Correction: Fitch Exp To Rate Discover Card Master Trust I Ser 2001-2 `AAA' & `A+'.Business Editors NOTE TO EDITORS: In an earlier press release, the $57.9 million floating-rate class B certificates were incorrectly classified as rated `A+', rather than having an expected rating of `A+'. The full corrected press release follows. NEW YORK--(BUSINESS WIRE)--Jan. 10, 2001 Discover Card Master Trust I's $1.1 billion floating-rate class A credit card pass-through certificates Pass-Through Certificates (PTCs) are instruments that evidence the ownership of two or more Equipment Trust Certificates. In other words, Equipment Trust Certificates may be bundled into a pass-through structure as a means of diversifying the asset pool and/or increasing the size , series 2001-2 are expected to be rated `AAA' by Fitch. In addition, the corresponding $57.9 million floating-rate class B certificates are expected to be rated `A+'. Series 2001-2's ratings reflect the high quality of the receivables generated by Discover Card holders, 12.5% available subordinated amount supporting class A, 7.5% cash collateral account protecting class B, sound legal and cash flow structures, and excellent servicing provided by Discover Bank. Economic and credit stress scenarios were applied to the collateral pool to determine the appropriate levels of credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing for the certificates. One of the more severe `AAA' scenarios involved decreasing yield by more than 30%, cutting monthly payment rate by 40% and increasing chargeoffs over 30%. The `A' stress decreased yield by 25%, payment rate by 30% and increased chargeoffs to 23%. With the credit enhancement currently available, the securities could withstand these stresses simultaneously and still make full and timely payments of principal and interest to class A and class B investors. Investors are further protected from a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in asset quality, seller insolvency insolvency Condition in which liabilities exceed assets so that creditors cannot be paid. It is a financial condition that often precedes bankruptcy. In the context of equity, insolvency is the inability to pay debts as they become due; insolvency under the balance-sheet or servicer default by early amortization triggers. If certain adverse events occur, an accelerated payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. of investor principal will begin possibly earlier than expected. During such an amortization event, finance charge collections normally allocated to the seller will become available to cover trust expenses through a structural feature that fixes the finance charge allocation based upon pre- amortization invested amounts. Allocating finance charge collections in this manner allows funds otherwise designated to the seller to flow through to the trust. Greenwood Greenwood. 1 City (1990 pop. 26,265), Johnson co., central Ind.; settled 1822, inc. as a city 1960. A residential suburb of Indianapolis, Greenwood is in a retail shopping area. Manufactures include motor vehicle parts and metal products. has the option the allocate collections on a floating basis, which would require enhancement levels to be increased to 17.5% for class A and 12.5% for class B. Class A and B certificate holders will receive monthly interest payments of 0.16% and 0.46%, respectively, over the one-month London Interbank Offered Rate London Interbank Offered Rate A short-term interest rate often quoted as a 1,3,6-month rate for U.S.dollars. (LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). ), throughout the revolving and accumulation periods Accumulation Period 1. The phase in an investor's life when he/she builds up his/her savings and the value of his/her investment portfolio with the intention of having a nest egg for retirement. 2. and on the expected final payment date, provided an early amortization event does not occur. Interest will be paid on the 15th of each month, beginning February 2001. Following a variable accumulation period, principal is expected to be paid to class A certificate holders on the January 2006 distribution date and to class B one month later. The series termination occurs on July 2008 distribution date. As a part of Group One, series 2001-2 will share excess finance charge and principal collections with other Group One series. |
|
Printer friendly
Cite/link
Email
Feedback
Reader Opinion