Jersey Firm Sets Up Funding Programme For MBNA

by Jason Gorringe, Tax-News.com, London

25 March 2005

Jersey law firm, Bedell Cristin, and its associated fiduciary services provider, Bedell Cristin Trust were recently involved in establishing a sophisticated new funding programme for MBNA Europe Bank Limited.

MBNA Europe is the second largest credit card company in the UK, with a 15% market share, and is one of the biggest card issuers in the US. It is Britain’s leading ‘affinity card’ issuer, providing services for ‘own brand’ credit cards offered by organisations such as the Manchester United, the World Wildlife Fund, British Heart Foundation and Virgin.

The new structure adds enhanced fund raising techniques to MBNA Europe’s existing securitisation programme. Securitisation is a widely used financing technique for credit card issuers which essentially enables them to sell their rights to receive future cash payments (from credit card holders) to raise money immediately to fund further development and growth of their business.

The “delinked” funding platform offers MBNA hugely increased flexibility and efficiency enabling them to streamline their fund raising activities to target those activities to suit prevailing market conditions. It is the first time such a platform has been established in Europe and the innovative nature of the programme has been clearly recognised by it recently receiving two prestigious industry awards having been voted European ABS Deal Of The Year by the International Securitisation Report and Consumer Finance Deal of the Year by Structured Finance International.

“We’re delighted to have been so closely involved in establishing this highly innovative arrangement for MBNA who are the market leaders in credit card financing techniques. This structure provides the benchmark for the whole industry and we believe other credit card issuers will soon follow MBNA’s lead.” says Shane Hollywood, a partner in the Structured Finance and Capital Markets Group at Bedell Cristin.

“The fact that MBNA chose to locate their structure in Jersey clearly demonstrates the Island’s position as the jurisdiction of choice of leading financial institutions who continue to choose to locate their cutting edge financing structures here. It also shows the confidence clients have in the depth and quality of professional expertise in Jersey and the well regulated environment Jersey offers.”

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