Capital on Tap announced its first public securitisation, London Cards No.1, on July 31, 2023. The £250 million transaction provided another funding channel for a business-card platform whose rewards included gift cards, cashback and travel. [S01]

Announcement date and transaction dates

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Announcement date and transaction dates

Stage

Date or detail

Pricing

June 5, 2023

Settlement

June 20, 2023

Public announcement

July 31, 2023

Transaction value

£250 million

Participation

Seven investors across six tranches

HSBC and BNP Paribas acted as co-arrangers and joint lead managers. The company said the structure comprised a loan note and five placed note tranches listed on the London Stock Exchange. Moody’s and DBRS assigned Aa3 and AAA respectively to the Class A loan note. [S01]

A different source of funding

The company described the deal as a way to diversify its funding mix. It said it had closed more than £1 billion of facilities since June 2021. That cumulative figure and the new transaction value have different scopes, so they should not be treated as separate amounts of fresh financing raised on the announcement date. [S01]

For the gift-card sector, the relevant connection is the cardholder reward proposition attached to business spending. The securitisation funds a wider credit business; it is not evidence of £250 million in gift-card sales or a new reward catalogue.

The distinction between pricing, settlement and announcement is also useful. Investors had agreed the transaction before the July press release, so the release documents an already completed financing step rather than an invitation for businesses to apply for a newly announced fund.

The announcement did not establish a change in the value of customers’ rewards. It provides evidence of funding diversification, while the consequences for cardholder terms require separate product documentation.