President's Choice Bank Issued Asset-Backed Securities
The bank has prepared a $450 million offering backed by a pool of credit card receivables in the Canadian market.
Updated on Oct. 9, 2026 in Credit Cards
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President's Choice Bank has launched an offering of asset-backed securities totalling $450 million. The transaction involves two series of notes supported by a portfolio of credit card receivables.
Why it matters
This significant offering provides the bank with capital liquidity by leveraging its existing credit card consumer debt. Investors gain exposure to pools with a gross yield of 26.49% and a monthly payment rate of 64.57%.
This asset-backed securities offering includes $200 million in series 2026-1 notes and $250 million in series 2026-2 notes. The pools feature a monthly payment rate of 64.57% and a gross yield of 26.49%.
The players
President's Choice Bank
A Canadian financial institution that provides personal banking services and is a subsidiary of Loblaw Companies Limited.
CIBC World Markets
The investment banking division of the Canadian Imperial Bank of Commerce that provides financial advisory and capital market services.
RBC Dominion Securities
A prominent Canadian wealth management and investment banking division operating under the Royal Bank of Canada.
BMO Nesbitt Burns
The full-service investment banking and brokerage subsidiary of the Bank of Montreal.
The details
The notes are divided into class A, B, and C tranches, with credit enhancement levels established at 7.00% for AAA notes and 3.50% for A notes. CIBC World Markets, RBC Dominion Securities, and BMO Nesbitt Burns are serving as the joint bookrunners for the transaction.
Timeline
August 2026: The underlying asset pools were examined.
Q1 2027: Prefunding periods for the series will conclude.
March 17, 2027: Interest payments begin for the 2026-1 series.
April 19, 2027: Interest payments begin for the 2026-2 series.
December 2029: The revolving period for the 2026-1 series will end.
Market Dynamics
The issuance of asset-backed securities by a financial institution is a standard mechanism permitted under the Bank Act of Canada to manage institutional liquidity. This transaction follows a pattern set by Canadian banking regulations allowing institutions to bundle and securitize consumer debt.
Investors and stakeholders should note that these notes are backed by consumer credit card receivables, representing a specific segment of the bank's balance sheet. The structure provides fixed payment schedules through 2034, influencing long-term portfolio yield expectations.
The takeaway
Asset-backed securities allow banks to convert future credit card payments into immediate liquid capital for new lending. Investors typically use these instruments to diversify risk by focusing on the underlying performance of credit card receivables.
What happens next
Interest payments for the 2026-1 series are scheduled to commence on March 17, 2027, followed by the 2026-2 series payments on April 19, 2027.
Further reading
For more information on the financial instruments affecting Canadian consumers, visit Credit Cards.
Source note: This article includes information reported by Asset Securitization Report.
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