Eagle Credit Card Trust securitization of PC Bank credit card receivables includes an optional discount sale option

Eagle Credit Card Trust (the “Trust”) has issued a short form base shelf prospectus for the securitization of credit card receivables generated by President's Choice Bank ("PC Bank" - a Sched. I bank wholly-owned by Loblaw) from PC Mastercard credit cards. The Trust will issue different series of credit card receivables-backed notes (the "Notes"), which will have recourse only to an undivided co-ownership interest in a revolving pool of credit card receivables generated under by PC Bank and certain related assets – and the Note proceeds will be used to acquire that co-ownership interest form PC Bank. PC Bank will continue to service the receivables.

A somewhat unusual feature of this securitization (as contrasted, for example, to the recent short form base prospectus of Glacier Credit Card Trust for Canadian Tire credit card receivables) is that the “Originator” (i.e., PC Bank) can, at its option, elect that the receivables will be sold to the Trust at a discount (rather than at par) to their principal amount. The tax disclosure contemplates that this discount would in effect be passed through as a discount on the issue price for the Notes, and indicates that whether the discounts would be taxable on an accrual or receivable basis could depend on “the facts and circumstances giving rise to the discount.”

The tax disclosure also does not express a view as to whether interest on the Notes would be subject to Part XIII tax as being participating debt interest.

Neal Armstrong. Summary of Eagle Credit Card Trust 2 August 2017 Short Form Base Shelf Prospectus under Offerings – Securitization Trust Notes – Credit Card Receivables.