KBRA Assigns Preliminary Ratings to London Cards Master Issuer Series 4

KBRA UK assigned preliminary ratings to six classes of notes issued through London Cards Master Issuer plc for Series 4 under the OnTap Master Trust structure. Backed by UK SME credit card receivables from Capital on Tap, the September 2026 issuance features a revolving period scheduled to end in September 2029.

London Cards Master Issuer plc is preparing a new round of structured debt under the OnTap Master Trust framework. According to KBRA UK, the rating agency has assigned preliminary marks to six distinct classes of notes associated with Series 4 of the programme.

Structure and Collateral Behind Series 4

The underlying collateral for the transaction stems from receivables originated and serviced by New Wave Capital Limited, which trades commercially as Capital on Tap, commonly abbreviated as CoT. Operating as a privately owned non-bank lender, Capital on Tap focuses on providing business credit cards tailored for small and medium-sized enterprises. Since launching its SME credit card line in 2017, the lender has expanded its footprint. By June 2026, CoT maintained approximately 190,000 customers alongside £1.7 billion in UK credit card receivables.

The newly rated notes draw credit enhancement from several distinct mechanisms within the trust architecture. According to KBRA UK, this support relies primarily on the subordination of junior note classes, excess finance charge collections, and a liquidity reserve. Notably, interchange fees generated through card transactions remain with Capital on Tap and do not factor into the collections made available to the Master Trust.

Discount Percentages and Revolving Timeline Parameters

To manage collections and cash flow waterfalls, the transaction applies a 1.8% Discount Percentage. Under this mechanism, principal receivables are purchased at a discount, allowing an equivalent proportion of principal collections to be reclassified as finance charge collections. These funds are subsequently channelled through the revenue waterfall.

The issuance features an initial revolving period scheduled to conclude in September 2029. However, transaction documents allow for this revolving window to be extended by up to 12 months, depending on future conditions and adherence to governing covenants.

Regulatory Endorsements and Oversight Framework

The preliminary credit ratings carry broad jurisdictional recognition through Kroll Bond Rating Agency, LLC, and its European subsidiaries. Kroll Bond Rating Agency Europe Limited endorses the ratings for utilization within the European Union, while KBRA UK maintains registration as a credit rating agency with the UK Financial Conduct Authority. Furthermore, parent entity KBRA operates as a nationally recognized statistical rating organization registered with the U.S. Securities and Exchange Commission.

Analytical coverage for the transaction is led by Dinesh Thapar, Senior Director at KBRA, alongside Managing Director Killian Walsh and Associate Director Christopher Noonan. John Hogan serves as the rating committee chair and Co-Head of Europe. Detailed information regarding key credit drivers, sensitivity analyses, and environmental, social, and governance factors associated with the ratings is accessible through KBRA’s official reporting disclosures.