---

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·	may periodically issue notes in one or more series, classes or tranches; and

 

·

will own—

 

 

 

 

·	will be secured by the issuing entity’s assets and will be paid only from proceeds of the issuing entity’s assets; and

 

·	may be issued as part of a designated series, class or tranche.

 

You should consider the discussion under “Risk Factors” beginning on page 22 of this prospectus and any risk factors in the accompanying prospectus supplement before you purchase any notes. The primary asset of the issuing entity is the collateral certificate, Series 2001-D.  The collateral certificate represents an undivided interest in BA Master Credit Card Trust II.  Master trust II’s assets include receivables arising in a portfolio of unsecured consumer revolving credit card accounts.  The notes are obligations of the issuing entity only and are not obligations of BA Credit Card Funding, LLC, FIA Card Services, National Association, their affiliates or any other person.  Each tranche of notes will be secured by specified assets of the issuing entity as described in this prospectus and in the accompanying prospectus supplement.  Noteholders will have no recourse to any other assets of the issuing entity for payment of the notes. The notes are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality.

 

 

 

 

 

 

 

 

 

 

 

·	the timing of interest and principal payments;

·	financial and other information about the issuing entity’s assets;

·	information about enhancement for your series, class or tranche; and

·	the method for selling the notes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	local, regional and national business, political or economic conditions may differ from those expected;

 

·	the effects and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board, may adversely affect Funding’s or FIA’s business;

 

·	the timely development and acceptance of new products and services may be different than anticipated;

 

·	technological changes instituted by Funding or FIA and by persons who may affect Funding’s or FIA’s business may be more difficult to accomplish or more expensive than anticipated or may have unforeseen consequences;

 

·	the ability to increase market share and control expenses may be more difficult than anticipated;

 

·	competitive pressures among financial services companies may increase significantly;

 

·	Funding’s or FIA’s reputation risk arising from negative public opinion;

 

·	changes in laws and regulations may adversely affect Funding, FIA or their businesses;

 

·	changes in accounting policies and practices, as may be adopted by regulatory agencies and the Financial Accounting Standards Board, may affect expected financial reporting or business results;

 

·	the costs, effects and outcomes of litigation may adversely affect Funding, FIA or their businesses; and

 

·	Funding or FIA may not manage the risks involved in the foregoing as well as anticipated.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	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 for 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.

 

 

 

 

 

 

 

 

 

 

 

·	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;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	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;

 

·	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;

 

·	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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

the nominal liquidation amount of your notes has been reduced by charge-offs due to uncovered Investor Default Amounts 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

 

·

receivables are sold (i) following the insolvency of Funding, (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.

 

 

 

·

Collateral Certificate.  The collateral certificate is an investor certificate issued as a part of “Series 2001-D” by master trust II to the issuing entity.  It represents an undivided interest in master trust II.  Master trust II owns primarily receivables arising in selected MasterCard, Visa and American Express revolving credit card accounts.  FIA or Funding has transferred, and Funding may continue to transfer, credit card receivables to master trust II in accordance with

 

 

 

 

 

 

 

 

 

 

 

 

 

·

Derivative Agreements.  Some notes may have the benefit of one or more derivative agreements, including interest rate or currency swaps, or other agreements described in “Sources of Funds to Pay the Notes—Derivative Agreements.”  A description of the specific terms of each derivative agreement and each derivative counterparty will be included in the applicable prospectus supplement.

 

·

Supplemental Credit Enhancement Agreements and Supplemental Liquidity Agreements.  Some notes may have the benefit of one or more additional forms of credit enhancement, referred to in this prospectus and the applicable prospectus supplement as supplemental credit enhancement agreements, such as letters of credit, cash collateral guarantees or accounts, surety bonds or insurance policies.  In addition, some notes may have the benefit of one or more forms of supplemental liquidity agreements, such as a liquidity facility with various liquidity providers.  Funding, FIA or an affiliate may be the provider of any supplemental credit enhancement agreement or supplemental liquidity agreement.  A description of the specific terms of any supplemental credit enhancement agreement or any supplemental liquidity agreement applicable to a series, class or tranche of notes and a description of the related provider will be included in the applicable prospectus supplement.  See “The Notes—General” and “Sources of Funds to Pay the Notes—Supplemental Credit Enhancement Agreements and Supplemental Liquidity Agreements” for a discussion of credit enhancement, supplemental credit enhancement agreements and supplemental liquidity agreements.

 

·

The Issuing Entity Accounts.  The issuing entity 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 issuing entity may establish supplemental accounts for any series, class or tranche of notes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	the occurrence of a note’s expected principal payment date;

 

·	each of the Pay Out Events applicable to Series 2001-D, as described under “Master Trust II—Pay Out Events”;

 

·	the issuing entity becoming an “investment company” within the meaning of the Investment Company Act of 1940, as amended; or

 

·	any additional early redemption events specified in the accompanying prospectus supplement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	for any tranche of notes, the issuing entity’s failure, for a period of 35 days, to pay interest upon such notes when such interest becomes due and payable;

 

·	for any tranche of notes, the issuing entity’s failure to pay the principal amount of such notes on the applicable legal maturity date;

 

·

the issuing entity’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;

 

·	the occurrence of certain events of bankruptcy, insolvency, conservatorship or receivership of the issuing entity; and

 

·	for any series, class or tranche of notes, any additional events of default specified in the accompanying prospectus supplement.

 

 

 

 

 

 

 

 

 

 

 

 

·	if the conditions specified in “The Indenture—Events of Default Remedies” are satisfied and, for 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; or

 

·	on the legal maturity date of those notes.

 

 

 

 

 

·	a security interest in any applicable supplemental account; and

 

·	a security interest in any derivative agreement for that tranche.

 

 

 

·	the portion of collections of principal receivables and finance charge receivables received by the issuing entity under the collateral certificate and available to that tranche of notes after giving effect to all allocations and reallocations;

 

·	funds in the applicable issuing entity accounts for that tranche of notes; and

 

·	payments received under any applicable derivative agreement for that tranche of notes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	FEES AND EXPENSES PAYABLE FROM BASERIES AVAILABLE FUNDS:
	·	SERVICING FEE: 2.00% OF SERIES 2001-D INVESTOR INTEREST – PAID TO THE SERVICER

 

 

 

 

 

 

 

 

 

 

 

 

 

	$1,000,000,000       Class A Notes	$1,000,000,000 Class A notes
	$200,000,000    Class B notes	Class A RSA of Class B notes $142,857,100 encumbered Class B notes		$57,142,900 unencumbered Class B notes
	$200,000,000    Class C Notes	$133,333,310.48 Greater of Class A RSA of Class C Notes and Class B RSA of Class C notes	$66,666,689.52 unencumbered Class C notes
	$211,567,248.09             Class D                Certificate	$211,567,248.09 Class D Certificate

 

 

 

 

·	For the $1,000,000,000 of Class A notes, the RSA of subordinated notes is $269,841,200.  Of that amount, the RSA of Class B notes is $142,857,100 (which is 14.28571% of $1,000,000,000) and the RSA of Class C notes is $126,984,100 (which is 12.69841% of $1,000,000,000).

 

·	Encumbered Class B notes consist of that portion of the Class B notes that provide credit enhancement to the Class A notes (which is equal to the Class A RSA of Class B notes or $142,857,100).

 

·	Unencumbered Class B notes consist of that portion of the Class B notes that do not provide credit enhancement to the Class A notes.  This unencumbered amount is equal to the aggregate amount of Class B notes ($200,000,000) minus the encumbered Class B notes ($142,857,100).

 

 

 

 

 

 

 

 

 

 

·	For the $57,142,900 of unencumbered Class B notes, the RSA of Class C notes is $6,349,210.48 (which is 11.11111% of $57,142,900).

 

·	For the $200,000,000 of Class B notes, the RSA of Class C notes is $133,333,310.48, or 100% of the Class A RSA of Class C notes ($126,984,100) plus the Class B RSA of Class C notes for the unencumbered Class B notes ($6,349,210.48).

 

·	Encumbered Class C notes consist of that portion of the Class C notes that provide credit enhancement to the Class A or the Class B notes (which is equal to the greater of the Class A RSA of Class C notes and the Class B RSA of Class C Notes, or $133,333,310.48).

 

·

Unencumbered Class C notes consist of that portion of the Class C notes that do not provide credit enhancement to the Class A or Class B notes.  This unencumbered amount is equal to the aggregate amount of Class C notes ($200,000,000) minus the encumbered Class C notes ($133,333,310.48), or $66,666,689.52.

 

·	The required Class D Investor Interest equals the sum of:

 

–

(i) The adjusted outstanding dollar principal amount of the Class A notes, divided by 0.6825 ($1,465,201,465.20), minus (ii) the adjusted outstanding dollar principal amount of the Class A notes ($1,000,000,000), minus (iii) the aggregate Class A required subordinated amount of Class B notes ($142,857,100), minus (iv) the aggregate Class A required subordinated amount of Class C notes ($126,984,100), for a total of $195,360,265.20;

 

–

(i) (A) the adjusted outstanding dollar principal amount of the Class B notes minus the aggregate Class A required subordinated amount of Class B notes, divided by (B) 0.795 ($71,877,861.64), minus (ii) the adjusted outstanding dollar principal amount of the Class B notes minus the aggregate Class A required subordinated amount of Class B notes ($57,142,900), minus (iii) (A) the adjusted outstanding dollar principal amount of the Class B notes minus the aggregate Class A required subordinated amount of Class B notes, times (B) 0.1111111 ($6,349,210.48), for a total of $8,385,751.16; and

 

–

(i) (A) the adjusted outstanding dollar principal amount of the Class C notes minus the aggregate Class B required subordinated amount of Class C notes, divided by (B) 0.895 ($74,487,921.25), minus (ii) the adjusted outstanding dollar principal amount of the Class C notes minus the aggregate Class B required subordinated amount of Class C notes ($66,666,689.52), for a total of $7,821,231.73.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	one or more obligations were issued by the trust as of September 27, 2010;

 

·	the transfer satisfied specified conditions for sale accounting treatment under generally accepted accounting principles in effect for reporting periods before November 15, 2009;

 

·	the transfer involved a securitization of the financial assets;

 

·	the depository institution received adequate consideration for the transfer; and

 

·	the financial assets were not transferred fraudulently, in contemplation of the depository institution’s insolvency, or with the intent to hinder, delay, or defraud the depository institution or its creditors.

 

 

 

 

 

 

 

 

 

 

 

 

 

·	authorize FIA to assign or to stop performing its obligations under the transaction documents, including its obligations to service the receivables, to make payments or deposits, to repurchase receivables, or to provide administrative services for Funding or the issuing entity;

 

·	prevent the appointment of a successor servicer or the appointment of a successor provider of administrative services for Funding or the issuing entity;

 

·	alter the terms on which FIA continues to service the receivables, to provide administrative services for Funding or the issuing entity, or to perform its other obligations under the transaction documents, including the amount or the priority of the fees paid to FIA;

 

·	prevent or limit the commencement of an early redemption of the notes, or instead do the opposite and require the early redemption to commence;

 

·	prevent or limit the early liquidation of the receivables or the collateral certificate and the termination of master trust II or the issuing entity, or instead do the opposite and require those to occur; or

 

·	prevent or limit continued transfers of receivables or continued distributions on the collateral certificate, or instead do the opposite and require those to continue.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	BACCS did not sell receivables to Funding but instead borrowed money from Funding and granted a security interest in the receivables;

 

·	Funding, master trust II, or the issuing entity, and its assets (including the receivables or the collateral certificate), should be substantively consolidated with the bankruptcy estate of BACCS or an affiliate; or

 

·	the receivables or the collateral certificate are necessary for BACCS or an affiliate to reorganize.

 

 

 

 

·	authorize BACCS or an affiliate to assign or to stop performing its obligations under the transaction documents, including its obligations to make payments or deposits or to repurchase receivables;

 

·	alter the terms on which BACCS or an affiliate continues to perform its obligations under the transaction documents, including the amount or the priority of the fees paid to BACCS or an affiliate;

 

 

 

 

 

 

 

 

 

 

·	prevent or limit the commencement of an early redemption of the notes, or instead do the opposite and require the early redemption to commence;

 

·	prevent or limit the early liquidation of the receivables or the collateral certificate and the termination of master trust II or the issuing entity, or instead do the opposite and require those to occur; or

 

·	prevent or limit continued transfers of receivables or continued distributions on the collateral certificate, or instead do the opposite and require those to continue.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	preventing certain increases in interest rates and fees during the first year after a credit card account is opened;

 

 

 

 

 

 

 

 

 

 

·

preventing increases at any time on interest rates on existing credit card balances, unless (i) minimum payment on the related account is 60 days or more delinquent, (ii) the rate increase is due to the expiration of a promotional rate (and any promotional rate must be effective for a least six months), (iii) the cardholder successfully completes or fails to comply with a negotiated workout plan or (iv) the increase is due to an increase in the index rate for a variable-rate credit card;

 

·	requiring that any promotional rates for credit cards be effective for at least six months;

 

·	requiring 45 days notice for any change of an interest rate, fees, or any other significant changes to a credit card account;

 

·	prohibiting “double-cycle” billing;

 

·	preventing credit card companies from charging “over-the-limit” fees unless a cardholder opts into receiving over-the-limit protection on the credit card, limits the number of such over-the-limit fees that can be charged for the same transaction, and limits such fees with respect to credit holds;

 

·	limiting the amount of any penalty fees or charges, including late fees, returned payment fees, and returned check fees, for credit card accounts to amounts that are “reasonable and proportional to the [related] omission or violation”;

 

·	requiring credit card companies to reevaluate annual percentage rate increases made on credit card accounts on or after January 1, 2009, and potentially reduce rates based on the review;

 

·	requiring credit card companies to mail billing statements 21 calendar days before the due date for cardholder payments;

 

·	requiring that cardholder payments in excess of the minimum be applied to balances with the highest interest rates first;

 

·	requiring same-day crediting of payments received in the mail by 5:00 p.m.;

 

·	allowing credit card companies to charge cardholders for payments by telephone or electronic means only if the cardholder requests an expedited payment through a customer service representative of the credit card company in connection with that payment;

 

·

preventing the issuance of credit cards to anyone under age 21 without (i) a cosigner that is 21 or older with demonstrated independent means of repaying, and who assumes joint liability for, the obligations on the credit card account or (ii) submission of financial information indicating that the cardholder himself has independent means of repaying the obligations on the credit card account; and

 

·	for accountholders under the age of 21 that rely on a parent, guardian or other cosigner who is jointly liable on the account, requiring that any increases in the related credit line must be approved by the cosigner.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If the rate at which FIA generates new receivables decreases significantly at a time when noteholders are scheduled to receive principal payments, noteholders might receive principal payments more slowly than planned or in reduced amounts.

 

 

 

·	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;

 

·	the extent of credit card usage by cardholders, and the creation of additional receivables in the accounts designated to master trust II; and

 

·	the rate of default by cardholders.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	the portion of the Available Principal Amounts and Available Funds allocated to the BAseries and available to your tranche of notes after giving effect to any reallocations and payments and deposits for senior notes;

 

·	funds in the applicable issuing entity accounts for your tranche of notes; and

 

·	payments received under any applicable derivative agreement, supplemental credit enhancement agreement or supplemental liquidity agreement for your tranche of notes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	enough senior notes are repaid so that the subordinated notes are no longer necessary to provide the required subordination;

 

·	new subordinated notes are issued so that the subordinated notes which are payable are no longer necessary to provide the required subordination;

 

·	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

 

·	the subordinated notes reach their legal maturity date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	acquiring and holding the collateral certificate, other certificates of beneficial interest in master trust II, and the other assets of the issuing entity and the proceeds from these assets, and granting a security interest in these assets;

 

·	issuing notes;

 

·	making payments on the notes; and

 

·	engaging in other activities that are necessary or incidental to accomplish these limited purposes, and which are not contrary to maintaining the status of the issuing entity as a “qualifying special purpose entity” under applicable accounting literature.

 

 

·	the collateral certificate;

 

·	derivative agreements that the issuing entity will enter into from time to time to manage interest rate or currency risk relating to certain series, classes or tranches of notes;

 

·	supplemental credit enhancement agreements or supplemental liquidity agreements that the issuing entity will enter into from time to time for certain series, classes or tranches of notes; and

 

·	funds on deposit in the issuing entity accounts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

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 “Sources of Funds to Pay the Notes—Deposit and Application of Funds for the BAseries—Targeted Deposits of BAseries 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 expected or required to be repaid even if other tranches of Class A notes are outstanding.

 

·

If the principal funding subaccounts for the senior classes of notes have been sufficiently prefunded as described in “Sources of Funds to Pay the Notes—Deposit and Application of Funds for the BAseries—Targeted Deposits of BAseries Available Principal Amounts to the Principal Funding Account—Prefunding of the Principal Funding Account for Senior Classes.”

 

·	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.

 

 

 

 

 

 

 

 

 

·	If the subordinated tranche of notes reaches its legal maturity date and there is a sale of credit card receivables as described in “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·

If Available Funds allocable to a series of notes are insufficient to fund the portion of Investor Default Amounts allocable to such series of notes (which will be allocated to each series of notes pro rata based on the Weighted Average Available Funds Allocation Amount of all notes in such series) such Investor Default Amounts will result in a reduction of the nominal liquidation amount of such series.  Within each series, subordinated classes of notes will bear the risk of reduction in their nominal liquidation amount due to charge-offs resulting from uncovered Investor Default Amounts before senior classes of notes.

 

·

In a multiple tranche series, while these reductions will be initially allocated pro rata to each tranche of notes, they will then be reallocated to the subordinated classes of notes in that series in succession, beginning with the most subordinated classes.  However, these reallocations will be made from senior notes to subordinated notes only to the extent that such senior notes have not used all of their required subordinated amount.  For any tranche, the required subordinated amount will be specified in the related prospectus supplement.  For multiple tranche series, these reductions will generally be allocated within each class pro rata to each outstanding tranche of the related class based on the Weighted Average Available Funds Allocation Amount of such tranche.  Reductions that cannot be reallocated to a subordinated tranche will reduce the nominal liquidation amount of the tranche to which the reductions were initially allocated.

 

·

If Available Principal Amounts are reallocated from subordinated notes of a series to pay interest on senior notes, any shortfall in the payment of the master trust II servicing fee or any other shortfall of Available Funds which Available Principal Amounts are reallocated to cover, the nominal liquidation amount of those subordinated notes will be reduced by the amount of the reallocations.  The amount of the reallocation of Available Principal Amounts will be applied to reduce the nominal liquidation amount of the subordinated classes of notes in that series in succession, to the extent of such senior tranches’ required subordinated amount of the related subordinated notes, beginning with the most subordinated classes.  No Available Principal Amounts will be reallocated to pay interest on a senior class of notes or any portion of the master trust II servicing fee if such reallocation would result in the reduction of the nominal liquidation amount of such senior class of notes.  For a multiple tranche series, these reductions will generally be allocated within each class pro rata to each outstanding tranche of the related class based on the Weighted Average Available Funds Allocation Amount of such tranche.

 

·	The nominal liquidation amount of a note will be reduced by the amount on deposit in its respective principal funding subaccount.

 

·	The nominal liquidation amount of a note will be reduced by the amount of all payments of principal of that note.

 

·

Upon a sale of credit card receivables after the insolvency of Funding, an event of default and acceleration or on the legal maturity date of a note, the nominal liquidation amount of such note will be automatically reduced to zero.  See “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables.”

 

 

 

 

 

 

 

 

 

 

 

·	For discount notes, the nominal liquidation amount will increase over time as principal accretes, to the extent that Available Funds are allocated for that purpose.

 

·

If Available Funds are available, they will be applied to reimburse earlier reductions in the nominal liquidation amount from charge-offs for uncovered Investor Default Amounts, or from reallocations of Available Principal Amounts from subordinated classes to pay shortfalls of Available Funds.  Within each series, the increases will be allocated first to the senior-most class with a deficiency in its nominal liquidation amount and then, in succession, to the subordinated classes with a deficiency in the nominal liquidation amount.  In a multiple tranche series, the increases will be further allocated to each tranche of a class pro rata based on the deficiency in the nominal liquidation amount in each tranche.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	the date of the payment in full of the stated principal amount of and all accrued, past due and additional interest on those notes;

 

·	the date on which the outstanding dollar principal amount of the notes is reduced to zero and all accrued, past due and additional interest on those notes is paid in full;

 

·	the legal maturity date of those notes, after giving effect to all deposits, allocations, reallocations, sale of credit card receivables and payments to be made on that date; or

 

·	the date on which a sale of receivables has taken place for such tranche, as described in “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(i)

a fraction, the numerator of which is the Class A required subordinated amount of Class C notes for all Class A BAseries notes that require any credit enhancement from Class B BAseries notes, and the denominator of which is the aggregate adjusted outstanding dollar principal amount of all Class B BAseries notes; plus

 

(ii)

11.11111% (referred to as the unencumbered percentage) multiplied by a fraction, the numerator of which is the aggregate adjusted outstanding dollar principal amount of all Class B BAseries notes minus the required subordinated amount of Class B notes for all Class A BAseries notes, and the denominator of which is the aggregate adjusted outstanding dollar principal amount of all Class B BAseries notes.

 

 

 

 

 

 

 

 

 

 

 

 

·	a decrease in the aggregate Adjusted Outstanding Dollar Principal Amount of Class A BAseries notes,

 

·	a decrease in the Class A required subordinated amount of Class B or Class C notes for outstanding tranches of Class A BAseries notes, or

 

·	the issuance of additional Class B BAseries notes.

 

 

 

·	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 BAseries;

 

·

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 treated as 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

 

·

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 issuing entity that were characterized as debt at the time of their issuance, (2) following the change, the issuing entity 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

·	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 for Class B notes to be made on that date; minus

 

·	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 issuances, deposits, allocations, reallocations or payments for Class A notes to be made on that date.

 

 

 

·	the aggregate nominal liquidation amount of all tranches of outstanding Class C notes on that date, after giving effect to any issuances, deposits, allocations, reallocations or payments for Class C notes to be made on that date; minus

 

·

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 for Class A notes to be made on that date.

 

 

·	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 for Class C notes to be made on that date; minus

 

·	the sum of:

 

–

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 for any BAseries notes to be made on that date; plus

 

–

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 for those Class A notes to be made on that date.

 

 

 

 

 

 

 

 

 

 

 

 

 

·

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 “Sources of Funds to Pay the Notes—Deposit and Application of Funds for the BAseries—Targeted Deposits of BAseries 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 they are expected to be repaid even if other tranches of Class A notes are outstanding.

 

·

If the principal funding subaccounts for the senior classes of notes have been sufficiently prefunded as described in “Sources of Funds to Pay the Notes—Deposit and Application of Funds for the BAseries—Targeted Deposits of BAseries Available Principal Amounts to the Principal Funding Account—Prefunding of the Principal Funding Account for Senior Classes.”

 

·	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.

 

·	If the subordinated tranche of notes reaches its legal maturity date and there is a sale of credit card receivables as described in “Sources of Funds to Pay the Notes—Sale of Credit Card Receivables.”

 

 

 

 

 

 

 

 

 

·

(i) the Adjusted Outstanding Dollar Principal Amount of the Class A notes (other than the Class A(2001-Emerald) notes), divided by 0.6825, minus (ii) the Adjusted Outstanding Dollar Principal Amount of the Class A notes (other than the Class A(2001-Emerald) notes), minus (iii) the aggregate Class A required subordinated amount of Class B notes, minus (iv) the aggregate Class A required subordinated amount of Class C notes minus the Class A required subordinated amount of Class C notes for the Class A(2001-Emerald) notes; plus

 

·

(i) the Adjusted Outstanding Dollar Principal Amount of the Class A(2001-Emerald) notes, divided by 0.85, minus (ii) the Adjusted Outstanding Dollar Principal Amount of the Class A(2001-Emerald) notes, minus (iii) the Class A required subordinated amount of Class C notes for the Class A(2001-Emerald) notes; plus

 

·

(i) (A) the Adjusted Outstanding Dollar Principal Amount of the Class B notes minus the aggregate Class A required subordinated amount of Class B notes, divided by (B) 0.795, minus (ii) the Adjusted Outstanding Dollar Principal Amount of the Class B notes minus the aggregate Class A required subordinated amount of Class B notes, minus (iii) (A) the Adjusted Outstanding Dollar Principal Amount of the Class B notes minus the aggregate Class A required subordinated amount of Class B notes, times (B) 0.1111111; plus

 

·

(i) (A) the Adjusted Outstanding Dollar Principal Amount of the Class C notes minus the sum of (x) the aggregate Class B required subordinated amount of Class C notes plus (y) the Class A required subordinated amount of Class C notes for the Class A(2001-Emerald) notes, divided by (B) 0.895, minus (ii) the Adjusted Outstanding Dollar Principal Amount of the Class C notes minus the sum of (A) the aggregate Class B required subordinated amount of Class C notes plus (B) the Class A required subordinated amount of Class C notes for the Class A(2001-Emerald) notes.

 

 

 

·	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;

 

·

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 treated as 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

 

·	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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	first, on or before the third Business Day before a new issuance of notes, the issuing entity gives the indenture trustee and the rating agencies written notice of the issuance;

 

 

 

 

 

 

 

 

 

 

·	second, on or prior to the date that the new issuance is to occur, the issuing entity delivers to the indenture trustee and each rating agency a certificate to the effect that:

 

 

 

 

 

 

·

third, the issuing entity delivers to the indenture trustee and the rating agencies an opinion of counsel that for federal income tax purposes (i) the new issuance 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, (ii) following the new issuance, master trust II will not be treated as an association, or a publicly traded partnership, taxable as a corporation, and (iii) the new issuance 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;

 

·

fourth, the issuing entity delivers to the indenture trustee and the rating agencies an opinion of counsel that for federal income tax purposes (i) the new issuance will not adversely affect the tax characterization as debt of any outstanding series, class or tranche of notes that were characterized as debt at the time of their issuance, (ii) following the new issuance, the issuing entity will not be treated as an association, or publicly traded partnership, taxable as a corporation, (iii) such issuance will not cause or constitute an event in which gain or loss would be recognized by any holder of such outstanding notes, and (iv) except as provided in the related indenture supplement, following the new issuance of a series, class or tranche of notes, the newly issued series, class or tranche of notes will be properly characterized as debt;

 

·	fifth, the issuing entity delivers to the indenture trustee an indenture supplement and terms document relating to the applicable series, class or tranche of notes;

 

 

 

 

 

 

 

 

 

 

 

·	sixth, no Pay Out Event with respect to Series 2001-D has occurred or is continuing as of the date of the new issuance;

 

·	seventh, in the case of foreign currency notes, the issuing entity appoints one or more paying agents in the appropriate countries;

 

·	eighth, each rating agency that has rated any outstanding notes has provided confirmation that the new issuance of notes will not cause a reduction, qualification or withdrawal of the ratings of any outstanding notes rated by that rating agency;

 

·	ninth, the provisions governing required subordinated amounts are satisfied; and

 

·	tenth, any other conditions in the accompanying prospectus supplement are satisfied.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	the conditions to issuance listed above are satisfied;

 

·	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; and

 

·	in the case of Class A or Class B BAseries notes, the required subordinated amount is available at the time of its issuance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	the ownership interests of its participants, including the U.S. depositories; and

 

·	all transfers of ownership interests between its participants.

 

 

·	the ownership interests of their customers, including indirect participants, that hold the notes through those participants; and

 

·	all transfers between these persons.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	DTC is unwilling or unable to continue as depository for the global notes or ceases to be a registered “clearing agency” and the issuing entity is unable to find a qualified replacement for DTC;

 

·	the issuing entity, in its sole discretion, elects to terminate the book-entry system through DTC; or

 

·

any event of default has occurred relating to those book-entry notes and beneficial owners evidencing not less than 50% of the unpaid outstanding dollar principal amount of the notes of that class advise the indenture trustee and DTC that the continuation of a book-entry system is no longer in the best interests of those beneficial owners.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·	the sum of the Daily Available Funds Amounts for each day during such month for that series of notes,

 

·

that series’s pro rata portion of the net investment earnings, if any, in the master trust II finance charge account that are allocated to Series 2001-D with respect to the related Transfer Date, based on the ratio of the aggregate amount on deposit in the master trust II finance charge account for that series of notes to the aggregate amount on deposit in the master trust II finance charge account for all series of notes, and