Cabela's 2010 Annual Report Download - page 68

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Another feature, which is applicable to the notes issued from the Trust, is one in which excess cash flows
generated by the transferred loans are held at the Trust for the benefit of the investors. This cash reserve account
funding is triggered when the three-month average excess spread rate of the Trust decreases to below 4.50% or
5.50% (depending on the series) with increasing funding requirements as excess spread levels decline below preset
levels or as contractually required by the governing documents. Similar to early amortization, this feature also is
designed to protect the investors’ interests from loss thus making the cash restricted. Upon scheduled maturity or
early amortization of a securitization, WFB is required to remit principal payments received on the securitized
pool of loans to the Trust which are restricted for the repayment of the investors’ principal note.
The total amounts and maturities for our credit card securitizations as of January 1, 2011, were as follows:
Series Type
Total
Available
Capacity
Third Party
Investor
Available
Capacity
Third Party
Investor
Outstanding Interest Rate Expected Maturity
(Dollars in Thousands)
Series 2006-III Term $250,000 $250,000 $250,000 Fixed October 2011
Series 2006-III Term 250,000 250,000 250,000 Floating October 2011
Series 2008-IV Term 122,500 122,500 122,500 Fixed September 2011
Series 2008-IV Term 77,500 75,900 75,900 Floating September 2011
Series 2009-I Term 75,000 - - Fixed March 2012
Series 2009-I Term 425,000 425,000 425,000 Floating March 2012
Series 2010-I Term 45,000 - - Fixed January 2015
Series 2010-I Term 255,000 255,000 255,000 Floating January 2015
Series 2010-II Term 127,500 127,500 127,500 Fixed August 2015
Series 2010-II Term 122,500 85,000 85,000 Floating August 2015
Total term 1,750,000 1,590,900 1,590,900
Series 2006-I Variable Funding 411,765 350,000 293,000 Floating September 2011
Series 2008-III Variable Funding 260,115 225,000 100,000 Floating November 2011
Total variable 671,880 575,000 393,000
Total available $ 2,421,880 $2,165,900 $1,983,900
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. WFB completed a securitization transaction
for $300 million under the TALF program in February 2010, and an additional $250 million securitization
transaction in September 2010. During 2010, WFB renewed its $260 million and $412 million variable funding
facilities that will mature in November 2011 and September 2011, respectively. In 2011, WFB intends to issue
additional certificates of deposit and additional term securitizations or variable funding facilities. We believe that
these liquidity sources are sufficient to fund WFB’s foreseeable cash requirements and near-term growth plans.
Furthermore, WFB’s securitized credit card loans could experience poor performance, including increased
delinquencies and credit losses, lower payment rates, or a decrease in excess spreads below certain thresholds.
This could result in a downgrade or withdrawal of the ratings on the outstanding securities issued in WFB’s
securitization transactions, cause “early amortization” of these securities, or result in higher required credit
enhancement levels. Credit card loans performed within established guidelines and no events which could trigger
an “early amortization” occurred during the years ended January 1, 2011, and January 2, 2010.