UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
________
FORM 10-K
________
 
(Mark One)
ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended: June 30, 2011
or
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For transition period ____________ to _____________
 
Commission file number: 000-20949
________
 
BA MASTER CREDIT CARD TRUST II
(Exact name of registrant as specified in its charter)
________
 
   
Delaware
N/A
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
   
c/o BA Credit Card Funding, LLC
214 North Tryon Street
Charlotte, NC
 
28255
(Address of principal executive offices)
(Zip Code)
 
Registrant’s telephone number, including area code: (980) 683-4915
________
 
BA CREDIT CARD FUNDING, LLC
 
(Exact name of depositor as specified in its charter)
 
FIA CARD SERVICES, NATIONAL ASSOCIATION
 
(Exact name of sponsor as specified in its charter)
________
 
Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

BA Master Credit Card Trust II, Series 1997-B Floating Rate Asset Backed Certificates.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ¨    No  ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  ý
 
 
 
 
 

 
 
 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ý  Yes    ¨  No


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     ý  Yes    ¨  No  [Rule 405 of Regulation S-T is not applicable.]


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ý  [Item 405 of Regulation S-K is not applicable.]


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨                                                                                                                               Accelerated filer  ¨
Non-accelerated filer  ý    (Do not check if a smaller reporting company)                          Smaller reporting company  ¨


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  ý


Registrant has no voting or non-voting common equity outstanding held by non-affiliates.

 
 
 
 
 
 




 
 
 

INTRODUCTORY NOTE

FIA Card Services, National Association (“FIA”) is the originator, seller, and servicer under the Second Amended and Restated Pooling and Servicing Agreement, dated as of October 20, 2006 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), and the Series 1997-B Supplement dated as of February 27, 1997 (as amended, supplemented or otherwise modified from time to time) by and between FIA and the trustee, providing for the issuance of the BA Master Credit Card Trust II Series 1997-B Floating Rate Asset Backed Certificates (the “Certificates”) and is the originator of the BA Master Credit Card Trust II (the “Trust” and the “Registrant”). The Certificates do not represent obligations of or interests in FIA. In November 1988, FIA (formerly known as MBNA America Bank, National Association) made application under the Securities Exchange Act of 1934 for an exemption from certain reporting requirements. On December 30, 1988, the staff of the Securities and Exchange Commission’s Division of Corporation Finance granted FIA’s exemption request, pursuant to which FIA is not required to respond to various items of Form 10-K. Such items are designated herein as “Not Applicable”.

 
 
 
 
 
 

 

 
 
 

PART I


Item 1: Business.
         Not Applicable.

Item 1A: Risk Factors.
         Not Applicable.

Item 1B: Unresolved Staff Comments.
         Not Applicable.

Item 2: Properties.
         Not Applicable.

Item 3: Legal Proceedings.

Industry Developments

FIA issues credit cards on MasterCard’s and Visa’s networks.  MasterCard and Visa are subject to settlement obligations relating to certain litigations and continue to be subject to significant ongoing litigations, including class actions, and increased competition.  These settlements and litigations are based on, among other things, claimed violations of United States federal antitrust laws, claims that currency conversion fees were wrongly applied on purchases of goods and services in foreign countries, and claims alleging that the interchange charged by MasterCard and Visa is impermissible.  The costs associated with these settlements, litigations and other matters could cause MasterCard and Visa to invest less in their networks and marketing efforts and could adversely affect the interchange paid to their member banks, including FIA.

Litigation

A group of merchants have filed a series of putative class actions and individual actions with regard to interchange fees associated with Visa and MasterCard payment card transactions.  These actions, which have been consolidated in the U.S. District Court for the Eastern District of New York under the caption In Re Payment Card Interchange Fee and Merchant Discount Anti-Trust Litigation (“Interchange”), name Visa, MasterCard and several banks and bank holding companies, including Bank of America Corporation, as defendants.  Plaintiffs allege that the defendants conspired to fix the level of default interchange rates, which represent the fee an issuing bank charges an acquiring bank on every transaction.  Plaintiffs also challenge as unreasonable restraints of trade under Section 1 of the Sherman Act certain rules of Visa and MasterCard related to merchant acceptance of payment cards at the point of sale.  Plaintiffs seek unspecified damages and injunctive relief based on their assertion that interchange would be lower or eliminated absent the alleged conduct.  On January 8, 2008, the court granted defendants’ motion to dismiss all claims for pre-2004 damages.  Motions to dismiss the remainder of the complaint and plaintiffs’ motion for class certification are pending.

In addition, plaintiffs filed supplemental complaints against certain defendants, including Bank of America Corporation, relating to initial public offerings (the “IPOs”) of MasterCard and Visa.  Plaintiffs allege that the MasterCard and Visa IPOs violated Section 7 of the Clayton Act and Section 1 of the Sherman Act.  Plaintiffs also assert that the MasterCard IPO was a fraudulent conveyance.  Plaintiffs seek unspecified damages and to undo the IPOs.  Motions to dismiss both supplemental complaints were filed in March 2009 and the motions remain pending.  On June 20, 2011, plaintiffs and defendants both moved for summary judgment.  Those motions are also pending; oral argument on the summary judgment motions is scheduled for November 2, 2011.  Trial has been scheduled to begin on September 12, 2012.

Bank of America Corporation and certain of its affiliates previously entered into loss-sharing agreements with Visa and other financial institutions in connection with certain antitrust litigation against Visa, including Interchange.  Bank of America Corporation and these same affiliates have now entered into additional loss-sharing agreements for Interchange that cover all defendants, including MasterCard.  Collectively, the loss-sharing agreements require Bank of America Corporation and/or certain affiliates to pay 11.6 percent of the monetary portion of any comprehensive Interchange settlement.  In the event of an adverse judgment, the agreements require Bank of America Corporation and/or certain affiliates to pay 12.8 percent of any damages associated with Visa-related claims (“Visa-related damages”), 9.1 percent of any damages associated
 
 
 
 
 
 

 
 
 
 

 with MasterCard-related claims, and 11.6 percent of any damages associated with internetwork claims (“internetwork damages”) or not associated specifically with Visa or MasterCard-related claims (“unassigned damages”).

Pursuant to Visa’s publicly-disclosed Retrospective Responsibility Plan (the “RRP”), Visa placed certain proceeds from its IPO into an escrow fund (the “Escrow”).  Under the RRP, funds in the Escrow may be accessed by Visa and its members, including Bank of America, to pay for a comprehensive settlement or damages in Interchange, with Bank of America Corporation’s payments from the Escrow capped at 12.81 percent of the funds that Visa places therein.  Subject to that cap, Bank of America Corporation may use Escrow funds to cover: 73.9 percent of its monetary payment towards a comprehensive Interchange settlement, 100 percent of its payment for any Visa-related damages and 73.9 percent of its payment for any internetwork damages and unassigned damages.

Item 4: (Removed and Reserved).
 
 
PART II
 
Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
         The Certificates of each series representing investors’ interests in the Trust are represented by one or more Certificates registered in the name of Cede & Co., the nominee of The Depository Trust Company.

Item 6: Selected Financial Data.
         Not Applicable.

Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations.
         Not Applicable.

Item 7A: Quantitative and Qualitative Disclosures about Market Risk.
         Not Applicable.

Item 8: Financial Statements and Supplementary Data.
         Not Applicable.

Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
         Not Applicable.

Item 9A: Controls and Procedures
         Not Applicable.

Item 9B: Other Information.
         None.
 
 
PART III
Item 10: Directors, Executive Officers and Corporate Governance.
         Not Applicable.

Item 11: Executive Compensation.
         Not Applicable.

Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
                     (a) The Certificates of each series representing investors’ interests in the Trust are represented by one or more Certificates registered in the name of Cede & Co., the nominee of The Depository Trust Company (“DTC”), and an investor
 
 
 
 
 

 
 
 
 

holding an interest in the Trust is not entitled to receive a Certificate representing such interest except in certain limited circumstances. Accordingly, Cede & Co. is the sole holder of record of Certificates, which it holds on behalf of brokers, dealers, banks and other direct participants in the DTC system at June 30, 2011. Such direct participants may hold Certificates for their own accounts or for the accounts of their customers. At June 30, 2011, the following direct DTC participants held positions in Certificates representing interests in the Trust equal to or exceeding 5% of the total principal amount of the Certificates of one or more series outstanding on that date, as indicated. The information on DTC participants’ held positions is provided by DTC.
 
       
Series
Participant Full Name
Total
Total
       
1997-B Class A
JPMorgan Chase Bank, National Association
$323,084,000
38.01%
 
State Street Bank and Trust Company
$283,443,000
33.35%
 
The Bank of New York Mellon / Mellon Trust of New England, National Association
$87,991,000
10.35%
 
The Bank of New York Mellon
$78,914,000
9.28%
 
Merrill Lynch, Pierce Fenner & Smith
$43,600,000
5.13%
       
1997-B Class B
JPMorgan Chase Bank, National Association
$33,800,000
45.07%
 
Citibank, N.A.
$31,200,000
41.60%
 
UMB Bank, National Association
$5,000,000
6.67%

 
The address of each of the above participants is:

 
c/o The Depository Trust Company
 
55 Water Street
 
New York, NY 10041

Item 13: Certain Relationships and Related Transactions, and Director Independence.
Not Applicable.

Item 14: Principal Accountant Fees and Services.
Not Applicable.
 
 
PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1) Not Applicable.

(a)(2) Not Applicable.

(a)(3) Not Applicable.

(b) Exhibits
   
Exhibit
Number
Description
31.1
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
99.1
Report of PricewaterhouseCoopers LLP pursuant to Section 3.06 of the Pooling and Servicing Agreement with regard to FIA Card Services, National Association (including the related assertion letter of FIA regarding its internal controls, delivered pursuant to Section 3.06 of the Pooling and Servicing Agreement).
   
99.2
Report of PricewaterhouseCoopers LLP pursuant to Section 3.06 of the Pooling and Servicing Agreement with regard to FIA Card Services, National Association (including the related assertion letter of FIA regarding its compliance with the provisions of the Pooling and Servicing Agreement, delivered pursuant to Section 3.06 thereof).
   
99.3
Servicer Compliance Statement of FIA Card Services, National Association.
 
 
 
 

 
 
 
 

(c) Not Applicable.
 
 
 
 

 

 
 
 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
 
BA Master Credit Card Trust II
   
 
By:     FIA Card Services, National Association,
 
as Servicer
   
   
 
By:     /s/ Michelle D. Dumont
 
Name:  Michelle D. Dumont
 
Title:    Senior Vice President
   
 
(senior officer in charge of the servicing function)
   
 
Date:  September 28, 2011
 
 
 
 
 

 


 
 
 

EXHIBIT INDEX
 
 
   
Exhibit
Number
Description
31.1
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
   
99.1
Report of PricewaterhouseCoopers LLP pursuant to Section 3.06 of the Pooling and Servicing Agreement with regard to FIA Card Services, National Association (including the related assertion letter of FIA regarding its internal controls, delivered pursuant to Section 3.06 of the Pooling and Servicing Agreement).
   
99.2
Report of PricewaterhouseCoopers LLP pursuant to Section 3.06 of the Pooling and Servicing Agreement with regard to FIA Card Services, National Association (including the related assertion letter of FIA regarding its compliance with the provisions of the Pooling and Servicing Agreement, delivered pursuant to Section 3.06 thereof).
   
99.3
Servicer Compliance Statement of FIA Card Services, National Association.