Cabela's 2008 Annual Report Download - page 58

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53
A credit card loan represents a financial asset. Unlike a mortgage or other closed-end loan account, the terms
of a credit card account permit a customer to borrow additional amounts and to repay each month an amount the
customer chooses, subject to a monthly minimum payment requirement. The credit card account remains open after
repayment of the balance and the customer may continue to use it to borrow additional amounts. WFB reserves the
right to change the credit card account terms, including interest rates and fees, in accordance with the terms of the
credit card agreement and applicable law. The credit card account is, therefore, separate and distinct from the loan. In
a credit card securitization, the credit card account relationships are not sold to the securitization entity. WFB retains
ownership of the credit card account relationship, including the right to change the terms of the credit card account.
WFB sells our credit card loans in the ordinary course of business through a commercial paper conduit program
and longer-term fixed and floating rate securitization transactions. In a conduit securitization, credit card loans of
WFB are converted into securities and sold to commercial paper issuers, which pool the securities with those of other
issuers. The amount securitized in a conduit structure is allowed to fluctuate within the terms of the facility, which
may provide greater flexibility for liquidity needs.
The total amounts and maturities for the credit card securitizations of WFB as of December 27, 2008, were as
follows:
Series Type Initial
Amount Interest Rate Expected Final
Maturity
(Dollars in Thousands)
Series 2004-I Term $75,000 Fixed March 2009
Series 2004-II Term 175,000 Floating March 2009
Series 2005-I Term 140,000 Fixed October 2010
Series 2005-I Term 110,000 Floating October 2010
Series 2006-III Term 250,000 Fixed October 2011
Series 2006-III Term 250,000 Floating October 2011
Series 2008-I Term 461,500 Fixed (1) December 2010
Series 2008-I Term 38,500 Floating December 2010
Series 2008-IV Term 122,500 Fixed September 2011
Series 2008-IV Term 77,500 Floating September 2011
Total term 1,700,000
Series 2006-I Variable Funding 376,355 Floating October 2009
Series 2008-II Variable Funding 320,856 Floating June 2009
Series 2008-III Variable Funding 213,904 Floating July 2009
Total variable 911,115
Total available $ 2,611,115
(1) The trust entered into an interest rate swap agreement to convert the floating rate notes with a notional amount
of $229.85 million into a fixed rate obligation.
We have been, and will continue to be, particularly reliant on funding from securitization transactions for WFB.
A failure to renew existing facilities or to add additional capacity on favorable terms as it becomes necessary could
increase our financing costs and potentially limit our ability to grow the business of WFB. Unfavorable conditions
in the asset-backed securities markets generally, including the unavailability of commercial bank liquidity support
or credit enhancements, could have a similar effect. During 2008, WFB completed two term securitizations totaling
$700 million, added two variable funding facilities totaling $500 million, and renewed a $350 million variable
funding facility. We expect these additional liquidity sources and the certificates of deposit market to provide
adequate liquidity to WFB for 2009.