MOODY'S CONFIRMS A2 RATINGS OF CERTIFICATES ISSUED BY DISCOVER CARD MASTER TRUST I
Approximately $ 1.1 Billion of Asset-Backed Securities Affected.
New York, August 19, 2005 -- Moody's Investors Service has confirmed the ratings on twenty classes
of subordinated Class B securities issued through Discover Card Master
Trust I (the trust).These securities were placed under review for
possible downgrade on April 13, 2005. This confirmation of
ratings concludes a review of outstanding certificates of Discover Credit
Card Master Trust I.
The rating action follows the August 18, 2005, confirmation
of Discover Bank's (Discover) deposit rating at A3 with a stable
outlook, following Morgan Stanley's announcement to retain
the Discover Financial Services business.
The following ratings were confirmed:
Issuer: Discover Card Master Trust I
$31,579,000 6.25% Class B Certificates,
Series 1996-3, rated A2
$52,632,000 Floating Rate Class B Certificates,
Series 1996-4, rated A2
$35,368,000 Floating Rate Class B Certificates,
Series 1998-5, rated A2
$34,211,000 Floating Rate Class B Certificates,
Series 2000-4, rated A2
$44,737,000 Floating Rate Class B Certificates,
Series 2000-7, rated A2
$26,316,000 Floating Rate Class B Certificates,
Series 2000-9, rated A2
$63,158,000 Floating Rate Class B Certificates,
Series 2001-1, rated A2
$57,895,000 Floating Rate Class B Certificates,
Series 2001-2 rated A2
$39,474,000 Floating Rate Class B Certificates,
Series 2001-3, rated A2
$26,316,000 Floating Rate Class B Certificates,
Series 2001-6, rated A2
$39,474,000 5.45% Class B Certificates,
Series 2002-2, rated A2
$47,369,000 Floating Rate Class B Certificates,
Series 2002-3, rated A2
$39,474,000 Floating Rate Class B Certificates,
Series 2002-4, rated A2
$26,316,000 Floating Rate Class B Certificates,
Subseries 1, Series 2003-1, rated A2
$26,316,000 3.45% Class B Certificates,
Subseries 2, Series 2003-1, rated A2
$26,316,000 Floating Rate Class B Certificates,
Subseries 3, Series 2003-1, rated A2
$52,632,000 3.85% Class B Certificates,
Series 2003-2, rated A2
$47,369,000 Floating Rate Class B Certificates,
Series 2003-3, rated A2
$57,895,000 Floating Rate Class B Certificates,
Subseries 1, Series 2003-4, rated A2
$39,474,000 Floating Rate Class B Certificates,
Subseries 2, Series 2003-4,
rated A2
$65,790,000 Floating Rate Class B Certificates,
Series 2004-1, rated A2
$65,790,000 Floating Rate Class B Certificates,
Subseries 1, Series 2004-2, rated A2
$26,316,000 Floating Rate Class B Certificates,
Subseries 2, Series 2004-2, rated A2
$78,948,000 Floating Rate Class B Certificates,
Series 2005-1, rated A2
In Moody's view, though the confirmation of the three-notch
downgrade of Discover Bank's deposit ratings from Aa3 to A3 on August
18, 2005 increased the likelihood that there could be a partial
or full shutdown of purchases on the Discover Card network, this
increased risk is not enough to warrant a downgrade on any of the outstanding
ABS certificates.
Moody's ratings on the Asset-backed securities (ABS) are
closely related to those of Discover Bank due to the risks associated
with the Discover Card proprietary payments network and the reliance on
a unique structural feature of the trust that was a key factor in setting
credit enhancement levels, as well as the assumption that Discover
will continue to maintain the seller's interest in the Trust at
well above the contractually required minimum of 7%.
The performance of the securitized Discover Card portfolio remains within
the bounds of Moody's expectations.
BACKGROUND
Discover Bank, the originator and servicer of the Discover card
receivables, is a Delaware-chartered, FDIC-insured
bank and an indirect subsidiary of Morgan Stanley. Discover Bank
has a long-term deposit rating of A3, a short-term
deposit rating of Prime-2, and a bank financial strength
rating of C-. Moody's rates Morgan Stanley's long-term
debt Aa3 (negative outlook) and rates its commercial paper Prime-1.
New York
Jay Eisbruck
Managing Director
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Jinhua (Rachel) Sun
Associate Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653