Explanation:
Credit card receivables are short-dated, revolving assets with high prepayment speeds, so their securitization requires a revolving structure. During the revolving period, principal collections from the collateral are reinvested to purchase new receivables. While a Master Trust is also commonly used for credit card asset pools, it involves high setup costs and complexity, making it suitable for frequent issuers rather than infrequent ones. Therefore, an infrequent issuer is most likely to use a standalone revolving structure.
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610.3. Which of the following structures is MOST LIKELY to be used by an infrequent issuer of securities whose asset pool consists of credit card debt, i.e., short-dated assets with a relatively high prepayment speed?
A
Master trust
B
Amortizing structure
C
Revolving structure
D
None of the above
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