Securities Law & Instruments

Headnote

National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- Application for relief from the prospectus requirement for special purpose vehicle trust to distribute short-term securitized product without a prospectus -- The Filer intends to obtain a second credit rating on its short-term securitized product -- Exemptive relief will allow the Filer to offer short-term securitized product to investors in the same manner without interruption while the Filer takes the necessary steps to obtain a second credit rating -- Relief is subject to the Filer satisfying all conditions in sections 2.35.1, 2.35.2, 2.35.3 and 2.35.4 of National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106) relating to the prospectus-exempt distribution of short-term securitized products other than the requirement that its short-term securitized product have two credit ratings -- Filer will have at least one credit rating at the highest credit rating category for short-term securitized products -- Exemptive relief will expire the earlier of one year from the date of the decision and the date that the Filer obtains a second credit rating that satisfies the requirements of the short-term securitized products prospectus exemption in NI 45-106.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c.S.5, as am., ss. 53, 74(1).

National Instrument 45-106 Prospectus and Registration Exemptions, s. 2.35.1.

May 5, 2015

IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA, BRITISH COLUMBIA, MANITOBA, NOVA SCOTIA, NEW BRUNSWICK, NEWFOUNDLAND AND LABRADOR, ONTARIO, PRINCE EDWARD ISLAND, SASKATCHEWAN AND QUEBEC (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF GLACIER CREDIT CARD TRUST (the Filer)

DECISION

Background

The principal regulator in the Province of Ontario (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) for an exemption that distributions of the Filer's short-term securitized product (as defined in National Instrument 45-106 Prospectus and Registration Exemptions (NI 45-106)) be exempt from the prospectus requirements of the Legislation for the lesser of one year from the date of this decision and the date the Filer obtains a second credit rating on its short-term securitized product in accordance with sections 2.35.2(a)(i) and (ii) of NI 45-106, subject to the conditions set out in this decision (the Exemption Sought).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

(a) the Ontario Securities Commission is the principal regulator for this application, and

(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in Alberta, British Columbia, Manitoba, Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island, Saskatchewan and Quebec (the Passport Jurisdictions).

Interpretation

Terms defined in NI 45-106, MI 11-102 and National Instrument 14-101 Definitions have the same meanings in this decision, unless otherwise defined.

Representations

The decision is based on the following facts represented by the Filer:

1. The Filer is a special purpose vehicle established pursuant to a declaration of trust dated as of March 31, 1995, as amended and restated as of November 29, 1995, and as further amended on November 19, 2002, June 20, 2003, September 5, 2008 and July 21, 2010, under the laws of the Province of Ontario, the beneficiary of which is a charity registered under the Income Tax Act (Canada).

2. The head office of the Filer is located in Toronto, Ontario.

3. The issuer trustee of the Filer is Computershare Trust Company of Canada, whose principal office is located in Toronto, Ontario.

4. The administrator of the Filer is Canadian Tire Bank (CT Bank), a Schedule I Canadian chartered bank governed by the Bank Act (Canada), whose head office is located in Toronto, Ontario.

5. The Filer is a reporting issuer, or the equivalent, in each of the provinces of Canada.

6. The Filer is not in default of any of the requirements of the securities legislation in any jurisdiction of Canada.

7. The Filer does not carry on any activities other than activities related to purchasing from CT Bank undivided co-ownership interests (Ownership Interests) in a revolving pool of credit card receivables (Receivables) and issuing asset-backed securities backed by Ownership Interests. CT Bank and its Canadian Tire-owned predecessors have been managing credit card receivables since the 1960's.

8. The Filer has issued nineteen series of asset-backed notes, six of which are outstanding on the date hereof. The Filer has issued eighteen series of term asset-backed notes with maturity dates more than one year from the date of issue (Term ABS) and one series of short-term securitized product, which is classified as "Series 1997-1".

9. Since 2001, the Filer has publicly offered thirteen series of Term ABS in Canada. From 1995 to 2000, the Filer privately placed five series of Term ABS in Canada.

10. The Filer's short-term securitized product has been sold in Canada since March 10, 1997 and the Filer has had short-term securitized product outstanding in Canada every day since at least 2002.

11. Sections 2.35.1, 2.35.2, 2.35.3 and 2.53.4 of NI 45-106, subject to the transitional provisions relating to Form 45-106F7 Information Memorandum for Short-term Securitized Products Distributed under Section 2.35.1 (Form 45-106F7) and Form 45-106F8 Monthly Disclosure Report for Short-term Securitized Products Distributed under Section 2.35.1 (Form 45-106F8), came into force on the date of this decision in each of the Jurisdictions.

12. Section 2.35.2(a)(i) of NI 45-106 sets out a requirement that a short-term securitized product have a credit rating from not less than two designated rating organizations, or their respective DRO affiliate, at least one of which is at or above one of the rating categories set forth in section 2.35.2(a)(i) of NI 45-106 or at or above a rating category that replaces one of such rating categories in order for a distribution of a short-term securitized product to be exempt from the prospectus requirements of the Legislation.

13. The Filer's short-term securitized product is currently only rated by DBRS Limited (DBRS).

14. The Filer's short-term securitized product is currently rated "R-1(high)(sf)" by DBRS. At all times since its initial issuance, DBRS has rated the Filer's short-term securitized product "R-1(high)" or "R-1(high)(sf)", which have been DBRS' highest short term debt ratings for short-term securitized products. The Filer's short-term securitized product rating has never been placed under review by DBRS.

15. The Filer intends to obtain a second credit rating on its short-term securitized product. The Exemption Sought will allow the Filer to offer short-term securitized product to investors in the same manner without interruption while the Filer takes the necessary steps to obtain a second credit rating.

16. As of the date of this decision, there has not been an amortization event or an event of default in respect of the Filer's short-term securitized product or any Term ABS issued by the Filer. In addition, as of the date of this decision, the Filer has never borrowed funds under any liquidity arrangements supporting its short-term securitized product.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the Decision Maker is that the Exemption Sought is granted provided that:

(a) at all times this decision is in force, a copy of this decision is posted on the Glacier Credit Card Trust investor reporting section of Canadian Tire Corporation, Limited's website; and

(b) at all times this decision is in force, subject to the transitional provisions relating to Form 45-106F7 and Form 45-106F8, any distributions of the Filer's short-term securitized product satisfy the requirements in sections 2.35.1, 2.35.2, 2.35.3 and 2.35.4 of NI 45-106, except that the requirement in section 2.35.2(a)(i) of NI 45-106 is replaced with the following requirement:

(i) the Filer has a credit rating from a designated rating organization, or its respective DRO affiliate, which is at or above one of the following rating categories or is at or above a rating category that replaces one of the following rating categories:

A. R-1(high)(sf) if issued by DBRS Limited;

B. F1+sf if issued by Fitch, Inc.;

C. P-1(sf) if issued by Moody's Canada Inc.; and

D. A-1(high)(sf) (Canada national scale) or A-1+(sf) (global scale) if issued by Standard & Poor's Ratings Services (Canada).

This decision will expire on the earlier of:

(a) one year from the date of this decision; and

(b) the date the Filer obtains a second credit rating on its short-term securitized product in accordance with sections 2.35.2(a)(i) and (ii) of NI 45-106.

"Monica Kowal"
Vice-Chair
Ontario Securities Commission
 
"Judith Robertson"
Commissioner
Ontario Securities Commission