sales in 2001, according to a spokesperson.
It is doubtful FCNB will find a buyer, most banks that would be interested are not in fiscal shape to afford it. Worse, the govt regulators have made it impossible for the best candidates (Metris, CompuCredit, Cap. 1) to to make a bid. Wrong place at the wrong time for FCNB.
REMEMBER NEXT CARD??? They closed a TON of accounts...MINE and WIFE'S included. O.C.C. and F.D.I.C. never found a buyer for the PRIME accounts...ALL THEY DID WAS SELL MOST OF THE SUB-PRIME ACCOUNTS.
I do remember next card, and didn't Merrick Bank (Card Services) take over some of the Nextcard accounts?
FCNB customer service lady told me that I handle the situation very well. I told me it had happhened to me last year and it was NextCard. She alos told me they could not issue any Visa/MC until they find buyer to buy card portfolio. Ron.
