Cabela's Credit Card Master Note Trust (Series ... - Standard & Poor's

Presale:Cabela's Credit Card Master NoteTrust (Series 2013-II)Primary Credit Analyst:James F Traynor, New York (1) 212-438-2627; james.traynor@standardandpoors.comSecondary Contact:Ildiko Szilank, New York (1) 212-438-2614; ildiko.szilank@standardandpoors.comTable Of Contents$291.75 Million Asset-Backed Notes Series 2013-IIRationaleTransaction OverviewCredit SupportStructural Overview And Payment PriorityOriginator OverviewCollateral OverviewCollateral Historical PerformanceStandard & Poor's Rating ScenariosYield PerformancePayment Rate PerformanceLoss PerformanceWWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 11174132 | 300129047

Table Of Contents (cont.)Purchase RateDilution AnalysisSensitivity AnalysisStandard & Poor's 17g-7 Disclosure ReportRelated Criteria And ResearchWWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 21174132 | 300129047

Presale:Cabela's Credit Card Master Note Trust (Series2013-II)$291.75 Million Asset-Backed Notes Series 2013-IIThis presale report is based on information as of Aug. 6, 2013. The ratings shown are preliminary. This report does not constitute arecommendation to buy, hold, or sell securities. Subsequent information may result in the assignment of final ratings that differ from thepreliminary ratings.Preliminary Ratings As Of Aug. 6, 2013Class Preliminary rating(i) Interest rate(ii) Preliminary amount (mil. $) Credit support (%)A-1/A-2 AAA (sf) Fixed/floating 255.00 15.00B A (sf) Fixed 24.00 7.00C BBB (sf) Fixed 12.75 2.75(iv)D(iii) NR Fixed 8.25 0.00(iv)(i)The rating on each class of securities is preliminary and subject to change at any time. (ii)The actual interest rates will be determined on thepricing date. (iii)The class D notes are not being offered publicly. (iv)The class C and D notes benefit from a spread account that will be funded byexcess cash flow if the quarterly excess spread percentage is equal to or less than 4.5%. NR--Not rated.ProfileExpected closing date Aug. 15, 2013.Expected principal payment date Aug. 15, 2018.Stated maturity date Aug. 16, 2021.Distribution date The 15th of each month (or the following business day), beginning Oct. 15, 2013.CollateralMaster trust assetsTransferorMaster trustIssuerServicer and originatorIndenture trustee/master trusttrusteeOwner trusteeUnderwritersThe series 2004-1 certificate issued by Cabela's Master Credit Card Trust (the master trust), which representsan undivided investor interest in the master trust's assets.Credit card receivables in Visa revolving credit card accounts (and potentially in MasterCard accounts if issuedin the future).WFB Funding LLC.Cabela's Master Credit Card Trust.Cabela's Credit Card Master Note Trust.World's Foremost Bank.U.S. Bank N.A.Wells Fargo Delaware Trust Co. N.A.RBC Capital Markets and Merrill Lynch, Pierce, Fenner & SmithRationaleThe preliminary ratings assigned to Cabela's Credit Card Master Note Trust's (the issuer's) series 2013-II class A-1,A-2, B, and C notes are based on:WWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 31174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)• Our view that the credit support for each class of rated notes should be sufficient to withstand the simultaneousstresses we apply to our 3.0%-5.0% base-case net loss rate assumption, 29.0%-31.0% base-case payment rateassumption, 14.0%-16.0% base-case yield assumption, and 0.0%-1.0% purchase rate assumption. In addition, weuse stressed excess spread and note interest rate assumptions to assess whether, in our opinion, sufficient creditsupport is available for the assigned preliminary ratings (for more information, see the Standard & Poor's RatingScenarios section). All of the stress assumptions are based on our current criteria and assumptions (see "GeneralMethodology And Assumptions For Rating U.S. ABS Credit Card Securitizations," published April 19, 2010, and"Revised Purchase And Payment Rate Assumptions For U.S. Credit Card ABS," published Sept. 14, 2011).• Our expectation that under a moderate ('BBB') stress scenario, all else being equal, our preliminary 'AAA (sf)' ratingson the class A notes will remain within one rating category of the assigned ratings in the next 12 months and ourpreliminary 'A (sf)' and 'BBB (sf)' ratings on the class B and C notes, respectively, will remain within two ratingcategories of the assigned ratings in the next 12 months, based on our credit stability criteria (see "Methodology:Credit Stability Criteria," published May 3, 2010).• Our view of the credit risk associated with the collateral loan pool's quality, based on our economic forecast,Cabela's Master Credit Card Trust's (the master trust's) portfolio performance, and the pool statistics.• Our view of World's Foremost Bank's (WFB's) servicing experience, and our opinion of the quality and consistencyof its account origination, underwriting, account management, collections, and general operational practices.• Our expectation of the timely interest and ultimate principal payments by Aug. 16, 2021, the stated maturity date,based on stressed cash flow modeling scenarios using assumptions commensurate with the assigned preliminaryratings.• The series 2013-II notes' underlying payment structure, cash flow mechanics, and legal structure.Transaction OverviewThe series 2013-II notes will be issued out of Cabela's Credit Card Master Note Trust (the issuer) and secured by theseries 2004-1 certificate issued by Cabela's Master Credit Card Trust. The series 2004-1 certificate represents anundivided investor interest in the master trust's assets, which comprise revolving credit card receivables generated bydesignated eligible Visa credit card accounts (MasterCard credit card accounts may be included in the future). Thetrustee will use the cash flows applied to the series 2004-1 certificate to make note interest and principal payments onthe issuer's outstanding discrete series, including the series 2013-II notes, based on each series' respective pro rataallocations included in the transaction documents.The series 2013-II notes will comprise four publicly rated classes (classes A-1, A-2, B, and C) of five-year notes.Interest will be due on the 15th of each month (or the next business day), beginning Oct. 15, 2013. The notes' interestrates will be determined on the pricing date.The series 2013-II notes will have a senior/subordinate structure. The class A-1 and A-2 notes are pari passu. Weassigned our preliminary 'AAA (sf)' ratings to the class A-1 and A-2 notes, which we collectively refer to as the class Anotes in describing the transaction's structural mechanics and subordination.The series 2013-II notes' structure includes a mechanism that allows them to be prefunded at closing. When weassigned the preliminary ratings, no prefunded amount was deposited into the prefunding account.Principal is scheduled to be repaid to noteholders on Aug. 15, 2018, the expected principal payment date. Based on theWWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 41174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)transaction documents, the expected principal payment date follows a cash accumulation period that's initiallydesignated to be 12 months, but can be shortened to one month depending on the principal payment rate and whetherother series issued from Cabela's Credit Card Master Note Trust have a priority on principal collections based on thetransaction documents.Credit SupportAccording to the transaction documents, the preliminary rated notes' credit support will be structured as follows:• The class A notes will receive credit support from the class B, C, and D notes' subordination sized to equal 15.0% ofthe initial aggregate note balance and a cash collateral account;• The class B notes will receive credit support from the class C and D notes' subordination sized to equal 7.0% of theinitial aggregate note balance and a cash collateral account; and• The class C notes will receive credit support from the class D notes' subordination sized to equal 2.75% of the initialaggregate note balance; a spread account dedicated to the class C and D notes and funded by excess cash flow ifthe quarterly excess spread percentage is equal to or less than 4.5%; and a cash collateral account.At closing, the spread account will not have an initial deposit. Based on the transaction documents, however, it will befunded with available excess spread if the three-month average excess spread is equal to or less than 4.5%. As of June30, 2013, the three-month average excess spread was 14.45%. If finance charge collections are insufficient to payinterest on the class C and D notes, the transaction provides that the trustee will withdraw funds from the spreadaccount and distribute those funds to pay interest to the class C and then D notes.The cash collateral account will also not be funded at closing. Based on the transaction documents, however, it will befunded with available excess spread if Cabela's Inc. (not rated) does not satisfy the minimum net worth covenant bythe last day of its related fiscal quarter. We didn't incorporate this covenant into our analysis when assigningpreliminary ratings to the series 2013-II notes. In our cash flow scenarios, therefore, we assumed that the cashcollateral account will not be funded for any rating categories.Structural Overview And Payment PriorityThe servicer will deposit the finance charge collections allocated daily to the series 2013-II notes into a collectionaccount to make monthly payments in the following priority:• Class A monthly interest (for classes A-1 and A-2, pro rata, if funds are insufficient);• Class B monthly interest;• The monthly servicing fee;• Class C monthly interest;• Class D monthly interest;• The series default amount and any uncovered dilution amount;• Any reimbursements for reduction amounts and reallocated principal;• If an event of default and acceleration of the series 2013-II notes occurs, an amount equal to the note principalbalance minus the amounts deposited into the principal funding account, if any;WWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 51174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)• The required reserve account amount;• The required spread account amount;• The required cash collateral account amount; and• Any remaining finance charge collections shared with other series issued in the same group.If sufficient finance charge collections are not available to pay the class A, B, and C monthly note interest or theservicing fee, the shortfalls will be covered by reallocating amounts from available principal collections. Anyreallocation, uncovered investor default, or uncovered dilutions will reduce the series 2013-II notes' invested amount.During the revolving period, the trustee will allocate principal collections to the series 2013-II notes based on theseries' invested amount to the transferor for reinvestment in new receivables. During the controlled accumulationperiod, the trustee will deposit principal collections up to a specified amount into the principal funding account forlater distribution to the noteholders on the expected principal payment date.Excess spread in the payment waterfall will fund a reserve account equal to 0.50% of the note principal balance tocover negative carry. As credit card receivables with higher interest earnings are replaced with cash during thecontrolled accumulation period, interest shortfalls may occur that could result in negative carry.If an early redemption occurs at any time, the trustee will immediately distribute the principal collections allocated tothe series 2013-II notes to the noteholders in the following priority:• To the class A-1 and A-2 notes, pro rata, until paid in full;• To the class B notes until paid in full;• To the class C notes until paid in full; and• To the class D notes until paid in full.Early redemption events include:• The transferor's, servicer's, or issuer's failure to make any payment or deposit on or before the date occurring fivebusiness days after the due date;• The transferor, servicer, or issuer breaches a covenant;• The issuer or servicer breaches a representation or warranty;• The servicer defaults, or the transferor consolidates or merges into any other corporation or transfers its propertiesand assets substantially;• The three-month average excess spread percentage for any monthly period is less than 0%;• The indenture trustee fails, for any reason, to have a valid and perfected first-priority security interest in any of theissuer's assets securing the series 2013-II notes;• An event of default occurs , for example, the issuer fails to pay interest or principal when due, the issuer breaches acovenant, agreement, representation, or warranty, or the issuer or account owner (WFB)becomes insolvent, and thenotes are accelerated;• The note principal balance is not paid in full by the expected principal payment date;• The transferor's interest average during any consecutive 20-day period is less than 5.0% of the average principalreceivables, and the transferor fails to designate additional accounts with a sufficient amount, so that the average ofthe transferor's interest as a percentage of the average principal receivables balance for such period is at least equalto 5.0% of the average principal receivables balance, and fails to transfer the receivables from those additionalaccounts to the master trust on or before the 10th business day following the consecutive 20-day period;WWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 61174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)• The issuer is subject to regulation as an investment company under the Investment Company Act of 1940;• The three-month average monthly principal payment rate is less than 15%; and• A payout described under the series 2004-1 certificate supplement occurs.Originator OverviewCabela's Inc. was founded in 1961 and is a direct marketer and specialty retailer of hunting, fishing, camping, andrelated outdoor merchandise. Cabela's generates sales through catalogs mailed worldwide, a Web site, and retail storesin the U.S. and Canada.WFB is a limited-purpose credit card bank and a wholly owned subsidiary of Cabela's. WFB is the originator andservicer of Cabela's Club Visa credit card accounts. The credit card program serves as a customer loyalty rewardprogram. WFB is a Nebraska state banking corporation that originated, or acquired, the receivables in the master trust,and is subject to the Nebraska Department of Banking and Finance and Federal Deposit Insurance Corp. (FDIC)regulation and supervision. Before March 2001, National Bank of Commerce Trust and Savings Association (NT&SA)issued and owned the credit card accounts under an agreement with Cabela's. When NT&SA merged with Wells FargoBank Nebraska N.A. (Wells Fargo), Cabela's chartered WFB as a special-purpose credit card bank and, on March 23,2001, WFB acquired all of Cabela's accounts that were held by Wells Fargo. WFB services the accounts at its facilitiesin Lincoln, Neb.Collateral OverviewCabela's portfolio has one of the highest current payment rates and one of the lowest loss rates among its peers. Webelieve this is partly due to the obligor base's high credit quality and the incentives that the Cabela's Club pointprogram provides, which attract a high portion of transactors (account holders who pay their monthly balances in full)in the master trust portfolio. As of June 30, 2013, approximately 93.5% of the receivables outstanding in Cabela'sMaster Credit Card Trust had a FICO score higher than 660, which we consider prime quality in the credit card sector.Cabela's portfolio grew in states that experienced less housing market distress than the sun states, such as California,Florida, and Arizona. The portfolio's highest state concentrations are in Pennsylvania and Minnesota, where thecompany has a large store presence. Overall portfolio growth grew about 9% from December 2009 through December2010, about 13% from December 2010 to December 2011, and about 12% from December 2011 to December 2012. Asof June 30, 2013, the top five geographic concentrations of receivables outstanding in Cabela's Master Credit CardTrust were Pennsylvania (8.93%), Minnesota (6.42%), Texas (5.45%), Michigan (5.34%), and Wisconsin (5.13%).As of June 30, 2013, the master trust consisted of $3.48 billion of principal receivables with the followingcharacteristics:• An average principal balance of $1,366;• An average credit limit of $10,985;• A utilization rate of 12.51%;• A weighted average age of 82 months;WWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 71174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)• 61.01% of the receivables are from accounts older than 61 months;• 8.19% of the receivables are from accounts equal to or less than 12 months old;• 71.73% of the receivables have FICO scores of 720 or higher; and• Of the account holders who made a payment during June 2013, 6.54% made minimum payments and 40.72% madefull payments.The receivables in the master trust are derived from WFB-owned Visa revolving credit card accounts. The accountshave been issued primarily to Cabela's customers. Cabela's most creditworthy customers are its primary source forpotential credit card accounts. All of WFB's credit cards currently offer a Cabela's Club point program through whichobligors receive a fixed percentage of points for every dollar transacted with WFB's credit card. Customers can redeemthese points and use them as a rebate on future purchases with Cabela's.WFB markets its credit cards to Cabela's customers through four channels:• Retail instant credit;• Internet instant credit;• Take-one applications; and• Prescreened instant credit, which primarily targets Cabela's catalog customers.The majority of WFB's accounts are originated through the retail instant credit program, and the majority of newaccounts will likely be originated through Cabela's stores as the company continues to expand its store base. AlthoughWFB originates a limited number of accounts through traditional pre-approval mailings, it limits its offers to existingCabela's customers.WFB has a contract with First Data Resources Inc. (FDR) for cardholder processing services, including accountrecords maintenance, statement generation, authorization processing, and the manufacturing of some of WFB's creditcards. Also, FDR's adaptive control system determines the collection activities on all delinquent accounts.Collateral Historical PerformanceWe compared Cabela's portfolio performance during the period from December 2007, when the most recent recessionbegan, through February 2010, the month in which the credit card industry's losses peaked (lagging about six monthsafter unemployment peaked), with Standard & Poor's U.S. private-label and bankcard Credit Card Quality Index(CCQI).During this time, Cabela's Credit Card Master Note Trust's principal receivables rose 14.1% to $2.3 billion from $2.1billion. In addition, yield declined slightly by 4.3% to 20.9% from 21.8%, the loss rate increased 117.0% to 4.6% from2.1%, the payment rate decreased 19.5% to 38.0% from 47.2%, and the excess spread rate declined 15.4% to 10.5%from 12.5%. Regarding delinquencies, the 30-plus-day delinquency rate rose 100% to 1.72% from 0.90%, the60-plus-day delinquency rate increased 112.2% to 1.0% from 0.5%, and the 90-plus-day delinquency rate grew 139.1%to 0.6% from 0.2%.During the same time period, the U.S. private-label CCQI principal receivables balance dropped 20.4% to $69 billionfrom $87 billion. Yield increased 15.8% to 27.7% from 23.9%, the loss rate rose 101.1% to 12.6% from 6.3%, theWWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 81174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)payment rate grew 1.9% to 14.5% from 14.2%, and the excess spread rate declined 7.8% to 10.1% from 10.9%. Fordelinquencies, the 30-plus-day delinquency rate rose 40.1% to 7.5% from 5.4%, the 60-plus-day delinquency rate grew46.7% to 5.4% from 3.7%, and the 90-plus-day delinquency rate increased 55.1% to 3.8% from 2.5%. Overall, theprivate-label trusts' performance variables (yield, loss, and payment rate) fared slightly better than those of thebankcard trusts.Comparatively, the U.S. bankcard CCQI principal receivables decreased 14% to $372 billion from $432 billion duringthe same period. In addition, yield increased 9.8% to 22.0% from 20.0%, the loss rate rose 116.7% to 10.5% from 4.9%,the payment rate declined 6.1% to 18.0% from 19.2%, and the excess spread rate decreased 1.3% to 8.3% from 8.4%.Overall delinquencies declined during this period: the 30-plus-day delinquency rate rose 33.5% to 5.7% from 4.3%, the60-plus-day delinquency rate increased 44.0% to 4.3% from 3.0%, and the 90-plus-day delinquency rate grew 53.3% to3.2% from 2.1%. Meanwhile, the U.S. unemployment rate rose 94% to 9.7% from 5.0%.Although Cabela's credit cards are general-purpose bankcards, we believe that the cards' utility depends significantlyon Cabela's stores and products and that the portfolio is most comparable with other private-label pools, includingbankcard pools that rely on a retailer or a niche market (see table 1 for the historical portfolio performance of WFB'scredit card portfolio since 2008 compared with Standard & Poor's private-label CCQI as of June 2013).Table 1World's Foremost Bank Portfolio Statistics6 months endedJune 30, 20136 monthsended June 30 12 months ended Dec. 31Avg. receivablesoutstandingAnnualized portfolioyield (%)Avg. monthlypayment rate (%)Delinquencies of 30days or more (%)Annualized netlosses (%)Private-labelCCQI 2013 2012 2011 2010 2009 200843,849,188,498 3,407,908,081 3,127,716,873 2,770,930,717 2,492,815,327 2,316,042,209 2,094,759,61726.4 19.51 19.85 19.89 20.63 21.49 20.4718.0 42.02 42.03 41.62 40.17 38.89 42.083.3 0.67 0.72 0.87 1.13 1.79 1.684.8 1.99 1.85 2.33 4.19 5.06 2.93CCQI--Standard & Poor's Credit Card Quality Index.Standard & Poor's Rating ScenariosIn May 2012, we changed some of our base-case assumptions for U.S. cobranded and retail credit card asset-backedsecurities (ABS) when we concluded our recent review of each credit card ABS deal backed by the seven issuers ofU.S. cobranded and retail credit card ABS that we rate. The overall collateral performance of the credit cardreceivables backing these transactions stabilized and improved during the past 18-24 months. As part of the review, weupdated, in certain instances, our base-case assumptions and stresses to the key performance variables (yield,charge-off rate, and payment rate) that we use in modeling and rating credit card ABS. For Cabela's master trustWWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 91174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)portfolio, we lowered our base-case payment rate assumption to 29.0%-31.0% from 30.0%-32.0% and maintained our3.0%-5.0% base-case loss rate assumption and 14.0%-16.0% base-case yield assumption. (For more information,please see "May 11, 2012, Ratings Raised, Affirmed On U.S. Private-Label Card ABS From Seven Issuers OnAdjustments To Key Performance Variables," published May 11, 2012.)We summarize the stresses we used when assigning our preliminary ratings to the series 2013-II notes in table 2 (formore information on our assumptions for this transaction and our current criteria, see "General Methodology AndAssumptions For Rating U.S. ABS Credit Card Securitizations," published April 19, 2010, and "Revised Purchase AndPayment Rate Assumptions For U.S. Credit Card ABS," published Sept. 14, 2011).Table 2Standard & Poor's Rating ScenariosScenario Net losses(i) Total payment rate(ii) Yield(iii) Purchase rateStandard & Poor's base-caseassumptionStandard & Poor's 'AAA (sf)'rating stressesStandard & Poor's 'A (sf)'rating stressesStandard & Poor's 'BBB (sf)'rating stresses6.50x-8.50x multiple applied toour base case3.25x-5.25x multiple applied toour base case1.75x-3.75x multiple applied toour base case3.00%-5.00% 29.00%-31.00% 14.00%-16.00% N/A30.00%-50.00% of our basecase40.00%-60.00% of our basecase50.00%-70.00% of our basecase60.00%-70.00% of our basecase65.00%-75.00% of our basecase75.00%-85.00% of our basecase0.00%0.00%0.00%-1.00%(i)In the 'AAA' and 'A' rating scenarios, losses start at our base-case assumption and then rise to the stressed multiple in 12 months. In the 'BBB'rating scenario, losses start at our base-case assumption and then rise to the stressed multiple in 18 months. (ii)The total payment and purchaserates begin at the stressed level in the first month of the cash flows. (iii)Yield begins at the stressed level in the first month of the cash flows for the'AAA' and 'A' scenarios and starts close to our base-case assumption, declining over 18 months. N/A--Not applicable.Yield PerformanceWe assume a 14.00%-16.00% base-case yield rate in our cash flow runs for this pool. Yield includes periodic financecharges, fees, and interchange. Cabela's portfolio includes approximately 41% transactors who make a high number ofpurchases, creating a larger portion of interchange income compared to portfolios with a significant portion ofrevolvers (account holders who pay only a portion of their monthly balances each month). Finance charges aregenerally one-month LIBOR plus 9.99%-20.99% depending on the risk-based pricing tier. Receivables arising frompurchases at Cabela's retail stores are currently subject to a 7.99%-9.99% fixed annual percentage rate.Our 'AAA' and 'A' cash flow analyses assume an immediate stress to portfolio yield to reflect restrictive pricingregulations and competitive pressures, including low introductory and promotional rates. In our 'BBB' cash flowanalysis, we assume that yield deteriorates during an 18-month period.Payment Rate PerformanceWe assume a 29.00%-31.00% base-case payment rate in our cash flows runs. As of June 30, 2013, the master trust'syear-to-date average payment rate was 42.97%, which has decreased slightly since 2007 as the portfolio matured andaverage balances grew. Despite this decline, the master trust's payment rate is still significantly higher than theWWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 101174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)private-label CCQI's payment rate. Cabela's high payment rates could reflect a higher-credit-quality obligor base andthe impact of the Club points program, which gives cardholders an incentive to transact rather than revolve balances.Approximately 41.00% of the master trust's accounts are transactors.In our analysis, we assume that payment rates immediately decrease to the stressed level when modeling all of ourrating scenarios. In addition to lowering the base-case assumption during the May 2012 review, we increased thestresses applied to the base case to reflect our view that the cards' use will be limited if the store becomes insolvent.Loss PerformanceWe assume base-case losses of 3.0%-5.0%, which is the lowest among its peers, in our cash flow runs. AlthoughCabela's has the lowest base-case loss rate, we also apply a stress level that is higher than others to balance it with thatof its peers. We think this portfolio would perform similarly to its peers in a stressed environment based on our view ofthe cards' limited use if the store becomes insolvent and because cardholders' incentive to keep accounts current isdiminished with the loss of store reward points. Our assumption is forward-looking and incorporates our U.S.unemployment economic forecast rate of 7.5% for full-year 2013 under a baseline scenario.WFB's portfolio has exhibited relatively low loss rates compared with the overall credit card industry. The mastertrust's net loss rate is approximately 64% lower than the private-label CCQI's net loss rate. Net losses decreased by66.9% to 1.76% in June 2013 from a peak of 5.31% in May 2009. We believe this loss stabilization could be attributedto tighter underwriting standards and the higher credit quality of WFB's obligor base. Unlike the rest of the industry,Cabela's portfolio has continued to grow, which has benefited loss rates because we calculate them as a percentage ofprincipal receivables.Beginning in June 2007, WFB began charging off receivables on a daily basis when an account becomes 130-daysdelinquent, compared with the industry norm of charging off receivables when an account is 180-days delinquent.Before June 2007, WFB charged off receivables on the 24th day of each month after an account was 115-daysdelinquent, resulting in a 129-day average charge-off.In our 'AAA' and 'A' rating scenarios, we assume that losses start at our base-case level and then rise to the stressedmultiple in 12 months. In the 'BBB' rating scenario, we assume that losses start at our base-case level and then rise tothe stressed multiple in 18 months.Purchase RateFor this pool, we assume a 0% purchase rate in our 'AAA' and 'A' rating scenarios. Our 0.0%-1.0% purchase rateassumption for the preliminary 'BBB (sf)' ratings resulted in a declining pool balance in our cash flow models. We usedpurchase rate inputs that were significantly lower than those in a typical bankcard portfolio because we believe thatthe cards' use will be limited. Upon the private-label seller/servicer's insolvency, we assume that the accounts may beclosed or reward credits may no longer be valued by cardholders.In our analysis, we assume that purchase rates immediately decrease to the stressed level when modeling all of ourWWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 111174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)rating scenarios.Dilution AnalysisUnder the transaction's terms, the required transferor percentage will equal at least 5% of the principal receivables tocover noncash reductions in the principal receivables balance. In our analysis, we reviewed the monthly fraud andreturn data, then staggered dilution that occurred during 30-, 60-, and 90-day cycles, and applied a 'AAA' multiple tothe base-case dilution rate to derive the dilution coverage level that we believe is commensurate with the assignedpreliminary ratings. Dilution, which is measured as a percentage of receivables, typically runs slightly higher inportfolios with higher purchase activity compared with a portfolio with more revolvers.Sensitivity AnalysisOur ratings incorporate credit stability as one of several factors that we use to determine an issuer's or an issue'screditworthiness (for more information, see "Methodology: Credit Stability Criteria," published May 3, 2010).Accordingly, we ran several sensitivity analyses to determine the series 2013-II notes' credit stability during periods ofmoderate stress.Based on our rating stability definition, a 'AAA' rating assigned to a new credit card note class signifies that we do notexpect the rating on the notes to fall more than one rating category within 12 months of the rating assignment undermoderate stress conditions. In addition, an 'A' or 'BBB' rating assigned to a new credit card class of notes signifies thatwe do not expect the rating on the notes to fall more than two rating categories within 12 months of the ratingassignment under moderate stress conditions.According to our current criteria and assumptions for rating the series 2013-II transaction, we tested how high lossrates could rise, based on the transaction's current capital structure, before the notes would be vulnerable to adowngrade. For example, to test whether the preliminary 'AAA (sf)' rating we assigned to the class A notes would bevulnerable to a downgrade of more than one category in a moderate ('BBB') stress scenario, we ran sensitivity analysesassuming that the pool's base-case loss rate would increase to 150% of the current base-case loss rate. In this scenario,we believe that our preliminary 'AAA (sf)' rating on the notes wouldn't become vulnerable to a downgrade by morethan one rating category, based on the credit support available to the series 2013-II class A notes.Standard & Poor's 17g-7 Disclosure ReportSEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed securityas defined in the Rule, to include a description of the representations, warranties and enforcement mechanismsavailable to investors and a description of how they differ from the representations, warranties and enforcementmechanisms in issuances of similar securities.The Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available athttp://standardandpoorsdisclosure-17g7.com/1715.pdf.WWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 121174132 | 300129047

Presale: Cabela's Credit Card Master Note Trust (Series 2013-II)Related Criteria And ResearchRelated Criteria• Revised Purchase And Payment Rate Assumptions For U.S. Credit Card ABS, Sept. 14, 2011• Principles Of Credit Ratings, Feb. 16, 2011• Methodology: Credit Stability Criteria, May 3, 2010• General Methodology And Assumptions For Rating U.S. ABS Credit Card Securitizations, April 19, 2010Related Research• U.S. Credit Card Quality Index: Bankcard And Private-Label Card Losses Remain At Near Record Lows In June,Aug. 2, 2013• U.S. Economic Forecast: Gale Warning, July 22, 2013• U.S. Credit Card ABS Fundamentals Remain Strong, Buoyed By Continued Tight Lending And Weak CreditDemand, May 8, 2013• Global Structured Finance Scenario And Sensitivity Analysis: The Effects Of The Top Five Macroeconomic Factors,Nov. 4, 2011• Ratings Raised, Affirmed on U.S. Private-Label Card ABS from Seven Issuers on Adjustments to Key PerformanceVariables, May 11, 2012The analysts would like to thank Michael Yeung for his analytical contributions to this presale report.WWW.STANDARDANDPOORS.COM/RATINGSDIRECT AUGUST 6, 2013 131174132 | 300129047

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