The information in this prospectus supplement and the accompanying prospectus is not complete and may be changed. We may not sell these
securities until we deliver a final prospectus supplement and accompanying prospectus. This prospectus supplement and the accompanying prospectus are not an offer to sell these securities and are not seeking an offer to buy these securities in any
state where the offer or sale is prohibited.
SUBJECT TO COMPLETION DATED AUGUST 20, 2002
Prospectus Supplement dated August [•], 2002
to Prospectus dated August 20, 2002
MBNA Credit Card Master Note Trust
Issuer
MBNA America Bank, National Association
Originator of the Issuer
MBNAseries
| The issuer will issue and sell: |
|
Class B(2002-3) Notes
|
| Principal amount |
|
$250,000,000 |
| |
| Interest rate |
|
one-month LIBOR plus
[•]% per year |
| |
| Interest payment dates |
|
15th day of each month,
beginning in October 2002 |
| |
| Expected principal payment date |
|
August 15, 2005 |
| |
| Legal maturity date |
|
January 15, 2008 |
| |
| Expected issuance date |
|
August [•], 2002 |
| |
| Price to public |
|
$[•] (or [•]%) |
| |
| Underwriting discount |
|
$[•] (or [•]%) |
| |
| Proceeds to the issuer |
|
$[•] (or [•]%) |
The Class B(2002-3) notes are a tranche of the Class B notes of the MBNAseries. Interest
and principal payments on Class B notes of the MBNAseries are subordinated to payments on Class A notes.
You
should consider the discussion under “Risk Factors” beginning on page S-14 in this prospectus supplement and on page 15 of the accompanying prospectus before you purchase any notes.
The notes are obligations of the issuer only and are not obligations of any other person. Each tranche of notes is secured by only some of the assets of the issuer.
Noteholders will have no recourse to any other assets of the issuer for the payment of the notes.
The primary
asset of the issuer is the collateral certificate, Series 2001-D, representing an undivided interest in MBNA Master Credit Card Trust II, whose assets include a portfolio of consumer revolving credit card accounts.
The notes are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality.
Neither the SEC nor any state securities commission has approved these notes or determined that this prospectus supplement or the
prospectus is truthful, accurate or complete. Any representation to the contrary is a criminal offense.
Underwriters
Deutsche Bank Securities
Banc One Capital Markets, Inc.
JPMorgan
Merrill Lynch & Co.
Salomon Smith Barney
Important Notice about Information Presented in this
Prospectus Supplement and the Accompanying Prospectus
We provide information to
you about the notes in two separate documents that progressively provide more detail: (a) this prospectus supplement, which will describe the specific terms of the MBNAseries and the Class B(2002-3) notes and (b) the accompanying prospectus,
which provides general information about each series of notes which may be issued by the MBNA Credit Card Master Note Trust, some of which may not apply to the MBNAseries or the Class B(2002-3) notes.
This prospectus supplement may be used to offer and sell the Class B(2002-3) notes only if accompanied by the prospectus.
This prospectus supplement may supplement disclosure in the accompanying prospectus. If the terms of the MBNAseries or the
Class B(2002-3) notes vary between this prospectus supplement and the prospectus, you should rely on the information in this prospectus supplement.
You should rely only on the information provided in this prospectus supplement and the accompanying prospectus including the information incorporated by reference. We have not authorized anyone to
provide you with different information. We are not offering the Class B(2002-3) notes in any state where the offer is not permitted. We do not claim the accuracy of the information in this prospectus supplement or the accompanying prospectus as of
any date other than the dates stated on their respective covers.
We include cross-references in this prospectus
supplement and in the accompanying prospectus to captions in these materials where you can find further related discussions. The Table of Contents in this prospectus supplement and in the accompanying prospectus provide the pages on which these
captions are located.
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S-3
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S-56 |
| Annex I: |
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A-I-1 |
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| Annex II: |
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A-II-1 |
S-4
This summary does not contain all the information
you may need to make an informed investment decision. You should read the entire prospectus supplement and the accompanying prospectus before you purchase any notes.
$250,000,000 Floating Rate Class B(2002-3) notes.
These Class B(2002-3) notes are part of a series of notes called the MBNAseries. The MBNAseries consists of Class A notes, Class B notes and Class C
notes. These Class B(2002-3) notes are a tranche of the Class B notes of the MBNAseries.
These Class B(2002-3) notes are issued by, and
are obligations of, the MBNA Credit Card Master Note Trust. The issuer expects to issue other classes and tranches of notes of the MBNAseries which may have different interest rates, interest payment dates, expected principal payment dates, legal
maturity dates and other characteristics. In addition, the issuer may issue other series of notes which may have different interest rates, interest payment dates, expected principal payment dates, legal maturity dates and other characteristics. See
“The Notes—Issuances of New Series, Classes and Tranches of Notes” in this prospectus supplement and in the prospectus.
Each class of notes in the MBNAseries may consist of multiple tranches. Notes of any tranche can be issued on any date so long as there is sufficient credit enhancement on that date, either in the form of outstanding subordinated
notes or other forms of credit enhancement. See “The Notes—Issuances of New Series, Classes and Tranches of Notes” in this prospectus supplement and in the prospectus. The expected principal
payment dates and legal maturity dates of tranches of senior and subordinated classes of the MBNAseries may be different. Therefore, subordinated notes may have expected principal payment dates and
legal maturity dates earlier than some or all senior notes of the MBNAseries. Subordinated notes will generally not be paid before their legal maturity date unless, after payment, the remaining outstanding subordinated notes provide the credit
enhancement required for the senior notes.
In general, the subordinated notes of the MBNAseries serve as credit enhancement for all of
the senior notes of the MBNAseries, regardless of whether the subordinated notes are issued before, at the same time as, or after the senior notes of the MBNAseries. However, certain tranches of senior notes may not require subordination from each
class of notes subordinated to it. For example, if a tranche of Class A notes requires credit enhancement solely from Class C notes, the Class B notes will not, in that case, provide credit enhancement for that tranche of Class A notes. The amount
of credit exposure of any particular tranche of notes is a function of, among other things, the total amount of notes issued, the required subordinated amount, the amount of usage of the required subordinated amount and the amount on deposit in the
senior tranches’ principal funding subaccounts.
Only the Class B(2002-3) notes are being offered through this prospectus
supplement and the accompanying
S-5
prospectus. Other series, classes and tranches of notes, including other tranches of notes that are included in the MBNAseries as a part of
the Class B notes, may be issued by the MBNA Credit Card Master Note Trust in the future.
These Class B(2002-3) notes are expected to be the sixth tranche of the Class B notes issued
by the issuer in the MBNAseries.
See “Annex I: Outstanding Series, Classes and Tranches of Notes” for information on
the other outstanding notes issued, or expected to be issued upon or prior to the issuance of these Class B(2002-3) notes, by the issuer.
Investment in the Class B(2002-3) notes involves risks. You should consider carefully the risk
factors beginning on page S-14 in this prospectus supplement and beginning on page 15 in the accompanying prospectus.
These Class B(2002-3) notes will accrue interest at an annual rate equal to LIBOR plus [•]%, as
determined on the related LIBOR determination date.
Interest on these Class B(2002-3) notes will begin to accrue on August [•],
2002 and will be calculated on the basis of a 360-day year and the actual number of days in the related interest period. Each interest period will begin on and include an interest payment date and end on but exclude the next interest payment date.
However, the first interest period will begin on and include August [•], 2002, which is the issuance date, and end on but exclude October 15, 2002, which is the first interest payment date for the Class B(2002-3) notes.
Interest on the Class B(2002-3) notes for any interest payment date will equal the product of:
Ÿ |
the Class B(2002-3) note interest rate for the applicable interest period; times |
Ÿ |
the actual number of days in the related interest period divided by 360; times |
Ÿ |
the outstanding dollar principal amount of the Class B(2002-3) notes as of the related record date. |
The issuer will make interest payments on these Class B(2002-3) notes on the 15th day of each month, beginning in October 2002. Interest payments due on a day
that is not a business day in New York, New York and Newark, Delaware will be made on the following business day.
The payment of
interest on a senior class of notes on any payment date is senior to the payment of interest on subordinated classes of notes of the MBNAseries on such date. Generally, no payment of interest will be made on any Class B note in the MBNAseries until
the required payment of interest has been made to the Class A notes in the MBNAseries. Similarly, generally, no payment of interest will be made on any Class C note in the MBNAseries until the required payment of interest has been made to the Class
A notes and the Class B notes in the MBNAseries. However, funds on deposit in the Class C reserve account will be available only to holders of Class C
S-6
notes to cover shortfalls of interest on any interest payment date.
The issuer expects to pay the stated principal amount of these Class B(2002-3) notes in one
payment on August 15, 2005, which is the expected principal payment date, and is obligated to do so if funds are available for that purpose and not required for subordination. If the stated principal amount of these Class B(2002-3) notes is not paid
in full on the expected principal payment date due to insufficient funds or insufficient credit enhancement, noteholders will generally not have any remedies against the issuer until January 15, 2008, the legal maturity date of these Class B(2002-3)
notes.
If the stated principal amount of these Class B(2002-3) notes is not paid in full on the expected principal payment date, then an
early redemption event will occur with respect to these Class B(2002-3) notes and, subject to the principal payment rules described below under “—Subordination; Credit Enhancement” and “—Required Subordination
Amount,” principal and interest payments on these Class B(2002-3) notes will be made monthly until they are paid in full or until the legal maturity date occurs, whichever is earlier.
Principal of these Class B(2002-3) notes may be paid earlier than the expected principal payment date if any other early redemption event or an event of default and acceleration occurs with
respect to these Class B(2002-3) notes. See “The Indenture—Early Redemption Events” and “—Events of Default” in the prospectus and “The Notes—Early Redemption of the Notes” in
this prospectus supplement.
The initial nominal liquidation amount of these Class B(2002-3) notes is
$250,000,000.
The nominal liquidation amount of a tranche of notes corresponds to the portion of the investor interest of the collateral
certificate that is allocable to support that tranche of notes. If the nominal liquidation amount of these Class B(2002-3) notes is reduced by:
Ÿ |
reallocations of available principal amounts to pay interest on a senior class of the MBNAseries or a portion of the master trust II servicing fee allocable to
the MBNAseries; or |
Ÿ |
charge-offs resulting from uncovered defaults on the principal receivables in master trust II allocable to the MBNAseries, |
the principal of and interest on these Class B(2002-3) notes may not be paid in full. If the nominal liquidation amount of these Class B(2002-3) notes
has been reduced, available principal amounts and available funds allocated to pay principal of and interest on these Class B(2002-3) notes will be reduced.
For a more detailed discussion of nominal liquidation amount, see “The Notes—Stated Principal Amount, Outstanding Dollar Principal Amount and Nominal Liquidation Amount” in the prospectus.
These Class B(2002-3) notes generally will not receive interest payments
on any payment date until the Class A notes have
S-7
received their full interest payments on such date. Available principal amounts allocable to these Class B(2002-3) notes may be applied to make
interest payments on the Class A notes of the MBNAseries or to pay a portion of the master trust II servicing fee allocable to the MBNAseries. Available principal amounts remaining on any payment date after any reallocations for interest on the
senior classes of notes or for a portion of the master trust II servicing fee allocable to the MBNAseries will be first applied to make targeted deposits to the principal funding subaccounts of senior classes of notes on such date before being
applied to make required deposits to the principal funding subaccounts of the subordinated notes on such date.
In addition, principal
payments on these Class B(2002-3) notes are subject to the principal payment rules described below.
In order to issue a senior class of notes, the required subordinated amount of
subordinated notes must be outstanding and available on the issuance date. Generally, the required subordinated amount of a subordinated class of notes for any date is an amount equal to a stated percentage of the adjusted outstanding dollar
principal amount of the senior tranche of notes for such date.
The Class B required subordinated amount of Class C notes for these Class
B(2002-3) notes is 100%, expressed as a percentage of the adjusted outstanding dollar principal amount of these Class B(2002-3) notes. This percentage may change without the consent of any noteholders if the rating agencies consent. In addition, the
required subordinated amount of subordinated notes of other Class B notes in the MBNAseries may be different than the percentage specified for these Class B(2002-3) notes. In addition, if the rating agencies consent and without the consent of any
noteholders, the issuer may utilize forms of credit enhancement other than subordinated notes in order to provide senior classes of notes with the required credit enhancement.
No payment of principal will be made on any Class B note in the MBNAseries unless, following the payment, the remaining available subordinated amount of Class B notes in the MBNAseries is at least
equal to the required subordinated amount for the outstanding Class A notes in the MBNAseries less any usage of the required subordinated amount of Class B notes for such outstanding Class A notes. Similarly, no payment of principal will be made on
any Class C note in the MBNAseries unless, following the payment, the remaining available subordinated amount of Class C notes in the MBNAseries is at least equal to the required subordinated amount for the outstanding Class A notes and Class B
notes in the MBNAseries less any usage of the required subordinated amount of Class C notes for such outstanding Class A notes and Class B notes. However, there are some exceptions to this rule. See “The Notes—Subordination of Interest
and Principal” in the prospectus.
The early redemption events applicable to all notes, including these Class
B(2002-3) notes, are described in the accompanying prospectus. In addition, if for any date the
S-8
amount of excess available funds averaged over the three preceding calendar months is less than the required excess available funds for such
date, an early redemption event for the Class B(2002-3) notes will occur. Excess available funds for any month equals the available funds allocated to the MBNAseries that month after application for targeted deposits to the interest funding account,
payment of the master trust II servicing fee allocable to the MBNAseries, application to cover defaults on principal receivables in master trust II allocable to the MBNAseries and reimbursement of any deficits in the nominal liquidation amounts of
notes. Required excess available funds is an amount equal to zero. This amount may be changed provided the issuer (i) receives the consent of the rating agencies and (ii) reasonably believes that the change will not have a material adverse effect on
the notes. See “The Notes—Early Redemption of the Notes” and “The Indenture—Early Redemption Events” in the prospectus.
The servicer has the right, but not the obligation, to direct the issuer
to redeem these Class B(2002-3) notes in whole but not in part on any day on or after the day on which the nominal liquidation amount of these Class B(2002-3) notes is reduced to less than 5% of their highest outstanding dollar principal amount.
This repurchase option is referred to as a clean-up call.
The issuer will not redeem subordinated notes if those notes are required to
provide credit enhancement for senior classes of notes of the MBNAseries. If the issuer is directed to redeem these Class B(2002-3) notes, it will notify the registered holders at least thirty days prior to the redemption date. The redemption price
of a note will equal 100% of the outstanding principal amount of that note, plus accrued but unpaid interest on the note to but excluding the date of redemption.
If the issuer is unable to pay the redemption price in full on the redemption date, monthly payments on these Class B(2002-3) notes will thereafter be made, subject to the principal payment rules described above under
“—Subordination; Credit Enhancement,” until either the principal of and accrued interest on these Class B(2002-3) notes are paid in full or the legal maturity date occurs, whichever is earlier. Any funds in the principal
funding subaccount and the interest funding subaccount for these Class B(2002-3) notes will be applied to make the principal and interest payments on these notes on the redemption date.
The Class B(2002-3) notes are subject to certain events of default described in
“The Indenture—Events of Default” in the prospectus. For a description of the remedies upon an event of default, see “The Indenture—Events of Default Remedies” in the prospectus and “Deposit and
Application of Funds—Sale of Credit Card Receivables” in this prospectus supplement.
S-9
The collateral certificate, which is the issuer’s primary source of funds for the payment of
principal of and interest on these Class B(2002-3) notes, is an investor certificate issued by master trust II. The collateral certificate represents an undivided interest in the assets of master trust II. Master trust II’s assets primarily
include credit card receivables from selected MasterCard® and VISA® revolving credit card accounts that meet the eligibility criteria for inclusion in master trust II. These eligibility criteria are
discussed in the prospectus under “Master Trust II—Addition of Master Trust II Assets.”
The credit card
receivables in master trust II consist primarily of principal receivables and finance charge receivables. Principal receivables include amounts charged by cardholders for merchandise and services and amounts advanced to cardholders as cash
advances. Finance charge receivables include periodic finance charges, annual membership fees, cash advance fees, late charges and certain other fees billed to cardholders, and recoveries on receivables in defaulted accounts.
In addition, MBNA is permitted to add to master trust II participations representing interests in a pool of assets primarily consisting of receivables
arising under consumer revolving credit card accounts owned by MBNA and collections thereon.
See “The Master Trust II
Portfolio” for detailed financial information on the receivables and the accounts.
See “Annex II: Outstanding Master
Trust II Series” of this prospectus supplement for additional information on the outstanding series in master trust
II.
The issuer has established a principal funding account, an interest funding account, an
accumulation reserve account and a Class C reserve account for the
S-10
benefit of the MBNAseries. The principal funding account, the interest funding account and the accumulation reserve account will
have subaccounts for the Class B(2002-3) notes.
Each month, distributions on the collateral certificate will be deposited into the
collection account. Those deposits will then be allocated to each series of notes, including the MBNAseries. The amounts allocated to the MBNAseries plus any other amounts to be treated as available funds and available principal amounts for the
MBNAseries will then be allocated to:
—the principal funding account;
—the interest funding account;
—the accumulation reserve account;
—the Class C reserve account;
—any other supplemental
account;
—payments under any applicable derivative agreements; and
| |
— |
the other purposes as specified in this prospectus supplement. |
Funds on deposit in the principal funding account and the interest funding account will be used to make payments of principal of and interest on the MBNAseries notes, including the Class B(2002-3)
notes.
The Class B(2002-3) notes are secured by a shared security interest in:
Ÿ |
the collateral certificate; |
Ÿ |
the collection account; |
Ÿ |
the applicable principal funding subaccount; |
Ÿ |
the applicable interest funding subaccount; and |
Ÿ |
the applicable accumulation reserve subaccount. |
However, the Class B(2002-3) notes are entitled to the benefits of only that portion of those assets allocated to them under the indenture and the MBNAseries indenture supplement.
See “The Notes—Sources of Funds to Pay the Notes—The Collateral Certificate” and “—The Issuer Accounts” in this
prospectus supplement and “Sources of Funds to Pay the Notes—The Collateral Certificate” in the prospectus.
The sole sources of payment for principal of or interest on these Class
B(2002-3) notes are provided by:
Ÿ |
the portion of the available principal amounts and available funds allocated to the MBNAseries and available to these Class B(2002-3) notes after giving effect
to any reallocations, payments and deposits for senior notes; and |
Ÿ |
funds in the applicable issuer accounts for these Class B(2002-3) notes. |
Class B(2002-3) noteholders will have no recourse to any other assets of the issuer or any other person or entity for the payment of principal of or interest on these Class B(2002-3) notes.
However, following a sale of credit card receivables (i) due to an insolvency of MBNA, (ii) due to an event of default and acceleration
with respect to the Class B(2002-3) notes or (iii) on the legal
S-11
maturity date for the Class B(2002-3) notes, as described in “Deposit and Application of Funds—Sale of Credit Card
Receivables” in this prospectus supplement and “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables” in the prospectus, the Class B(2002-3) noteholders have recourse only to the proceeds of that sale.
The issuer will establish an accumulation reserve subaccount to cover
shortfalls in investment earnings on amounts (other than prefunded amounts) on deposit in the principal funding subaccount for these Class B(2002-3) notes.
The amount targeted to be deposited in the accumulation reserve subaccount for these Class B(2002-3) notes is zero, unless more than one budgeted deposit is required to accumulate and pay the principal of the Class B(2002-3)
notes on its expected principal payment date, in which case, the amount targeted to be deposited is 0.5% of the outstanding dollar principal amount of the Class B(2002-3) notes, or such other amount designated by the issuer. See “Deposit and
Application of Funds—Targeted Deposits to the Accumulation Reserve Account.”
The MBNAseries will be included in “Group A.” In addition to the
MBNAseries, the issuer may issue other series of notes that are included in Group A. As of the date of this prospectus supplement, the MBNAseries is the only series of notes issued by the issuer.
To the extent that available funds allocated to the MBNAseries are available after all required applications of such amounts as described in “Deposit and
Application of Funds—Application of MBNAseries Available Funds,” these unused available funds, called shared excess available funds, will be applied to cover shortfalls in available funds for other series of notes in Group A. In
addition, the MBNAseries may receive the benefits of shared excess available funds from other series in Group A, to the extent available funds for such other series of notes are not needed for such series. See “Deposit and Application
of Funds—Shared Excess Available Funds” herein and “Sources of Funds to Pay the Notes—The Collateral Certificate” and “—Deposit and Application of Funds” in the prospectus.
The issuer will apply to list these Class B(2002-3) notes on the Luxembourg Stock
Exchange. The issuer cannot guarantee that the application for the listing will be accepted. You should consult with Deutsche Bank Luxembourg S.A., the Luxembourg listing agent for these Class B(2002-3) notes, Boulevard Konrad Adenauer 2, L-1115
Luxembourg, phone number (352) 42 12 21, to determine whether these Class B(2002-3) notes have been listed on the Luxembourg Stock Exchange.
The issuer will issue these Class B(2002-3) notes only if they are rated at least “A” or
“A2” or its equivalent by at least one nationally recognized rating agency.
S-12
Other tranches of Class B notes may have different rating requirements from the Class B(2002-3) notes.
A rating addresses the likelihood of the payment of interest on a note when due and the ultimate payment of principal of that note by
its legal maturity date. A rating does not address the likelihood of payment of principal of a note on its expected principal payment date. In addition, a rating does not address the possibility of an early payment or acceleration of a note, which
could be caused by an early redemption event or an event of default. A rating is not a recommendation to buy, sell or hold notes and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated
independently of any other rating.
See “Risk Factors—If the ratings of the notes are lowered or withdrawn, their market
value could decrease” in the prospectus.
S-13
The risk factors disclosed in this section and in “Risk
Factors” in the accompanying prospectus describe the principal risk factors of an investment in the Class B(2002-3) notes.
Only some of the assets of the issuer are available for payments on any tranche of notes
The sole sources of payment of principal of and interest on your tranche of notes are provided by:
| |
Ÿ |
the portion of the available principal amounts and available funds allocated to the MBNAseries and available to your tranche of notes after giving effect to any
reallocations and payments and deposits for senior notes; and |
| |
Ÿ |
funds in the applicable issuer accounts for your tranche of notes. |
As a result, you must rely only on the particular allocated assets as security for your tranche of notes for repayment of the principal of and interest on your notes. You
will not have recourse to any other assets of the issuer or any other person for payment of your notes. See “The Notes—Sources of Funds to Pay the Notes” in this prospectus supplement and “Sources of Funds to Pay the
Notes” in the accompanying prospectus.
In addition, if there is a sale of credit card receivables due
to the insolvency of MBNA, due to an event of default and acceleration or on the applicable legal maturity date, as described in “Deposit and Application of Funds—Sale of Credit Card Receivables” in this prospectus supplement
and “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables” in the accompanying prospectus, your tranche of notes has recourse only to the proceeds of that sale, any amounts then on deposit in the issuer accounts
allocated to and held for the benefit of your tranche of notes and any amounts payable under any applicable derivative agreement.
Class B notes and Class C notes are subordinated and bear losses before Class A notes
Class B notes of the MBNAseries are subordinated in right of payment of principal and interest to Class A notes, and Class C notes of the MBNAseries are subordinated in right of payment of principal and interest to Class A notes and
Class B notes.
In the MBNAseries, available funds are first used to pay interest due to Class A noteholders,
next to pay interest due to Class B
S-14
noteholders, and lastly to pay interest due to Class C noteholders. If available funds are not sufficient to pay interest on all classes of notes, the notes may not receive full payment of
interest if, in the case of Class A and Class B notes, reallocated available principal amounts, and in the case of Class C notes, amounts on deposit in the applicable Class C reserve subaccount, are insufficient to cover the shortfall.
In the MBNAseries, available principal amounts may be reallocated to pay interest on senior classes of notes of the MBNAseries
and to pay a portion of the master trust II servicing fee allocable to the MBNAseries to the extent that available funds are insufficient to make such payments. In addition, charge-offs due to defaulted principal receivables in master trust II
allocable to the MBNAseries generally are reallocated from the senior classes to the subordinated classes of the MBNAseries. If these reallocations of available principal amounts and charge-offs are not reimbursed from available funds, the full
stated principal amount of the subordinated classes of notes will not be repaid. See “The Notes—Stated Principal Amount, Outstanding Dollar Principal Amount and Nominal Liquidation Amount—Nominal Liquidation Amount” in the
prospectus and “Deposit and Application of Funds—Application of MBNAseries Available Principal Amounts.”
In addition, after application to pay interest on senior classes of notes or to pay a portion of the master trust II servicing fee allocable to the MBNAseries, available principal amounts are first used to pay principal due to Class
A noteholders, next to pay principal due to Class B noteholders, and lastly to pay principal due to Class C noteholders.
If there is a sale of the credit card receivables owned by master trust II due to an insolvency of MBNA or due to an event of default and acceleration with respect to the MBNAseries, the net proceeds of the sale allocable to
principal payments with respect to the collateral certificate will generally be used first to pay amounts due to Class A noteholders, next to pay amounts due to Class B noteholders, and lastly, to pay amounts due to Class C noteholders. This
could cause a loss to Class A, Class B or Class C noteholders if the amount available to them is not enough to pay the Class A, Class B or Class C notes in full.
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Payment of Class B notes and Class C notes may be delayed or reduced due
to the subordination provisions
For the MBNAseries, subordinated notes, except as noted in the following
paragraph, will be paid principal only to the extent that sufficient funds are available and such notes are not needed to provide the required subordination for senior classes of notes of the MBNAseries. In addition, available principal amounts
allocated to the MBNAseries will be applied first to pay shortfalls in interest on senior classes of notes, then to pay a portion of the shortfall in the master trust II servicing fee allocable to the MBNAseries and then to make targeted deposits to
the principal funding subaccounts of senior classes of notes before being applied to make required deposits to the principal funding subaccounts of the subordinated notes.
If subordinated notes reach their expected principal payment date, or an early redemption event, event of default and acceleration or other optional or mandatory
redemption occurs with respect to such subordinated notes prior to the legal maturity date, and cannot be paid because of the subordination provisions of the MBNAseries indenture supplement, prefunding of the principal funding subaccounts for the
senior notes of the MBNAseries will begin, as described in “Deposit and Application of Funds—Targeted Deposits of MBNAseries Available Principal Amounts to the Principal Funding Account,” and no available principal amounts will
be deposited into the principal funding subaccount of, or used to make principal payments on, the subordinated notes. After that time, the subordinated notes will be paid only if, and to the extent that:
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enough senior notes are repaid so that the subordinated notes are no longer necessary to provide the required subordination; |
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new subordinated notes are issued so that the subordinated notes which are payable are no longer necessary to provide the required subordination;
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the principal funding subaccounts for the senior notes are prefunded so that the subordinated notes are no longer necessary to provide the required
subordination; or |
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the subordinated notes reach their legal maturity date. |
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This may result in a delay or loss of principal payments to holders of
subordinated notes. See “Deposit and Application of Funds—Targeted Deposits of MBNAseries Available Principal Amounts to the Principal Funding Account—Prefunding of the Principal Funding Account for Senior Classes.”
Class A and Class B notes of the MBNAseries can lose their subordination under some circumstances
resulting in delayed or reduced payments to you
Subordinated notes of the MBNAseries may have expected
principal payment dates and legal maturity dates earlier than some or all of the notes of the senior classes.
If
notes of a subordinated class reach their expected principal payment date at a time when they are needed to provide the required subordination for the senior classes of the MBNAseries and the issuer is unable to issue additional notes of that
subordinated class or obtain acceptable alternative forms of credit enhancement, prefunding of the senior classes will begin and such subordinated notes will not be paid on their expected principal payment date. The principal funding subaccounts for
the senior classes will be prefunded with available principal amounts allocable to the MBNAseries and available for that purpose in an amount necessary to permit the payment of those subordinated notes while maintaining the required subordination
for the senior classes. See “Deposit and Application of Funds—Targeted Deposits of MBNAseries Available Principal Amounts to the Principal Funding Account.”
There will generally be a 29-month period between the expected principal payment date and the legal maturity date of the subordinated notes to prefund the principal
funding subaccounts of the senior classes, if necessary. Notes of a subordinated class which have reached their expected principal payment date will not be paid until the remaining subordinated notes provide the required subordination for the senior
notes, which payment may be delayed further as other subordinated notes reach their expected principal payment date. The subordinated notes will be paid on their legal maturity date, to the extent that any funds are available for that purpose from
proceeds of the sale of receivables or otherwise, whether or not the senior classes of notes have been fully prefunded.
If the rate of repayment of principal receivables in master trust II were to decline during this prefunding period, then the principal funding subaccounts for the senior classes of notes
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may not be fully prefunded before the legal maturity date of the subordinated notes. In that event and only to the
extent not fully prefunded, the senior classes would not have the required subordination beginning on the legal maturity date of those subordinated notes unless additional subordinated notes of that class were issued or a sufficient amount of senior
notes have matured so that the remaining outstanding subordinated notes provide the necessary subordination.
The
table under “The Master Trust II Portfolio—Principal Payment Rates” sets forth the highest and lowest cardholder monthly principal payment rates for the master trust II portfolio during the periods shown in such table.
Principal payment rates may change due to a variety of factors including economic, social and legal factors, changes in the terms of credit card accounts by MBNA or the addition of credit card accounts to master trust II with different
characteristics. There can be no assurance that the rate of principal repayment will remain in this range in the future.
Yield and payments on the receivables could decrease resulting in the receipt of principal payments earlier than the expected principal payment date
There is no assurance that the stated principal amount of your notes will be paid on its expected principal payment date.
A significant decrease in the amount of credit card receivables in master trust II for any reason could result in an early redemption
event and in early payment of your notes, as well as decreased protection to you against defaults on the credit card receivables. In addition, the effective yield on the credit card receivables owned by master trust II could decrease due to, among
other things, a change in periodic finance charges on the credit card accounts, an increase in the level of delinquencies or increased convenience use of the card whereby cardholders pay their credit card balance in full each month and incur no
finance charges. This could reduce the amount of available funds. If the amount of excess available funds for any three consecutive calendar months is less than the required excess available funds for such three months, an early redemption event
will occur and could result in an early payment of your notes. See “Prospectus Supplement Summary—Early Redemption of Notes.”
See “Risk Factors” in the prospectus for a discussion of other circumstances under which you may receive principal payments earlier or later than the expected principal payment date.
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This prospectus supplement and the accompanying prospectus use defined
terms. You can find a listing of defined terms in the “Glossary of Defined Terms” beginning on page S-56 in this prospectus supplement and beginning on page 103 in the accompanying prospectus.
The MBNAseries notes will be issued pursuant to the indenture and an
indenture supplement. The following discussion and the discussion under “The Notes” and “The Indenture” in the prospectus summarize the material terms of the notes, the indenture and the MBNAseries indenture
supplement. These summaries do not purport to be complete and are qualified in their entirety by reference to the provisions of the notes, the indenture and the MBNAseries indenture supplement. Neither the indenture nor the MBNAseries indenture
supplement limits the aggregate principal amount of notes that may be issued.
The MBNAseries will be included in
Excess Available Funds Group A for the purpose of sharing excess available funds. The MBNAseries notes will be issued in classes. Each class of notes may have multiple tranches which may be issued at different times and have different terms.
Whenever a “class” of notes is referred to in this prospectus supplement or the accompanying prospectus, it includes all tranches of that class of notes, unless the context otherwise requires.
No senior class of the MBNAseries may be issued unless a sufficient amount of subordinated notes or other acceptable credit enhancement
have previously been issued and are outstanding. See “—Issuances of New Series, Classes and Tranches of Notes—Required Subordinated Amount.”
The issuer will pay principal of and interest on the Class B(2002-3) notes solely from the portion of MBNAseries Available Funds and MBNAseries Available Principal Amounts
and from other amounts which are available to the Class B(2002-3) notes under the indenture and the MBNAseries indenture supplement after giving effect to all allocations and reallocations. If those sources are not sufficient to pay the Class
B(2002-3) notes, Class B(2002-3) noteholders will have no recourse to any other assets of the issuer or any other person or entity for the payment of principal of or interest on those notes.
Principal and interest payments on Class B
notes and Class C notes of the MBNAseries are subordinated to payments on Class A notes of the MBNAseries. Subordination of Class B notes and Class C notes of the MBNAseries provides credit enhancement for Class A notes of the MBNAseries.
Principal and interest payments on Class C notes of the MBNAseries are subordinated to payments on Class A notes
and Class B notes of the MBNAseries. Subordination of Class C notes of the MBNAseries provides credit enhancement for Class A notes and Class B notes of the MBNAseries.
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In addition, in the case of a discount note, the accreted principal of that note
corresponding to capitalized interest will be senior or subordinated to the same extent that principal is senior or subordinated.
MBNAseries Available Principal Amounts may be reallocated to pay interest on senior classes of notes or to pay a portion of the master trust II servicing fee allocable to the MBNAseries, subject to certain limitations. In addition,
charge-offs due to uncovered defaults on principal receivables in master trust II allocable to the MBNAseries generally are reallocated from the senior classes to the subordinated classes of the MBNAseries. See “The Notes—Stated
Principal Amount, Outstanding Dollar Principal Amount and Nominal Liquidation Amount—Nominal Liquidation Amount” and “Master Trust II—Defaulted Receivables; Rebates and Fraudulent Charges” in the prospectus.
In the MBNAseries, payment of principal may be made on a subordinated class of notes before payment in full of
each senior class of notes only under the following circumstances:
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If after giving effect to the proposed principal payment there is still a sufficient amount of subordinated notes to support the outstanding senior notes. See
“Deposit and Application of Funds—Targeted Deposits of MBNAseries Available Principal Amounts to the Principal Funding Account” and “—Allocation to Principal Funding Subaccounts.” For example, if a tranche
of Class A notes has been repaid, this generally means that, unless other Class A notes are issued, at least some Class B notes and Class C notes may be repaid when such Class B notes and Class C notes are required to be repaid even if other
tranches of Class A notes are outstanding. |
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If the principal funding subaccounts for the senior classes of notes have been sufficiently prefunded as described in “Deposit and Application of
Funds—Targeted Deposits of MBNAseries Available Principal Amounts to the Principal Funding Account—Prefunding of the Principal Funding Account for Senior Classes.” |
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If new tranches of subordinated notes are issued so that the subordinated notes that have reached their expected principal payment date are no longer necessary
to provide the required subordination. |
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If the subordinated tranche of notes reaches its legal maturity date and there is a sale of credit card receivables as described in “Deposit and
Application of Funds—Sale of Credit Card Receivables.” |
MBNAseries Available
Principal Amounts remaining after any reallocations for interest on the senior notes or for a portion of the master trust II servicing fee allocable to the MBNAseries will be applied to make targeted deposits to the principal funding subaccounts of
senior notes before being applied to make targeted deposits to the principal funding subaccounts of the subordinated notes if such remaining amounts are not sufficient to make all required targeted deposits.
The issuer may issue new series, classes and tranches of
notes (including additional notes of an outstanding tranche or class), so long as the conditions to issuance listed in “The
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Notes—Issuances of New Series, Classes and Tranches of Notes” in the prospectus are satisfied and so long as any increase in
the targeted deposit amount of any Class C reserve subaccount caused by such issuance will have been funded on or prior to such issuance date.
The issuer and the indenture trustee are not required to obtain the consent of any noteholder of any outstanding series, class or tranche to issue any additional notes.
No Class A notes or Class B notes may be issued
unless the required subordinated amount of subordinated classes is available at the time of its issuance. The required subordinated amount of a tranche of a senior class of notes of the MBNAseries is the aggregate nominal liquidation amount of a
subordinated class that is required to be outstanding and available on the date when a tranche of a senior class of notes is issued.
The issuer may change the required subordinated amount for any tranche of notes of the MBNAseries, or the method of computing the required subordinated amount, at any time without the consent of any noteholders so long as
the issuer has:
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received confirmation from each rating agency that has rated any outstanding notes that the change will not result in the reduction, qualification or withdrawal
of its then-current rating of any outstanding notes in the MBNAseries; |
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delivered an opinion of counsel that for federal income tax purposes (1) the change will not adversely affect the tax characterization as debt of any
outstanding series or class of investor certificates issued by master trust II that were characterized as debt at the time of their issuance, (2) following the change, master trust II will not be an association, or a publicly traded partnership,
taxable as a corporation, and (3) such change will not cause or constitute an event in which gain or loss would be recognized by any holder of an investor certificate issued by master trust II; and |
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delivered an opinion of counsel that for federal income tax purposes (1) the change will not adversely affect the tax characterization as debt of any
outstanding series, class or tranche of notes of the issuer that were characterized as debt at the time of their issuance, (2) following the change, the issuer will not be treated as an association, or publicly traded partnership, taxable as a
corporation, and (3) such change will not cause or constitute an event in which gain or loss would be recognized by any holder of such notes. |
In order to issue Class A notes, the issuer must calculate the available amount of Class B notes and Class C notes. The issuer will first calculate the amount of Class B notes available for such
new tranche of Class A notes. This is done by computing the following:
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the aggregate nominal liquidation amount of all tranches of outstanding Class B notes on that date, after giving effect to any issuances, deposits, allocations,
reallocations or payments with respect to Class B notes to be made on that date; minus |
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the aggregate amount of the Class A required subordinated amount of Class B notes for all other Class A notes which are outstanding on that date, after giving
effect to any
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issuances, deposits, allocations, reallocations or payments with respect to Class A notes to be made on that date. |
The calculation in the prior paragraph will also be made in the same manner for calculating the amount of Class C notes available for Class A notes.
In order to issue Class B notes, the issuer must calculate the available amount of Class C notes. This is done by computing the
following:
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the aggregate nominal liquidation amount of all tranches of Class C notes which are outstanding on that date, after giving effect to any issuances, deposits,
allocations, reallocations or payments with respect to Class C notes to be made on that date; minus |
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the aggregate amount of the Class B required subordinated amount of Class C notes for all other tranches of Class B notes which are outstanding on that date,
after giving effect to any issuances, deposits, allocations, reallocations or payments with respect to Class C notes to be made on that date; plus |
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the aggregate amount of the Class A required subordinated amount of Class C notes for all tranches of Class A notes for which the Class A required subordinated
amount of Class B notes is equal to zero which are outstanding on that date, after giving effect to any issuances, deposits, allocations, reallocations or payments with respect to those Class A notes to be made on that date.
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If the issuer obtains confirmation from each rating
agency that has rated any outstanding notes that the issuance of a new series, class or tranche of notes will not cause a reduction or withdrawal of the ratings of any outstanding notes rated by that rating agency, then some of the conditions to
issuance described above and under “The Notes—Issuance of New Series, Classes and Tranches of Notes” in the prospectus may be waived.
The primary source of funds for the payment of
principal of and interest on the notes is the collateral certificate issued by master trust II to the issuer. For a description of the collateral certificate, master trust II and its assets, see “Master Trust II” and
“Sources of Funds to Pay the Notes—The Collateral Certificate” in the prospectus.
The issuer may enter into
derivative agreements with respect to certain tranches of the MBNAseries as a source of funds to pay principal of or interest on the notes. See “Deposit and Application of Funds—Payments Received from Derivative Counterparties for
Interest of Foreign Currency Notes” and “—Payments Received from Derivative Counterparties for Principal.” The issuer has not entered into such a derivative agreement for the Class B(2002-3) notes.
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The issuer will establish a principal funding account, an
interest funding account and an accumulation reserve account for the benefit of the MBNAseries, which will have subaccounts for each tranche of notes of the MBNAseries, and a Class C reserve account, which will have subaccounts for each tranche of
Class C notes of the MBNAseries.
Each month, distributions on the collateral certificate will be deposited into
the collection account, and then allocated to each series of notes (including the MBNAseries) as described in the accompanying prospectus, and then allocated to the principal funding account, the interest funding account, the accumulation reserve
account, the Class C reserve account and any other supplemental account, to make payments under any applicable derivative agreements and additionally as specified in “Deposit and Application of Funds.”
Funds on deposit in the principal funding account and the interest funding account will be used to make payments of principal of and
interest on the MBNAseries notes when such payments are due. Payments of interest and principal will be due in the month when the funds are deposited into the accounts, or in later months. If interest on a note is not scheduled to be paid every
month—for example, if interest on that note is payable quarterly, semiannually or at another interval less frequently than monthly—the issuer will deposit accrued interest amounts funded from MBNAseries Available Funds into the interest
funding subaccount for that note to be held until the interest is due. See “Deposit and Application of Funds—Targeted Deposits of MBNAseries Available Funds to the Interest Funding Account.”
If the issuer anticipates that MBNAseries Available Principal Amounts will not be enough to pay the stated principal amount of a note on
its expected principal payment date, the issuer may begin to apply MBNAseries Available Principal Amounts in months before the expected principal payment date and deposit those funds into the principal funding subaccount established for that tranche
to be held until the expected principal payment date of that note. However, since funds in the principal funding subaccount for tranches of subordinated notes will not be available for credit enhancement for any senior classes of notes, MBNAseries
Available Principal Amounts will not be deposited into the principal funding subaccount for a tranche of subordinated notes if such deposit would reduce the available subordination below the required subordination.
If the earnings on funds in the principal funding subaccount are less than the interest payable on the portion of principal in the
principal funding subaccount for the applicable tranche of notes, the amount of such shortfall will be withdrawn from the accumulation reserve account to the extent available, unless the amounts on deposit in the principal funding subaccount are
prefunded amounts, in which case additional finance charge collections will be allocable to the collateral certificate and the MBNAseries and will be treated as MBNAseries Available Funds as described under “Deposit and Application of
Funds—MBNAseries Available Funds” in this prospectus supplement and “Master Trust II—Application of Collections” in the prospectus.
The collateral certificate
is allocated a portion of collections of finance charge receivables, collections of principal receivables, its share of the payment obligation on the
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master trust II servicing fee and its share of defaults on principal receivables in master trust II based on the investor percentage. The MBNAseries and the other series of notes are secured by a
shared security interest in the collateral certificate and the collection account of the issuer, but each series of notes (including the MBNAseries) is entitled to the benefits of only that portion of those assets allocable to it under the
indenture and the applicable indenture supplement. Therefore, only a portion of the collections allocated to the collateral certificate are available to the MBNAseries. Similarly, MBNAseries notes are entitled only to their allocable share of
MBNAseries Available Funds, MBNAseries Available Principal Amounts, amounts on deposit in the applicable issuer accounts, any payments received from derivative counterparties (to the extent not included in MBNAseries Available Funds) and proceeds of
the sale of credit card receivables by master trust II. Noteholders will have no recourse to any other assets of the issuer or any other person or entity for the payment of principal of or interest on the notes.
Each tranche of notes of the MBNAseries is entitled to the benefits of only that portion of the issuer’s assets allocated to that
tranche under the indenture and the MBNAseries indenture supplement. Each tranche of notes is also secured by a security interest in the applicable principal funding subaccount, the applicable interest funding subaccount, the applicable accumulation
reserve subaccount, in the case of a tranche of Class C notes, the applicable Class C reserve subaccount and any other applicable supplemental account, and by a security interest in any applicable derivative agreement.
The early redemption events applicable to all notes are
described in “The Indenture— Early Redemption Events” in the prospectus. In addition, if for any date the amount of Excess Available Funds averaged over the three preceding months is less than the Required Excess Available
Funds for such date, an early redemption event for the Class B(2002-3) notes will occur.
The indenture specifies how Available Funds
(primarily consisting of collections of finance charge receivables allocated and paid to the collateral certificateholder) and Available Principal Amounts (primarily consisting of collections of principal receivables allocated and paid to the
collateral certificateholder) will be allocated among the multiple series of notes secured by the collateral certificate. The MBNAseries indenture supplement specifies how MBNAseries Available Funds (which are the MBNAseries’s share of
Available Funds plus other amounts treated as MBNAseries Available Funds) and MBNAseries Available Principal Amounts (which are the MBNAseries’s share of Available Principal Amounts plus other amounts treated as MBNAseries Available
Principal Amounts) will be deposited into the issuer accounts established for the MBNAseries to provide for the payment of interest on and principal of MBNAseries notes as payments become due. In addition, the MBNAseries indenture supplement
specifies how defaults on principal receivables in master trust II and the master trust II servicing fee will be allocated to the collateral certificate and the MBNAseries. The following sections summarize those provisions.
S-24
MBNAseries Available Funds will consist of the following
amounts:
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The MBNAseries’s share of collections of finance charge receivables allocated and paid to the collateral certificateholder and investment earnings on funds
held in the collection account. See “Sources of Funds to Pay the Notes—Deposit and Application of Funds” in the prospectus. |
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Withdrawals from the accumulation reserve subaccount. |
If the number of months targeted to accumulate budgeted deposits of MBNAseries Available Principal Amounts for the payment of principal on a tranche of notes is greater than one month, then the issuer
will begin to fund an accumulation reserve subaccount for such tranche. See “—Targeted Deposits of MBNAseries Available Principal Amounts to the Principal Funding Account.” The amount targeted to be deposited in the
accumulation reserve account for each month, beginning with the third month prior to the first Transfer Date on which MBNAseries Available Principal Amounts are to be accumulated for such tranche, will be an amount equal to 0.5% of the outstanding
dollar principal amount of such tranche of notes.
On each Transfer Date, the issuer will calculate the targeted
amount of principal funding subaccount earnings for each tranche of notes, which will be equal to the amount that the funds (other than prefunded amounts) on deposit in each principal funding subaccount would earn at the interest rate payable by the
issuer—taking into account payments due under applicable derivative agreements—on the related tranche of notes. As a general rule, if the amount actually earned on such funds on deposit is less than the targeted amount of earnings, then
the amount of such shortfall will be withdrawn from the applicable accumulation reserve subaccount and treated as MBNAseries Available Funds for such month.
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Additional finance charge collections allocable to the MBNAseries. |
The issuer will notify the servicer from time to time of the aggregate prefunded amount on deposit in the principal funding account. Whenever there are any prefunded
amounts on deposit in any principal funding subaccount, master trust II will designate an amount of the Seller Interest equal to such prefunded amounts. On each Transfer Date, the issuer will calculate the targeted amount of principal funding
subaccount prefunded amount earnings for each tranche of notes, which will be equal to the amount that the prefunded amounts on deposit in each principal funding subaccount would earn at the interest rate payable by the issuer—taking into
account payments due under applicable derivative agreements—on the related tranche of notes. As a general rule, if the amount actually earned on such funds on deposit is less than the targeted amount of earnings, collections of finance charge
receivables allocable to such designated portion of the Seller Interest up to the amount of the shortfall will be treated as MBNAseries Available Funds. See “Master Trust II—Application of Collections” in the prospectus.
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Investment earnings on amounts on deposit in the principal funding account, interest funding account and accumulation reserve account for the MBNAseries.
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Any shared excess available funds allocable to the MBNAseries. |
See “—Shared Excess Available Funds” in this prospectus supplement.
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Amounts received from derivative counterparties. |
Unless otherwise specified in the MBNAseries indenture supplement, payments received under derivative agreements for interest on notes of the MBNAseries payable in U.S. dollars will be treated as
MBNAseries Available Funds.
On each Transfer Date, the indenture
trustee will apply MBNAseries Available Funds as follows:
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first, to make the targeted deposits to the interest funding account to fund the payment of interest on the notes and certain payments due to derivative
counterparties; |
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second, to pay the MBNAseries’s share of the master trust II servicing fee, plus any previously due and unpaid master trust II servicing fee
allocable to the MBNAseries, to the servicer; |
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third, to be treated as MBNAseries Available Principal Amounts in an amount equal to the amount of defaults on principal receivables in master trust II
allocated to the MBNAseries for the preceding month; |
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fourth, to be treated as MBNAseries Available Principal Amounts in an amount equal to the Nominal Liquidation Amount Deficits, if any, of MBNAseries notes;
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fifth, to make the targeted deposit to the accumulation reserve account, if any; |
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sixth, to make the targeted deposit to the Class C reserve account, if any; |
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seventh, to make any other payment or deposit required by any class or tranche of MBNAseries notes; |
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eighth, to be treated as shared excess available funds; and |
The
aggregate deposit targeted to be made each month to the interest funding account will be equal to the sum of the interest funding account deposits targeted to be made for each tranche of notes set forth below. The deposit targeted for any month will
also include any shortfall in the targeted deposit from any prior month which has not been previously deposited.
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Interest Payments. The deposit targeted for any tranche of outstanding interest-bearing notes on each Transfer Date will be equal
to the amount of interest accrued
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on the outstanding dollar principal amount of that tranche during the period from and including the first Monthly
Interest Accrual Date in the prior month to but excluding the first Monthly Interest Accrual Date for the current month.
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Amounts Owed to Derivative Counterparties. If a tranche of notes has a Performing or non-Performing derivative agreement for
interest that provides for payments to the applicable derivative counterparty, in addition to any applicable stated interest as determined under the item above, the deposit targeted for that tranche of notes on each Transfer Date with respect to any
payment to the derivative counterparty will be specified in the MBNAseries indenture supplement. |
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Discount Notes. The deposit targeted for a tranche of discount notes on each Transfer Date is the amount of accretion of principal
of that tranche of notes from and including the prior Monthly Principal Accrual Date—or in the case of the first Monthly Principal Accrual Date, from and including the date of issuance of that tranche—to but excluding the first Monthly
Principal Accrual Date for the next month. |
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Specified Deposits. If any tranche of notes provides for deposits in addition to or different from the deposits described above to
be made to the interest funding subaccount for that tranche, the deposits targeted for that tranche each month are the specified amounts. |
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Additional Interest. The deposit targeted for any tranche of notes that has previously due and unpaid interest for any month will
include the interest accrued on that overdue interest during the period from and including the first Monthly Interest Accrual Date in the prior month to but excluding the first Monthly Interest Accrual Date for the current month.
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Each deposit to the interest funding account for each month will be made on the following Transfer Date. A
tranche of notes may be entitled to more than one of the preceding deposits.
A class or tranche of notes for
which credit card receivables have been sold by master trust II as described in “—Sale of Credit Card Receivables” will not be entitled to receive any of the preceding deposits to be made from MBNAseries Available Funds after
the sale has occurred.
The aggregate amount to be deposited in
the interest funding account will be allocated, and a portion deposited in the interest funding subaccount established for each tranche of notes, as follows:
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MBNAseries Available Funds are at least equal to targeted amounts. If MBNAseries Available Funds are at least equal to the sum of
the deposits targeted by each tranche of notes as described above, then that targeted amount will be deposited in the interest funding subaccount established for each tranche. |
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MBNAseries Available Funds are less than targeted amounts. If MBNAseries Available Funds are less than the sum of the deposits
targeted by each tranche of notes as described above, then MBNAseries Available Funds will be allocated to each tranche of notes as follows: |
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first, to cover the deposits with respect to the Class A notes (including any applicable derivative counterparty payments), |
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second, to cover the deposits with respect to the Class B notes (including any applicable derivative counterparty payments), and
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— |
third, to cover the deposits with respect to the Class C notes (including any applicable derivative counterparty payments). |
In each case, MBNAseries Available Funds allocated to a class will be allocated to each tranche of notes within such class
pro rata based on the ratio of:
| |
— |
the aggregate amount of the deposits targeted with respect to that tranche of notes, to |
| |
— |
the aggregate amount of the deposits targeted with respect to all tranches of notes in such class. |
Payments received under derivative agreements for interest of foreign currency notes in the MBNAseries will be applied as specified in the MBNAseries indenture supplement.
On each Transfer Date when there is a
charge-off for uncovered defaults on principal receivables in master trust II allocable to the MBNAseries for the prior month, that reduction will be allocated (and reallocated) on that date to each tranche of notes as set forth below:
Initially, the amount of such charge-off will be allocated to each tranche of outstanding notes pro rata based on
the ratio of the Weighted Average Available Funds Allocation Amount for such tranche for the prior month to the Weighted Average Available Funds Allocation Amount for the MBNAseries for the prior month.
Immediately afterwards, the amount of charge-offs allocated to the Class A notes and Class B notes will be reallocated to the Class C
notes as set forth below, and the amount of charge-offs allocated to the Class A notes and not reallocated to the Class C notes because of the limits set forth below will be reallocated to the Class B notes as set forth below. In addition,
charge-offs initially allocated to Class A notes which are reallocated to Class B notes because of Class C usage limitations can be reallocated to Class C notes if permitted as described below. Any amount of charge-offs which cannot be reallocated
to a subordinated class as a result of the limits set forth below will reduce the nominal liquidation amount of the tranche of notes to which it was initially allocated.
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Limits on Reallocations of Charge-Offs to a Tranche of Class C Notes from Tranches of Class A and Class B Notes.
No reallocations of charge-offs from a tranche of Class A notes to Class C notes may cause that
tranche’s Class A Usage of Class C Required Subordinated Amount to exceed that tranche’s Class A required subordinated amount of Class C notes.
No reallocations of charge-offs from a tranche of Class B notes to Class C notes may cause that tranche’s Class B Usage of Class C Required Subordinated Amount to exceed that tranche’s Class
B required subordinated amount of Class C notes.
The amount of charge-offs permitted to be reallocated to
tranches of Class C notes will be applied to each tranche of Class C notes pro rata based on the ratio of the Weighted Average Available Funds Allocation Amount of such tranche of Class C notes for the prior month to the Weighted Average
Available Funds Allocation Amount of all Class C notes in the MBNAseries for the prior month.
No such
reallocation of charge-offs will reduce the nominal liquidation amount of any tranche of Class C notes below zero.
Limits on Reallocations of Charge-Offs to a Tranche of Class B Notes from Tranches of Class A Notes.
No reallocations of charge-offs from a tranche of Class A notes to Class B notes may cause that tranche’s Class A Usage of Class B Required Subordinated Amount to exceed that tranche’s Class A required subordinated amount
of Class B notes.
The amount of charge-offs permitted to be reallocated to tranches of Class B notes will be
applied to each tranche of Class B notes pro rata based on the ratio of the Weighted Average Available Funds Allocation Amount for that tranche of Class B notes for the prior month to the Weighted Average Available Funds Allocation Amount for
all Class B notes in the MBNAseries for the prior month.
No such reallocation of charge-offs will reduce the
nominal liquidation amount of any tranche of Class B notes below zero.
For each tranche of notes, the nominal
liquidation amount of that tranche will be reduced by an amount equal to the charge-offs which are allocated or reallocated to that tranche of notes less the amount of charge-offs that are reallocated from that tranche of notes to a
subordinated class of notes.
If there are
MBNAseries Available Funds available to reimburse any Nominal Liquidation Amount Deficits on any Transfer Date, such funds will be allocated to each tranche of notes as follows:
| |
Ÿ |
first, to each tranche of Class A notes, |
S-29
| |
Ÿ |
second, to each tranche of Class B notes, and |
| |
Ÿ |
third, to each tranche of Class C notes. |
In each case, MBNAseries Available Funds allocated to a class will be allocated to each tranche of notes within such class pro rata based on the ratio of:
—the Nominal Liquidation Amount Deficit of such tranche of notes, to
—the aggregate Nominal Liquidation Amount Deficits of all tranches of such class.
In no event will the nominal liquidation amount of a tranche of notes be increased above the Adjusted Outstanding Dollar Principal Amount
of such tranche.
On each Transfer Date, the
indenture trustee will apply MBNAseries Available Principal Amounts as follows:
| |
Ÿ |
first, for each month, if MBNAseries Available Funds are insufficient to make the full targeted deposit into the interest funding subaccount for any tranche of
Class A notes, then MBNAseries Available Principal Amounts (in an amount not to exceed the sum of the investor percentage of collections of principal receivables allocated to the Class B notes and the Class C notes for each day during such
month) will be allocated to the interest funding subaccount of each such tranche of Class A notes pro rata based on, in the case of each such tranche of Class A notes, the lesser of: |
| |
— |
the amount of the deficiency of the targeted amount to be deposited into the interest funding subaccount of such tranche of Class A notes, and
|
| |
— |
an amount equal to the sum of the Class A Unused Subordinated Amount of Class C notes plus the Class A Unused Subordinated Amount of Class B notes
for such tranche of Class A notes (determined after giving effect to the allocation of charge-offs for uncovered defaults on principal receivables in master trust II); |
| |
Ÿ |
second, for each month, if MBNAseries Available Funds are insufficient to make the full targeted deposit into the interest funding subaccount for any tranche of
Class B notes, then MBNAseries Available Principal Amounts (in an amount not to exceed the sum of the investor percentage of collections of principal receivables allocated to the Class B notes and the Class C notes for each day during such month
minus the aggregate amount of MBNAseries Available Principal Amounts reallocated as described in the first clause above) will be allocated to the interest funding subaccount of each such tranche of Class B notes pro rata based on, in
the case of each such tranche of Class B notes, the lesser of: |
| |
— |
the amount of the deficiency of the targeted amount to be deposited into the interest funding subaccount of such tranche of Class B notes, and
|
| |
— |
an amount equal to the Class B Unused Subordinated Amount of Class C notes for such tranche of Class B notes (determined after giving effect to the allocation
of charge-offs for uncovered defaults on principal receivables in master trust II and the
|
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reallocation of MBNAseries Available Principal Amounts as described in the first clause above);
| |
Ÿ |
third, for each month, if MBNAseries Available Funds are insufficient to pay the portion of the master trust II servicing fee allocable to the MBNAseries, then
MBNAseries Available Principal Amounts (in an amount not to exceed the sum of the investor percentage of collections of principal receivables allocated to the Class B notes and the Class C notes for each day during such month minus the
aggregate amount of MBNAseries Available Principal Amounts reallocated as described in the first and second clauses above) will be paid to the servicer in an amount equal to, and allocated to each such tranche of Class A notes pro rata based
on, in the case of each tranche of Class A notes, the lesser of: |
| |
— |
the amount of the deficiency times the ratio of the Weighted Average Available Funds Allocation Amount for such tranche for such month to the Weighted Average
Available Funds Allocation Amount for the MBNAseries for such month, and |
| |
— |
an amount equal to the Class A Unused Subordinated Amount of Class C notes plus the Class A Unused Subordinated Amount of Class B notes for such tranche
of Class A notes (determined after giving effect to the allocation of charge-offs for uncovered defaults on principal receivables in master trust II and the reallocation of MBNAseries Available Principal Amounts as described in the first and second
clauses above); |
| |
Ÿ |
fourth, for each month, if MBNAseries Available Funds are insufficient to pay the portion of the master trust II servicing fee allocable to the MBNAseries, then
MBNAseries Available Principal Amounts (in an amount not to exceed the sum of the investor percentage of collections of principal receivables allocated to the Class B notes and the Class C notes for each day during such month minus the
aggregate amount of MBNAseries Available Principal Amounts reallocated as described in the first, second and third clauses above) will be paid to the servicer in an amount equal to, and allocated to each tranche of Class B notes pro rata
based on, in the case of each such tranche of Class B notes, the lesser of: |
| |
— |
the amount of the deficiency times the ratio of the Weighted Average Available Funds Allocation Amount for such tranche for such month to the Weighted Average
Available Funds Allocation Amount for the MBNAseries for such month, and |
| |
— |
an amount equal to the Class B Unused Subordinated Amount of Class C notes for such tranche of Class B notes (determined after giving effect to the allocation
of charge-offs for uncovered defaults on principal receivables in master trust II and the reallocation of MBNAseries Available Principal Amounts as described in the preceding clauses); |
| |
Ÿ |
fifth, to make the targeted deposits to the principal funding account as described below under “—Targeted Deposits of MBNAseries Available
Principal Amounts to the Principal Funding Account;” and |
| |
Ÿ |
sixth, to the issuer for reinvestment in the Investor Interest of the collateral certificate. |
S-31
A tranche of notes for which credit card receivables have been sold by master
trust II as described in “—Sale of Credit Card Receivables” will not be entitled to receive any further allocations of MBNAseries Available Funds or MBNAseries Available Principal Amounts.
The Investor Interest of the collateral certificate is the sum of the nominal liquidation amounts of each tranche of notes issued by the
issuer and outstanding and, therefore, will be reduced by the amount of MBNAseries Available Principal Amounts used to make deposits into the interest funding account, payments to the servicer and deposits into the principal funding account. If the
Investor Interest of the collateral certificate is reduced because MBNAseries Available Principal Amounts have been used to make deposits into the interest funding account or payments to the servicer or because of charge-offs due to uncovered
defaults on principal receivables in master trust II, the amount of Available Funds and Available Principal Amounts allocated to the collateral certificate and the amount of MBNAseries Available Funds and MBNAseries Available Principal Amounts will
be reduced unless the reduction in the Investor Interest is reimbursed from amounts described above in the fourth item in “—Application of MBNAseries Available Funds.”
Each reallocation of MBNAseries Available Principal Amounts deposited to the interest funding subaccount of a tranche of Class A notes as described in the first clause of “—Application of
MBNAseries Available Principal Amounts” will reduce the nominal liquidation amount of the Class C notes. However, the amount of such reduction for each such tranche of Class A notes will not exceed the Class A Unused Subordinated
Amount of Class C notes for such tranche of Class A notes.
Each reallocation of MBNAseries Available Principal
Amounts deposited to the interest funding subaccount of a tranche of Class A notes as described in the first clause of “—Application of MBNAseries Available Principal Amounts” which does not reduce the nominal liquidation
amount of Class C notes pursuant to the preceding paragraph will reduce the nominal liquidation amount of the Class B notes. However, the amount of such reduction for each such tranche of Class A notes will not exceed the Class A Unused
Subordinated Amount of Class B notes for such tranche of Class A notes, and such reductions in the nominal liquidation amount of the Class B notes may be reallocated to the Class C notes if permitted as described below.
Each reallocation of MBNAseries Available Principal Amounts deposited to the interest funding subaccount of a tranche of Class B notes as
described in the second clause of “—Application of MBNAseries Available Principal Amounts” will reduce the nominal liquidation amount (determined after giving effect to the preceding paragraphs) of the Class C notes.
Each reallocation of MBNAseries Available Principal Amounts paid to the servicer as described in the third
clause of “—Application of MBNAseries Available Principal Amounts” will reduce the nominal liquidation amount (determined after giving effect to the preceding
S-32
paragraphs) of the Class C notes. However, the amount of such reduction for each such tranche of Class A notes will not exceed the Class A Unused Subordinated Amount of Class C notes for such
tranche of Class A notes (after giving effect to the preceding paragraphs).
Each reallocation of MBNAseries
Available Principal Amounts paid to the servicer as described in the third clause of “—Application of MBNAseries Available Principal Amounts” which does not reduce the nominal liquidation amount of Class C notes as described
above will reduce the nominal liquidation amount (determined after giving effect to the preceding paragraphs) of the Class B notes. However, the amount of such reduction for each such tranche of Class A notes will not exceed the Class A
Unused Subordinated Amount of Class B notes for such tranche of Class A notes (after giving effect to the preceding paragraphs), and such reductions in the nominal liquidation amount of the Class B notes may be reallocated to the Class C notes
if permitted as described below.
Each reallocation of MBNAseries Available Principal Amounts paid to the servicer
as described in the fourth clause of “—Application of MBNAseries Available Principal Amounts” will reduce the nominal liquidation amount (determined after giving effect to the preceding paragraphs) of the Class C notes.
Subject to the following paragraph, each reallocation of MBNAseries Available Principal Amounts which reduces the
nominal liquidation amount of Class B notes as described above will reduce the nominal liquidation amount of each tranche of the Class B notes pro rata based on the ratio of the Weighted Average Available Funds Allocation Amount for such
tranche of Class B notes for the related month to the Weighted Average Available Funds Allocation Amount for all Class B notes for the related month. However, any allocation of any such reduction that would otherwise have reduced the nominal
liquidation amount of a tranche of Class B notes below zero will be reallocated to the remaining tranches of Class B notes in the manner set forth in this paragraph.
Each reallocation of MBNAseries Available Principal Amounts which reduces the nominal liquidation amount of Class B notes as described in the preceding paragraph may be
reallocated to the Class C notes and such reallocation will reduce the nominal liquidation amount of the Class C notes. However, the amount of such reallocation from each tranche of Class B notes will not exceed the Class B Unused
Subordinated Amount of Class C notes for such tranche of Class B notes.
Each reallocation of MBNAseries Available
Principal Amounts which reduces the nominal liquidation amount of Class C notes as described above will reduce the nominal liquidation amount of each tranche of the Class C notes pro rata based on the ratio of the Weighted Average Available
Funds Allocation Amount for such tranche of Class C notes for the related month to the Weighted Average Available Funds Allocation Amount for all Class C notes for the related month. However, any allocation of any such reduction that would
otherwise have reduced the nominal liquidation amount of a tranche of Class C notes below zero will be reallocated to the remaining tranches of Class C notes in the manner set forth in this paragraph.
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None of such reallocations will reduce the nominal liquidation amount of any
tranche of Class B or Class C notes below zero.
For each tranche of notes, the nominal liquidation amount of that
tranche will be reduced by the amount of reductions which are allocated or reallocated to that tranche less the amount of reductions which are reallocated from that tranche to notes of a subordinated class.
Each tranche of notes will be allocated MBNAseries Available Principal Amounts and MBNAseries Available Funds solely to the extent of its nominal liquidation amount. Therefore, if the nominal liquidation amount of any tranche of
notes has been reduced due to reallocations of MBNAseries Available Principal Amounts to cover payments of interest or the master trust II servicing fee or due to charge-offs for uncovered defaults on principal receivables in master trust II, such
tranche of notes will not be allocated MBNAseries Available Principal Amounts or MBNAseries Available Funds to the extent of such reductions. However, any funds in the applicable principal funding subaccount, any funds in the applicable interest
funding subaccount, any amounts payable from any applicable derivative agreement, any funds in the applicable accumulation reserve subaccount, and in the case of Class C notes, any funds in the applicable Class C reserve subaccount, will still be
available to pay principal of and interest on that tranche of notes. If the nominal liquidation amount of a tranche of notes has been reduced due to reallocation of MBNAseries Available Principal Amounts to pay interest on senior classes of notes or
the master trust II servicing fee, or due to charge-offs for uncovered defaults on principal receivables in master trust II, it is possible for that tranche’s nominal liquidation amount to be increased by allocations of MBNAseries Available
Funds. However, there are no assurances that there will be any MBNAseries Available Funds for such allocations.
The amount targeted to be deposited into the principal funding account in any month will be the highest of the following amounts. However, no amount will be deposited into the principal funding subaccount for any subordinated note
unless following such deposit the remaining available subordinated amount is equal to the aggregate unused subordinated amount for all outstanding senior notes.
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Ÿ |
Principal Payment Date. For the month before any principal payment date of a tranche of notes, the deposit targeted for that
tranche of notes for that month is equal to the nominal liquidation amount of that tranche of notes as of the close of business on the last day of such month, determined after giving effect to any charge-offs for uncovered defaults on principal
receivables in master trust II and any reallocations, payments or deposits of MBNAseries Available Principal Amounts occurring on the following Transfer Date. |
S-34
| |
Ÿ |
Budgeted Deposits. Each month beginning with the twelfth month before the expected principal payment date of a tranche of notes,
the deposit targeted to be made into the principal funding subaccount for a tranche of notes will be one-twelfth of the expected outstanding dollar principal amount of that tranche of notes as of its expected principal payment date.
|
The issuer may postpone the date of the targeted deposits under the previous sentence. If the issuer and the
servicer determine that less than twelve months would be required to accumulate MBNAseries Available Principal Amounts necessary to pay a tranche of notes on its expected principal payment date, using conservative historical information about
payment rates of principal receivables under master trust II and after taking into account all of the other expected payments of principal of master trust II investor certificates and notes to be made in the next twelve months, then the start of the
targeted deposits may be postponed each month by one month, with proportionately larger targeted deposits for each month of postponement.
| |
Ÿ |
Prefunding of the Principal Funding Account for Senior Classes. If the issuer determines that any date on which principal is
payable or to be deposited into a principal funding subaccount with respect to any tranche of Class C notes will occur at a time when the payment or deposit of all or part of that tranche of Class C notes would be prohibited because it would
cause a deficiency in the remaining available subordination for the Class A notes or Class B notes, the targeted deposit amount for the Class A notes and Class B notes will be an amount equal to the portion of the Adjusted Outstanding Dollar
Principal Amount of the Class A notes and Class B notes that would have to cease to be outstanding in order to permit the payment of or deposit with respect to that tranche of Class C notes. |
If the issuer determines that any date on which principal is payable or to be deposited into a principal funding subaccount with respect
to any Class B notes will occur at a time when the payment or deposit of all or part of that tranche of Class B notes would be prohibited because it would cause a deficiency in the remaining available subordination for the Class A notes, the
targeted deposit amount for the Class A notes will be an amount equal to the portion of the Adjusted Outstanding Dollar Principal Amount of the Class A notes that would have to cease to be outstanding in order to permit the payment of or deposit
with respect to that tranche of Class B notes.
Prefunding of the principal funding subaccount for the senior
tranches of the MBNAseries will continue until:
| |
— |
enough senior notes are repaid so that the subordinated notes that are payable are no longer necessary to provide the required subordination for the outstanding
senior notes; |
| |
— |
new subordinated notes are issued so that the subordinated notes that are payable are no longer necessary to provide the required subordination for the
outstanding senior notes; or |
S-35
| |
— |
the principal funding subaccounts for the senior notes are prefunded so that the subordinated notes that are payable are no longer necessary to provide the
required subordination for the outstanding senior notes. |
For purposes of calculating the
prefunding requirements, the required subordinated amount of a tranche of a senior class of notes of the MBNAseries will be calculated as described under “The Notes—Issuance of New Series, Classes and Tranches of Notes—Required
Subordinated Amount” based on its Adjusted Outstanding Dollar Principal Amount on such date. However, if any early redemption event has occurred with respect to the subordinated notes or if the usage of the subordinated notes with respect
to such senior notes is greater than zero, the required subordinated amount will be calculated based on the Adjusted Outstanding Dollar Principal Amount of such tranche as of the close of business on the day immediately preceding the occurrence of
such early redemption event or the date on which the usage of the subordinated notes exceeds zero.
When the
prefunded amounts are no longer necessary, they will be withdrawn from the principal funding account and applied in accordance with the description under “—Withdrawals from Principal Funding Account—Withdrawals of Prefunded
Amounts.” The nominal liquidation amount of the prefunded tranches will be increased by the amount removed from the principal funding account.
If any tranche of senior notes becomes payable as a result of an early redemption event, event of default or other optional or mandatory redemption, or upon reaching its expected principal payment
date, any prefunded amounts on deposit in its principal funding subaccount will be paid to noteholders of that tranche and deposits to pay the notes will continue as necessary to pay that tranche.
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Ÿ |
Event of Default, Early Redemption Event or Other Optional or Mandatory Redemption. If any tranche of notes has been accelerated
after the occurrence of an event of default during that month, or an early redemption event or other optional or mandatory redemption has occurred with respect to any tranche of notes, the deposit targeted for that tranche of notes with respect to
that month and each following month will equal the nominal liquidation amount of that tranche of notes as of the close of business on the last day of the preceding month, determined after giving effect to reallocations, payments or deposits
occurring on the Transfer Date with respect to such month. |
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Ÿ |
Amounts Owed to Derivative Counterparties. If a tranche of U.S. dollar notes or foreign currency notes that has a Performing or
non-Performing derivative agreement for principal that provides for a payment to the applicable derivative counterparty, the deposit targeted for that tranche of notes on each Transfer Date with respect to any payment to the derivative counterparty
will be specified in the MBNAseries indenture supplement. |
S-36
MBNAseries Available Principal Amounts,
after any reallocation to cover MBNAseries Available Funds shortfalls, if any, will be allocated each month, and a portion deposited in the principal funding subaccount established for each tranche of notes, as follows:
| |
Ÿ |
MBNAseries Available Principal Amounts Equal Targeted Amounts. If MBNAseries Available Principal Amounts remaining after giving
effect to clauses one through four under “—Application of MBNAseries Available Principal Amounts” are equal to the sum of the deposits targeted by each tranche of notes, then the applicable targeted amount will be deposited in
the principal funding subaccount established for each tranche. |
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Ÿ |
MBNAseries Available Principal Amounts Are Less Than Targeted Amounts. If MBNAseries Available Principal Amounts remaining after
giving effect to clauses one through four under “—Application of MBNAseries Available Principal Amounts” are less than the sum of the deposits targeted by each tranche of notes, then MBNAseries Available Principal Amounts will
be deposited in the principal funding subaccounts for each tranche in the following priority: |
| |
— |
first, the amount available will be allocated to the Class A notes, |
| |
— |
second, the amount available after the application above will be allocated to the Class B notes, and |
| |
— |
third, the amount available after the applications above will be allocated to the Class C notes. |
In each case, MBNAseries Available Principal Amounts allocated to a class will be allocated to each tranche of notes within such class
pro rata based on the ratio of:
| |
— |
the amount targeted to be deposited into the principal funding subaccount for the applicable tranche of such class, to |
| |
— |
the aggregate amount targeted to be deposited into the principal funding subaccount for all tranches of such class. |
If restrictions in “—Limit on Deposits to the Principal Funding Subaccount of Subordinated Notes; Limit on Repayments of all
Tranches” prevent the deposit of MBNAseries Available Principal Amounts into the principal funding subaccount of any subordinated note, the aggregate amount of MBNAseries Available Principal Amounts available to make the targeted deposit
for such subordinated tranche will be allocated first to the Class A notes and then to the Class B notes, in each case pro rata based on the dollar amount of subordinated notes required to be outstanding for the related senior notes. See
“—Targeted Deposits of MBNAseries Available Principal Amounts to the Principal Funding Account.”
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Limit on Deposits to the Principal Funding Subaccount of Subordinated Notes.
No MBNAseries Available Principal Amounts will be deposited in the principal funding subaccount of any tranche of Class B notes unless, following such deposit, the available subordinated amount of Class B notes is at least
equal to the required subordinated amount of Class B notes for all outstanding Class A notes minus the Class A Usage of Class B Required Subordinated Amount for all Class A notes. For this purpose, the available subordinated amount of Class B
notes is equal to the aggregate nominal liquidation amounts of all other Class B notes of the MBNAseries which will be outstanding after giving effect to the deposit into the principal funding subaccount of such tranche of Class B notes and all
other Class B notes which have a targeted deposit into the principal funding account for such month.
No
MBNAseries Available Principal Amounts will be deposited in the principal funding subaccount of any tranche of Class C notes unless, following such deposit:
—the available subordinated amount of Class C notes is at least equal to the required subordinated amount of Class C notes for all outstanding Class A
notes minus the Class A Usage of Class C Required Subordinated Amount for all Class A notes; and
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— |
the available subordinated amount of Class C notes is at least equal to the required subordinated amount of Class C notes for all outstanding Class B notes
minus the Class B Usage of Class C Required Subordinated Amount for all Class B notes. |
For this purpose,
the available subordinated amount of Class C notes is equal to the aggregate nominal liquidation amounts of all other Class C notes of the MBNAseries which will be outstanding after giving effect to the deposit into the principal funding subaccount
of such tranche of Class C notes and all other Class C notes which have a targeted deposit into the principal funding account for such month.
MBNAseries Available Principal Amounts will be deposited in the principal funding subaccount of a subordinated note if and only to the extent that such deposit is not contrary to either of the
preceding two paragraphs and the prefunding target amount for each senior note is zero.
Limit on Repayments of
all Tranches.
No amounts on deposit in a principal funding subaccount for any tranche of Class A notes or
Class B notes will be applied to pay principal of that tranche or to make a payment under a derivative agreement with respect to principal of that tranche in excess of the highest outstanding dollar principal amount of that tranche (or, in the case
of foreign currency notes, such other amount that may be specified in the MBNAseries indenture supplement). In the case of any tranche of Class C notes, no amounts on deposit in a principal funding subaccount or, if applicable, a Class C reserve
subaccount for any such tranche will be applied to pay principal of that tranche or to make a payment under a derivative agreement with respect
S-38
to principal of that tranche in excess of the highest outstanding dollar principal amount of that tranche (or, in the case of foreign currency notes, such other amount that may be specified in
the MBNAseries indenture supplement).
Unless otherwise
specified in the related indenture supplement, dollar payments for principal received under derivative agreements of U.S. dollar notes in the MBNAseries will be treated as MBNAseries Available Principal Amounts. Payments received under derivative
agreements for principal of foreign currency notes in the MBNAseries will be applied as specified in the MBNAseries indenture supplement.
Withdrawals from any Class C reserve subaccount will be deposited into the principal funding subaccount for the applicable tranche of Class C notes to the extent required pursuant to the MBNAseries indenture supplement.
After giving effect to all deposits of
funds to the interest funding account in a month, the following withdrawals from the applicable interest funding subaccount may be made, to the extent funds are available, in the applicable interest funding subaccount. A tranche of notes may be
entitled to more than one of the following withdrawals in a particular month:
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Ÿ |
Withdrawals for U.S. Dollar Notes. On each applicable interest payment date for each tranche of U.S. dollar notes, an amount equal
to interest due on the applicable tranche of notes on the applicable interest payment date (including any overdue interest payments and additional interest on overdue interest payments) will be withdrawn from that interest funding subaccount and
paid to the applicable paying agent. |
| |
Ÿ |
Withdrawals for Foreign Currency Notes with a Non-Performing Derivative Agreement. On each applicable interest payment date with
respect to a tranche of foreign currency notes that has a non-Performing derivative agreement for interest, the amount specified in the MBNAseries indenture supplement will be withdrawn from that interest funding subaccount and, if so specified in
the applicable indenture supplement, converted to the applicable foreign currency at the applicable spot exchange rate and remitted to the applicable paying agent. |
| |
Ÿ |
Withdrawals for Discount Notes. On each applicable principal payment date, with respect to each tranche of discount notes, an
amount equal to the amount of the accretion of principal of that tranche of notes from the prior principal payment date—or, in the case of the first principal payment date, the date of issuance of that tranche—to but excluding the
applicable principal payment date will be withdrawn from that interest funding subaccount and invested in the Investor Interest of the collateral certificate. |
S-39
| |
Ÿ |
Withdrawals for Payments to Derivative Counterparties. On each date on which a payment is required under the applicable derivative
agreement, with respect to any tranche of notes that has a Performing or non-Performing derivative agreement for interest, an amount equal to the amount of the payment to be made under the applicable derivative agreement (including, if applicable,
any overdue payment and any additional interest on overdue payments) will be withdrawn from that interest funding subaccount and paid in accordance with the MBNAseries indenture supplement. |
If the aggregate amount available for withdrawal from an interest funding subaccount is less than all withdrawals required to be made from
that subaccount in a month after giving effect to all deposits, then the amounts on deposit in that interest funding subaccount will be withdrawn and, if payable to more than one person, applied pro rata based on the amounts of the
withdrawals required to be made. After payment in full of any tranche of notes, any amount remaining on deposit in the applicable interest funding subaccount will be first applied to cover any interest funding subaccount shortfalls for other
tranches of notes in the manner described in “—Allocation to Interest Funding Subaccounts,” second applied to cover any principal funding subaccount shortfalls in the manner described in “—Allocation to Principal
Funding Subaccounts,” and third paid to the issuer.
After giving effect to all deposits of
funds to the principal funding account in a month, the following withdrawals from the applicable principal funding subaccount will be made to the extent funds are available in the applicable principal funding subaccount. A tranche of notes may be
entitled to more than one of the following withdrawals in a particular month:
| |
Ÿ |
Withdrawals for U.S. Dollar Notes with no Derivative Agreement for Principal. On each applicable principal payment date, with
respect to each tranche of U.S. dollar notes that has no derivative agreement for principal, an amount equal to the principal due on the applicable tranche of notes on the applicable principal payment date will be withdrawn from the applicable
principal funding subaccount and paid to the applicable paying agent. |
| |
Ÿ |
Withdrawals for U.S. Dollar or Foreign Currency Notes with a Performing Derivative Agreement for Principal. On each date on which
a payment is required under the applicable derivative agreement with respect to any tranche of U.S. dollar or foreign currency notes that has a Performing derivative agreement for principal, an amount equal to the amount of the payment to be made
under the applicable derivative agreement will be withdrawn from the applicable principal funding subaccount and paid to the applicable derivative counterparty. The issuer will direct the applicable derivative counterparty to remit its payments
under the applicable derivative agreement to the applicable paying agent. |
| |
Ÿ |
Withdrawals for Foreign Currency Notes with a non-Performing Derivative Agreement for Principal. On each principal payment date
with respect to a tranche of foreign currency notes that has a non-Performing derivative agreement for principal,
|
S-40
| |
an amount equal to the amount specified in the applicable indenture supplement will be withdrawn from that principal funding subaccount and, if so specified in the applicable indenture
supplement, converted to the applicable foreign currency at the prevailing spot exchange rate and paid to the applicable paying agent. |
| |
Ÿ |
Withdrawals for U.S. Dollar Notes with a non-Performing Derivative Agreement for Principal. On each principal payment date with
respect to a tranche of U.S. dollar notes with a non-Performing derivative agreement for principal, the amount specified in the applicable indenture supplement will be withdrawn from the applicable principal funding subaccount and paid to the
applicable paying agent. |
| |
Ÿ |
Withdrawals of Prefunded Amounts. If prefunding of the principal funding subaccounts for senior classes of notes is no longer
necessary as a result of payment of senior notes or issuance of additional subordinated notes, as described under “—Targeted Deposits of Available Principal Amounts to the Principal Funding Account—Prefunding of the Principal
Funding Account for Senior Classes,” the prefunded amounts will be withdrawn from the principal funding account and first, allocated among and deposited to the principal funding subaccounts of the Class A notes up to the amount then
targeted to be on deposit in such principal funding subaccount; second, allocated among and deposited to the principal funding subaccounts of the Class B notes up to the amount then targeted to be on deposit in such principal funding
subaccount; third, allocated among and deposited to the principal funding subaccount of the Class C notes up to the amount then targeted to be on deposit in such principal funding subaccount; and fourth, any remaining amounts paid to
master trust II to increase the Investor Interest of the collateral certificate. |
| |
Ÿ |
Withdrawals on the Legal Maturity Date. On the legal maturity date of any tranche of notes, amounts on deposit in the principal
funding subaccount of such tranche may be applied to pay principal of that tranche or to make a payment under a derivative agreement with respect to principal of that tranche. |
If the aggregate amount available for withdrawal from a principal funding subaccount for any tranche of notes is less than all withdrawals required to be made from
that principal funding subaccount for that tranche in a month, then the amounts on deposit will be withdrawn and applied pro rata based on the amounts of the withdrawals required to be made. Upon payment in full of any tranche of notes, any
remaining amount on deposit in the applicable principal funding subaccount will be first applied to cover any interest funding subaccount shortfalls for other tranches of notes, second applied to cover any principal funding subaccount shortfalls,
and third paid to the issuer.
Credit card receivables may be sold upon the
insolvency of MBNA, upon an event of default and acceleration with respect to a tranche of notes and on the legal maturity date of a
S-41
tranche of notes. See “The Indenture—Events of Default” and “Master Trust II—Pay Out Events” in the
prospectus.
If a tranche of notes has an event of default and is accelerated before its legal maturity date,
master trust II may sell credit card receivables in an amount up to the nominal liquidation amount of the affected tranche plus any accrued, past due or additional interest on the affected tranche if the conditions described in “The
Indenture—Events of Default” in the prospectus are satisfied. This sale will take place at the option of the indenture trustee or at the direction of the holders of a majority of aggregate outstanding dollar principal amount of notes
of that tranche. However, a sale will only be permitted if at least one of the following conditions is met:
| |
Ÿ |
the holders of 90% of the aggregate outstanding dollar principal amount of the accelerated tranche of notes consent; |
| |
Ÿ |
the net proceeds of such sale (plus amounts on deposit in the applicable subaccounts and payments to be received from any applicable derivative
agreement) would be sufficient to pay all amounts due on the accelerated tranche of notes; or |
| |
Ÿ |
if the indenture trustee determines that the funds to be allocated to the accelerated tranche of notes, including MBNAseries Available Funds and MBNAseries
Available Principal Amounts allocable to the accelerated tranche of notes, payments to be received from any applicable derivative agreement and amounts on deposit in the applicable subaccounts, may not be sufficient on an ongoing basis to make all
payments on the accelerated tranche of notes as such payments would have become due if such obligations had not been declared due and payable, and 66 2/3% of the noteholders of the accelerated tranche of notes consent to the sale. |
Any sale of receivables for a subordinated tranche of notes will be delayed if the subordination provisions prevent payment of the accelerated tranche until a sufficient amount of senior classes of
notes are prefunded, or a sufficient amount of senior notes have been repaid, or a sufficient amount of subordinated tranches have been issued, in each case, to the extent that the accelerated tranche of notes is no longer needed to provide the
required subordination for the senior classes.
If principal of or interest on a tranche of notes has not been
paid in full on its legal maturity date (after giving effect to any allocations, deposits and distributions to be made on such date), the sale will automatically take place on that date regardless of the subordination requirements of any senior
classes of notes. Proceeds from such a sale will be immediately paid to the noteholders of the related tranche.
The amount of credit card receivables sold will be up to the nominal liquidation amount of, plus any accrued, past due and additional interest on, the tranches of notes that directed the sale to be made. The nominal liquidation
amount of any tranche of notes that directed the sale to be made will be automatically reduced to zero upon such sale. After such sale, no more MBNAseries Available Principal Amounts or MBNAseries Available Funds will be allocated to that tranche.
S-42
If a tranche of notes directs a sale of credit card receivables, then after the
sale that tranche will no longer be entitled to credit enhancement from subordinated classes of notes of the same series. Tranches of notes that have directed sales of credit card receivables are not outstanding under the indenture.
After giving effect to a sale of receivables for a tranche of notes, the amount of proceeds may be less than the outstanding
dollar principal amount of that tranche. This deficiency can arise because of a Nominal Liquidation Amount Deficit or if the sale price for the receivables was less than the outstanding dollar principal amount. These types of deficiencies will not
be reimbursed unless, in the case of Class C notes only, there are sufficient amounts in the related Class C reserve subaccount.
Any amount remaining on deposit in the interest funding subaccount for a tranche of notes that has received final payment as described in “—Final Payment of the Notes” and that has caused a sale of receivables
will be treated as MBNAseries Available Funds and be allocated as described in “—Application of MBNAseries Available Funds.”
The
Class C reserve account will be funded on each Transfer Date, as necessary, from MBNAseries Available Funds as described under “—Application of MBNAseries Available Funds.” The aggregate deposit targeted to be made to the Class
C reserve account in each month will be the sum of the Class C reserve subaccount deposits targeted to be made for each tranche of Class C notes as required under the MBNAseries indenture supplement.
Withdrawals will be made from the Class
C reserve account in the amount and manner required under the MBNAseries indenture supplement.
If more than one budgeted
deposit is targeted for a tranche, the accumulation reserve subaccount will be funded for such tranche no later than three months prior to the date on which a budgeted deposit is first targeted for such tranche as described under “Deposit
and Application of Funds—Targeted Deposits of MBNAseries Available Principal Amounts to the Principal Funding Account.” The accumulation reserve subaccount for a tranche of notes will be funded on each Transfer Date, as necessary, from
MBNAseries Available Funds as described under “—Application of MBNAseries Available Funds.” The aggregate deposit targeted to be made to the accumulation reserve account in each month will be the sum of the accumulation reserve
subaccount deposits targeted to be made for each tranche of notes.
If the aggregate amount of MBNAseries
Available Funds available for deposit to the accumulation reserve account is less than the sum of the targeted deposits for each tranche of notes, then the amount available will be allocated to each tranche of notes up to the targeted deposit pro
rata based on the ratio of the Weighted Average Available Funds Allocation Amount for that tranche for that month to the Weighted Average Available Funds Allocation
S-43
Amount for all tranches of notes that have a targeted deposit to their accumulation reserve subaccounts for that month. After the initial allocation, any excess will be further allocated in a
similar manner to those accumulation reserve subaccounts which still have an uncovered targeted deposit.
Withdrawals will be made from the
accumulation reserve subaccounts, but in no event more than the amount on deposit in the applicable accumulation reserve subaccount, in the following order:
| |
Ÿ |
Interest. On or prior to each Transfer Date, the issuer will calculate for each tranche of notes the amount of any shortfall of
net investment earnings for amounts on deposit in the principal funding subaccount for that tranche (other than prefunded amounts) over the amount of interest that would have accrued on such deposit if that tranche had borne interest at the
applicable note interest rate (or other rate specified in the MBNAseries indenture supplement) for the prior month. If there is any such shortfall for that Transfer Date, or any unpaid shortfall from any earlier Transfer Date, the issuer will
withdraw the sum of those amounts from the accumulation reserve subaccount, to the extent available, for treatment as MBNAseries Available Funds for such month. |
| |
Ÿ |
Payment to Issuer. Upon payment in full of any tranche of notes, any amount on deposit in the applicable accumulation reserve
subaccount will be paid to the issuer. |
Noteholders are entitled to payment of principal in an
amount equal to the outstanding dollar principal amount of their respective notes. However, MBNAseries Available Principal Amounts will be allocated to pay principal on the notes only up to their nominal liquidation amount, which will be reduced for
charge-offs due to uncovered defaults of principal receivables in master trust II and reallocations of MBNAseries Available Principal Amounts to pay interest on senior classes of notes or a portion of the master trust II servicing fee allocable to
such notes. In addition, if a sale of receivables occurs, as described in “—Sale of Credit Card Receivables,” the amount of receivables sold will be limited to the nominal liquidation amount of, plus any accrued, past due or
additional interest on, the related tranche of notes. If the nominal liquidation amount of a tranche has been reduced, noteholders of such tranche will receive full payment of principal only to the extent proceeds from the sale of receivables are
sufficient to pay the full principal amount, amounts are received from an applicable derivative agreement or amounts have been previously deposited in an issuer account for such tranche of notes.
On the date of a sale of receivables, the proceeds of such sale will be available to pay the outstanding dollar principal amount of, plus any accrued, past due and
additional interest on, that tranche.
S-44
A tranche of notes will be considered to be paid in full, the holders of those notes will have no further right or claim,
and the issuer will have no further obligation or liability for principal or interest, on the earliest to occur of:
| |
Ÿ |
the date of the payment in full of the stated principal amount of and all accrued, past due and additional interest on that tranche of notes;
|
| |
Ÿ |
the date on which the outstanding dollar principal amount of that tranche of notes is reduced to zero, and all accrued, past due or additional interest on that
tranche of notes is paid in full; |
| |
Ÿ |
the legal maturity date of that tranche of notes, after giving effect to all deposits, allocations, reallocations, sales of credit card receivables and payments
to be made on that date; or |
| |
Ÿ |
the date on which a sale of receivables has taken place with respect to such tranche, as described in “—Sale of Credit Card Receivables.”
|
All notes of a tranche will receive payments of principal and interest pro
rata based on the stated principal amount of each note in that tranche.
MBNAseries Available Funds for any month remaining
after making the seventh application described under “—Application of MBNAseries Available Funds” will be available for allocation to other series of notes in Group A. Such excess including excesses, if any, from other series
of notes in Group A, called shared excess available funds, will be allocated to cover certain shortfalls in Available Funds for the series in Group A, if any, which have not been covered out of Available Funds allocable to such series. If these
shortfalls exceed shared excess available funds for any month, shared excess available funds will be allocated pro rata among the applicable series in Group A based on the relative amounts of those shortfalls in Available Funds. To the
extent that shared excess available funds exceed those shortfalls, the balance will be paid to the issuer. For the MBNAseries, shared excess available funds, to the extent available and allocated to the MBNAseries, will cover shortfalls in the first
four applications described in “—Application of MBNAseries Available Funds.”
MBNA America Bank, National Association (referred to in
this prospectus supplement as MBNA) is a wholly-owned subsidiary of MBNA Corporation. MBNA has two wholly-owned foreign bank subsidiaries, MBNA Europe Bank Limited located in the United Kingdom and MBNA Canada Bank, located in Canada.
On a managed basis, including loan accounts originated or acquired by MBNA Europe Bank Limited and MBNA Canada Bank, MBNA
maintained loan accounts with aggregate outstanding balances of $98.3 billion as of June 30, 2002. Of this amount, $74.5 billion were
S-45
MasterCard and VISA credit card loans originated in the United States. As of June 30, 2002, MBNA had assets of $44.6 billion, deposits of $28.0 billion and capital and surplus accounts of $7.6
billion, and MBNA Corporation had consolidated assets of $47.2 billion, consolidated deposits of $27.0 billion and capital and surplus accounts of $8.2 billion.
MBNA, using MBNA Technology, Inc. as its service bureau,
generates and mails to cardholders monthly statements summarizing account activity and processes cardholder monthly payments. Generally, cardholders must make a monthly minimum payment at least equal to the lesser of (i) the sum of all finance
charges, bank imposed fees, a stated minimum amount (generally $15) and past due amounts or (ii) 2.25% of the statement balance plus past due amounts, but generally not less than $15. Certain eligible cardholders are given the option periodically to
take a payment deferral.
The finance charges on purchases, which are assessed monthly, are calculated by
multiplying the account’s average daily purchase balance by the applicable daily periodic rate, and multiplying the result by the number of days in the billing cycle. Finance charges are calculated on purchases from the date of the purchase or
the first day of the billing cycle in which the purchase is posted to the account, whichever is later. Monthly periodic finance charges are not assessed in most circumstances on new purchases if all balances shown on the previous billing statement
are paid by the due date, which is generally at least 25 days after the billing date. Monthly periodic finance charges are not assessed in most circumstances on previous purchases if all balances shown on the two previous billing statements are paid
by their respective due dates.
The finance charges, which are assessed monthly on cash advances (including
balance transfers), are calculated by multiplying the account’s average cash advance balance by the applicable daily periodic rate, and multiplying the result by the number of days in the billing cycle. Finance charges are calculated on cash
advances (including balance transfers) from the date of the transaction. Currently, MBNA generally treats the day on which a cash advance check is deposited or cashed as the transaction date for such check.
MBNA offers fixed rate and variable rate credit card accounts. MBNA also offers temporary promotional rates.
MBNA assesses annual membership fees on certain accounts although under various marketing programs these fees may be waived or rebated.
For most credit card accounts, MBNA also assesses late, overlimit and returned check charges. MBNA generally assesses a fee on cash advances and certain purchase transactions.
An account is contractually delinquent if
the minimum payment is not received by the due date indicated on the customer’s statement. Efforts to collect contractually delinquent
S-46
credit card receivables currently are made by MBNA’s Customer Assistance personnel. Collection activities include statement messages,
telephone calls and formal collection letters. MBNA employs two principal computerized systems for collecting past due accounts. The Predictive Management System analyzes each cardholder’s purchase and repayment habits and selects accounts for
initial contact with the objective of contacting the highest risk accounts first. The accounts selected are queued to MBNA’s proprietary Outbound Call Management System. This system sorts accounts by a number of factors, including time zone,
degree of delinquency and dollar amount due, and automatically dials delinquent accounts in order of priority. Representatives are automatically linked to the cardholder’s account information and voice line when a contact is established.
Accounts are worked continually at each stage of delinquency through the end of the month in which the account
falls 180 days past due. As an account enters the 180 day delinquency level, it is classified as a potential charge-off. Accounts failing to make a payment by the end of the month in which the account falls 180 days past due are written off.
Managers may defer a charge-off of an account for another month, pending continued payment activity or other special circumstances. Senior manager approval is required on all exceptions to charge-off. Accounts of cardholders in bankruptcy are
currently charged-off no later than is consistent with this policy.
The receivables conveyed to master trust II arise in
accounts selected from the Bank Portfolio on the basis of criteria set forth in the master trust II agreement as applied on the Cut-Off Date and, with respect to additional accounts, as of the related date of their designation. The
receivables in master trust II may include receivables that are contractually delinquent. The seller has the right, subject to certain limitations and conditions set forth therein, to designate from time to time additional accounts and to transfer
to master trust II all receivables of such additional accounts. Any additional accounts designated must be Eligible Accounts as of the date the seller designates such accounts as additional accounts.
Minimum scheduled payments for
the accounts are generally due 25 days from the end of the last billing cycle. A credit card account is contractually delinquent if less than 90% of the minimum payment is made by the payment due date. For collection purposes, however, an account is
considered delinquent if at least 90% of the minimum payment required to be made is not received by MBNA within 5 days after the due date reflected in the respective monthly billing statement. Upon receipt of 3 consecutive payments on their
respective due dates, delinquent accounts may qualify to be redesignated as non-delinquent.
The following tables
set forth the delinquency experience for cardholder payments on the credit card accounts in the Master Trust II Portfolio for each of the periods shown. The receivables outstanding on the accounts consist of all amounts due from cardholders as
posted to the accounts as of the end of the period shown. We cannot provide any assurance that the delinquency experience for the receivables in the future will be similar to the historical experience set forth below.
S-47
Delinquency Experience
Master Trust II Portfolio
(Dollars in Thousands)
| |
|
June 30,
|
|
|
December 31,
|
|
| |
|
2002
|
|
|
2001
|
|
|
2000
|
|
| |
|
Receivables
|
|
Percentage
of Total Receivables
|
|
|
Receivables
|
|
Percentage
of Total Receivables
|
|
|
Receivables
|
|
Percentage
of Total Receivables
|
|
| Receivables
Outstanding |
|
$ |
65,565,403 |
|
|
|
|
$ |
66,500,791 |
|
|
|
|
$ |
58,611,594 |
|
|
|
| Receivables
Delinquent: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 30-59 Days |
|
$ |
1,278,134 |
|
1.95 |
% |
|
$ |
1,247,086 |
|
1.88 |
% |
|
$ |
1,024,175 |
|
1.75 |
% |
| 60-89 Days |
|
|
714,871 |
|
1.09 |
|
|
|
708,484 |
|
1.07 |
|
|
|
583,768 |
|
1.00 |
|
| 90 or More |
|
|
1,498,215 |
|
2.28 |
|
|
|
1,473,667 |
|
2.21 |
|
|
|
1,158,371 |
|
1.97 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
3,491,220 |
|
5.32 |
% |
|
$ |
3,429,237 |
|
5.16 |
% |
|
$ |
2,766,314 |
|
4.72 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
December 31,
|
|
| |
|
1999
|
|
|
1998
|
|
|
1997
|
|
| |
|
Receivables
|
|
Percentage
of Total Receivables
|
|
|
Receivables
|
|
Percentage
of Total Receivables
|
|
|
Receivables
|
|
Percentage
of Total Receivables
|
|
| Receivables
Outstanding |
|
$ |
51,032,411 |
|
|
|
|
$ |
42,099,780 |
|
|
|
|
$ |
35,542,445 |
|
|
|
| Receivables
Delinquent: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 30-59 Days |
|
$ |
817,374 |
|
1.60 |
% |
|
$ |
756,062 |
|
1.80 |
% |
|
$ |
671,313 |
|
1.89 |
% |
| 60-89 Days |
|
|
482,084 |
|
0.94 |
|
|
|
416,500 |
|
0.99 |
|
|
|
329,087 |
|
0.93 |
|
| 90 or More |
|
|
1,064,669 |
|
2.09 |
|
|
|
914,003 |
|
2.17 |
|
|
|
708,755 |
|
1.99 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
2,364,127 |
|
4.63 |
% |
|
$ |
2,086,565 |
|
4.96 |
% |
|
$ |
1,709,155 |
|
4.81 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth the principal charge-off experience
for cardholder payments on the credit card accounts in the Master Trust II Portfolio for each of the periods shown. Charge-offs consist of write-offs of principal receivables. If accrued finance charge receivables that have been written off were
included in total charge-offs, total charge-offs would be higher as an absolute number and as a percentage of the average of principal receivables outstanding during the periods indicated. Average principal receivables outstanding is the average of
the daily principal receivables balance during the periods indicated. We cannot provide any assurance that the charge-off experience for the receivables in the future will be similar to the historical experience set forth below.
S-48
Principal Charge-Off Experience
Master Trust II Portfolio
(Dollars in Thousands)
| |
|
Six Months Ended June 30, 2002
|
|
|
Year Ended December 31,
|
|
| |
|
|
2001
|
|
|
2000
|
|
| Average Principal Receivables Outstanding |
|
$ |
64,100,172 |
|
|
$ |
59,261,613 |
|
|
$ |
52,869,754 |
|
| Total Charge-Offs |
|
$ |
1,775,338 |
|
|
$ |
3,102,804 |
|
|
$ |
2,697,976 |
|
| Total Charge-Offs as a percentage of Average Principal Receivables Outstanding |
|
|
5.54 |
% |
|
|
5.24 |
% |
|
|
5.10 |
% |
| |
|
Year Ended December 31,
|
|
| |
|
1999
|
|
|
1998
|
|
|
1997
|
|
| Average Principal Receivables Outstanding |
|
$ |
44,034,527 |
|
|
$ |
36,987,103 |
|
|
$ |
28,445,493 |
|
| Total Charge-Offs |
|
$ |
2,172,404 |
|
|
$ |
1,843,986 |
|
|
$ |
1,330,140 |
|
| Total Charge-Offs as a percentage of Average Principal Receivables Outstanding |
|
|
4.93 |
% |
|
|
4.99 |
% |
|
|
4.68 |
% |
Total charge-offs as a percentage of average principal receivables
outstanding for the month ended July 31, 2002 were 5.59% calculated as an annualized figure. Total charge-offs are total principal charge-offs before recoveries and do not include any charge-offs of finance charge receivables or the amount of any
reductions in average daily principal receivables outstanding due to fraud, returned goods, customer disputes or other miscellaneous adjustments.
The following table sets forth the
revenue experience for the credit card accounts from finance charges, fees paid and interchange in the Master Trust II Portfolio for each of the periods shown.
The revenue experience in the following table is calculated on a cash basis. Yield from finance charges and fees is the result of dividing finance charges and fees by average daily principal
receivables outstanding during the periods indicated. Finance charges and fees are comprised of monthly cash collections of periodic finance charges and other credit card fees including interchange.
S-49
Revenue Experience
Master Trust II Portfolio
(Dollars in Thousands)
| |
|
Six Months Ended June 30, 2002
|
|
|
Year Ended December 31,
|
|
| |
|
|
2001
|
|
|
2000
|
|
| Finance Charges and Fees* |
|
$ |
5,805,251 |
|
|
$ |
11,486,818 |
|
|
$ |
10,122,205 |
|
| Yield from Finance Charges and Fees |
|
|
18.11 |
% |
|
|
19.38 |
% |
|
|
19.15 |
% |
| |
|
Year Ended December 31,
|
|
| |
|
1999
|
|
|
1998
|
|
|
1997
|
|
| Finance Charges and Fees |
|
$ |
8,121,775 |
|
|
$ |
6,737,139 |
|
|
$ |
4,951,621 |
|
| Yield from Finance Charges and Fees |
|
|
18.44 |
% |
|
|
18.21 |
% |
|
|
17.41 |
% |
* |
Since December 17, 2001, recoveries on receivables in Defaulted Accounts have been included as amounts received in respect of finance charge receivables.
|
The yield on a cash basis will be affected by numerous factors, including the monthly periodic
finance charges on the receivables, the amount of the annual membership fees and other fees, changes in the delinquency rate on the receivables, the percentage of cardholders who pay their balances in full each month and do not incur monthly
periodic finance charges, the percentage of credit card accounts bearing finance charges at promotional rates and changes in the level of delinquencies on the receivables. See “Risk Factors” in the prospectus.
The revenue from periodic finance charges and fees—other than annual fees—depends in part upon the collective
preference of cardholders to use their credit cards as revolving debt instruments for purchases and cash advances and to pay account balances over several months—as opposed to convenience use, where cardholders pay off their entire balance each
month, thereby avoiding periodic finance charges on their purchases—and upon other credit card related services for which the cardholder pays a fee. Fees for these other services will be treated for purposes of the master trust II agreement as
principal receivables rather than finance charge receivables; however, MBNA may specify that it will treat these fees as finance charge receivables. Revenues from periodic finance charges and fees also depend on the types of charges and fees
assessed on the credit card accounts. Accordingly, revenue will be affected by future changes in the types of charges and fees assessed on the accounts and on the types of additional accounts added from time to time. These revenues could be
adversely affected by future changes in fees and charges assessed by MBNA and other factors. See “MBNA’s Credit Card Activities” in the prospectus.
MBNA, as seller, will transfer to master trust II a percentage of
the interchange attributed to cardholder charges for goods and services in the accounts of master trust II. Interchange will be allocated to each series of master trust II investor certificates based on such series’s pro rata portion as
measured by its Investor Interest of cardholder charges for goods and services in the accounts of master trust II relative to the total amount of cardholder charges for goods and services in the MasterCard and VISA credit card accounts owned by
MBNA, as reasonably estimated by the seller.
S-50
MasterCard and VISA may from time to time change the amount of interchange reimbursed to banks issuing their credit
cards. Interchange will be treated as collections of finance charge receivables. Under the circumstances described herein, interchange will be used to pay a portion of the Investor Servicing Fee required to be paid on each Transfer Date. See
“Master Trust II—Servicing Compensation and Payment of Expenses” and “MBNA’s Credit Card Activities—Interchange” in the prospectus.
The following table sets forth the highest and lowest
cardholder monthly principal payment rates for the Master Trust II Portfolio during any month in the periods shown and the average cardholder monthly principal payment rates for all months during the periods shown, in each case calculated as a
percentage of total beginning monthly account principal balances during the periods shown. Principal payment rates shown in the table are based on amounts which are deemed payments of principal receivables with respect to the accounts.
Cardholder Monthly Principal Payment Rates
Master Trust II Portfolio
| |
|
Six Months Ended June 30,
2002
|
|
|
Year Ended December 31,
|
| |
|
|
2001
|
|
2000
|
|
1999
|
|
1998
|
|
1997
|
| Lowest Month |
|
12.93 |
% |
|
12.28% |
|
12.21% |
|
12.56% |
|
11.47% |
|
11.02% |
| Highest Month |
|
14.12 |
% |
|
13.76% |
|
14.05% |
|
13.61% |
|
13.43% |
|
13.00% |
| Monthly Average |
|
13.55 |
% |
|
13.03% |
|
13.01% |
|
13.17% |
|
12.59% |
|
11.62% |
Generally, cardholders must make a monthly minimum payment at least
equal to the lesser of (i) the sum of all finance charges, bank imposed fees, a stated minimum amount (generally $15) and past due amounts or (ii) 2.25% of the statement balance plus past due amounts, but generally not less than $15. Certain
eligible cardholders are given the option periodically to take a payment deferral. We cannot assure you that the cardholder monthly principal payment rates in the future will be similar to the historical experience set forth above. In addition, the
amount of collections of receivables may vary from month to month due to seasonal variations, general economic conditions and payment habits of individual cardholders.
MBNA, as seller, has the right, subject to certain limitations and conditions, to designate certain removed credit card accounts and to require the master trust II trustee
to reconvey all receivables in such removed credit card accounts to the seller. Once an account is removed, receivables existing or guaranteed under that credit card account are not transferred to master trust II.
As of the beginning of the day on July 30, 2002:
| |
Ÿ |
the Master Trust II Portfolio included $67,082,743,333 of principal receivables and $1,779,954,613 of finance charge receivables;
|
| |
Ÿ |
the credit card accounts had an average principal receivable balance of $1,607 and an average credit limit of $13,387; |
S-51
| |
Ÿ |
the percentage of the aggregate total receivable balance to the aggregate total credit limit was 12.3%; |
| |
Ÿ |
the average age of the credit card accounts was approximately 72 months; and |
| |
Ÿ |
cardholders whose accounts are included in the Master Trust II Portfolio had billing addresses in all 50 States and the District of Columbia.
|
The following tables summarize the Master Trust II Portfolio by various criteria as of the beginning of the
day on July 30, 2002. The information in the following tables and the preceding paragraph does not reflect the removal of 629,253 zero balance accounts from master trust II on August 6, 2002. Because the future composition of the Master Trust II
Portfolio may change over time, these tables do not describe the composition of the Master Trust II Portfolio at any future time.
Composition by Account Balance
Master Trust II Portfolio
| Account Balance Range
|
|
Number of Accounts
|
|
Percentage of Total Number of
Accounts
|
|
|
Receivables
|
|
|
Percentage of Total Receivables
|
|
| Credit Balance |
|
685,409 |
|
1.7 |
% |
|
$ |
(72,385,818 |
) |
|
(0.1 |
)% |
| No Balance |
|
23,867,023 |
|
57.2 |
|
|
|
0 |
|
|
0.0 |
|
| $ .01-$ 5,000.00 |
|
12,366,579 |
|
29.6 |
|
|
|
16,881,052,986 |
|
|
24.5 |
|
| $ 5,000.01-$10,000.00 |
|
2,977,772 |
|
7.1 |
|
|
|
21,289,975,334 |
|
|
30.9 |
|
| $10,000.01-$15,000.00 |
|
1,057,321 |
|
2.5 |
|
|
|
12,925,572,783 |
|
|
18.8 |
|
| $15,000.01-$20,000.00 |
|
429,265 |
|
1.0 |
|
|
|
7,432,698,191 |
|
|
10.8 |
|
| $20,000.01-$25,000.00 |
|
206,912 |
|
0.5 |
|
|
|
4,664,305,733 |
|
|
6.8 |
|
| $25,000.01 or More |
|
164,526 |
|
0.4 |
|
|
|
5,741,478,737 |
|
|
8.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
41,754,807 |
|
100.0 |
% |
|
$ |
68,862,697,946 |
|
|
100.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Composition by Credit Limit
Master Trust II Portfolio
| Credit Limit Range
|
|
Number of Accounts
|
|
Percentage of Total
Number of Accounts
|
|
|
Receivables
|
|
Percentage of Total Receivables
|
|
| Less than or equal to $5,000.00 |
|
7,054,379 |
|
16.9 |
% |
|
$ |
5,903,806,452 |
|
8.6 |
% |
| $ 5,000.01-$10,000.00 |
|
12,353,292 |
|
29.6 |
|
|
|
17,204,541,081 |
|
25.0 |
|
| $10,000.01-$15,000.00 |
|
9,680,638 |
|
23.2 |
|
|
|
15,164,130,219 |
|
22.0 |
|
| $15,000.01-$20,000.00 |
|
5,643,679 |
|
13.5 |
|
|
|
10,596,942,956 |
|
15.4 |
|
| $20,000.01-$25,000.00 |
|
4,993,286 |
|
11.9 |
|
|
|
10,375,763,785 |
|
15.1 |
|
| $25,000.01 or More |
|
2,029,533 |
|
4.9 |
|
|
|
9,617,513,453 |
|
13.9 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
41,754,807 |
|
100.0 |
% |
|
$ |
68,862,697,946 |
|
100.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
S-52
Composition by Period of Delinquency
Master Trust II Portfolio
| Period of Delinquency (Days Contractually Delinquent)
|
|
Number of Accounts
|
|
Percentage of Total Number of Accounts
|
|
|
Receivables
|
|
Percentage of Total Receivables
|
|
| Not Delinquent |
|
40,416,516 |
|
96.8 |
% |
|
$ |
60,658,005,503 |
|
88.1 |
% |
| Up to 29 Days |
|
724,469 |
|
1.7 |
|
|
|
4,108,778,663 |
|
6.0 |
|
| 30 to 59 Days |
|
228,965 |
|
0.6 |
|
|
|
1,422,503,775 |
|
2.1 |
|
| 60 to 89 Days |
|
117,987 |
|
0.3 |
|
|
|
777,653,102 |
|
1.1 |
|
| 90 or More Days |
|
266,870 |
|
0.6 |
|
|
|
1,895,756,903 |
|
2.7 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
41,754,807 |
|
100.0 |
% |
|
$ |
68,862,697,946 |
|
100.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
Composition by Account Age
Master Trust II Portfolio
| Account Age
|
|
Number of Accounts
|
|
Percentage of Total Number of Accounts
|
|
|
Receivables
|
|
Percentage of Total Receivables
|
|
| Not More than 6 Months |
|
2,681,682 |
|
6.4 |
% |
|
$ |
4,486,607,818 |
|
6.5 |
% |
| Over 6 Months to 12 Months |
|
2,510,157 |
|
6.0 |
|
|
|
3,005,541,127 |
|
4.4 |
|
| Over 12 Months to 24 Months |
|
4,888,110 |
|
11.7 |
|
|
|
6,229,294,360 |
|
9.1 |
|
| Over 24 Months to 36 Months |
|
5,195,381 |
|
12.5 |
|
|
|
7,323,514,692 |
|
10.6 |
|
| Over 36 Months to 48 Months |
|
4,797,061 |
|
11.5 |
|
|
|
6,833,338,063 |
|
9.9 |
|
| Over 48 Months to 60 Months |
|
4,356,121 |
|
10.4 |
|
|
|
5,947,096,939 |
|
8.6 |
|
| Over 60 Months to 72 Months |
|
4,144,954 |
|
9.9 |
|
|
|
6,807,954,314 |
|
9.9 |
|
| Over 72 Months |
|
13,181,341 |
|
31.6 |
|
|
|
28,229,350,633 |
|
41.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
41,754,807 |
|
100.0 |
% |
|
$ |
68,862,697,946 |
|
100.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
Geographic Distribution of Accounts
Master Trust II Portfolio
| State
|
|
Number of Accounts
|
|
Percentage of Total Number of Accounts
|
|
|
Receivables
|
|
Percentage of Total Receivables
|
|
| California |
|
3,830,871 |
|
9.2 |
% |
|
$ |
7,358,636,292 |
|
10.7 |
% |
| Florida |
|
2,940,235 |
|
7.0 |
|
|
|
5,033,963,291 |
|
7.3 |
|
| New York |
|
2,874,197 |
|
6.9 |
|
|
|
4,553,474,333 |
|
6.6 |
|
| Pennsylvania |
|
2,697,024 |
|
6.5 |
|
|
|
3,813,645,382 |
|
5.5 |
|
| Texas |
|
2,258,175 |
|
5.4 |
|
|
|
4,491,530,013 |
|
6.5 |
|
| New Jersey |
|
1,840,850 |
|
4.4 |
|
|
|
3,086,258,947 |
|
4.5 |
|
| Illinois |
|
1,704,648 |
|
4.1 |
|
|
|
2,608,582,767 |
|
3.8 |
|
| Ohio |
|
1,686,760 |
|
4.0 |
|
|
|
2,380,027,406 |
|
3.5 |
|
| Virginia |
|
1,502,979 |
|
3.6 |
|
|
|
2,484,810,461 |
|
3.6 |
|
| Michigan |
|
1,472,028 |
|
3.5 |
|
|
|
2,335,341,981 |
|
3.4 |
|
| Other |
|
18,947,040 |
|
45.4 |
|
|
|
30,716,427,073 |
|
44.6 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
41,754,807 |
|
100.0 |
% |
|
$ |
68,862,697,946 |
|
100.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
S-53
Since the largest number of cardholders (based on billing address) whose accounts
were included in master trust II as of July 30, 2002 were in California, Florida, New York, Pennsylvania and Texas, adverse changes in the economic conditions in these areas could have a direct impact on the timing and amount of payments on the
notes.
Subject to the terms and conditions of the underwriting agreement for
these Class B(2002-3) notes, the issuer has agreed to sell to each of the underwriters named below, and each of those underwriters has severally agreed to purchase, the principal amount of these Class B(2002-3) notes set forth opposite its name:
| Underwriters
|
|
Principal Amount
|
| Deutsche Bank Securities Inc. |
|
$ |
50,000,000 |
| Banc One Capital Markets, Inc. |
|
|
50,000,000 |
| J.P. Morgan Securities Inc. |
|
|
50,000,000 |
| Merrill Lynch, Pierce, Fenner & Smith Incorporated |
|
|
50,000,000 |
| Salomon Smith Barney Inc. |
|
|
50,000,000 |
| |
|
|
|
| Total |
|
$ |
250,000,000 |
| |
|
|
|
The several underwriters have agreed, subject to the terms and
conditions of the underwriting agreement, to purchase all $250,000,000 of the aggregate principal amount of these Class B(2002-3) notes if any of these Class B(2002-3) notes are purchased.
The underwriters have advised the issuer that the several underwriters propose initially to offer these Class B(2002-3) notes to the public at the public offering
price set forth on the cover page of this prospectus supplement, and to certain dealers at that public offering price less a concession not in excess of [Ÿ]% of the principal amount of these Class B(2002-3) notes. The underwriters may allow, and those dealers may reallow to other dealers, a concession not in excess of [Ÿ]% of the principal amount.
After the public offering, the public offering price and other selling terms may be changed by the underwriters.
Each underwriter of these Class B(2002-3) notes has agreed that:
| |
Ÿ |
it has not offered or sold, and prior to the date which is six months after the date of issue of the Class B(2002-3) notes will not offer or sell any Class
B(2002-3) notes to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in
circumstances which do not constitute an offer to the public in the United Kingdom for the purposes of the Public Offers of Securities Regulations 1995 (the “Regulations”) and the Financial Services and Markets Act 2000 (the
“FSMA”); |
S-54
| |
Ÿ |
it has complied and will comply with all applicable provisions of the Regulations and the FSMA with respect to anything done by it in relation to the Class
B(2002-3) notes in, from or otherwise involving the United Kingdom; and |
| |
Ÿ |
it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Class B(2002-3) notes in circumstances in which Section 21(1) of the FSMA does not apply to the issuer.
|
In connection with the sale of these Class B(2002-3) notes, the underwriters may engage in:
| |
Ÿ |
over-allotments, in which members of the syndicate selling these Class B(2002-3) notes sell more notes than the issuer actually sold to the syndicate, creating
a syndicate short position; |
| |
Ÿ |
stabilizing transactions, in which purchases and sales of these Class B(2002-3) notes may be made by the members of the selling syndicate at prices that do not
exceed a specified maximum; |
| |
Ÿ |
syndicate covering transactions, in which members of the selling syndicate purchase these Class B(2002-3) notes in the open market after the distribution has
been completed in order to cover syndicate short positions; and |
| |
Ÿ |
penalty bids, by which underwriters reclaim a selling concession from a syndicate member when any of these Class B(2002-3) notes originally sold by that
syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. |
These stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of these Class B(2002-3) notes to be higher than it would otherwise be. These transactions, if commenced, may be discontinued at any
time.
The issuer and MBNA will, jointly and severally, indemnify the underwriters against certain liabilities,
including liabilities under applicable securities laws, or contribute to payments the underwriters may be required to make in respect of those liabilities.
The proceeds to the issuer from the sale of these Class B(2002-3) notes and the underwriting discount are set forth on the cover page of this prospectus supplement. Additional offering expenses are
estimated to be $400,000.
S-55
“Class A Unused Subordinated Amount of Class B
notes” means for any tranche of outstanding Class A notes, with respect to any Transfer Date, an amount equal to the Class A required subordinated amount of Class B notes minus the Class A Usage of Class B Required Subordinated Amount,
each as of such Transfer Date.
“Class A Unused Subordinated Amount of Class C notes” means for any
tranche of outstanding Class A notes, with respect to any Transfer Date, an amount equal to the Class A required subordinated amount of Class C notes minus the Class A Usage of Class C Required Subordinated Amount, each as of such Transfer
Date.
“Class A Usage of Class B Required Subordinated Amount” means, with respect to any tranche of
outstanding Class A notes, zero on the date of issuance of such tranche, and on any Transfer Date thereafter, the sum of the Class A Usage of Class B Required Subordinated Amount as of the preceding date of determination plus the sum of the
following amounts:
(1) an amount equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the Class A Unused Subordinated Amount of Class B notes for that tranche of Class A notes (as of the last day of the
preceding month) and the denominator of which is the aggregate nominal liquidation amount of all Class B notes (as of the last day of the preceding month), times |
| |
Ÿ |
the amount of charge-offs for uncovered defaults on principal receivables in master trust II initially allocated to Class B notes which did not result in a
Class A Usage of Class C Required Subordinated Amount for such tranche of Class A notes on such Transfer Date; plus |
(2) the amount of charge-offs for uncovered defaults on principal receivables in master trust II initially allocated to that tranche of Class A notes and then reallocated on such Transfer
Date to Class B notes; plus
(3) the amount of MBNAseries Available Principal Amounts
reallocated on such Transfer Date to the interest funding subaccount for that tranche of Class A notes which did not result in a Class A Usage of Class C Required Subordinated Amount for such tranche of Class A notes; plus
(4) an amount equal to the aggregate amount of MBNAseries Available Principal Amounts reallocated to pay any
amount to the servicer for such tranche of Class A notes which did not result in a Class A Usage of Class C Required Subordinated Amount for such tranche of Class A notes on such Transfer Date; minus
(5) an amount (which will not exceed the sum of items (1) through (4) above) equal to the sum of:
S-56
| |
— |
a fraction, the numerator of which is the Class A Usage of Class B Required Subordinated Amount (prior to giving effect to any reimbursement of a Nominal
Liquidation Amount Deficit for any tranche of Class B notes on such Transfer Date) for such tranche of Class A notes and the denominator of which is the aggregate Nominal Liquidation Amount Deficits for all tranches of Class B notes (prior to giving
effect to any reimbursement of a Nominal Liquidation Amount Deficit for any tranche of Class B notes on such Transfer Date), times |
| |
— |
the aggregate amount of the Nominal Liquidation Amount Deficits of any tranche of Class B notes which are reimbursed on such Transfer Date, plus
|
| |
Ÿ |
if the aggregate Class A Usage of Class B Required Subordinated Amount (prior to giving effect to any reimbursement of Nominal Liquidation Amount Deficits for
any tranche of Class B notes on such Transfer Date) for all Class A notes exceeds the aggregate Nominal Liquidation Amount Deficits of all tranches of Class B notes (prior to giving effect to any reimbursement on such Transfer Date), the product of:
|
| |
— |
a fraction, the numerator of which is the amount of such excess and the denominator of which is the aggregate Nominal Liquidation Amount Deficits for all
tranches of Class C notes (prior to giving effect to any reimbursement of a Nominal Liquidation Amount Deficit for any tranche of Class C notes on such Transfer Date), times |
| |
— |
the aggregate amount of the Nominal Liquidation Amount Deficits of any tranche of Class C notes which are reimbursed on such Transfer Date, times
|
| |
— |
a fraction, the numerator of which is the Class A Usage of the Class B Required Subordinated Amount of such tranche of Class A notes and the denominator of
which is the Class A Usage of Class B Required Subordinated Amount for all Class A notes in the MBNAseries. |
“Class A Usage of Class C Required Subordinated Amount” means, with respect to any tranche of outstanding Class A notes, zero on the date of issuance of such tranche of Class A notes, and on any Transfer Date thereafter,
the sum of the Class A Usage of Class C Required Subordinated Amount as of the preceding date of determination plus the sum of the following amounts:
(1) an amount equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the Class A Unused Subordinated Amount of Class C notes for that tranche of Class A notes (as of the last day of the
preceding month) and the denominator of which is the aggregate nominal liquidation amount of all Class C notes (as of the last day of the preceding month), times |
| |
Ÿ |
the amount of charge-offs for uncovered defaults on principal receivables in master trust II initially allocated on such Transfer Date to Class C notes; plus
|
S-57
(2) the amount of charge-offs for uncovered defaults
on principal receivables in master trust II initially allocated to that tranche of Class A notes and then reallocated on such date to Class C notes; plus
(3) an amount equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the Class A Unused Subordinated Amount of Class B notes for that tranche of Class A notes (as of the last day of the
preceding month) and the denominator of which is the aggregate nominal liquidation amount of all Class B notes (as of the last day of the preceding month), times |
| |
Ÿ |
the amount of charge-offs for uncovered defaults on principal receivables in master trust II initially allocated on such Transfer Date to Class B notes; plus
|
(4) the amount of MBNAseries Available Principal Amounts
reallocated on such Transfer Date to the interest funding subaccount for that tranche of Class A notes; plus
(5) an amount equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the Class A Unused Subordinated Amount of Class B notes for such tranche of Class A notes (as of the last day of the
preceding month) and the denominator of which is the aggregate nominal liquidation amount of all Class B notes (as of the last day of the preceding month), times |
| |
Ÿ |
the amount of MBNAseries Available Principal Amounts reallocated on such Transfer Date to the interest funding subaccount for any tranche of Class B notes;
plus |
(6) the amount of MBNAseries Available Principal
Amounts reallocated on such Transfer Date to pay any amount to the servicer for such tranche of Class A notes; plus
(7) an amount equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the Class A Unused Subordinated Amount of Class B notes for that tranche of Class A notes (as of the last day of the
preceding month) and the denominator of which is the aggregate nominal liquidation amount of all Class B notes (as of the last day of the preceding month), times |
| |
Ÿ |
the amount of MBNAseries Available Principal Amounts reallocated on such Transfer Date to pay any amount to the servicer for any tranche of Class B notes;
minus |
(8) an amount (which will not exceed the sum of items
(1) through (7) above) equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the Class A Usage of Class C Required Subordinated Amount (prior to giving effect to any reimbursement of a Nominal
Liquidation Amount Deficit for any tranche of Class C notes on such Transfer Date) for that tranche of Class A notes and the denominator of which is the aggregate Nominal Liquidation Amount Deficits (prior to giving effect to such reimbursement) of
all Class C notes, times |
S-58
| |
Ÿ |
the aggregate Nominal Liquidation Amount Deficits of all Class C notes which are reimbursed on such Transfer Date. |
“Class B Unused Subordinated Amount of Class C notes” means for any tranche of outstanding Class B notes, with respect to any
Transfer Date, an amount equal to the Class B required subordinated amount of Class C notes minus the Class B Usage of Class C Required Subordinated Amount, each as of such Transfer Date.
“Class B Usage of Class C Required Subordinated Amount” means, with respect to any tranche of outstanding Class B notes, zero on the date of issuance of such
tranche, and on any Transfer Date thereafter, the sum of the Class B Usage of Class C Required Subordinated Amount as of the preceding date of determination plus the sum of the following amounts:
(1) an amount equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the Class B Unused Subordinated Amount of Class C notes for that tranche of Class B notes (as of the last day of the
preceding month) and the denominator of which is the aggregate nominal liquidation amount of all Class C notes (as of the last day of the preceding month), times |
| |
Ÿ |
the amount of charge-offs for uncovered defaults on principal receivables in master trust II initially allocated on such Transfer Date to Class C notes; plus
|
(2) an amount equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the nominal liquidation amount for that tranche of Class B notes (as of the last day of the preceding month) and the
denominator of which is the aggregate nominal liquidation amount of all Class B notes (as of the last day of the preceding month), times |
| |
Ÿ |
the sum of (i) the amount of charge-offs for uncovered defaults on principal receivables in master trust II initially allocated to any tranche of Class A notes
that has a Class A Unused Subordinated Amount of Class B notes that was included in Class A Usage of Class C Required Subordinated Amount and (ii) the amount of charge-offs for uncovered defaults on principal receivables in master trust II initially
allocated to any tranche of Class A notes that has a Class A Unused Subordinated Amount of Class B notes that was included in Class A Usage of Class B Required Subordinated Amount; plus |
(3) the amount of charge-offs for uncovered defaults on principal receivables in master trust II initially
allocated to that tranche of Class B notes, and then reallocated on such date to the Class C notes; plus
(4) an amount equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the nominal liquidation amount for that tranche of Class B notes (as of the last day of the preceding month) and the
denominator of which is the aggregate nominal liquidation amount of all Class B notes (as of the last day of the preceding month), times |
S-59
| |
Ÿ |
the amount of MBNAseries Available Principal Amounts reallocated on such Transfer Date to the interest funding subaccount for any tranche of Class A notes that
has a Class A Unused Subordinated Amount of Class B notes; plus |
(5) the amount of MBNAseries Available Principal Amounts reallocated on such Transfer Date to the interest funding subaccount for that tranche of Class B notes; plus
(6) an amount equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the nominal liquidation amount for such tranche of Class B notes (as of the last day of the preceding month) and the
denominator of which is the aggregate nominal liquidation amount of all Class B notes (as of the last day of the preceding month), times |
| |
Ÿ |
the amount of MBNAseries Available Principal Amounts reallocated on such Transfer Date to pay any amount to the servicer for any tranche of Class A notes that
has a Class A Unused Subordinated Amount of Class B notes; plus |
(7) the amount of MBNAseries Available Principal Amounts reallocated on such Transfer Date to pay any amount to the servicer for such tranche of Class B notes; minus
(8) an amount (which will not exceed the sum of items (1) through (7) above) equal to the product of:
| |
Ÿ |
a fraction, the numerator of which is the Class B Usage of Class C Required Subordinated Amount (prior to giving effect to any reimbursement of a Nominal
Liquidation Amount Deficit for any tranche of Class C notes on such Transfer Date) for that tranche of Class B notes and the denominator of which is the aggregate Nominal Liquidation Amount Deficits (prior to giving effect to such reimbursement) of
all Class C notes, times |
| |
Ÿ |
the aggregate Nominal Liquidation Amount Deficits of all Class C notes which are reimbursed on such Transfer Date. |
“Excess Available Funds” means, for the MBNAseries for any month, the Available Funds allocable to the MBNAseries remaining
after application to cover targeted deposits to the interest funding account, payment of the portion of the master trust II servicing fee allocable to the MBNAseries, and application to cover any defaults on principal receivables in master trust II
allocable to the MBNAseries or any deficits in the nominal liquidation amount of the MBNAseries notes.
“LIBOR” means, as of any LIBOR Determination Date, the rate for deposits in United States dollars for a one-month period which appears on Telerate Page 3750 as of 11:00 a.m., London time, on such date. If such rate does not
appear on Telerate Page 3750, the rate for that LIBOR Determination Date will be determined on the basis of the rates at which deposits in United States dollars are offered by four major banks selected by the beneficiary of the issuer at
approximately 11:00 a.m., London time, on that day to prime banks in the London interbank market for a one-month period. The indenture trustee will request the principal
S-60
London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for that LIBOR Determination Date will be the arithmetic mean of
such quotations. If fewer than two quotations are provided, the rate for that LIBOR Determination Date will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the beneficiary of the issuer, at approximately 11:00
a.m., New York City time, on that day for loans in United States dollars to leading European banks for a one-month period.
“LIBOR Determination Date” means (i) August [•], 2002 for the period from and including the issuance date to but excluding October 15, 2002 and (ii) for each interest period thereafter, the second London Business Day
prior to each interest payment date on which such interest period commences.
“London Business Day”
means any Business Day on which dealings in deposits in United States dollars are transacted in the London interbank market.
“MBNAseries Available Funds” means, for any month, the amounts to be treated as MBNAseries Available Funds as described in “Deposit and Application of Funds—MBNAseries Available Funds.”
“MBNAseries Available Principal Amounts” means, for any month, the sum of the Available Principal Amounts allocated
to the MBNAseries, dollar payments for principal under any derivative agreements for tranches of notes of the MBNAseries, and any amounts of MBNAseries Available Funds available to cover defaults on principal receivables in master trust II allocable
to the MBNAseries or any deficits in the nominal liquidation amount of the MBNAseries notes.
“Monthly
Interest Accrual Date” means, with respect to any outstanding series, class or tranche of notes:
| |
• |
each interest payment date for such series, class or tranche, and |
| |
• |
for any month in which no interest payment date occurs, the date in that month corresponding numerically to the next interest payment date for that series,
class or tranche of notes, or in the case of a series, class or tranche of zero-coupon discount notes, the expected principal payment date for that series, class or tranche; but |
| |
— |
for the month in which a series, class or tranche of notes is issued, the date of issuance of such series, class or tranche will be the first Monthly Interest
Accrual Date for such tranche of notes; |
| |
— |
for the month next following the month in which a series, class or tranche of notes is issued, unless otherwise indicated, the first day of such month will be
the first Monthly Interest Accrual Date in such next following month for such series, class or tranche of notes; |
| |
— |
any date on which proceeds from a sale of receivables following an event of default and acceleration of any series, class or tranche of notes are deposited into
the interest funding account for such series, class or tranche of notes will be a Monthly Interest Accrual Date for such series, class or tranche of notes; |
S-61
—if there is no such numerically corresponding date in
that month, then the Monthly Interest Accrual Date will be the last Business Day of the month; and
—if the numerically corresponding date in such month is not a Business Day with respect to that class or tranche, then the Monthly Interest Accrual Date will be the next following Business Day, unless that Business Day would
fall in the following month, in which case the monthly interest date will be the last Business Day of the earlier month.
“Monthly Principal Accrual Date” means with respect to any outstanding series, class or tranche of notes:
| |
• |
for any month in which the expected principal payment date occurs for such series, class or tranche, such expected principal payment date, or if that day is not
a Business Day, the next following Business Day; and |
| |
• |
for any month in which no expected principal payment date occurs for such series, class or tranche, the date in that month corresponding numerically to the
expected principal payment date for that tranche of notes (or for any month following the last expected principal payment date, the date in such month corresponding numerically to the preceding expected principal payment date for such tranche of
notes); but |
—following a Pay Out Event, the second Business Day
following such Pay Out Event shall be a Monthly Principal Accrual Date;
—any date on which
prefunded excess amounts are released from any principal funding subaccount and deposited into the principal funding subaccount of any tranche of notes on or after the expected principal payment date for such tranche of notes will be a Monthly
Principal Accrual Date for such tranche of notes;
—any date on which proceeds from a sale
of receivables following an event of default and acceleration of any series, class or tranche of notes are deposited into the principal funding account for such series, class or tranche of notes will be a Monthly Principal Accrual Date for such
series, class or tranche of notes;
—if there is no numerically corresponding date in that
month, then the Monthly Principal Accrual Date will be the last Business Day of the month; and
—if the numerically corresponding date in such month is not a Business Day, the Monthly Principal Accrual Date will be the next following Business Day, unless that Business Day would fall in the following month, in which case
the Monthly Principal Accrual Date will be the last Business Day of the earlier month.
“Nominal Liquidation
Amount Deficit” means, for any tranche of notes, the Adjusted Outstanding Dollar Principal Amount minus the nominal liquidation amount of that tranche.
“Performing” means, with respect to any derivative agreement, that no payment default or repudiation by the derivative counterparty has occurred and such
derivative agreement has not been terminated.
S-62
“Required Excess Available Funds” means, for any month, zero;
provided, however, that this amount may be changed if the issuer (i) receives the consent of the rating agencies and (ii) reasonably believes that the change will not have a material adverse effect on the notes.
“Telerate Page 3750” means the display page currently so designated on the Moneyline Telerate Service (or such other page as may
replace that page on that service for the purpose of displaying comparable rates or prices).
S-63
Annex I
The information provided in this Annex I is an integral
part of the prospectus supplement.
MBNAseries
| Class C
|
|
Issuance Date
|
|
Nominal Liquidation Amount
|
|
|
Note Interest Rate
|
|
Expected Principal Payment
Date
|
|
Legal Maturity
Date
|
| Class C(2001-1) |
|
5/24/01 |
|
$ |
250,000,000 |
|
|
One Month LIBOR + 1.05% |
|
May 2006 |
|
October 2008 |
| Class C(2001-2) |
|
7/12/01 |
|
$ |
100,000,000 |
|
|
Not to exceed One Month LIBOR + 1.15% |
|
July 2008 |
|
December 2010 |
| Class C(2001-3) |
|
7/25/01 |
|
$ |
400,000,000 |
|
|
6.55% |
|
July 2006 |
|
December 2008 |
| Class C(2001-4) |
|
9/6/01 |
|
$ |
250,000,000 |
|
|
One Month LIBOR + 1.05% |
|
August 2006 |
|
January 2009 |
| Class C(2001-5) |
|
12/11/01 |
|
$ |
150,000,000 |
|
|
One Month LIBOR + 1.22% |
|
January 2007 |
|
June 2009 |
| Class C(2002-1) |
|
2/28/02 |
|
$ |
250,000,000 |
|
|
6.80% |
|
February 2012 |
|
July 2014 |
| Class C(2002-2) |
|
6/12/02 |
|
$ |
100,000,000 |
|
|
Not to exceed One Month LIBOR + 0.95% |
|
May 2007 |
|
October 2009 |
| Class C(2002-3) |
|
6/12/02 |
|
$ |
200,000,000 |
|
|
One Month LIBOR + 1.35% |
|
May 2012 |
|
October 2014 |
| *Class C(2002-4) |
|
8/[Ÿ]/02 |
|
$ |
100,000,000 |
|
|
One Month LIBOR + [Ÿ]% |
|
August 2007 |
|
January 2010 |
| *Class C(2002-5) |
|
8/[Ÿ]/02 |
|
$ |
100,000,000 |
|
|
[Ÿ]% |
|
August 2005 |
|
January 2008 |
| |
| Class B
|
|
Issuance Date
|
|
Nominal Liquidation Amount
|
|
|
Note Interest Rate
|
|
Expected Principal Payment Date
|
|
Legal Maturity Date
|
| Class B(2001-1) |
|
5/24/01 |
|
$ |
250,000,000 |
|
|
One Month LIBOR + 0.375% |
|
May 2006 |
|
October 2008 |
| Class B(2001-2) |
|
9/6/01 |
|
$ |
250,000,000 |
|
|
One Month LIBOR + 0.36% |
|
August 2006 |
|
January 2009 |
| Class B(2001-3) |
|
12/20/01 |
|
$ |
150,000,000 |
|
|
Not to exceed One Month LIBOR + 0.50% |
|
January 2007 |
|
June 2009 |
| Class B(2002-1) |
|
2/28/02 |
|
$ |
250,000,000 |
|
|
5.15% |
|
February 2007 |
|
July 2009 |
| Class B(2002-2) |
|
6/12/02 |
|
$ |
250,000,000 |
|
|
One Month LIBOR + 0.38% |
|
May 2007 |
|
October 2009 |
| |
| Class A
|
|
Issuance Date
|
|
Nominal Liquidation Amount
|
|
|
Note Interest Rate
|
|
Expected Principal Payment Date
|
|
Legal Maturity Date
|
| Class A(2001-1) |
|
5/31/01 |
|
$ |
1,000,000,000 |
|
|
5.75% |
|
May 2006 |
|
October 2008 |
| Class A(2001-2) |
|
7/26/01 |
|
$ |
500,000,000 |
|
|
One Month LIBOR + 0.25% |
|
July 2011 |
|
December 2013 |
| Class A(2001-3) |
|
8/8/01 |
|
$ |
1,000,000,000 |
|
|
Three Month LIBOR + 0.11% |
|
July 2006 |
|
December 2008 |
| Class A(2001-Emerald) |
|
8/15/01 |
|
Up to $ |
5,650,000,000 |
|
|
— |
|
— |
|
— |
| Class A(2001-4) |
|
9/27/01 |
|
$ |
1,000,000,000 |
|
|
One Month LIBOR + 0.13% |
|
September 2004 |
|
February 2007 |
| Class A(2001-5) |
|
11/8/01 |
|
$ |
500,000,000 |
|
|
One Month LIBOR + 0.21% |
|
October 2008 |
|
March 2011 |
| Class A(2002-1) |
|
1/31/02 |
|
$ |
1,000,000,000 |
|
|
4.95% |
|
January 2007 |
|
June 2009 |
| Class A(2002-2) |
|
3/27/02 |
|
$ |
656,175,000 |
|
|
Not to exceed Three Month LIBOR + 0.35%1 |
|
February 17, 2012 |
|
July 17, 2014 |
| Class A(2002-3) |
|
4/24/02 |
|
$ |
750,000,000 |
|
|
One Month LIBOR + 0.24% |
|
April 2012 |
|
September 2014 |
| Class A(2002-4) |
|
5/9/02 |
|
$ |
1,000,000,000 |
|
|
One Month LIBOR + 0.11% |
|
March 2007 |
|
August 2009 |
| Class A(2002-5) |
|
5/30/02 |
|
$ |
750,000,000 |
|
|
One Month LIBOR + 0.18% |
|
May 2009 |
|
October 2011 |
| Class A(2002-6) |
|
6/26/02 |
|
$ |
750,000,000 |
|
|
3.90% |
|
June 2005 |
|
November 2007 |
| Class A(2002-7) |
|
7/25/02 |
|
$ |
497,250,000 |
|
|
Not to exceed Three Month LIBOR + 0.25%2 |
|
July 17, 2009 |
|
December 19, 2011 |
| Class A(2002-8) |
|
7/31/02 |
|
$ |
400,000,000 |
|
|
Three Month LIBOR + 0.15% |
|
July 2009 |
|
December 2011 |
| Class A(2002-9) |
|
7/31/02 |
|
$ |
700,000,000 |
|
|
Three Month LIBOR + 0.09% |
|
July 2007 |
|
December 2009 |
*Expected Issuance.
1Class A(2002-2) noteholders will receive interest at
5.60% on an outstanding euro principal amount of €750,000,000, pursuant to the terms of a currency and interest rate swap applicable only to the Class A(2002-2) notes.
2Class A(2002-7) noteholders will receive interest at Three Month EURIBOR + 0.15% on an outstanding euro principal amount of €500,000,000, pursuant to the terms of a currency and
interest rate swap applicable only to the Class A(2002-7) notes.
A-I-1
Annex II
The information provided in this Annex II is an
integral part of the prospectus supplement.
| #
|
|
Series/Class
|
|
Issuance Date
|
|
Investor Interest
|
|
Certificate Rate
|
|
Scheduled Payment Date
|
|
Termination Date
|
| 1 |
|
Series 1994-E |
|
12/15/94 |
|
|
|
|
|
|
|
|
| |
|
Investor Interest |
|
|
|
|
|
|
|
|
|
|
| |
|
(as of 7/31/02) |
|
— |
|
$450,000,000 |
|
Commercial Paper Index |
|
— |
|
— |
| |
|
Cash Collateral Amount |
|
— |
|
$20,000,000 |
|
— |
|
— |
|
— |
| 2 |
|
Series 1995-A |
|
3/22/95 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$500,250,000 |
|
One Month LIBOR + .27% |
|
August 2004 |
|
January 2007 |
| |
|
Class B |
|
— |
|
$25,875,000 |
|
One Month LIBOR + .45% |
|
September 2004 |
|
January 2007 |
| |
|
Collateral Interest |
|
— |
|
$48,875,000 |
|
— |
|
— |
|
— |
| 3 |
|
Series 1995-C |
|
6/29/95 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$500,250,000 |
|
6.45% |
|
June 2005 |
|
February 2008 |
| |
|
Class B |
|
— |
|
$25,875,000 |
|
One Month LIBOR + .42% |
|
July 2005 |
|
February 2008 |
| |
|
Collateral Interest |
|
— |
|
$48,875,000 |
|
— |
|
— |
|
— |
| 4 |
|
Series 1995-E |
|
8/2/95 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$0 |
|
— |
|
— |
|
— |
| |
|
Class B |
|
— |
|
$22,500,000 |
|
One Month LIBOR + .32% |
|
September 2002 |
|
January 2005 |
| |
|
Collateral Interest |
|
— |
|
$15,000,000 |
|
— |
|
— |
|
— |
| 5 |
|
Series 1995-G |
|
9/27/95 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$435,000,000 |
|
One Month LIBOR + .21% |
|
October 2002 |
|
March 2005 |
| |
|
Class B |
|
— |
|
$22,500,000 |
|
One Month LIBOR + .33% |
|
November 2002 |
|
March 2005 |
| |
|
Collateral Interest |
|
— |
|
$42,500,000 |
|
— |
|
— |
|
— |
| 6 |
|
Series 1995-J |
|
11/21/95 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$435,000,000 |
|
One Month LIBOR + .23% |
|
November 2002 |
|
April 2005 |
| |
|
Class B |
|
— |
|
$22,500,000 |
|
One Month LIBOR + .35% |
|
December 2002 |
|
April 2005 |
| |
|
Collateral Interest |
|
— |
|
$42,500,000 |
|
— |
|
— |
|
— |
| 7 |
|
Series 1996-A |
|
2/28/96 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$609,000,000 |
|
One Month LIBOR + .21% |
|
February 2003 |
|
July 2005 |
| |
|
Class B |
|
— |
|
$31,500,000 |
|
One Month LIBOR + .34% |
|
March 2003 |
|
July 2005 |
| |
|
Collateral Interest |
|
— |
|
$59,500,000 |
|
— |
|
— |
|
— |
| 8 |
|
Series 1996-B |
|
3/26/96 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$435,000,000 |
|
One Month LIBOR + .26% |
|
March 2006 |
|
August 2008 |
| |
|
Class B |
|
— |
|
$22,500,000 |
|
One Month LIBOR + .37% |
|
April 2006 |
|
August 2008 |
| |
|
Collateral Interest |
|
— |
|
$42,500,000 |
|
— |
|
— |
|
— |
| 9 |
|
Series 1996-E |
|
5/21/96 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .17% |
|
May 2003 |
|
October 2005 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .31% |
|
June 2003 |
|
October 2005 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 10 |
|
Series 1996-G |
|
7/17/96 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$425,000,000 |
|
One Month LIBOR + .18% |
|
July 2006 |
|
December 2008 |
| |
|
Class B |
|
— |
|
$37,500,000 |
|
One Month LIBOR + .35% |
|
August 2006 |
|
December 2008 |
| |
|
Collateral Interest |
|
— |
|
$37,500,000 |
|
— |
|
— |
|
— |
| 11 |
|
Series 1996-J |
|
9/19/96 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$850,000,000 |
|
One Month LIBOR +.15% |
|
September 2003 |
|
February 2006 |
| |
|
Class B |
|
— |
|
$75,000,000 |
|
One Month LIBOR + .36% |
|
October 2003 |
|
February 2006 |
| |
|
Collateral Interest |
|
— |
|
$75,000,000 |
|
— |
|
— |
|
— |
| 12 |
|
Series 1996-K |
|
10/24/96 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$850,000,000 |
|
One Month LIBOR + .13% |
|
October 2003 |
|
March 2006 |
| |
|
Class B |
|
— |
|
$75,000,000 |
|
One Month LIBOR + .35% |
|
November 2003 |
|
March 2006 |
| |
|
Collateral Interest |
|
— |
|
$75,000,000 |
|
— |
|
— |
|
— |
| 13 |
|
Series 1996-M |
|
11/26/96 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$425,000,000 |
|
Three Month LIBOR + .13% |
|
November 2006 |
|
April 2009 |
| |
|
Class B |
|
— |
|
$37,500,000 |
|
Three Month LIBOR + .35% |
|
December 2006 |
|
April 2009 |
| |
|
Collateral Interest |
|
— |
|
$37,500,000 |
|
— |
|
— |
|
— |
| 14 |
|
Series 1997-B |
|
2/27/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$850,000,000 |
|
One Month LIBOR + .16% |
|
March 2012 |
|
August 2014 |
| |
|
Class B |
|
— |
|
$75,000,000 |
|
One Month LIBOR + .35% |
|
March 2012 |
|
August 2014 |
| |
|
Collateral Interest |
|
— |
|
$75,000,000 |
|
— |
|
— |
|
— |
| 15 |
|
Series 1997-C |
|
3/26/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .11% |
|
March 2004 |
|
August 2006 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .30% |
|
March 2004 |
|
August 2006 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
A-II-1
| #
|
|
Series/Class
|
|
Issuance Date
|
|
Investor Interest
|
|
Certificate Rate
|
|
Scheduled Payment Date
|
|
Termination Date
|
| 16 |
|
Series 1997-D |
|
5/22/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$387,948,000 |
|
Three Month LIBOR + .05% |
|
May 2007 |
|
October 2009 |
| |
|
Class B |
|
— |
|
$34,231,000 |
|
Not to Exceed Three Month LIBOR + .50% |
|
May 2007 |
|
October 2009 |
| |
|
Collateral Interest |
|
— |
|
$34,231,000 |
|
— |
|
— |
|
— |
| 17 |
|
Series 1997-G |
|
6/18/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$460,000,000 |
|
One Month LIBOR + .15% |
|
June 2004 |
|
November 2006 |
| |
|
Class B |
|
— |
|
$40,600,000 |
|
One Month LIBOR + .36% |
|
June 2004 |
|
November 2006 |
| |
|
Collateral Interest |
|
— |
|
$40,600,000 |
|
— |
|
— |
|
— |
| 18 |
|
Series 1997-H |
|
8/6/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$507,357,000 |
|
Three Month LIBOR + .07% |
|
September 2007 |
|
February 2010 |
| |
|
Class B |
|
— |
|
$44,770,000 |
|
Not to Exceed Three Month LIBOR + .50% |
|
September 2007 |
|
February 2010 |
| |
|
Collateral Interest |
|
— |
|
$44,770,000 |
|
— |
|
— |
|
— |
| 19 |
|
Series 1997-I |
|
8/26/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
6.55% |
|
August 2004 |
|
January 2007 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .31% |
|
August 2004 |
|
January 2007 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 20 |
|
Series 1997-J |
|
9/10/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .12% |
|
September 2004 |
|
February 2007 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .30% |
|
September 2004 |
|
February 2007 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 21 |
|
Series 1997-K |
|
10/22/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .12% |
|
November 2005 |
|
April 2008 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .32% |
|
November 2005 |
|
April 2008 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 22 |
|
Series 1997-L |
|
11/13/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$511,000,000 |
|
Three Month LIBOR - .01% |
|
November 2002 |
|
April 2005 |
| |
|
Class B |
|
— |
|
$45,100,000 |
|
Not to Exceed Three Month LIBOR + .50% |
|
November 2002 |
|
April 2005 |
| |
|
Collateral Interest |
|
— |
|
$45,100,000 |
|
— |
|
— |
|
— |
| 23 |
|
Series 1997-M |
|
11/6/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
Three Month LIBOR + .11% |
|
October 2002 |
|
March 2005 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
Three Month LIBOR + .27% |
|
October 2002 |
|
March 2005 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 24 |
|
Series 1997-O |
|
12/23/97 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$425,000,000 |
|
One Month LIBOR + .17% |
|
December 2007 |
|
May 2010 |
| |
|
Class B |
|
— |
|
$37,500,000 |
|
One Month LIBOR + .35% |
|
December 2007 |
|
May 2010 |
| |
|
Collateral Interest |
|
— |
|
$37,500,000 |
|
— |
|
— |
|
— |
| 25 |
|
Series 1998-A |
|
3/18/98 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .11% |
|
March 2003 |
|
August 2005 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
Not to Exceed One Month LIBOR + .50% |
|
March 2003 |
|
August 2005 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 26 |
|
Series 1998-B |
|
4/14/98 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$550,000,000 |
|
Three Month LIBOR + .09% |
|
April 2008 |
|
September 2010 |
| |
|
Class B |
|
— |
|
$48,530,000 |
|
Not to Exceed Three Month LIBOR + .50% |
|
April 2008 |
|
September 2010 |
| |
|
Collateral Interest |
|
— |
|
$48,530,000 |
|
— |
|
— |
|
— |
| 27 |
|
Series 1998-C |
|
6/24/98 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .08% |
|
June 2003 |
|
November 2005 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .25% |
|
June 2003 |
|
November 2005 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 28 |
|
Series 1998-D |
|
7/30/98 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$475,000,000 |
|
5.80% |
|
July 2003 |
|
December 2005 |
| |
|
Class B |
|
— |
|
$42,000,000 |
|
One Month LIBOR + .25% |
|
July 2003 |
|
December 2005 |
| |
|
Collateral Interest |
|
— |
|
$42,000,000 |
|
— |
|
— |
|
— |
| 29 |
|
Series 1998-E |
|
8/11/98 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$750,000,000 |
|
Three Month LIBOR + .145% |
|
April 2008 |
|
September 2010 |
| |
|
Class B |
|
— |
|
$66,200,000 |
|
Three Month LIBOR + .33% |
|
April 2008 |
|
September 2010 |
| |
|
Collateral Interest |
|
— |
|
$66,200,000 |
|
— |
|
— |
|
— |
| 30 |
|
Series 1998-F |
|
8/26/98 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$425,000,000 |
|
Three Month LIBOR + .10% |
|
September 2005 |
|
February 2008 |
| |
|
Class B |
|
— |
|
$37,500,000 |
|
Three Month LIBOR + .28% |
|
September 2005 |
|
February 2008 |
| |
|
Collateral Interest |
|
— |
|
$37,500,000 |
|
— |
|
— |
|
— |
| 31 |
|
Series 1998-G |
|
9/10/98 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .13% |
|
September 2006 |
|
February 2009 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .40% |
|
September 2006 |
|
February 2009 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
A-II-2
| #
|
|
Series/Class
|
|
Issuance Date
|
|
Investor Interest
|
|
Certificate Rate
|
|
Scheduled Payment Date
|
|
Termination Date
|
| 32 |
|
Series 1998-J |
|
10/29/98 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$660,000,000 |
|
5.25% |
|
September 2003 |
|
February 2006 |
| |
|
Class B |
|
— |
|
$45,000,000 |
|
5.65% |
|
September 2003 |
|
February 2006 |
| |
|
Collateral Interest |
|
— |
|
$45,000,000 |
|
— |
|
— |
|
— |
| 33 |
|
Series 1999-A |
|
3/25/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$425,000,000 |
|
One Month LIBOR + .14% |
|
February 2004 |
|
July 2006 |
| |
|
Class B |
|
— |
|
$37,500,000 |
|
One Month LIBOR + .37% |
|
February 2004 |
|
July 2006 |
| |
|
Collateral Interest |
|
— |
|
$37,500,000 |
|
— |
|
|
|
|
| 34 |
|
Series 1999-B |
|
3/26/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
5.90% |
|
March 2009 |
|
August 2011 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
6.20% |
|
March 2009 |
|
August 2011 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 35 |
|
Series 1999-C |
|
5/18/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$799,500,000 |
|
Three Month LIBOR + .19% |
|
May 2004 |
|
October 2006 |
| |
|
Class B |
|
— |
|
$70,550,000 |
|
Not to Exceed Three Month LIBOR + .50% |
|
May 2004 |
|
October 2006 |
| |
|
Collateral Interest |
|
— |
|
$70,550,000 |
|
— |
|
— |
|
— |
| 36 |
|
Series 1999-D |
|
6/3/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$425,000,000 |
|
One Month LIBOR + .19% |
|
June 2006 |
|
November 2008 |
| |
|
Class B |
|
— |
|
$37,500,000 |
|
6.50% |
|
June 2006 |
|
November 2008 |
| |
|
Collateral Interest |
|
— |
|
$37,500,000 |
|
— |
|
— |
|
— |
| 37 |
|
Series 1999-F |
|
8/3/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$509,400,000 |
|
Three Month LIBOR - .125% |
|
August 2004 |
|
January 2007 |
| |
|
Class B |
|
— |
|
$44,950,000 |
|
Not to Exceed Three Month LIBOR + .50% |
|
August 2004 |
|
January 2007 |
| |
|
Collateral Interest |
|
— |
|
$44,950,000 |
|
— |
|
— |
|
— |
| 38 |
|
Series 1999-G |
|
7/29/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
6.35% |
|
July 2004 |
|
December 2006 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
6.60% |
|
July 2004 |
|
December 2006 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 39 |
|
Series 1999-H |
|
8/18/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$850,000,000 |
|
Three Month LIBOR + .21% |
|
April 2004 |
|
September 2006 |
| |
|
Class B |
|
— |
|
$75,000,000 |
|
Three Month LIBOR + .48% |
|
April 2004 |
|
September 2006 |
| |
|
Collateral Interest |
|
— |
|
$75,000,000 |
|
— |
|
— |
|
— |
| 40 |
|
Series 1999-J |
|
9/23/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$850,000,000 |
|
7.00% |
|
September 2009 |
|
February 2012 |
| |
|
Class B |
|
— |
|
$75,000,000 |
|
7.40% |
|
September 2009 |
|
February 2012 |
| |
|
Collateral Interest |
|
— |
|
$75,000,000 |
|
— |
|
— |
|
— |
| 41 |
|
Series 1999-K |
|
10/27/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$0 |
|
— |
|
— |
|
— |
| |
|
Collateral Interest |
|
— |
|
$200,000,000 |
|
— |
|
October 2002 |
|
March 2005 |
| 42 |
|
Series 1999-L |
|
11/5/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .25% |
|
October 2006 |
|
March 2009 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .53% |
|
October 2006 |
|
March 2009 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 43 |
|
Series 1999-M |
|
12/1/99 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$425,000,000 |
|
6.60% |
|
November 2004 |
|
April 2007 |
| |
|
Class B |
|
— |
|
$37,500,000 |
|
6.80% |
|
November 2004 |
|
April 2007 |
| |
|
Collateral Interest |
|
— |
|
$37,500,000 |
|
— |
|
— |
|
— |
| 44 |
|
Series 2000-A |
|
3/8/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
7.35% |
|
February 2005 |
|
July 2007 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
7.55% |
|
February 2005 |
|
July 2007 |
| |
|
Collateral interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 45 |
|
Series 2000-B |
|
3/28/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .115% |
|
February 2003 |
|
July 2005 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .30% |
|
February 2003 |
|
July 2005 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 46 |
|
Series 2000-C |
|
4/13/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$1,275,000,000 |
|
One Month LIBOR + .16% |
|
February 2005 |
|
July 2007 |
| |
|
Class B |
|
— |
|
$112,500,000 |
|
One Month LIBOR + .375% |
|
February 2005 |
|
July 2007 |
| |
|
Collateral Interest |
|
— |
|
$112,500,000 |
|
— |
|
— |
|
— |
| 47 |
|
Series 2000-D |
|
5/11/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$722,500,000 |
|
One Month LIBOR + .20% |
|
April 2007 |
|
September 2009 |
| |
|
Class B |
|
— |
|
$63,750,000 |
|
One Month LIBOR + .43% |
|
April 2007 |
|
September 2009 |
| |
|
Collateral Interest |
|
— |
|
$63,750,000 |
|
— |
|
— |
|
— |
| 48 |
|
Series 2000-E |
|
6/1/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$500,000,000 |
|
7.80% |
|
May 2010 |
|
October 2012 |
| |
|
Class B |
|
— |
|
$45,000,000 |
|
8.15% |
|
May 2010 |
|
October 2012 |
| |
|
Collateral Interest |
|
— |
|
$45,000,000 |
|
— |
|
— |
|
— |
A-II-3
| #
|
|
Series/Class
|
|
Issuance Date
|
|
Investor Interest
|
|
Certificate Rate
|
|
Scheduled Payment Date
|
|
Termination Date
|
| 49 |
|
Series 2000-F |
|
6/23/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$750,000,000 |
|
Three Month LIBOR + .125% |
|
June 2005 |
|
November 2007 |
| |
|
Class B |
|
— |
|
$66,200,000 |
|
Three Month LIBOR + .35% |
|
June 2005 |
|
November 2007 |
| |
|
Collateral Interest |
|
— |
|
$66,200,000 |
|
— |
|
— |
|
— |
| 50 |
|
Series 2000-G |
|
7/20/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
Three Month LIBOR + .13% |
|
July 2005 |
|
December 2007 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
Three Month LIBOR + .40% |
|
July 2005 |
|
December 2007 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 51 |
|
Series 2000-H |
|
8/23/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$595,000,000 |
|
One Month LIBOR + .25% |
|
August 2010 |
|
January 2013 |
| |
|
Class B |
|
— |
|
$52,500,000 |
|
One Month LIBOR + .60% |
|
August 2010 |
|
January 2013 |
| |
|
Collateral Interest |
|
— |
|
$52,500,000 |
|
— |
|
— |
|
— |
| 52 |
|
Series 2000-I |
|
9/8/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$850,000,000 |
|
6.90% |
|
August 2005 |
|
January 2008 |
| |
|
Class B |
|
— |
|
$75,000,000 |
|
7.15% |
|
August 2005 |
|
January 2008 |
| |
|
Collateral Interest |
|
— |
|
$75,000,000 |
|
— |
|
— |
|
— |
| 53 |
|
Series 2000-J |
|
10/12/00 |
|
|
|
|
|
|
|
|
| |
|
Class A Swiss Francs |
|
— |
|
CHF 1,000,000,000 |
|
4.125% |
|
|
|
|
| |
|
Class A |
|
— |
|
$568,990,043 |
|
Three Month LIBOR + .21% |
|
October 17, 2007 |
|
March 17, 2010 |
| |
|
Class B |
|
— |
|
$50,250,000 |
|
One Month LIBOR + .44% |
|
October 2007 |
|
March 17, 2010 |
| |
|
Collateral Interest |
|
— |
|
$50,250,000 |
|
— |
|
— |
|
— |
| 54 |
|
Series 2000-K |
|
11/21/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
Three Month LIBOR + .11% |
|
October 2005 |
|
March 2008 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
Three Month LIBOR + .375% |
|
October 2005 |
|
March 2008 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 55 |
|
Series 2000-L |
|
12/13/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$425,000,000 |
|
6.50% |
|
November 2007 |
|
April 2010 |
| |
|
Class B |
|
— |
|
$37,500,000 |
|
One Month LIBOR + .50% |
|
November 2007 |
|
April 2010 |
| |
|
Collateral Interest |
|
— |
|
$37,500,000 |
|
— |
|
— |
|
— |
| 56 |
|
Series 2000-Z |
|
3/30/00 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$0 |
|
Commercial Paper Index |
|
— |
|
— |
| |
|
Class B |
|
— |
|
$0 |
|
— |
|
— |
|
— |
| 57 |
|
Series 2001-A |
|
2/20/01 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$1,062,500,000 |
|
One Month LIBOR + .15% |
|
February 2006 |
|
July 2008 |
| |
|
Class B |
|
— |
|
$93,750,000 |
|
One Month LIBOR + .45% |
|
February 2006 |
|
July 2008 |
| |
|
Collateral Interest |
|
— |
|
$93,750,000 |
|
— |
|
— |
|
— |
| 58 |
|
Series 2001-B |
|
3/8/01 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$637,500,000 |
|
One Month LIBOR + .26% |
|
March 2011 |
|
August 2013 |
| |
|
Class B |
|
— |
|
$56,250,000 |
|
One Month LIBOR + .60% |
|
March 2011 |
|
August 2013 |
| |
|
Collateral Interest |
|
— |
|
$56,250,000 |
|
— |
|
— |
|
— |
| 59 |
|
Series 2001-C |
|
4/25/01 |
|
|
|
|
|
|
|
|
| |
|
Class A |
|
— |
|
$675,000,000 |
|
Three Month LIBOR - .125% |
|
April 2011 |
|
September 2013 |
| |
|
Class B |
|
— |
|
$60,000,000 |
|
One Month LIBOR + .62% |
|
April 2011 |
|
September 2013 |
| |
|
Collateral Interest |
|
— |
|
$60,000,000 |
|
— |
|
— |
|
— |
A-II-4
Prospectus Dated August 20, 2002
MBNA Credit Card Master Note Trust
Issuer
MBNA America Bank, National Association
Originator of the Issuer
The issuer—
Ÿ |
may periodically issue notes in one or more series, classes or tranches; and |
| |
— |
the collateral certificate, Series 2001-D, representing an undivided interest in master trust II, whose assets include a portfolio of consumer revolving
credit card accounts; and |
| |
— |
other property described in this prospectus and in the accompanying prospectus supplement. |
The notes—
Ÿ |
will be secured by the issuer’s assets and will be paid only from proceeds of the issuer’s assets; |
Ÿ |
offered with this prospectus and the related prospectus supplement will be rated in one of the four highest rating categories by at least one nationally
recognized rating agency; and |
Ÿ |
may be issued as part of a designated series, class or tranche. |
You should consider the discussion under “Risk Factors”
beginning on page 15 of this prospectus before you purchase any notes.
MBNA Credit Card Master Note Trust will be the
issuer of the notes. The notes will be obligations of the issuer only and are not obligations of any other person. Each tranche of notes will be secured by only some of the assets of the issuer. Noteholders will have no recourse to any other
assets of the issuer for the payment of the notes.
The notes will not be insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency or instrumentality.
Neither the SEC nor any state securities commission has
approved these notes or determined that this prospectus is truthful, accurate or complete. Any representation to the contrary is a criminal offense.
Important Notice about Information Presented in this
Prospectus and the Accompanying Prospectus Supplement
We provide information to you about the notes in two separate documents that progressively provide more detail: (a) this prospectus, which provides general information, some of which may not apply to a particular series, class or
tranche of notes, including your series, class or tranche, and (b) the accompanying prospectus supplement, which will describe the specific terms of your series, class or tranche of notes, including:
| |
• |
|
the timing of interest and principal payments; |
| |
• |
|
financial and other information about the issuer’s assets; |
| |
• |
|
information about enhancement for your series, class or tranche; |
| |
• |
|
the ratings for your class or tranche; and |
| |
• |
|
the method for selling the notes. |
This prospectus may be used to offer and sell any series, class or tranche of notes only if accompanied by the prospectus supplement for that series, class or tranche.
If the terms of a particular series, class or tranche of notes vary between this prospectus and the prospectus supplement, you should rely
on the information in the prospectus supplement.
You should rely only on the information provided in this
prospectus and the accompanying prospectus supplement including the information incorporated by reference. We have not authorized anyone to provide you with different information. We are not offering the notes in any state where the offer is not
permitted. We do not claim the accuracy of the information in this prospectus or the accompanying prospectus supplement as of any date other than the dates stated on their respective covers.
We include cross-references in this prospectus and in the accompanying prospectus supplement to captions in these materials where you can find further related discussions.
The Table of Contents in this prospectus and in the accompanying prospectus supplement provide the pages on which these captions are located.
2
| |
|
Page
|
| |
| Prospectus Summary |
|
6 |
| Securities Offered |
|
6 |
| Risk Factors |
|
6 |
| Issuer |
|
6 |
| Master Trust II |
|
6 |
| MBNA |
|
6 |
| Indenture Trustee |
|
6 |
| Series, Classes and Tranches of Notes |
|
6 |
| Interest Payments |
|
7 |
| Expected Principal Payment Date and Legal Maturity Date |
|
7 |
| Stated Principal Amount, Outstanding Dollar Principal Amount and Nominal Liquidation Amount of Notes |
|
8 |
| Subordination |
|
9 |
| Limit on Repayment of All
Notes |
|
10 |
| Sources of Funds to Pay the
Notes |
|
10 |
| Early Redemption of Notes |
|
11 |
| Events of Default |
|
11 |
| Events of Default Remedies |
|
12 |
| Security for the Notes |
|
13 |
| Limited Recourse to the Issuer |
|
13 |
| Registration, Clearance and Settlement |
|
13 |
| ERISA Eligibility |
|
13 |
| Tax Status |
|
14 |
| Denominations |
|
14 |
| Record Date |
|
14 |
| |
| Risk Factors |
|
15 |
| |
| Glossary |
|
29 |
| |
| The Issuer |
|
29 |
| |
| Use of Proceeds |
|
30 |
| |
| MBNA and MBNA Corporation |
|
30 |
| Industry Developments |
|
30 |
3
| |
|
Page
|
| |
| The Notes |
|
32 |
| General |
|
32 |
| Interest |
|
33 |
| Principal |
|
33 |
| Stated Principal Amount, Outstanding Dollar Principal Amount and Nominal Liquidation Amount |
|
34 |
| Stated Principal Amount |
|
34 |
| Outstanding Dollar Principal Amount |
|
34 |
| Nominal Liquidation Amount |
|
34 |
| Final Payment of the Notes |
|
37 |
| Subordination of Interest and Principal |
|
37 |
| Required Subordinated Amount |
|
38 |
| Early Redemption of Notes |
|
38 |
| Issuances of New Series, Classes and Tranches of Notes |
|
39 |
| Payments on Notes; Paying
Agent |
|
41 |
| Denominations |
|
41 |
| Record Date |
|
42 |
| Governing Law |
|
42 |
| Form, Exchange and Registration and Transfer of Notes |
|
42 |
| Book-Entry Notes |
|
42 |
| The Depository Trust Company |
|
44 |
| Clearstream, Luxembourg |
|
45 |
| Euroclear System |
|
45 |
| Distributions on Book-Entry
Notes |
|
46 |
| Global Clearance and Settlement Procedures |
|
46 |
| Definitive Notes |
|
47 |
| Replacement of Notes |
|
48 |
| |
| Sources of Funds to Pay the Notes |
|
48 |
| The Collateral Certificate |
|
48 |
| |
|
Page
|
| Deposit and Application of
Funds |
|
51 |
| Issuer Accounts |
|
52 |
| Derivative Agreements |
|
53 |
| Sale of Credit Card Receivables |
|
53 |
| Limited Recourse to the Issuer; Security for the Notes |
|
54 |
| |
| The Indenture |
|
54 |
| Indenture Trustee |
|
54 |
| Issuer Covenants |
|
55 |
| Early Redemption Events |
|
55 |
| Events of Default |
|
57 |
| Events of Default Remedies |
|
57 |
| Meetings |
|
59 |
| Voting |
|
60 |
| Amendments to the Indenture and Indenture Supplements |
|
60 |
| Tax Opinions for Amendments |
|
63 |
| Addresses for Notices |
|
63 |
| Issuer’s Annual Compliance Statement |
|
63 |
| Indenture Trustee’s Annual
Report |
|
63 |
| List of Noteholders |
|
64 |
| Reports |
|
64 |
| |
| MBNA’s Credit Card Activities |
|
64 |
| General |
|
64 |
| Acquisition and Use of Credit Card Accounts |
|
65 |
| MBNA Technology, Inc. |
|
66 |
| Interchange |
|
66 |
| |
| Master Trust II |
|
67 |
| General |
|
67 |
| Master Trust II Trustee |
|
67 |
| The Receivables |
|
68 |
| Investor Certificates |
|
69 |
| Transfer and Assignment of Receivables |
|
70 |
| Addition of Master Trust II
Assets |
|
70 |
| Removal of Accounts |
|
72 |
| |
|
Page
|
| Collection and Other Servicing Procedures |
|
73 |
| Master Trust II Accounts |
|
73 |
| Investor Percentage |
|
74 |
| Transfer of Annual Membership Fees |
|
74 |
| Application of Collections |
|
74 |
| Defaulted Receivables; Rebates and Fraudulent Charges |
|
76 |
| Master Trust II Termination |
|
77 |
| Pay Out Events |
|
77 |
| Servicing Compensation and Payment of Expenses |
|
78 |
| New Issuances |
|
80 |
| Representations and Warranties |
|
81 |
| Certain Matters Regarding MBNA as Seller and as Servicer |
|
83 |
| Servicer Default |
|
85 |
| Evidence as to Compliance |
|
85 |
| Amendments to the Master Trust II Agreement |
|
86 |
| Certificateholders Have Limited Control of Actions |
|
88 |
| |
| Material Legal Aspects of the Receivables |
|
89 |
| Transfer of the Receivables and the Collateral Certificate |
|
89 |
| Certain Matters Relating to Conservatorship or
Receivership |
|
89 |
| Consumer Protection Laws |
|
91 |
| |
| Federal Income Tax Consequences |
|
92 |
| General |
|
92 |
| Tax Characterization of the Issuer and the Notes |
|
93 |
| Consequences to Holders of the Offered Notes |
|
94 |
| State and Local Tax
Consequences |
|
97 |
| |
| Benefit Plan Investors |
|
97 |
| Prohibited Transactions |
|
98 |
4
| |
|
Page
|
| Potential Prohibited Transactions from Investment in Notes |
|
98 |
| Prohibited Transactions between the Benefit Plan and a Party in Interest |
|
98 |
| Prohibited Transactions between the Issuer or Master Trust II and a Party in Interest |
|
99 |
| Investment by Benefit Plan Investors |
|
100 |
| |
|
Page
|
| Tax Consequences to Benefit
Plans |
|
100 |
| |
| Plan of Distribution |
|
100 |
| |
| Legal Matters |
|
101 |
| |
| Where You Can Find More Information |
|
102 |
| |
| Glossary of Defined Terms |
|
103 |
5
This summary does not contain all the information you may
need to make an informed investment decision. You should read the entire prospectus and any supplement to this prospectus before you purchase any notes. The accompanying supplement to this prospectus may supplement disclosure in this prospectus.
The issuer will be offering notes. The notes will be issued pursuant to an indenture
between the issuer and The Bank of New York, as indenture trustee.
Investment in notes involves risks. You should consider carefully the risk factors beginning on
page 15 in this prospectus and any risk factors disclosed in the accompanying prospectus supplement.
MBNA Credit Card Master Note Trust, a Delaware trust, will be the issuer of the notes. The address of
the issuer will be MBNA Credit Card Master Note Trust, c/o Wilmington Trust Company, Rodney Square North, 1100 N. Market Street, Wilmington, Delaware 19890-0001. Its telephone number will be (302) 651-1284.
The issuer’s primary asset will be the collateral certificate issued by the MBNA Master
Credit Card Trust II, which is referred to in this prospectus and in the accompanying prospectus supplement as master trust II. For a description of the collateral certificate, see “Sources of Funds to Pay the Notes—The Collateral
Certificate.” Master trust II’s assets consist primarily of credit card receivables arising in a portfolio of consumer revolving credit card accounts. In addition, MBNA is permitted to add to master trust II participations
representing interests in a pool of assets primarily consisting of receivables arising under consumer revolving credit card accounts owned by MBNA and collections thereon. For a description of master trust II, see “Master Trust II.”
MBNA America Bank, National Association formed master trust II and has transferred and may continue to
transfer credit card receivables to master trust II. MBNA will be responsible for servicing, managing and making collections on the credit card receivables in master trust II.
MBNA will be the originator and beneficiary of the issuer.
The Bank of New York will be the indenture trustee under the indenture for the notes.
Series, Classes and Tranches of Notes
The notes will be issued in series. Each series is entitled to
its allocable share of the issuer’s assets. It is expected that most series will consist of multiple classes. A class designation determines the relative seniority for receipt of cash flows and funding of uncovered defaults on principal
receivables
6
in master trust II allocated to the related series of notes. For example, subordinated classes of notes provide credit enhancement for senior classes of notes in the same series.
Some series of notes will be multiple tranche series, meaning that they may have classes consisting of multiple tranches. Tranches of notes within a
class may be issued on different dates and have different stated principal amounts, rates of interest, interest payment dates, expected principal payment dates, legal maturity dates and other material terms as described in the related prospectus
supplement.
In a multiple tranche series, the expected principal payment dates and the legal maturity dates of the senior and
subordinated classes of such series may be different. As such, certain subordinated tranches of notes may have expected principal payment dates and legal maturity dates earlier than some or all of the senior notes of such series. However,
subordinated notes will not be repaid before their legal maturity dates, unless, after payment, the remaining subordinated notes provide the required enhancement for the senior notes. In addition, senior notes will not be issued unless, after
issuance, there are enough outstanding subordinated notes to provide the required subordinated amount for the senior notes. See “The Notes—Issuance of New Series, Classes and Tranches of Notes.”
Some series may not be multiple tranche series. For these series, there will be only one tranche per class and each class will generally be issued on the same
date. The expected principal payment dates and legal
maturity dates of the subordinated classes of such a series will either be the same as or later than those of the senior
classes of that series.
Each tranche of notes, other than discount notes, will bear interest from the date and at
the rate set forth or as determined in the related prospectus supplement. Interest on the notes will be paid on the interest payment dates specified in the related prospectus supplement.
Expected Principal Payment Date and Legal Maturity Date
Unless otherwise specified in the related prospectus
supplement, it is expected that the issuer will pay the stated principal amount of each note in one payment on that note’s expected principal payment date. The expected principal payment date of a note is generally 29 months before its legal
maturity date. The legal maturity date is the date on which a note is legally required to be fully paid in accordance with its terms. The expected principal payment date and legal maturity date for a note will be specified in the related prospectus
supplement.
The issuer will be obligated to pay the stated principal amount of a note on its expected principal payment date, or upon
the occurrence of an early redemption event or event of default and acceleration or other optional or mandatory redemption, only to the extent that funds are available for that purpose and only to the extent that payment is permitted by the
subordination provisions of the senior notes of the same series. The
7
remedies a noteholder may exercise following an event of default and acceleration or on the legal maturity date are described in “The
Indenture—Events of Default Remedies” and “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables.”
Stated Principal Amount, Outstanding Dollar Principal Amount and Nominal Liquidation Amount of Notes
Each
note has a stated principal amount, an outstanding dollar principal amount and a nominal liquidation amount.
• |
|
Stated Principal Amount. The stated principal amount of a note is the amount that is stated on the face of the note to be payable
to the holder. It can be denominated in U.S. dollars or a foreign currency. |
• |
|
Outstanding Dollar Principal Amount. For U.S. dollar notes (other than discount notes), the outstanding dollar principal amount is
the same as the initial dollar principal amount of the notes (as set forth in the applicable supplement to this prospectus), less principal payments to noteholders. For foreign currency notes, the outstanding dollar principal amount is the U.S.
dollar equivalent of the initial dollar principal amount of the notes (as set forth in the related prospectus supplement), less dollar payments to derivative counterparties with respect to principal. For discount notes, the outstanding dollar
principal amount is an amount stated in, or determined by a formula described in, the related prospectus supplement. |
In addition, a note may have an adjusted outstanding dollar principal amount. The adjusted outstanding dollar principal amount is the same as the outstanding dollar principal amount, less any funds on deposit in the
principal funding subaccount for that note.
• |
|
Nominal Liquidation Amount. The nominal liquidation amount of a note is a U.S. dollar amount based on the outstanding dollar
principal amount of the note, but after deducting: |
| |
— |
|
that note’s share of reallocations of available principal amounts used to pay interest on senior classes of notes or a portion of the master trust II
servicing fee allocated to its series; |
| |
— |
|
that note’s share of charge-offs resulting from uncovered defaults on principal receivables in master trust II; |
| |
— |
|
amounts on deposit in the principal funding subaccount for that note; |
and adding back all reimbursements from excess available funds allocated to that note of (i) reallocations of available principal amounts used to pay interest on senior classes of notes or the
master trust II servicing fee or (ii) charge-offs resulting from uncovered defaults on principal receivables in master trust II. Excess available funds are available funds that remain after the payment of interest and other required payments with
respect to the notes.
The nominal liquidation amount of a note corresponds to the portion of the investor interest of the collateral
certificate that is allocated to support that note.
8
The aggregate nominal liquidation amount of all of the notes is equal to the investor interest of the
collateral certificate. The investor interest of the collateral certificate corresponds to the amount of principal receivables in master trust II that is allocated to support the collateral certificate. For a more detailed discussion, see the
definition of investor interest in the glossary. Anything that increases or decreases the aggregate nominal liquidation amount of the notes will also increase or decrease the investor interest of the collateral certificate.
Upon a sale of credit card receivables held by master trust II (i) following the insolvency of MBNA, (ii) following an event of default and acceleration for a
note, or (iii) on a note’s legal maturity date, each as described in “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables,” the nominal liquidation amount of a note will be reduced to zero.
For a detailed discussion of nominal liquidation amount, see “The Notes—Stated Principal Amount, Outstanding Dollar Principal Amount and
Nominal Liquidation Amount.”
Unless otherwise specified in the prospectus supplement, payment of principal of and interest
on subordinated classes of notes will be subordinated to the payment of principal of and interest on senior classes of notes.
Unless
otherwise specified in the prospectus supplement, available principal amounts allocable to the notes of a series may be reallocated to pay interest on senior classes of notes in that series or a portion of the
master trust II servicing fee allocable to that series. In addition, the nominal liquidation amount of a subordinated class of notes will generally be reduced for charge-offs resulting from uncovered
defaults on principal receivables in master trust II prior to any reductions in the nominal liquidation amount of the senior classes of notes of the same series. While in a multiple tranche series charge-offs from uncovered defaults on principal
receivables in master trust II allocable to the series will be initially allocated to each tranche pro rata, these charge-offs will then be reallocated from tranches in the senior classes to tranches in the subordinated classes to the extent
credit enhancement in the form of subordination is still available to such senior tranches.
In addition, available principal amounts are
first utilized to fund targeted deposits to the principal funding subaccounts of senior classes before being applied to the principal funding subaccounts of the subordinated classes.
In a multiple tranche series, subordinated notes that reach their expected principal payment date, or that have an early redemption event, event of default or other optional or mandatory redemption,
will not be paid to the extent that those notes are necessary to provide the required subordination for senior classes of notes of the same series. If a tranche of subordinated notes cannot be paid because of the subordination provisions of its
respective indenture supplement, prefunding of the principal funding subaccounts for the senior notes of the same series will begin, as described in the related prospectus supplement. After that time, the
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subordinated notes will be paid only to the extent that:
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the principal funding subaccounts for the senior classes of notes of that series are prefunded in an amount such that the subordinated notes that have reached
their expected principal payment date are no longer necessary to provide the required subordination; |
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new tranches of subordinated notes of that series are issued so that the subordinated notes that have reached their expected principal payment date are no
longer necessary to provide the required subordination; |
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enough notes of senior classes of that series are repaid so that the subordinated notes that have reached their expected principal payment date are no longer
necessary to provide the required subordination; or |
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the subordinated notes reach their legal maturity date. |
On the legal maturity date of a tranche of notes, available principal amounts, if any, allocable to that tranche and proceeds from any sale of receivables will be paid to the noteholders of that
tranche, even if payment would reduce the amount of available subordination below the required subordination for the senior classes of that series.
Limit on Repayment of All Notes
You may not receive full repayment of your notes if:
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the nominal liquidation amount of your notes has been reduced by charge-offs due to uncovered defaults on principal receivables in master trust II or as a
result of reallocations of available principal amounts to pay interest on senior classes of notes or a portion of the master trust II servicing fee, and those amounts have not been reimbursed from available funds; or |
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receivables are sold (i) following the insolvency of MBNA, (ii) following an event of default and acceleration or (iii) on the legal maturity date, and the
proceeds from the sale of receivables, plus any available amounts on deposit in the applicable subaccounts allocable to your notes are insufficient. |
Sources of Funds to Pay the Notes
The issuer will have the following sources of funds to pay principal of and
interest on the notes:
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Collateral Certificate. The collateral certificate is an investor certificate issued as “Series 2001-D” by master trust
II to the issuer. It represents an undivided interest in the assets of master trust II. Master trust II owns primarily receivables arising in selected MasterCard and VISA consumer revolving credit card accounts. MBNA has transferred, and may
continue to transfer, credit card receivables to master trust II in accordance with the terms of the master trust II agreement. Both collections of principal receivables and finance charge receivables will be allocated among holders of interests in
master trust II—including the collateral certificate—based generally on the investment in principal receivables of each interest in master trust II. If collections of receivables allocable to the collateral certificate are less than
expected, payments of principal of and interest on the notes could be delayed or remain unpaid. |
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The collateral certificate will receive an investment grade
rating from at least one nationally recognized rating agency.
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Derivative Agreements. Some notes may have the benefit of one or more derivative agreements, including interest rate or currency swaps, or other similar
agreements with various counterparties. A description of the specific terms of each derivative agreement and each derivative counterparty will be included in the applicable prospectus supplement. |
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The Issuer Accounts. The issuer will establish a collection account for the purpose of receiving collections of finance charge receivables and principal
receivables and other related amounts from master trust II payable under the collateral certificate. If so specified in the prospectus supplement, the issuer may establish supplemental accounts for any series, class or tranche of notes.
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Each month, distributions on the collateral certificate will be deposited into the collection account. Those deposits
will then be allocated among each series of notes and applied as described in the accompanying prospectus supplement.
Early Redemption of Notes
The issuer will be required to redeem any note upon the occurrence of an early
redemption event with respect to that note, but only to the extent funds are available for such redemption after giving effect to all allocations and reallocations and, in the case of subordinated notes of a multiple tranche series, only to the
extent that payment is permitted by the subordination provisions of the senior notes of the same series.
However, if so specified in the
accompanying prospectus supplement, subject to certain exceptions, any notes that have the benefit of a derivative agreement will not be redeemed prior to such notes’ expected principal payment date.
Early redemption events include, unless otherwise provided in the related prospectus supplement, the following:
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the occurrence of a note’s expected principal payment date; |
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each of the pay out events applicable to the collateral certificate, as described under “Master Trust II—Pay Out Events”;
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the issuer becoming an “investment company” within the meaning of the Investment Company Act of 1940, as amended; or
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any additional early redemption events specified in the accompanying prospectus supplement. |
It is not an event of default if the issuer fails to redeem a note because it does not have sufficient funds available or because payment of the note is delayed
because it is necessary to provide required subordination for a senior class of notes.
If so specified in the accompanying prospectus
supplement, under certain circumstances the servicer may direct the issuer to redeem the notes of any series, class or tranche before the applicable expected principal payment date on the terms described in such prospectus supplement.
The documents that govern the terms and conditions of the notes include a list of adverse
events known as events of default.
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Some events of default result in an automatic acceleration of the notes, and others result in the right of the holders of the affected series, class or tranche of notes to demand acceleration
after an affirmative
vote by holders of more than 50% of the outstanding dollar principal amount of the affected series, class or tranche of notes.
Events of default for any series, class or tranche of notes include the following:
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with respect to any tranche of notes, the issuer’s failure, for a period of 35 days, to pay interest upon such notes when such interest becomes due and
payable; |
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with respect to any tranche of notes, the issuer’s failure to pay the principal amount of such notes on the applicable legal maturity date;
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the issuer’s default in the performance, or breach, of any other of its covenants or warranties in the indenture for a period of 60 days after either the
indenture trustee or the holders of 25% of the aggregate outstanding dollar principal amount of the outstanding notes of the affected series, class or tranche has provided written notice requesting remedy of such breach, and, as a result of such
default, the interests of the related noteholders are materially and adversely affected and continue to be materially and adversely affected during the 60 day period; |
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the occurrence of certain events of bankruptcy, insolvency, conservatorship or receivership of the issuer; and |
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with respect to any series, class or tranche of notes, any additional events of default specified in the accompanying prospectus supplement.
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An event of default with respect to one series, class or tranche of notes will not necessarily be an event of default with respect
to any other series, class or tranche of notes.
Events of Default Remedies
After an event of default and acceleration of a series, class or tranche of notes,
funds on deposit in the applicable issuer accounts for the affected notes will be applied to pay principal of and interest on those notes. Then, in each following month, available principal amounts and available funds allocated to those notes will
be applied to make monthly principal and interest payments on those notes until the earlier of the date those notes are paid in full or the legal maturity date of those notes. However, subordinated notes of a multiple tranche series will receive
payment of principal of those notes prior to the legal maturity date of such notes only if and to the extent that funds are available for that payment and, after giving effect to that payment, the required subordination will be maintained for senior
notes in that series.
If an event of default of a series, class or tranche of notes occurs and that series, class or tranche of notes is
accelerated, the indenture trustee may, and at the direction of the majority of the noteholders of the affected series, class or tranche will, direct master trust II to sell credit card receivables. However, this sale of receivables may occur only
if:
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the conditions specified in “The Indenture—Events of Default” are satisfied and, for subordinated notes of a multiple tranche series, only
to the extent that payment is permitted by the
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subordination provisions of the senior notes of the same series; or
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on the legal maturity date of those notes. |
The holders of the accelerated notes will be paid their allocable share of the proceeds of a sale of credit card receivables. Upon the sale of the receivables, the nominal liquidation amount of those accelerated notes will be reduced
to zero. See “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables.”
The notes of all series are secured by a shared security interest in the collateral
certificate and the collection account, but each tranche of notes is entitled to the benefits of only that portion of those assets allocated to it under the indenture and the indenture supplement.
Each tranche of notes is also secured by:
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a security interest in any applicable supplemental account; and |
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a security interest in any derivative agreement for that tranche. |
Limited Recourse to the Issuer
The sole source of payment for principal of or interest on a tranche of notes
is provided by:
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the portion of collections of principal receivables and finance charge receivables received by the issuer under the collateral certificate and available to that
tranche of notes after giving effect to all allocations and reallocations; |
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funds in the applicable issuer accounts for that tranche of notes; and |
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payments received under any applicable derivative agreement for that tranche of notes. |
Noteholders will have no recourse to any other assets of the issuer or any other person or entity for the payment of principal of or interest on the notes.
If there is a sale of credit card receivables (i) following the insolvency of MBNA, (ii) following an event of default and acceleration, or (iii) on
the applicable legal maturity date, each as described in “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables,” following such sale those noteholders have recourse only to the proceeds of that sale, investment
earnings on those proceeds and any funds previously deposited in any applicable issuer account for such noteholders.
Registration, Clearance and Settlement
The notes offered by this prospectus will be registered in the
name of The Depository Trust Company or its nominee, and purchasers of notes will only be entitled to receive a definitive certificate under limited circumstances. Owners of notes may elect to hold their notes through The Depository Trust Company in
the United States or through Clearstream, Luxembourg or the Euroclear System in Europe. Transfers will be made in accordance with the rules and operating procedures of those clearing systems. See “The Notes—Book-Entry Notes.”
The indenture permits benefit plans to purchase notes of every class offered
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pursuant to this prospectus and a related prospectus supplement. A fiduciary of a benefit plan should consult its counsel as to whether a
purchase of notes by the plan is permitted by ERISA and the Internal Revenue Code. See “Benefit Plan Investors.”
Subject to important considerations described under “Federal Income Tax
Consequences” in this prospectus, Orrick, Herrington & Sutcliffe LLP, as special tax counsel to the issuer, is of the opinion that, for United States federal income tax purposes (1) the notes will be treated as indebtedness and (2) the
issuer will not be an association or a publicly traded partnership taxable as a corporation. In addition, noteholders will agree, by acquiring notes, to treat the notes as debt for federal, state and local income and franchise tax purposes.
The notes offered by this prospectus will be issued in denominations of $1,000 and multiples of
$1,000 in excess of that amount.
The record date for payment of the notes will be the last day of the month before the related
payment date.
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The risk factors
disclosed in this section of the prospectus and in the accompanying prospectus supplement describe the principal risk factors of an investment in the notes.
Some liens or interests may be given priority over your notes which could cause your receipt of payments to be delayed or reduced.
MBNA will represent and warrant that its transfer of receivables to master trust II is either (1) an absolute sale of those receivables or (2) the grant of a security
interest in those receivables. For a description of master trust II’s rights if these representations and warranties are not true, see “Master Trust II—Representations and Warranties” in this prospectus. In addition, MBNA
will represent and warrant that its transfer of the collateral certificate to the issuer is either (1) an absolute sale of the collateral certificate or (2) the grant of a security interest in the collateral certificate.
MBNA will take steps under the Uniform Commercial Code to perfect master trust II’s interest in the receivables and the
issuer’s and the indenture trustee’s interest in the collateral certificate. Nevertheless, if the UCC does not govern these transfers and if some other action is required under applicable law and has not been taken, payments to you could
be delayed or reduced.
MBNA will represent, warrant, and covenant that both its transfer of receivables to
master trust II and its transfer of the collateral certificate to the issuer is perfected and free and clear of the lien or interest of any other entity. If this is not true, master trust II’s interest in the receivables and the issuer’s
and the indenture trustee’s interest in the collateral certificate could be impaired, and payments to you could be delayed or reduced. For instance,
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a prior or subsequent transferee of receivables could have an interest in the receivables superior to the interest of master trust II, or a prior or subsequent
transferee of the collateral certificate could have an interest in the collateral certificate superior to the interest of the issuer and the indenture trustee; |
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a tax, governmental, or other nonconsensual lien that attaches to the property of MBNA could have priority over the interest of master trust II in the
receivables and the interest of the issuer and the indenture trustee in the collateral certificate; and |
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the administrative expenses of a conservator or receiver for MBNA could be paid from collections on the receivables or distributions on the collateral
certificate before master trust II, the issuer or the indenture trustee receives any payments. |
If a conservator or receiver were appointed for MBNA, delays or reductions in payment of your notes could occur.
MBNA is chartered as a national banking association and is regulated and supervised by the Office of the Comptroller of the Currency, which is authorized to appoint the Federal Deposit Insurance
Corporation as conservator or receiver for MBNA if certain events occur relating to MBNA’s financial condition or the propriety of its actions. In addition, the FDIC could appoint itself as conservator or receiver for MBNA.
Although MBNA will treat both its transfer of the receivables to master trust II and its transfer of the collateral
certificate to the issuer as sales for accounting purposes, each of these transfers may constitute the grant of a security interest under general applicable law. Nevertheless, the FDIC has issued regulations surrendering certain rights under the
Federal Deposit Insurance Act, as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, to reclaim, recover, or recharacterize a financial institution’s transfer of financial assets such as the receivables and the
collateral certificate if (i) the transfer involved a securitization of the financial assets and meets specified conditions for treatment as a sale under relevant accounting principles, (ii) the financial institution received adequate consideration
for the transfer, (iii) the parties intended that the transfer constitute a sale for accounting purposes, and (iv) the financial assets were not transferred fraudulently, in contemplation of the financial institution’s insolvency, or with
the intent to hinder, delay, or defraud the financial institution or its creditors. The master trust II agreement and MBNA’s transfer of the receivables, as well as the trust agreement and MBNA’s transfer of the collateral certificate, are
intended to satisfy all of these conditions.
If a condition required under the FDIC’s regulations were
found not to have been met, however, the FDIC could reclaim, recover, or recharacterize MBNA’s transfer of the receivables or the collateral certificate. The FDIA would limit master trust II’s, the issuer’s or the indenture
trustee’s damages in this event to its “actual direct compensatory damages” determined as of the date
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that the FDIC was appointed as conservator or receiver for MBNA. The FDIC, moreover, could delay its decision whether to reclaim, recover, or recharacterize MBNA’s transfer of the
receivables or the collateral certificate for a reasonable period following its appointment as conservator or receiver for MBNA. Therefore, if the FDIC were to reclaim, recover, or recharacterize MBNA’s transfer of the receivables or the
collateral certificate, payments to you could be delayed or reduced.
Even if the conditions set forth in the
regulations were satisfied and the FDIC did not reclaim, recover, or recharacterize MBNA’s transfer of the receivables or the collateral certificate, you could suffer a loss on your investment if (i) the master trust II agreement, the trust
agreement, or MBNA’s transfer of the receivables or the collateral certificate were found to violate the regulatory requirements of the FDIA, (ii) master trust II, the master trust II trustee, the issuer, or the indenture trustee were required
to comply with the claims process established under the FDIA in order to collect payments on the receivables or the collateral certificate, (iii) the FDIC were to request a stay of any action by master trust II, the master trust II trustee, the
issuer, or the indenture trustee to enforce the master trust II agreement, the trust agreement, the indenture, the collateral certificate, or the notes, or (iv) the FDIC were to repudiate other parts of the master trust II agreement or the trust
agreement, such as any obligation to collect payments on or otherwise service the receivables or to manage the issuer.
In addition, regardless of the terms of the master trust II agreement, the trust agreement, or the indenture, and regardless of the instructions of those authorized to direct the master trust II trustee’s, the issuer’s or
the indenture trustee’s actions, the FDIC as conservator or receiver for MBNA may have the power (i) to prevent or require the commencement of an early redemption of the notes, (ii) to prevent, limit, or require the early liquidation of
receivables or the collateral certificate and termination of master trust II or the issuer, or (iii) to require, prohibit, or limit the continued transfer of receivables or payments on the collateral certificate. Furthermore, regardless of the terms
of the master trust II agreement or the trust agreement, the FDIC (i) could prevent the appointment of a successor servicer or another manager for the issuer or (ii) could authorize MBNA to stop servicing the receivables or managing the issuer.
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If any of these events were to occur, payments to you could be delayed or reduced.
In addition, if insolvency proceedings were commenced by or against MBNA, or if certain time periods were to pass, master trust II, the issuer and the indenture trustee may lose any perfected security interest in collections
held by MBNA and commingled with its other funds. See “Sources of Funds to Pay the Notes—The Collateral Certificate” and “Master Trust II—Application of Collections.”
Changes to consumer protection laws may impede collection efforts or alter timing and amount of collections which may result in an
acceleration of or reduction in payments on your notes.
Receivables that do not comply with consumer
protection laws may not be valid or enforceable under their terms against the obligors of those receivables.
Federal and state consumer protection laws regulate the creation and enforcement of consumer loans. Congress and the states could further regulate the credit card and consumer credit industry in ways that make it more difficult for
MBNA as servicer of master trust II to collect payments on the receivables or that reduce the finance charges and other fees that MBNA as seller to master trust II can charge on credit card account balances. For example, if MBNA were required to
reduce its finance charges and other fees, resulting in a corresponding decrease in the credit card accounts’ effective yield, this could lead to an early redemption event and could result in an acceleration of payment or reduced payments on
your notes. See “Material Legal Aspects of the Receivables—Consumer Protection Laws” in this prospectus.
If a cardholder sought protection under federal or state bankruptcy or debtor relief laws, a court could reduce or discharge completely the cardholder’s obligations to repay amounts due on its account and, as a result, the
related receivables would be written off as uncollectible. The noteholders could suffer a loss if no funds are available from credit enhancement or other sources. See “Master Trust II—Defaulted Receivables; Rebates and Fraudulent
Charges” in this prospectus.
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Competition in the credit card industry may result in a decline in ability
to generate new receivables. This may result in the payment of principal earlier or later than the expected principal payment date, or in reduced amounts.
The credit card industry is highly competitive. As new credit card companies enter the market and companies try to expand their market share, effective advertising, target
marketing and pricing strategies grow in importance. MBNA’s ability to compete in this environment will affect its ability to generate new receivables and might also affect payment patterns on the receivables. If the rate at which MBNA
generates new receivables declines significantly, MBNA might be unable to transfer additional receivables or designate additional credit card accounts to master trust II and a pay out event could occur, resulting in payment of principal sooner than
expected or in reduced amounts. If the rate at which MBNA generates new receivables decreases significantly at a time when noteholders are scheduled to receive principal, noteholders might receive principal more slowly than planned or in reduced
amounts.
Payment patterns of cardholders may not be consistent over time and variations in these payment
patterns may result in reduced payment of principal, or receipt of payment of principal earlier or later than expected.
Collections of principal receivables available to pay your notes on any principal payment date or to make deposits into an issuer account will depend on many factors, including:
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the rate of repayment of credit card balances by cardholders, which may be slower or faster than expected which may cause payment on the notes to be earlier or
later than expected; |
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the extent of credit card usage by cardholders, and the creation of additional receivables in the accounts designated to master trust II; and
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the rate of default by cardholders. |
Changes in payment patterns and credit card usage result from a variety of economic, competitive, social and legal factors. Economic factors include the rate of inflation, unemployment levels and
relative interest rates. The availability of incentive or other award programs may also affect cardholders’ actions.
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Social factors include consumer confidence levels and the public’s attitude about incurring debt and the
consequences of personal bankruptcy.
The acts of terrorism which occurred in the United States on September 11,
2001 had an immediate impact on commercial operations in the United States, including consumers’ use of credit cards and payment of credit card bills in the first few days after the attack. The ongoing effect of these events and other terrorist
acts on credit card use and payment patterns is unclear. Political and military actions in response to these events and the impact of those actions on credit card use and payment patterns are also unclear. There may be an adverse effect on general
economic conditions, consumer confidence and general market liquidity. In addition, existing and future legislation may impact the incurrence of consumer debt and payment of credit card balances. In particular, under the Soldiers’ and
Sailors’ Civil Relief Act of 1940, as amended, members of the military, including reservists, on active duty who have entered into obligations, such as incurring consumer credit card debt, before being called to active duty may be entitled to
reductions in interest rates to a cap of 6% and a stay of collection efforts. We have no information at this time concerning how many accounts in the master trust II portfolio may be affected by the limitations and restrictions of the Soldiers’
and Sailors’ Civil Relief Act.
We cannot predict how any of these or other factors will affect
repayment patterns or credit card use and, consequently, the timing and amount of payments on your notes. Any reductions in the amount, or delays in the timing, of interest or principal payments will reduce the amount available for distribution on
the notes.
Allocations of defaulted principal receivables and reallocation of available principal amounts
could result in a reduction in payment on your notes.
MBNA, as servicer, will write off the principal
receivables arising in credit card accounts in the master trust II portfolio if the principal receivables become uncollectible. Your notes will be allocated a portion of these defaulted principal receivables. In addition, available principal amounts
may be reallocated to pay interest on senior classes of notes or to pay a portion of the master trust II servicing fee. You may not receive full repayment of your notes and full payment of interest due if (i) the nominal liquidation amount of
your notes has been
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reduced by charge-offs resulting from uncovered default amounts on principal receivables in master trust II or as the
result of reallocations of available principal amounts to pay interest and a portion of the master trust II servicing fee, and (ii) those amounts have not been reimbursed from available funds. For a discussion of nominal liquidation amount,
see “The Notes—Stated Principal Amount, Outstanding Dollar Principal Amount and Nominal Liquidation Amount.”
The note interest rate and the receivables interest rate may re-set at different times or fluctuate differently, resulting in a delay or reduction in payments on your notes.
Some credit card accounts may have finance charges set at a variable rate based on a designated index (for example, the prime rate). A
series, class or tranche of notes may bear interest either at a fixed rate or at a floating rate based on a different index. If the rate charged on the credit card accounts declines, collections of finance charge receivables allocated to the
collateral certificate may be reduced without a corresponding reduction in the amounts payable as interest on the notes and other amounts paid from collections of finance charge receivables. This could result in delayed or reduced principal and
interest payments to you.
Issuance of additional notes or master trust II investor certificates may affect
the timing and amount of payments to you.
The issuer expects to issue notes from time to time, and
master trust II may issue new investor certificates from time to time. New notes and master trust II investor certificates may be issued without notice to existing noteholders, and without their consent, and may have different terms from outstanding
notes and investor certificates. For a description of the conditions that must be met before master trust II can issue new investor certificates or the issuer can issue new notes, see “Master Trust II—New Issuances” and
“The Notes—Issuances of New Series, Classes and Tranches of Notes.”
The issuance of new
notes or master trust II investor certificates could adversely affect the timing and amount of payments on outstanding notes. For example, if notes in your series issued after your notes have a higher interest rate than your notes, this could result
in a reduction in the available funds used to pay interest on
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your notes. Also, when new notes or investor certificates are issued, the voting rights of your notes will be diluted. See “Risk Factors—You may have limited or no ability to control
actions under the indenture and the master trust II agreement.”
Addition of credit card accounts
to master trust II may decrease the credit quality of the assets securing the repayment of your notes. If this occurs, your receipt of payments of principal and interest may be reduced, delayed or accelerated.
The assets of master trust II, and therefore the assets allocable to the collateral certificate held by the issuer, change every day.
MBNA may choose, or may be required, to add credit card receivables to master trust II. The credit card accounts from which these receivables arise may have different terms and conditions from the credit card accounts already designated for master
trust II. For example, the new credit card accounts may have higher or lower fees or interest rates, or different payment terms. We cannot guarantee that new credit card accounts will be of the same credit quality as the credit card accounts
currently or historically designated for master trust II. If the credit quality of the assets in master trust II were to deteriorate, the issuer’s ability to make payments on the notes could be adversely affected. See “Master Trust
II—Addition of Master Trust II Assets.”
MBNA may not be able to generate new receivables or
designate new credit card accounts to master trust II when required by the master trust II agreement. This could result in an acceleration of or reduction in payments on your notes.
The issuer’s ability to make payments on the notes will be impaired if sufficient new credit card receivables are not generated by MBNA. We do not guarantee that new
credit card receivables will be created, that any credit card receivables will be added to master trust II or that credit card receivables will be repaid at a particular time or with a particular pattern.
