info

Yes No
Moodys.com
Terms of Use
REGULATORY AFFAIRS
CAREERS
ABOUT US
CONTACT US
HOME
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Can't read?
Try a new set
Send Cancel
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
OK
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
OK
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

Terms of One-Time Website Use

 

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

 

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

 

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

 

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

MOODY'S PLACES 49 CLASSES OF CERTIFICATES ISSUED BY THE DISCOVER CARD MASTER TRUST I UNDER REVIEW FOR POSSIBLE DOWNGRADE

13 Apr 2005
MOODY'S PLACES 49 CLASSES OF CERTIFICATES ISSUED BY THE DISCOVER CARD MASTER TRUST I UNDER REVIEW FOR POSSIBLE DOWNGRADE

Approximately $25 Billion of Asset-Backed Securities Affected.

New York, April 13, 2005 -- Moody's Investors Service has placed the ratings on forty-nine classes of securities in twenty-one series issued through Discover Card Master Trust I (the Trust) under review for possible downgrade. Included in the review are the Prime-1-rated certificates issued out of the Newcastle Certificate Program. The ratings of five series scheduled to mature within the next six months are unaffected by this rating action.

Moody's said that this rating action follows the April 4, 2005 announcement by Morgan Stanley that its board of directors had authorized management to pursue a spin-off of its subsidiary, Discover Financial Services. Morgan Stanley's management recommendations are to be reported to the board for final determination. On April 5, 2005, Moody's affirmed the Aa3 ratings of Morgan Stanley and changed the outlook to negative from stable. At the same time, Discover Bank's Aa3 long-term deposit rating, C bank financial strength rating, and Prime-1 short-term deposit rating were placed under review for downgrade.

Moody's review of the asset-backed securities will focus on the financial strength and management of Discover Bank -- an important factor in Moody's overall credit assessment of the Discover Card master trust receivables-backed securities.

The complete rating action is as follows:

UNDER REVIEW FOR POSSIBLE DOWNGRADE

Issuer: Discover Card Master Trust I

$4,000,000,000 Newcastle Certificate Program, Series 2000-A, rated Prime-1

$600,000,000 6.05% Class A Certificates, Series 1996-3, rated Aaa

$31,579,000 6.25% Class B Certificates, Series 1996-3, rated A2

$1,000,000,000 Floating Rate Class A Certificates, Series 1996-4, rated Aaa

$52,632,000 Floating Rate Class B Certificates, Series 1996-4, rated A2

$671,980,000 Floating Rate Class A Certificates, Series 1998-5, rated Aaa

$35,368,000 Floating Rate Class B Certificates, Series 1998-5, rated A2

$650,000,000 Floating Rate Class A Certificates, Series 2000-4, rated Aaa

$34,211,000 Floating Rate Class B Certificates, Series 2000-4, rated A2

$850,000,000 Floating Rate Class A Certificates, Series 2000-7, rated Aaa

$44,737,000 Floating Rate Class B Certificates, Series 2000-7, rated A2

$500,000,000 6.35% Class A Certificates, Series 2000-9, rated Aaa

$26,316,000 Floating Rate Class B Certificates, Series 2000-9, rated A2

$1,200,000,000 Floating Rate Class A Certificates, Series 2001-1, rated Aaa

$63,158,000 Floating Rate Class B Certificates, Series 2001-1, rated A2

$1,100,000,000 Floating Rate Class A Certificates, Series 2001-2, rated Aaa

$57,895,000 Floating Rate Class B Certificates, Series 2001-2 rated A2

$750,000,000 Floating Rate Class A Certificates, Series 2001-3, rated Aaa

$39,474,000 Floating Rate Class B Certificates, Series 2001-3, rated A2

$500,000,000 5.75% Class A Certificates, Series 2001-6, rated Aaa

$26,316,000 Floating Rate Class B Certificates, Series 2001-6, rated A2

$750,000,000 5.15% Class A Certificates, Series 2002-2, rated Aaa

$39,474,000 5.45% Class B Certificates, Series 2002-2, rated A2

$900,000,000 Floating Rate Class A Certificates, Series 2002-3, rated Aaa

$47,369,000 Floating Rate Class B Certificates, Series 2002-3, rated A2

$750,000,000 Floating Rate Class A Certificates, Series 2002-4, rated Aaa

$39,474,000 Floating Rate Class B Certificates, Series 2002-4, rated A2

$500,000,000 Floating Rate Class A Certificates, Subseries 1, Series 2003-1, rated Aaa

$26,316,000 Floating Rate Class B Certificates, Subseries 1, Series 2003-1, rated A2

$500,000,000 Floating Rate Class A Certificates, Subseries 2, Series 2003-1, rated Aaa

$26,316,000 3.45% Class B Certificates, Subseries 2, Series 2003-1, rated A2

$500,000,000 Floating Rate Class A Certificates, Subseries 3, Series 2003-1, rated Aaa

$26,316,000 Floating Rate Class B Certificates, Subseries 3, Series 2003-1, rated A2

$1,000,000,000 Floating Rate Class A Certificates, Series 2003-2, rated Aaa

$52,632,000 3.85% Class B Certificates, Series 2003-2, rated A2

$900,000,000 Floating Rate Class A Certificates, Series 2003-3, rated Aaa

$47,369,000 Floating Rate Class B Certificates, Series 2003-3, rated A2

$1,100,000,000 Floating Rate Class A Certificates, Subseries 1, Series 2003-4, rated Aaa

$57,895,000 Floating Rate Class B Certificates, Subseries 1, Series 2003-4, rated A2

$750,000,000 Floating Rate Class A Certificates, Subseries 2, Series 2003-4, rated Aaa

$39,474,000 Floating Rate Class B Certificates, Subseries 2, Series 2003-4, rated A2

$1,250,000,000 Floating Rate Class A Certificates, Series 2004-1, rated Aaa

$65,790,000 Floating Rate Class B Certificates, Series 2004-1, rated A2

$1,250,000,000 Floating Rate Class A Certificates, Subseries 1, Series 2004-2, rated Aaa

$65,790,000 Floating Rate Class B Certificates, Subseries 1, Series 2004-2, rated A2

$500,000,000 Floating Rate Class A Certificates, Subseries 2, Series 2004-2, rated Aaa

$26,316,000 Floating Rate Class B Certificates, Subseries 2, Series 2004-2, rated A2

$1,500,000,000 Floating Rate Class A Certificates, Series 2005-1, rated Aaa

$78,948,000 Floating Rate Class B Certificates, Series 2005-1, rated A2

The ratings of the following classes of certificates are not affected by this rating action because of their scheduled maturity within the next six months.

$39,474,000 Floating Rate Class B Certificates, Series 2000-2, rated A2

$1,200,000,000 Floating Rate Class A Certificates, Series 2000-5, rated Aaa

$63,158,000 Floating Rate Class B Certificates, Series 2000-5, rated A2

$700,000,000 Floating Rate Class A Certificates, Series 2000-6, rated Aaa

$36,843,000 Floating Rate Class B Certificates, Series 2000-6, rated A2

RATIONALE

Moody's ratings on the asset-backed securities 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.

The Discover Card Payments Network

The Discover Card proprietary payments network is a distinguishing feature of the Discover Card franchise. This network allows merchants to accept Discover Card transactions and, because it is an independent network, its viability is inextricably linked to the credit strength of Discover Bank. By contrast, the strength of the more broadly accepted VISA and MasterCard payments networks is not directly related to the credit strength of any individual member bank. As a result, if Discover Bank should encounter financial difficulty, it is possible the credit cards will lose utility. The loss of card utility would prohibit cardholders from making purchases on their cards and would adversely affect the credit performance of the underlying pool of credit card receivables.

Fixed Allocation of Finance Charge Collections

Another important consideration in Moody's ratings of the receivable-backed securities issued from the Trust is a structural feature that allows a fixed allocation of finance charge collections.

From a credit perspective, this feature can be quite powerful. Under the fixed finance charge allocation method, as principal on the investor certificates is paid down during an early amortization period, certificateholders continue to be allocated a percentage of the finance charge collections on each payment date based on the certificate principal amount prior to the commencement of the early amortization period. The result is an "over-collateralization" of finance charge collections, which may be applied to make up shortfalls in amounts due to certificateholders.

Moody's has historically given as much as a 5% reduction in required credit enhancement for both the senior and subordinate certificates (e.g., from 17.5% to 12.5% for the Aaa-rated senior certificates) due to the inclusion of the fixed finance charge allocation feature in the Discover master trust. However, the benefit that this feature accrues is predicated on the assumption that the underlying card program is viable and/or is supported by a highly rated entity. For example, in a scenario in which card utility is lost and cardholders can no longer make purchases, the fixed allocation feature would no longer provide any incremental benefit.

COLLATERAL PERFORMANCE

The performance of the securitized Discover Card portfolio remains within the bounds of Moody's expectations and is not a principal factor in the ratings review. The long-term average yield has remained slightly below the industry average as measured by Moody's Credit Card Index. The chargeoff rate and payment rate have trended above the industry average.

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 Aa3, a short-term deposit rating of Prime-1, and a bank financial strength rating of C, all of which are under review for possible downgrade. 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
William Black
VP - Senior Credit Officer
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH  CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND  OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES  ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR  PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​​​
Moodys.com