<PAGE>
Prospectus Supplement to Prospectus Dated May 21, 1999
MBNA Master Credit Card Trust II
Issuer
MBNA America Bank, National Association
Seller and Servicer
SERIES 1999-H
$925,000,000 Floating Rate Asset Backed Certificates
<TABLE>
<S> <C> <C> <C>
- ------------------- The Trust will issue --
Consider
carefully the Class A Certificates Class B Certificates
risk factors -------------------- --------------------
beginning on Principal amount $850,000,000 $75,000,000
page 10 in the Certificate rate Three-Month LIBOR Three-Month LIBOR
prospectus. plus 0.21% annually plus 0.48% annually
Interest paid Quarterly Quarterly
A certificate is First interest
not a deposit and payment date October 15, 1999 October 15, 1999
neither the Scheduled principal
certificates nor payment date April 15, 2004 April 15, 2004
the underlying Legal final
accounts or maturity September 15, 2006 September 15, 2006
receivables are
insured or
guaranteed by the Credit Enhancement--
Federal Deposit
Insurance The Class B Certificates are subordinated to the Class A
Corporation or Certificates. Subordination of the Class B Certificates
any other provides credit enhancement for the Class A Certificates.
governmental
agency. The Trust is also issuing a Collateral Interest in the
amount of $75,000,000 that is subordinated to the Class A
The certificates Certificates and the Class B Certificates. Subordination
will represent of the Collateral Interest provides credit enhancement
interests in the for both the Class A and the Class B Certificates.
trust only and
will not This prospectus supplement and the accompanying
represent prospectus relate to the offering of the Certificates
interests in or only.
obligations of
MBNA or any MBNA
affiliate.
This prospectus
supplement may be
used to offer and
and sell the
certificates only
if accompanied by
the prospectus.
- -------------------
</TABLE>
Neither the SEC nor any state securities commission has approved the
certificates or determined that this prospectus supplement or the accompanying
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
Underwriters of the Class A Certificates
Merrill Lynch & Co. J.P. Morgan & Co.
Banc One Capital Markets, Inc.
Salomon Smith Barney
Underwriter of the Class B Certificates
Merrill Lynch & Co.
August 4, 1999
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
We provide information to you about the certificates in two separate
documents that progressively provide more detail: (a) the accompanying
Prospectus, which provides general information, some of which may not apply to
your Series of certificates and (b) this Prospectus Supplement, which describes
the specific terms of your Series of certificates.
If the terms of your Series of certificates vary between this Prospectus
Supplement and the accompanying Prospectus, you should rely on the information
in this Prospectus Supplement.
We include cross-references in this Prospectus Supplement and the
accompanying Prospectus to captions in these materials where you can find
further related discussions. The following Table of Contents and the Table of
Contents included in the accompanying Prospectus provide the pages on which
these captions are located.
You can find a listing of the pages where capitalized terms used in this
Prospectus Supplement and the accompanying Prospectus are defined under the
caption "Index of Terms for Prospectus Supplement" beginning on page S-50 in
this document and under the caption "Index of Terms for Prospectus" beginning
on page 58 in the accompanying Prospectus.
----------------
S-2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY OF TERMS........................................................... S-5
Offered Securities........................................................ S-5
Interest Payments........................................................ S-5
Principal Payments....................................................... S-6
The Collateral Interest................................................... S-7
Credit Enhancement........................................................ S-7
Other Interests in the Trust.............................................. S-7
Other Series of Certificates............................................. S-7
The Seller Interest...................................................... S-7
Information About the Receivables......................................... S-7
Collections by the Servicer............................................... S-7
Allocations and Payments to You and Your Series........................... S-7
Allocations of Collections of Finance Charge Receivables................. S-8
Allocations of Collections of Principal Receivables...................... S-9
Revolving Period........................................................ S-11
Controlled Accumulation Period.......................................... S-11
Rapid Amortization Period............................................... S-11
Pay Out Events.......................................................... S-11
Shared Principal Collections.............................................. S-12
Denominations............................................................. S-12
Registration, Clearance and Settlement.................................... S-12
Tax Status................................................................ S-13
ERISA Considerations...................................................... S-13
Certificate Ratings....................................................... S-13
Exchange Listing.......................................................... S-13
MBNA'S CREDIT CARD PORTFOLIO............................................... S-14
General................................................................... S-14
Billing and Payments...................................................... S-14
Delinquency and Gross Charge-Off Experience............................... S-14
Interchange............................................................... S-16
THE RECEIVABLES............................................................ S-16
MATURITY ASSUMPTIONS....................................................... S-19
Controlled Accumulation Period............................................ S-19
Rapid Amortization Period................................................. S-20
Pay Out Events............................................................ S-20
Payment Rates............................................................. S-21
RECEIVABLE YIELD CONSIDERATIONS............................................ S-21
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
MBNA AND MBNA CORPORATION.................................................. S-22
Year 2000................................................................. S-23
Project Overview......................................................... S-23
Project Readiness........................................................ S-23
Costs.................................................................... S-24
Risks.................................................................... S-24
Contingency Plans........................................................ S-24
Safe Harbor for Forward-Looking Statements............................... S-24
DESCRIPTION OF SERIES PROVISIONS........................................... S-25
General................................................................... S-25
New Issuances............................................................. S-26
Interest Payments......................................................... S-26
Principal Payments........................................................ S-28
Postponement of Controlled Accumulation Period............................ S-29
Subordination............................................................. S-30
Allocation Percentages.................................................... S-30
Reallocation of Cash Flows................................................ S-32
Application of Collections................................................ S-34
Allocations.............................................................. S-34
Payment of Interest, Fees and Other Items................................ S-34
Excess Spread............................................................ S-35
Payments of Principal.................................................... S-37
Shared Principal Collections.............................................. S-38
Defaulted Receivables; Investor Charge-Offs............................... S-39
Principal Funding Account................................................. S-40
Interest Funding Account.................................................. S-41
Reserve Account........................................................... S-41
Pay Out Events............................................................ S-42
Servicing Compensation and Payment of Expenses............................ S-43
Reports to Certificateholders............................................. S-44
Amendments................................................................ S-44
ERISA CONSIDERATIONS....................................................... S-45
General................................................................... S-45
Class A Certificates...................................................... S-45
Class B Certificates...................................................... S-46
Consultation with Counsel................................................. S-47
UNDERWRITING............................................................... S-48
INDEX OF TERMS FOR PROSPECTUS SUPPLEMENT................................... S-50
ANNEX I: OTHER SERIES ISSUED AND OUTSTANDING............................... A-1
</TABLE>
S-3
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
S-4
<PAGE>
SUMMARY OF TERMS
. This summary highlights selected information from this document and does not
contain all of the information that you need to consider in making your
investment decision. To understand all of the terms of the offering of the
certificates, read carefully this entire document and the accompanying
Prospectus.
. This summary provides an overview of certain calculations, cash flows and
other information to aid your understanding and is qualified by the full
description of these calculations, cash flows and other information in this
Prospectus Supplement and the accompanying Prospectus.
OFFERED SECURITIES
MBNA Master Credit Card Trust II (the "Trust") is offering the Class A Floating
Rate Asset Backed Certificates (the "Class A Certificates") and the Class B
Floating Rate Asset Backed Certificates (the "Class B Certificates") as part of
Series 1999-H. The Class A Certificates and the Class B Certificates (together,
the "Certificates") represent an interest in the assets of the Trust.
The Class B Certificates are subordinated to the Class A Certificates.
Interest Payments
The Class A Certificates will accrue interest for each Interest Period at the
Class A Certificate Rate set on the related LIBOR Determination Date. The
"Class A Certificate Rate" is an annual rate equal to LIBOR plus 0.21%.
The Class B Certificates will accrue interest for each Interest Period at the
Class B Certificate Rate set on the related LIBOR Determination Date. The
"Class B Certificate Rate" is an annual rate equal to LIBOR plus 0.48%.
Interest accrued during each Interest Period will be due on each Interest
Payment Date. Any interest due but not paid on an Interest Payment Date will be
payable on the next Interest Payment Date together with additional interest at
the applicable certificate rate plus 2% per annum.
. An "Interest Payment Date" is the 15th day of each January, April, July and
October, or if that day is not a business day, the next business day
(however, during the Rapid Amortization Period, each Distribution Date is an
Interest Payment Date). The first Interest Payment Date is October 15, 1999.
. A "Distribution Date" is the 15th day of each month, or if that day is not a
business day, the next business day. The first Distribution Date is October
15, 1999.
. Each "Interest Period" begins on and includes a Distribution Date and ends on
but excludes the next Distribution Date. However, the first Interest Period
will begin on and include August 18, 1999 (the "Closing Date") and end on but
exclude October 15, 1999, the first Distribution Date.
. LIBOR is the rate for deposits in U.S. dollars for a three-month period (or,
during the Rapid Amortization Period, the rate for deposits in U.S. dollars
for a one-month period) which appears on the Dow Jones Telerate Page 3750 (or
similar replacement page) as of 11:00 a.m., London time, on the related LIBOR
Determination Date. In addition, see "Description of Series Provisions--
Interest Payments" in this Prospectus Supplement for a discussion of the
determination of LIBOR if that rate does not appear on Dow Jones Telerate
Page 3750 (or similar replacement page).
. "LIBOR Determination Dates" are:
. August 16, 1999, for the period beginning on and including the Closing Date
and ending on but excluding October 15, 1999;
. For each Interest Period beginning on or after October 15, 1999, the
related LIBOR Determination Date is the second London business day prior to
the later of (i) the most recent Interest Payment Date preceding the first
day of such Interest Period and (ii) the Interest Payment Date occuring on
the first day of such Interest Period.
S-5
<PAGE>
The following time line shows the relevant dates for the first two Interest
Payment Dates.
First Two Payment Dates
Closing Interest Interest
Date Payment Payment
(8/18/99) (10/15/99) (1/18/00)
| | |
- -------------------------------------------------------------------------------
| | |
LIBOR LIBOR LIBOR
set Re-set Re-set
(8/16/99) (10/13/99) (1/13/00)
Other Interest Payment Dates and LIBOR Determination Dates will follow
sequentially after the second Interest Payment Date in the same manner as is
shown in the time line.
See "Description of Series Provisions--Interest Payments" in this Prospectus
Supplement for a discussion of the determination of amounts available to pay
interest and for the definition of business day and London business day.
You may obtain the certificate rates for the current and immediately preceding
Interest Periods by telephoning The Bank of New York, the Trustee, at its
Corporate Trust Office at (212) 815-5738.
Principal Payments
You are expected to receive payment of principal in full on the "Scheduled
Payment Date" which is April 15, 2004, or, if that date is not a business day,
the next business day. However, certain circumstances could cause principal to
be paid earlier or later, or in reduced amounts. No principal will be paid to
the Class B Certificateholders until the Class A Certificateholders are paid in
full. See "Maturity Assumptions" in this Prospectus Supplement and in the
accompanying Prospectus and "Description of Series Provisions--Allocation
Percentages" in this Prospectus Supplement.
The final payment of principal and interest on the Certificates will be made no
later than September 15, 2006, or, if that date is not a business day, the next
business day, called the "Legal Final Maturity" or the "Series 1999-H
Termination Date."
See "Description of Series Provisions--Principal Payments" in this Prospectus
Supplement for a discussion of the determination of amounts available to pay
principal.
THE COLLATERAL INTEREST
The Trust is also issuing an interest in the assets of the Trust that is
subordinated to the Certificates called the "Collateral Interest." The initial
Collateral Interest Amount is $75,000,000, representing 7.5% of the initial
aggregate principal amount of the Certificates plus the initial Collateral
Interest Amount. As a subordinated interest, the Collateral Interest is a form
of Credit Enhancement for the Certificates. The Collateral Interest Holder will
have voting and certain other rights as if the Collateral Interest were a
subordinated class of certificates.
The Collateral Interest is not being offered through this Prospectus Supplement
and the accompanying Prospectus.
CREDIT ENHANCEMENT
Credit Enhancement for your Series is for your Series's benefit only, and you
are not entitled to the benefits of any credit enhancement available to other
Series.
Subordination of the Class B Certificates provides Credit Enhancement for the
Class A Certificates. Subordination of the Collateral Interest provides Credit
Enhancement for both the Class A Certificates and the Class B Certificates. The
Collateral Interest Amount and the Class B Investor Interest must be reduced to
zero before the Class A Investor Interest will suffer any loss of principal.
The Collateral Interest Amount must be reduced to zero before the Class B
Investor Interest will suffer any loss of principal. For a description of the
events which may lead to a reduction of the Class A Investor Interest, the
Class B Investor Interest and the Collateral Interest Amount, see "Description
of Series Provisions--Reallocation of Cash Flows," "--Application of
Collections" and "--Defaulted Receivables; Investor Charge-Offs" in this
Prospectus Supplement.
S-6
<PAGE>
OTHER INTERESTS IN THE TRUST
Other Series of Certificates
The Trust has issued other Series of certificates and expects to issue
additional Series of certificates. When issued by the Trust, the certificates
of each of those Series also represent an interest in the assets of the Trust.
You can review a summary of each Series previously issued and currently
outstanding under the caption "Annex I: Other Series Issued and Outstanding"
included at the end of this Prospectus Supplement. The Trust may issue
additional Series with terms that may be different from any other Series
without prior review or consent by any Certificateholders.
The Seller Interest
MBNA will own the "Seller Interest," which represents the remaining interest in
the assets of the Trust not represented by the Certificates, the Collateral
Interest and the other interests issued by the Trust. The Seller Interest does
not provide credit enhancement for your Series or any other Series.
INFORMATION ABOUT THE RECEIVABLES
The Trust assets include Receivables from certain MasterCard(R) and VISA(R)*
revolving credit card accounts selected from MBNA's credit card account
portfolio.
The Receivables consist of both Principal Receivables and Finance Charge
Receivables.
"Principal Receivables" are, generally, (a) amounts charged by cardholders for
goods and services and (b) cash advances.
"Finance Charge Receivables" are (a) the related finance charges and credit
card fees and (b) for your Series, certain amounts of fees, called Interchange,
collected through MasterCard and VISA and annual membership fees collected from
cardholders.
See "MBNA's Credit Card Portfolio--Interchange" in this Prospectus Supplement
and "MBNA's Credit Card Activities--Interchange" and "Description of the
Certificates--Transfer of Annual Membership Fees" in the accompanying
Prospectus.
COLLECTIONS BY THE SERVICER
The Servicer will collect payments on the Receivables and will deposit those
collections in an account. The Servicer will keep track of those collections
that are Finance Charge Receivables and those collections that are Principal
Receivables.
ALLOCATIONS AND PAYMENTS TO YOU AND YOUR SERIES
Each month, the Servicer will allocate collections and the amount of
Receivables that are not collected and are written off as uncollectible, called
the Default Amount, among:
. your Series, based on the size of the Investor Interest (initially
$1,000,000,000);
. other outstanding Series, based on the size of their respective interests in
the Trust; and
. MBNA, based on the size of the Seller Interest.
The Trust assets allocated to your Series will be allocated to the following,
based on varying percentages:
. holders of the Class A Certificates, based on the Class A Investor Interest
(initially $850,000,000);
. holders of the Class B Certificates, based on the Class B Investor Interest
(initially $75,000,000); and
. the holder of the Collateral Interest, based on the Collateral Interest
Amount (initially $75,000,000).
See the following chart and "Description of Series Provisions--Allocation
Percentages" in this Prospectus Supplement.
The chart on the following page illustrates the Trust's general allocation
structure only and does not reflect the relative percentages of collections or
other amounts allocated to the Seller Interest, to any Series, including your
Series, or to holders of the Class A Certificates, the Class B Certificates or
the Collateral Interest.
- --------
* MasterCard(R) and VISA(R) are federally registered servicemarks of MasterCard
International Inc. and Visa U.S.A., Inc., respectively.
S-7
<PAGE>
ALLOCATION OF TRUST ASSETS
--------------
Trust Assets
--------------
--------------------------------
-------------- -------------- -----------------
Other Series Your Series Seller Interest
-------------- -------------- -----------------
--------------------------------
-------------- -------------- -----------------
Class A Class B Collateral
Certificates Certificates Interest
-------------- -------------- -----------------
You are entitled to receive payments of interest and principal based upon
allocations to your Series. The Investor Interest, which is the basis for
allocations to your Series, is the sum of (a) the Class A Investor Interest,
(b) the Class B Investor Interest and (c) the Collateral Interest Amount. The
Class A Investor Interest, the Class B Investor Interest and the Collateral
Interest Amount will initially equal the outstanding principal amount of the
Class A Certificates, the Class B Certificates and the Collateral Interest. The
Investor Interest will decline as a result of principal payments and may
decline due to the writing off of Receivables or other reasons. If your
investor interest declines, amounts allocated and available for payment to your
Series and to you will be reduced. For a description of the events which may
lead to these reductions, see "Description of Series Provisions--Reallocation
of Cash Flows" in this Prospectus Supplement.
Allocations of Collections of Finance Charge Receivables
The chart on the following page demonstrates the manner in which collections of
Finance Charge Receivables are allocated and applied to your Series. The chart
is a simplified demonstration of certain allocation and payment provisions and
is qualified by the full descriptions of these provisions in this Prospectus
Supplement and the accompanying Prospectus.
Step 1: Collections of Finance Charge Receivables for your Series are
allocated, based on varying percentages, among the Class A Investor Interest,
the Class B Investor Interest and the Collateral Interest Amount.
Step 2: Collections of Finance Charge Receivables allocated to the Class A
Investor Interest are applied to cover, in the following priority: the
interest payment due to Class A, Class A's portion of the servicing fee due to
the Servicer and Class A's portion of the Default Amount.
Collections of Finance Charge Receivables allocated to the Class B Investor
Interest are applied to cover, in the following priority: the interest
payment due to Class B and Class B's portion of the servicing fee due to the
Servicer.
Collections of Finance Charge Receivables allocated to the Collateral
Interest Amount are applied, under certain circumstances, to cover the
Collateral Interest's portion of the servicing fee due to the Servicer.
Remaining collections of Finance Charge Receivables allocated to the Class B
Investor Interest and the Collateral Interest Amount are applied in Step 3
because of their subordinated status.
Step 3: Collections of Finance Charge Receivables allocated to your Series and
not used in Step 2 are treated as Excess Spread and applied, in the following
priority, to cover:
. the interest payment due to Class A, Class A's portion of the servicing fee
due to the Servicer and Class A's portion of the Default Amount, each to the
extent not covered in Step 2;
. reimbursement of certain reductions of the Class A Investor Interest;
. the interest payment due to Class B and Class B's portion of the servicing
fee due to the Servicer, each to the extent not covered in Step 2;
. Class B's portion of the Default Amount;
. reimbursement of certain reductions of the Class B Investor Interest;
S-8
<PAGE>
. the interest payment due to the Collateral Interest;
. the Collateral Interest's portion of the servicing fee due to the Servicer,
to the extent not covered in Step 2;
. the Collateral Interest's portion of the Default Amount;
. reimbursement of certain reductions of the Collateral Interest Amount; and
. funding, if necessary, of a reserve account maintained to cover certain
interest payment shortfalls, if any.
Remaining Excess Spread is then paid to the holder of the Collateral Interest.
See "Description of Series Provisions--Application of Collections" in this
Prospectus Supplement.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ALLOCATIONS OF COLLECTIONS OF FINANCE CHARGE RECEIVABLES
----------------------------------------------
Collections of Finance Charge
Receivables Allocated to Your Series
----------------------------------------------
---------------------------------------------------------------
- -------- -------------------- -------------------- ---------------------
Step 1 Class A Investor Class B Investor Collateral Interest
- -------- Interest Interest Amount
-------------------- -------------------- ---------------------
- -------- ----------------------------- ----------------------------- -----------------------------
Step 2 1. Class A Interest Payment 1. Class B Interest Payment 1. Collateral Interest
- -------- 2. Class A Servicing Fee 2. Class B Servicing Fee Servicing Fee
3. Class A Default Amount
----------------------------- ----------------------------- -----------------------------
---------------------------------------------------------------
- -------- -----------------------------
Step 3 Excess Spread
- -------- -----------------------------
---------------------------------------------------------------
1. Class A Interest Payment
2. Class A Servicing Fee
3. Class A Default Amount
4. Reimburse Class A Investor Interest
5. Class B Interest Payment
6. Class B Servicing Fee
7. Class B Default Amount
8. Reimburse Class B Investor Interest
9. Apply Remaining Excess Spread to
Collateral Interest and Other Items as
Described Above in the Accompanying Text
---------------------------------------------------------------
</TABLE>
Allocations of Collections of Principal Receivables
The chart on the following page demonstrates the manner in which collections of
Principal Receivables are allocated and applied to your Series. The chart is a
simplified demonstration of certain allocation and payment provisions and is
qualified by the full descriptions of these provisions in this Prospectus
Supplement and the accompanying Prospectus.
Step 1: Collections of Principal Receivables for your Series are allocated,
based on varying percentages, among the Class A Investor Interest, the Class B
Investor Interest and the Collateral Interest Amount.
S-9
<PAGE>
Step 2: Collections of Principal Receivables allocated to the Collateral
Interest Amount and the Class B Investor Interest may be reallocated and made
available to pay amounts due to the Class A Investor Interest that have not
been paid by either the Class A's share of collections of Finance Charge
Receivables or Excess Spread. If required Class A amounts are satisfied, the
Collateral Interest Amount also provides the same type of protection to the
Class B Investor Interest. Certain collections which are reallocated for Class
A or Class B will not be made part of Available Investor Principal
Collections.
Step 3: Collections of Principal Receivables allocated to your Series and not
used in Step 2 above are combined with shared principal collections from other
Series, to the extent necessary and available, and treated as Available
Investor Principal Collections.
Available Investor Principal Collections may be paid, or accumulated and then
paid, to you as payments of principal. The amount, priority and timing of
your principal payments, if any, depend on whether your Series is in the
Revolving Period, the Controlled Accumulation Period or a Rapid Amortization
Period, as described below.
The Class A Certificates will be paid in full before the Class B Certificates
and the Collateral Interest receive any payments of principal. The Class B
Certificates will be paid in full before the Collateral Interest receives any
payments of principal.
See "Maturity Assumptions" and "Description of Series Provisions--Application
of Collections" in this Prospectus Supplement.
Step 4: Collections of Principal Receivables allocated to your Series and not
used in Steps 2 and 3 above may be paid to other Series, to the extent
necessary, or to the Seller.
<TABLE>
<S> <C> <C> <C>
ALLOCATIONS OF COLLECTIONS OF PRINCIPAL RECEIVABLES
----------------------------------------
Collections of Principal Receivables
Allocated to Your Series
----------------------------------------
-------------------------------------------------------
- -------- -------------------- -------------------- --------------------
Step 1 Class A Investor Class B Interest Collateral Interest
- -------- Interest Investor Amount
-------------------- -------------------- --------------------
- -------- ----------------------------- -----------------------------
Step 2 Reallocation for Class A, Reallocation for Class A
- -------- if any & Class B, if any
----------------------------- -----------------------------
-------------------------------------------------------
- -------- ----------------------------- -----------------------------
Step 3 Available Investor Principal Shared Principal Collections
- -------- Collections from Other Series
----------------------------- -----------------------------
--------------------------------------------
1. Class A Principal Payment
2. Class B Principal Payment
3. Collateral Interest Principal Payment
--------------------------------------------
- -------- --------------------------------
Step 4 Shared Principal Collections
- -------- to Other Series
--------------------------------
</TABLE>
S-10
<PAGE>
Revolving Period: Series 1999-H will have a period of time, called the
"Revolving Period," when the Trust will not pay, or accumulate, principal for
Certificateholders or the holder of the Collateral Interest. In general, during
the Revolving Period the Trust will pay available principal to other Series or
the holder of the Seller Interest. See "Description of Series Provisions--
Principal Payments" and "--Application of Collections" in this Prospectus
Supplement.
The Revolving Period starts on the Closing Date and ends on the earlier to
begin of:
. the Controlled Accumulation Period; or
. a Rapid Amortization Period.
Controlled Accumulation Period: During the period called the "Controlled
Accumulation Period," each month the Servicer will deposit a specified amount
in the Principal Funding Account in order to pay the Certificates and the
Collateral Interest in full on the Scheduled Payment Date.
Each month, the Trust will pay principal not required to be deposited in the
Principal Funding Account to other Series or the holder of the Seller Interest.
Each month, if the amount actually deposited in the Principal Funding Account
is less than the required deposit, the amount of this deficiency will be
carried forward as a shortfall and included in the next month's required
deposit.
See "Description of Series Provisions--Principal Payments" and "--Application
of Collections" in this Prospectus Supplement. For information about the
application of money on deposit in the Principal Funding Account, including any
net investment earnings, see "Description of Series Provisions--Principal
Funding Account" in this Prospectus Supplement.
On the Scheduled Payment Date, the Trust will use the money on deposit in the
Principal Funding Account to pay (a) the Class A Investor Interest, (b) if the
Class A Investor Interest is paid in full, the Class B Investor Interest and
(c) if the Class B Investor Interest is paid in full, the Collateral Interest
Amount.
You should be aware that there may not be sufficient amounts available to pay
principal in full for the Class A Investor Interest, the Class B Investor
Interest and the Collateral Interest Amount on the Scheduled Payment Date. In
addition, if the money on deposit in the Principal Funding Account is
insufficient to pay these amounts on the Scheduled Payment Date or if a Pay Out
Event occurs, the Rapid Amortization Period will begin and the timing of your
principal payments could change. See "Maturity Assumptions" in this Prospectus
Supplement and in the accompanying Prospectus.
The Controlled Accumulation Period is scheduled to begin at the close of
business on March 31, 2003, but in some cases may be delayed to no later than
the close of business on February 29, 2004. See "Description of Series
Provisions--Postponement of Controlled Accumulation Period" in this Prospectus
Supplement.
The Controlled Accumulation Period will end when any one of the following
occurs:
. the Investor Interest is paid in full;
. a Rapid Amortization Period begins; or
. the Series 1999-H Termination Date.
Rapid Amortization Period: If a period called the "Rapid Amortization Period"
begins, the Trust will use any available principal collections allocated to
your Series to pay (a) the Class A Investor Interest, (b) if the Class A
Investor Interest is paid in full, the Class B Investor Interest and (c) if the
Class B Investor Interest is paid in full, the Collateral Interest Amount.
These payments will begin on the Distribution Date in the month after the Rapid
Amortization Period begins.
The Rapid Amortization Period will begin if a Pay Out Event occurs and will end
when any one of the following occurs:
. the Investor Interest is paid in full;
. the Series 1999-H Termination Date; or
. the Trust Termination Date.
Pay Out Events: Certain adverse events called Pay Out Events might lead to the
start of a Rapid Amortization Period and the end of either the Revolving Period
or the Controlled Accumulation Period.
S-11
<PAGE>
A Pay Out Event for your Series will include the following events:
. the Seller does not make any required payment or deposit (within the
applicable grace period);
. the Seller materially violates any other obligation or agreement causing you
to be adversely affected, if (a) the Seller does not remedy the violation
within 60 days after it has received written notice and (b) you continue to
be materially and adversely affected for the 60-day period;
. the Seller provides certain representations, warranties or other information
which were materially incorrect at the time they were provided causing you to
be adversely affected, if (a) they continue to be materially incorrect 60
days after the Seller has received written notice and (b) you continue to be
materially and adversely affected for the 60-day period;
. the three-month average net yield on the Receivables is below the three-month
average of a minimum level called the Base Rate;
. the Seller fails to transfer additional assets to the Trust when required;
. certain defaults by the Servicer that have a material adverse effect on you;
. you are not paid in full on the Scheduled Payment Date;
. certain events of insolvency or receivership relating to the Seller;
. the Seller is unable to transfer Receivables to the Trust as required under
the Agreement; or
. the Trust becomes an "investment company" under the Investment Company Act of
1940.
For a more detailed discussion of these Pay Out Events, see "Description of
Series Provisions--Pay Out Events" in this Prospectus Supplement. In addition,
see "Description of the Certificates--Pay Out Events" in the accompanying
Prospectus for a discussion of the consequences of an insolvency or
receivership of the Seller.
SHARED PRINCIPAL COLLECTIONS
This Series is included in a group of Series designated as "Group One." Each
Series identified under the caption "Annex I: Other Series Issued and
Outstanding" included at the end of this Prospectus Supplement is, and other
Series in the future may be, included in Group One. To the extent that
collections of Principal Receivables allocated to your Series are not needed to
make payments or deposits to the Principal Funding Account for your Series,
these collections, called Shared Principal Collections, will be applied to
cover principal payments for other Series within Group One. Any reallocation
for this purpose will not reduce your Series's Investor Interest. In addition,
you may receive the benefits of collections of Principal Receivables and
certain other amounts allocated to other Series in Group One, to the extent
those collections are not needed for those other Series. See "Description of
Series Provisions--Shared Principal Collections" in this Prospectus Supplement
and "Description of the Certificates--Shared Principal Collections" in the
accompanying Prospectus.
DENOMINATIONS
Beneficial interests in the Certificates will be offered in minimum
denominations of $1,000 and integral multiples of that amount.
REGISTRATION, CLEARANCE AND SETTLEMENT
Your Certificates will be registered in the name of Cede & Co., as the nominee
of the Depository Trust Company ("DTC"). You will not receive a definitive
certificate representing your interest, except in limited circumstances
described in the accompanying Prospectus when Certificates in fully registered,
certificated form are issued. See "Description of the Certificates--Definitive
Certificates" in the accompanying Prospectus.
You may elect to hold your Certificates through DTC, in the United States, or
Cedelbank, societe anonyme ("Cedelbank") or the Euroclear System ("Euroclear"),
in Europe. Transfers within DTC, Cedelbank or Euroclear, as the case may be,
will be made in accordance with the usual rules and operating procedures of
those systems. Cross-market transfers between persons holding directly or
indirectly through DTC and counterparties holding directly or indirectly
through Cedelbank or
S-12
<PAGE>
Euroclear will be made in DTC through the relevant depositaries of Cedelbank or
Euroclear. See "Description of the Certificates--Book-Entry Registration" in
the accompanying Prospectus.
We expect that the Certificates will be delivered in book-entry form through
the facilities of DTC, Cedelbank and Euroclear on or about the Closing Date.
TAX STATUS
Special Counsel to the Seller is of the opinion that under existing law your
Certificates will be characterized as debt for federal income tax purposes.
Under the Agreement, you and the Seller will agree to treat your Certificates
as debt for federal, state and local income tax purposes and franchise tax
purposes. See "Federal Income Tax Consequences" in the accompanying Prospectus
for additional information concerning the application of federal income tax
laws.
ERISA CONSIDERATIONS
Subject to important considerations described under "ERISA Considerations" in
this Prospectus Supplement and in the accompanying Prospectus, the Class A
Certificates are eligible for purchase by persons investing assets of employee
benefit plans or individual retirement accounts.
Subject to important considerations described under "ERISA Considerations" in
this Prospectus Supplement and the accompanying Prospectus, the Class B
Certificates may be eligible for purchase by persons investing assets of
employee benefit plans or individual retirement accounts.
CERTIFICATE RATINGS
The Class A Certificates are required to be rated in the highest rating
category by at least one nationally recognized rating organization.
The Class B Certificates are required to be rated in one of the three highest
rating categories by at least one nationally recognized rating organization.
See "Certificate Ratings" in the accompanying Prospectus for a discussion of
the primary factors upon which the ratings are based.
EXCHANGE LISTING
We will apply to list the Certificates on the Luxembourg Stock Exchange. We
cannot guaranty that the application for the listing will be accepted. You
should consult with Bankers Trust Luxembourg S.A., the Luxembourg listing agent
for the Certificates, 14 Boulevard F.D. Roosevelt, L-2450 Luxembourg, phone
number (352) 46 02 41, to determine whether or not the Certificates are listed
on the Luxembourg Stock Exchange.
S-13
<PAGE>
MBNA'S CREDIT CARD PORTFOLIO
General
The receivables (the "Receivables") conveyed or to be conveyed to the Trust
by MBNA America Bank, National Association ("MBNA") pursuant to a pooling and
servicing agreement dated as of August 4, 1994 (as amended from time to time,
the "Agreement") between MBNA, as seller (the "Seller") and as servicer of the
Receivables, and The Bank of New York, as trustee (the "Trustee"), have been or
will be generated from transactions made by holders of selected MasterCard and
VISA credit card accounts (the "Accounts"), including premium accounts and
standard accounts, from the portfolio of MasterCard and VISA accounts owned by
the Seller (the "Bank Portfolio").
Billing and Payments
MBNA, using MBNA Hallmark Information Services, Inc. as its service bureau,
generates and mails to cardholders monthly statements summarizing account
activity and processes cardholder monthly payments. Currently, cardholders must
make a monthly minimum payment at least equal to the greater of (i) 2% of the
statement balance plus past due amounts and (ii) a stated minimum payment
(generally $15) plus past due amounts. 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. Generally, a cash advance fee is not assessed on balance
transfers.
Delinquency and Gross Charge-Off Experience
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 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 ("OCMS"). OCMS sorts accounts by a
number of factors, including time zone, degree of delinquency and dollar amount
due. OCMS 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.
S-14
<PAGE>
Accounts are worked continually at each stage of delinquency through the 180
day past due level. As an account enters the 180 day delinquency level, it is
classified as a potential charge-off. Accounts failing to make a payment during
the 180 day cycle 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.
In February 1999, the Federal Financial Institutions Examination Council
published a revised policy statement on the classification of consumer loans.
The revised policy establishes uniform guidelines for charge-off of loans to
delinquent, bankrupt and deceased borrowers, for charge-off of fraudulent
accounts, and for re-aging, extending, deferring or rewriting delinquent
accounts. The Bank expects to complete its implementation of the guidelines
prior to or on December 31, 2000. The Bank, as Servicer, will accelerate
charge-off of some delinquent loans when it implements the guidelines but does
not expect implementation to have an effect upon the payment of principal and
interest on the Certificates. This statement is a forward-looking statement,
subject to certain risks and uncertainties. The implementation of the
guidelines could, in combination with other adverse changes, such as a material
increase in charge-off rates or in the rate of interest payable to
Certificateholders, have a material adverse effect upon the payments of
principal and interest on the Certificates.
The following tables set forth the delinquency and gross charge-off
experience for each of the periods shown for the Bank Portfolio of credit card
accounts. The Bank Portfolio's delinquency and gross charge-off experience is
comprised of segments which may, when taken individually, have delinquency and
gross charge-off characteristics different from those of the overall Bank
Portfolio of credit card accounts. As of the beginning of the day on July 27,
1999, the Receivables in the Trust Portfolio represented approximately 94% of
the Bank Portfolio. Because the Trust Portfolio is only a portion of the Bank
Portfolio, actual delinquency and gross charge-off experience with respect to
the Receivables may be different from that set forth below for the Bank
Portfolio. There can be no assurance that the delinquency and gross charge-off
experience for the Receivables in the future will be similar to the historical
experience of the Bank Portfolio set forth below.
Delinquency Experience
Bank Portfolio
(Dollars in Thousands)
<TABLE>
<CAPTION>
June 30, December 31,
----------------------- -----------------------------------------------------------------------
1999 1998 1997 1996
----------------------- ----------------------- ----------------------- -----------------------
Percentage Percentage Percentage Percentage
of Total of Total of Total of Total
Receivables Receivables Receivables Receivables Receivables Receivables Receivables Receivables
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receivables Outstand-
ing(1) $49,315,568 $46,946,483 $41,567,876 $33,070,523
Receivables Delinquent:
30 - 59 Days $ 872,640 1.77% $ 842,557 1.79% $ 799,458 1.92% $ 619,940 1.87%
60 - 89 Days 434,842 0.88 459,367 0.98 386,276 0.93 282,815 0.86
90 or more 1,051,298 2.13 1,009,157 2.15 833,957 2.01 606,650 1.83
----------- ------ ----------- ------ ----------- ------ ----------- ------
Total $ 2,358,780 4.78% $ 2,311,081 4.92% $ 2,019,691 4.86% $ 1,509,405 4.56%
=========== ====== =========== ====== =========== ====== =========== ======
</TABLE>
- --------
(1) 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.
S-15
<PAGE>
Gross Charge-Off Experience
Bank Portfolio
(Dollars in Thousands)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, -------------------------------------
1999 1998 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Average Receivables Out-
standing(1)............... $46,991,760 $43,205,658 $36,651,499 $27,781,061
Total Gross Charge-
Offs(2)................... 1,376,291 2,415,466 1,897,006 1,193,375
Total Gross Charge-Offs as
a percentage of Average
Receivables
Outstanding(3)............ 5.86% 5.59% 5.18% 4.30%
</TABLE>
- --------
(1) Average Receivables Outstanding is the average of the daily receivable
balance during the period indicated.
(2) Total Gross Charge-Offs are total principal and interest charge-offs before
recoveries and do not include the amount of any reductions in Average
Receivables Outstanding due to fraud, returned goods, customer disputes or
other miscellaneous credit adjustments.
(3) The percentage reflected for the six months ended June 30, 1999 is an
annualized figure.
Interchange
The Seller will be required, pursuant to the terms of the Agreement, to
transfer to the Trust a percentage of the Interchange attributed to cardholder
charges for goods and services in the Accounts. Interchange arising under the
Accounts will be allocated to the Certificates and the Collateral Interest on
the basis of the percentage equivalent of the ratio which the amount of the
Investor Percentage, with regard to Finance Charge Receivables, of cardholder
charges for goods and services in the Accounts bears 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. 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 for the purposes of determining the amount of
Finance Charge Receivables, allocating collections of Finance Charge
Receivables, making required monthly payments, and calculating the Portfolio
Yield. 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 "Description of Series Provisions--Servicing Compensation
and Payment of Expenses" in this Prospectus Supplement and "MBNA's Credit Card
Activities--Interchange" in the accompanying Prospectus.
THE RECEIVABLES
The Receivables conveyed to the Trust arise in Accounts selected from the
Bank Portfolio on the basis of criteria set forth in the Agreement as applied
on June 22, 1994 (the "Cut-Off Date") and, with respect to Additional Accounts,
as of the related date of their designation (the "Trust Portfolio"). Pursuant
to the Agreement, 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 the Trust all Receivables of such Additional
Accounts, whether such Receivables are then existing or thereafter created. Any
Additional Accounts designated pursuant to the Agreement must be Eligible
Accounts as of the date the Seller designates such accounts as Additional
Accounts. On September 19, 1994, November 15, 1994, March 30, 1995, July 6,
1995, October 3, 1995, March 8, 1996, May 30, 1996, September 4, 1996, October
3, 1996, November 5, 1996, February 4, 1997, April 4, 1997, July 2, 1997,
October 2, 1997, December 17, 1997, April 10, 1998, July 2, 1998, September 22,
1998, November 17, 1998, February 10, 1999, April 5, 1999, June 17, 1999 and
July 27, 1999, the Seller designated Additional Accounts and conveyed the
Receivables arising therein to the Trust, which included approximately $1.487
billion, $1.087 billion, $1.288 billion, $1.094 billion, $1.193 billion, $1.981
billion, $1.685 billion, $1.986 billion, $1.087 billion, $690.6 million, $1.681
billion, $1.392 billion,
S-16
<PAGE>
$2.472 billion, $1.23 billion, $1.862 billion, $2.135 billion, $1.316 billion,
$1.97 billion, $915.1 million, $1.224 billion, $1.408 billion, $1.97 billion
and $1.487 billion of Principal Receivables, respectively. In addition, the
Seller will be required to designate Additional Accounts, to the extent
available, (a) to maintain the Seller Interest so that, during any period of 30
consecutive days, the Seller Interest averaged over that period equals or
exceeds the Minimum Seller Interest for the same period and (b) to maintain,
for so long as certificates of any Series (including the Certificates) remain
outstanding, an aggregate amount of Principal Receivables equal to or greater
than the Minimum Aggregate Principal Receivables. "Minimum Seller Interest" for
any period means 4% of the average Principal Receivables for such period;
provided, however, that the Seller may reduce the Minimum Seller Interest to
not less than 2% of the average Principal Receivables for such period upon
satisfaction of the Rating Agency Condition and certain other conditions to be
set forth in the Agreement. "Minimum Aggregate Principal Receivables" means,
with respect to all Series then outstanding, unless otherwise provided in the
related Series Supplement, an amount equal to the sum of the numerators used in
the calculation of the Investor Percentages with respect to Principal
Receivables for all outstanding Series on such date; provided, however, that
with respect to any Series in its Rapid Accumulation Period, or such other
period as designated in the related Series Supplement, with an investor
interest as of such date of determination equal to the principal funding
account balance relating to such Series, taking into account any deposit to be
made to the principal funding account relating to such Series on the Transfer
Date following such date of determination, the numerator used in the
calculation of the Investor Percentage with respect to Principal Receivables
relating to such Series shall, solely for the purpose of the definition of
Minimum Aggregate Principal Receivables, be deemed to equal zero; provided
further, however, that the Minimum Aggregate Principal Receivables may be
reduced to a lesser amount at any time if the Rating Agency Condition is
satisfied. The Seller will convey the Receivables then existing or thereafter
created under such Additional Accounts to the Trust. Further, pursuant to the
Agreement, the Seller will have the right (subject to certain limitations and
conditions) to designate certain Removed Accounts and to require the Trustee to
reconvey all Receivables in such Removed Accounts to the Seller, whether such
Receivables are then existing or thereafter created. Throughout the term of the
Trust, the Accounts from which the Receivables arise will be the Accounts
designated by the Seller on the Cut-Off Date plus any Additional Accounts minus
any Removed Accounts. As of the Cut-Off Date and, with respect to Receivables
in Additional Accounts, as of the related date of their conveyance to the
Trust, and on the date any new Receivables are created, the Seller will
represent and warrant to the Trust that the Receivables meet the eligibility
requirements specified in the Agreement. See "Description of the Certificates--
Representations and Warranties" in the accompanying Prospectus. The Accounts
included in all figures set forth in the paragraph below and the following
tables include approximately 2.5 million inactive Accounts with zero balances
which the Seller anticipates removing from the Trust prior to the Closing Date.
The Receivables in the Trust Portfolio, as of the beginning of the day on
July 27, 1999, included $45,504,331,425 of Principal Receivables and
$1,034,859,444 of Finance Charge Receivables. The Accounts had an average
Principal Receivable balance of $1,299 and an average credit limit of $10,707.
The percentage of the aggregate total Receivable balance to the aggregate total
credit limit was 12.41%. The average age of the Accounts was approximately 43
months. As of the beginning of the day on July 27, 1999, cardholders whose
Accounts are included in the Trust Portfolio had billing addresses in all 50
States and the District of Columbia. As of the beginning of the day on July 27,
1999, 37.15% of the Accounts were standard accounts and 62.85% were premium
accounts, and the aggregate Principal Receivable balances of standard accounts
and premium accounts, as a percentage of the total aggregate Principal
Receivables, were 25.25% and 74.75%, respectively.
S-17
<PAGE>
The following tables summarize the Trust Portfolio by various criteria as of
the beginning of the day on July 27, 1999. Because the future composition of
the Trust Portfolio may change over time, these tables are not necessarily
indicative of the composition of the Trust Portfolio at any subsequent time.
Composition by Account Balance
Trust Portfolio
<TABLE>
<CAPTION>
Number Percentage of Percentage
of Total Number of Total
Account Balance Range Accounts of Accounts Receivables Receivables
- --------------------- ---------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
Credit Balance............ 468,113 1.3% $ (60,350,862) (0.1)%
No Balance................ 21,460,879 61.3 0 0.0
$ .01 - $ 5,000.00... 9,628,283 27.5 13,530,079,882 29.1
$ 5,000.01 - $10,000.00... 2,422,500 6.9 17,008,349,466 36.5
$10,000.01 - $15,000.00... 671,700 1.9 8,051,079,329 17.3
$15,000.01 - $20,000.00... 221,320 0.6 3,787,190,071 8.1
$20,000.01 - $25,000.00... 90,955 0.3 2,026,152,794 4.4
$25,000.01 or More........ 65,433 0.2 2,196,690,189 4.7
---------- ----- --------------- -----
Total................... 35,029,183 100.0% $46,539,190,869 100.0%
========== ===== =============== =====
</TABLE>
Composition by Credit Limit
Trust Portfolio
<TABLE>
<CAPTION>
Percentage of Percentage
Number Total Number of Total
Credit Limit Range of Accounts of Accounts Receivables Receivables
- ------------------ ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
Less than or equal to
$5,000.00.............. 7,317,985 20.9% $ 4,331,163,289 9.3%
$ 5,000.01 -
$10,000.00............ 12,043,342 34.4 14,995,934,760 32.2
$10,000.01 -
$15,000.00............ 8,239,114 23.5 11,333,840,738 24.4
$15,000.01 -
$20,000.00............ 3,727,901 10.6 6,311,484,800 13.6
$20,000.01 -
$25,000.00............ 2,439,338 7.0 5,038,779,371 10.8
$25,000.01 or More...... 1,261,503 3.6 4,527,987,911 9.7
---------- ----- --------------- -----
Total................. 35,029,183 100.0% $46,539,190,869 100.0%
========== ===== =============== =====
</TABLE>
Composition by Period of Delinquency
Trust Portfolio
<TABLE>
<CAPTION>
Period of Delinquency Percentage of Percentage
(Days Contractually Number Total Number of Total
Delinquent) of Accounts of Accounts Receivables Receivables
- --------------------- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
Not Delinquent............ 33,903,030 96.8% $40,996,506,126 88.1%
Up to 29 Days............. 661,240 1.9 3,116,795,947 6.7
30 to 59 Days............. 197,483 0.6 985,561,379 2.1
60 to 89 Days............. 92,213 0.2 447,187,260 1.0
90 or More Days........... 175,217 0.5 993,140,157 2.1
---------- ----- --------------- -----
Total................... 35,029,183 100.0% $46,539,190,869 100.0%
========== ===== =============== =====
</TABLE>
S-18
<PAGE>
Composition by Account Age
Trust Portfolio
<TABLE>
<CAPTION>
Percentage of Percentage
Number Total Number of Total
Account Age of Accounts of Accounts Receivables Receivables
- ----------- ----------- -------------- --------------- -----------
<S> <C> <C> <C> <C>
Not More Than 6 Months.. 2,896,761 8.2% $ 3,272,746,971 7.0%
Over 6 Months to 12
Months................. 2,269,305 6.5 3,018,700,009 6.5
Over 12 Months to 24
Months................. 5,969,396 17.0 5,807,176,347 12.5
Over 24 Months to 36
Months................. 6,682,787 19.1 6,945,896,821 14.9
Over 36 Months to 48
Months................. 6,192,759 17.7 6,621,651,279 14.2
Over 48 Months to 60
Months................. 4,574,076 13.1 5,967,997,073 12.8
Over 60 Months to 72
Months................. 2,008,245 5.7 4,418,274,088 9.5
Over 72 Months.......... 4,435,854 12.7 10,486,748,281 22.6
---------- ----- --------------- -----
Total................. 35,029,183 100.0% $46,539,190,869 100.0%
========== ===== =============== =====
</TABLE>
Geographic Distribution of Accounts
Trust Portfolio
<TABLE>
<CAPTION>
Percentage of Percentage
Number Total Number of Total
State of Accounts of Accounts Receivables Receivables
- ----- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
California................ 3,735,154 10.7% $ 6,047,240,701 13.0%
New York.................. 2,765,748 7.9 3,496,962,169 7.5
Texas..................... 2,138,451 6.1 3,322,290,620 7.1
Florida................... 1,739,354 5.0 2,555,871,134 5.5
Pennsylvania.............. 1,957,018 5.6 2,043,704,149 4.4
New Jersey................ 1,373,194 3.9 1,914,335,224 4.1
Illinois.................. 1,509,365 4.3 1,890,092,386 4.1
Ohio...................... 1,582,149 4.5 1,707,237,549 3.7
Michigan.................. 1,278,061 3.6 1,525,335,462 3.3
Maryland.................. 940,414 2.7 1,441,751,220 3.1
Other..................... 16,010,275 45.7 20,594,370,255 44.2
---------- ----- --------------- -----
Total................... 35,029,183 100.0% $46,539,190,869 100.0%
========== ===== =============== =====
</TABLE>
MATURITY ASSUMPTIONS
The Agreement provides that the holders of the Class A Certificates (the
"Class A Certificateholders") will not receive payments of principal until the
Scheduled Payment Date, or earlier in the event of a Pay Out Event which
results in the commencement of the Rapid Amortization Period. The holders of
the Class B Certificates (the "Class B Certificateholders" and, together with
the Class A Certificateholders, the "Certificateholders") will not begin to
receive principal until the final principal payment on the Class A Certificates
has been made.
Controlled Accumulation Period
On each Transfer Date during the Controlled Accumulation Period, an amount
equal to, for each Monthly Period, the least of (a) the Available Investor
Principal Collections, (b) the applicable "Controlled Deposit Amount," which is
equal to the sum of the applicable Controlled Accumulation Amount for such
Monthly Period and the applicable Accumulation Shortfall, if any, and (c) the
Adjusted Investor Interest prior to any deposits on such day, will be deposited
in the Principal Funding Account established by the Trustee until the
S-19
<PAGE>
amount on deposit in the Principal Funding Account (the "Principal Funding
Account Balance") equals the Investor Interest. Amounts in the Principal
Funding Account are expected to be available to pay in full, the Class A
Investor Interest and, after the payment of the Class A Investor Interest in
full, the Class B Investor Interest on the Scheduled Payment Date, and, after
the deposit of the Class A Investor Interest and the Class B Investor Interest
in full in the Distribution Account, the Collateral Interest Amount on the
Transfer Date relating to the Scheduled Payment Date. Although it is
anticipated that collections of Principal Receivables will be available on each
Transfer Date during the Controlled Accumulation Period to make a deposit of
the applicable Controlled Deposit Amount and that the Class A Investor Interest
will be paid to the Class A Certificateholders and the Class B Investor
Interest will be paid to the Class B Certificateholders on the Scheduled
Payment Date and the Collateral Interest Amount will be paid to the holder of
the Collateral Interest (the "Collateral Interest Holder") on the Transfer Date
relating to the Scheduled Payment Date, no assurance can be given in this
regard. If the amount required to pay the Class A Investor Interest, the Class
B Investor Interest and the Collateral Interest Amount in full is not available
on the Scheduled Payment Date, a Pay Out Event will occur and the Rapid
Amortization Period will commence.
Rapid Amortization Period
If a Pay Out Event occurs during either the Revolving Period or the
Controlled Accumulation Period, the Rapid Amortization Period will commence. If
a Pay Out Event occurs during the Controlled Accumulation Period, any amount on
deposit in the Principal Funding Account will be paid to the Class A
Certificateholders and, after the Class A Investor Interest has been paid in
full, the Class B Certificateholders on the first Distribution Date with
respect to the Rapid Amortization Period. In addition, to the extent that the
Class A Investor Interest has not been paid in full, the Class A
Certificateholders will be entitled to monthly payments of principal equal to
the Available Investor Principal Collections until the earlier of (a) the date
on which the Class A Certificates have been paid in full, (b) the Series 1999-H
Termination Date and (c) the Trust Termination Date. After the Class A
Certificates have been paid in full and if the Series 1999-H Termination Date
or the Trust Termination Date has not occurred, Available Investor Principal
Collections will be paid to the Class B Certificateholders on each Distribution
Date until the earliest of (a) the date on which the Class B Certificates have
been paid in full, (b) the Series 1999-H Termination Date and (c) the Trust
Termination Date.
Pay Out Events
A Pay Out Event occurs, either automatically or after specified notice, upon
(a) the failure of the Seller to make certain payments or transfers of funds
for the benefit of the Certificateholders within the time periods stated in the
Agreement, (b) certain material breaches of certain representations, warranties
or covenants of the Seller, (c) certain insolvency events involving the Seller,
(d) the average of the Portfolio Yields for any three consecutive Monthly
Periods being less than the average of the Base Rates for such period, (e) the
Trust becoming an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, (f) the failure of the Seller to convey
Receivables arising under Additional Accounts or Participations to the Trust
when required by the Agreement, (g) the occurrence of a Servicer Default which
would have a material adverse effect on the Certificateholders, (h)
insufficient monies available to pay the Investor Interest in full on the
Scheduled Payment Date, or (i) the Seller becomes unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of the
Agreement. See "Description of Series Provisions--Pay Out Events" in this
Prospectus Supplement and "Description of the Certificates--Pay Out Events" in
the accompanying Prospectus. The term "Base Rate" means, with respect to any
Monthly Period, the annualized percentage equivalent of a fraction, the
numerator of which is the sum of the Class A Monthly Interest, the Class B
Monthly Interest and the Collateral Minimum Monthly Interest, each for the
related Interest Period and the Certificateholder Servicing Fee and the
Servicer Interchange, each for such Monthly Period, and the denominator of
which is the Investor Interest as of the close of business on the last day of
such Monthly Period. The term "Portfolio Yield" means, with respect to any
Monthly Period, the annualized percentage equivalent of a fraction, the
numerator of which is the sum of collections of Finance Charge Receivables,
annual membership fees, Principal Funding Investment Proceeds, the amount of
any investment earnings (net of investment losses and expenses), if any, on
funds on deposit in the Interest Funding Account for the related
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<PAGE>
Transfer Date ("Interest Funding Investment Proceeds") and amounts withdrawn
from the Reserve Account, if any, deposited into the Finance Charge Account and
allocable to the Certificates and the Collateral Interest for such Monthly
Period, calculated on a cash basis after subtracting the Aggregate Investor
Default Amount for such Monthly Period, and the denominator of which is the
Investor Interest as of the close of business on the last day of such Monthly
Period.
Payment Rates
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Bank Portfolio during any month in the periods shown and
the average cardholder monthly payment rates for all months during the periods
shown, in each case calculated as a percentage of total opening monthly account
balances during the periods shown. Payment rates shown in the table are based
on amounts which would be deemed payments of Principal Receivables and Finance
Charge Receivables with respect to the Accounts.
Cardholder Monthly Payment Rates
Bank Portfolio
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, -----------------------
1999 1998 1997 1996
---------- ------- ------- -------
<S> <C> <C> <C> <C>
Lowest Month......................... 13.29% 12.26% 11.30% 10.69%
Highest Month........................ 14.55% 14.07% 13.15% 11.56%
Monthly Average...................... 13.89% 13.35% 12.20% 11.19%
</TABLE>
Generally, cardholders must make a monthly minimum payment equal to 2.0% of
the statement balance plus past due amounts. However, the cardholder was and is
generally required to make a monthly minimum payment (generally $15) plus past
due amounts. There can be no assurance that the cardholder monthly 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. There can be no assurance that
collections of Principal Receivables with respect to the Trust Portfolio will
be similar to the historical experience set forth above or that deposits into
the Principal Funding Account or the Distribution Account, as applicable, will
be made in accordance with the applicable Controlled Accumulation Amount. If a
Pay Out Event occurs, the average life of the Certificates and the Collateral
Interest could be significantly reduced.
Because there may be a slowdown in the payment rate below the payment rates
used to determine the Controlled Accumulation Amounts, or a Pay Out Event may
occur which would initiate the Rapid Amortization Period, there can be no
assurance that the actual number of months elapsed from the date of issuance of
Series 1999-H to its final Distribution Date will equal the expected number of
months. As described under "Description of Series Provisions--Postponement of
Controlled Accumulation Period" in this Prospectus Supplement, the Servicer may
shorten the Controlled Accumulation Period and, in such event, there can be no
assurance that there will be sufficient time to accumulate all amounts
necessary to pay the Investor Interest on the Scheduled Payment Date. See
"Maturity Assumptions" and "Risk Factors--Timing of Principal Payments" in the
accompanying Prospectus.
RECEIVABLE YIELD CONSIDERATIONS
The gross revenues from finance charges and fees billed to accounts in the
Bank Portfolio for each of the three calendar years contained in the period
ended December 31, 1998 and the six calendar months contained in the period
ended June 30, 1999 are set forth in the following table.
The historical yield figures in the following table are calculated on an
accrual basis. Collections of Receivables included in the Trust will be on a
cash basis and may not reflect the historical yield experience in the table.
During periods of increasing delinquencies or periodic payment deferral
programs, accrual yields may
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<PAGE>
exceed cash amounts accrued and billed to cardholders. Conversely, cash yields
may exceed accrual yields as amounts collected in a current period may include
amounts accrued during prior periods. However, the Seller believes that during
the three calendar years contained in the period ended December 31, 1998 and
the six calendar months contained in the period ended June 30, 1999, the yield
on an accrual basis closely approximated the yield on a cash basis. The yield
on both an accrual and 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 and the percentage of cardholders who pay their balances in
full each month and do not incur monthly periodic finance charges. See "Risk
Factors" in the accompanying Prospectus.
Bank Portfolio Yield
<TABLE>
<CAPTION>
Six Months
Ended Year Ended December 31,
June 30, -------------------------------
1999 1998 1997 1996
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Average Account Monthly Accrued
Finance
Charges and Fees(1)(2)........... $ 28.45 $ 27.59 $ 25.58 $ 24.27
Average Account Balance(3)....... $1,950.43 $1,902.58 $1,822.14 $1,738.50
Yield from Finance Charges and
Fees(4)......................... 17.50% 17.40% 16.85% 16.75%
Yield from Interchange(5)........ 1.37% 1.32% 1.23% 1.17%
Yield from Finance Charges, Fees
and Interchange(6).............. 18.87% 18.72% 18.08% 17.92%
</TABLE>
- --------
(1) Finance Charges and Fees are comprised of monthly periodic finance charges
and other credit card fees.
(2) Average Account Monthly Accrued Finance Charges and Fees are presented net
of adjustments made pursuant to MBNA's normal servicing procedures,
including removal of incorrect or disputed monthly periodic finance
charges.
(3) Average Account Balance includes purchases, cash advances and accrued and
unpaid monthly periodic finance charges and other charges and is calculated
based on the average of the account balances during the periods shown for
accounts with charging privileges.
(4) Yield from Finance Charges and Fees is the result of dividing the
annualized Average Account Monthly Accrued Finance Charges and Fees by the
Average Account Balance for the period.
(5) Yield from Interchange is the result of dividing annualized revenue
attributable to Interchange received during the period by the Average
Account Balance for the period. The amount of Interchange for each of the
periods indicated above has been estimated.
(6) The percentage reflected for the six months ended June 30, 1999 is an
annualized figure.
The revenue for the Bank Portfolio of credit card accounts shown in the above
table is comprised of monthly periodic finance charges, credit card fees and
Interchange. These revenues vary for each account based on the type and volume
of activity for each account. Because the Trust Portfolio is only a portion of
the Bank Portfolio, actual yield with respect to Receivables may be different
from that set forth above for the Bank Portfolio. See "MBNA's Credit Card
Portfolio" in this Prospectus Supplement and "MBNA's Credit Card Activities" in
the accompanying Prospectus.
MBNA AND MBNA CORPORATION
MBNA America Bank, National Association, a national banking association
located in Wilmington, Delaware, conducts nationwide consumer lending programs
principally comprised of credit card related activities. MBNA International
Bank Limited, a private limited company incorporated under the laws of England
and Wales, is a wholly-owned subsidiary of MBNA. On a managed basis, including
loans originated by MBNA International Bank Limited, MBNA maintained loan
accounts with aggregate outstanding balances of $63.5 billion as of June 30,
1999. Of this amount, $52.8 billion were MasterCard and VISA credit card loans
originated in the United States. As of June 30, 1999, the premium credit card
portfolio in the United States accounted for 64% of MBNA's domestic MasterCard
and VISA credit card accounts with outstanding balances and 74% of MBNA's
outstanding domestic MasterCard and VISA credit card loans.
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<PAGE>
MBNA conducts all direct customer contact processes with respect to the
cardholder. This involves a 24 hour, 365 day per year Customer Service
telephone staff, Credit Decisions, Correspondence Resolution, Security and
Collection Operations. As of March 31, 1999, MBNA had assets of $25.3 billion,
deposits of $17.3 billion and capital and surplus accounts of $3.1 billion.
MBNA is a wholly-owned subsidiary of the Corporation. MBNA was established in
January 1991 in connection with a restructuring of the former MBNA America
Bank, N.A., a wholly-owned subsidiary of MNC Financial, Inc. The Corporation is
a bank holding company organized under the laws of Maryland in 1990 and
registered under the Bank Holding Company Act of 1956, as amended. As of June
30, 1999, the Corporation had consolidated assets of $28.0 billion,
consolidated deposits of $16.4 billion and capital and surplus accounts of $3.8
billion. The principal asset of the Corporation is the capital stock of MBNA.
Year 2000
Project Overview. Like most major financial institutions, the Corporation is
highly dependent upon technology to deliver products and services to its
customers. Credit card transactions and authorizations require a variety of
voice and data networks, and service providers to operate successfully.
Sophisticated computer and telecommunication systems enable the Corporation to
process these transactions and service customer accounts. Many computer
applications have been written using two digits rather than four to define the
applicable year, and therefore may not recognize a date using "00" as the Year
2000. Computer applications may not be able to properly process transactions
with dates in the Year 2000 or thereafter.
The Corporation began its Year 2000 Project (the "Project") to address this
issue in 1994. The Project is organized into six major components: Application
Software; Infrastructure; Business Unit; Telecommunication; Desktop
Infrastructure; and Readiness Testing. The Application Software component
includes all internally developed and purchased software used to perform
specific business functions. This portion of the Project encompasses nearly all
mission critical applications, including systems that service and support
loans, deposits, customer service activities, and financial systems. The
Infrastructure component includes the computer hardware and associated system's
software upon which Application Software is run, and includes mainframe and
distributed system platforms. The Business Unit component encompasses
internally developed or acquired application software that is managed outside
the technology area. It also includes all vendor supplied services and non-
technology equipment, such as building operation and security systems. The
Telecommunication component incorporates all voice and data networking and
switching components; voice response technology; and local, long distance, and
international telecommunication services. The Desktop Infrastructure component
addresses local area network and desktop computing environments and includes
all hardware and software components. The Readiness Testing component is the
final comprehensive integrated test of Application Software and Infrastructure
in a fully Year 2000 compliant environment. This will include interfaces with
major vendors such as MasterCard International and Visa International.
The Corporation completed the Application Software, Infrastructure, Business
Unit, Telecommunication, and Desktop Infrastructure components of the Project.
This included the assessment, renovation, validation and implementation phases.
Assessment activities will continue throughout 1999 to minimize overall risk.
Contingency plans have been completed and are undergoing testing. These plans
are designed to minimize the impact of any disruptions which may occur.
Project Readiness. A stand-alone test environment has been constructed to
perform extensive final readiness testing. The stand-alone test environment is
separate from the Corporation's production systems and thus reduces the risk
that testing will disrupt the Corporation's operations. This environment
includes a voice and data network as well as mainframe, distributed, and
desktop computers. All critical applications will be fully tested in a Year
2000 compliant environment as a final assurance step. Testing within the
readiness environment began in March 1999. The Corporation has successfully
completed two test cycles of the December 31, 1999 to January 1, 2000 rollover,
along with other significant dates. In addition to testing the
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<PAGE>
transition to the new century, other key dates to be tested include September
9, 1999, year-end 2000 and the Year 2000 leap year. This environment will be
maintained throughout 1999 in order to allow testing of significant system
changes and newly acquired software. As an added assurance, the Corporation has
had substantial portions of its applications systems checked by qualified
third-party vendors.
The Corporation relies on various third-parties to perform processing
services and to supply critical system applications. Critical third-party
provided software applications are being tested regardless of vendor statements
of fitness to ensure Year 2000 compliance. Regular meetings and site visits are
being held with MasterCard International, Visa International and other critical
third party service providers to evaluate and monitor their project status.
Costs. The total cost associated with required modifications to become Year
2000 compliant is not expected to be material to the Corporation's consolidated
financial position. The estimated total cost of the Project is expected to be
approximately $40 million. Costs incurred and expensed through June 30, 1999
were approximately $28 million. The majority of the remaining cost is
associated with completing the readiness testing and staffing a transition team
for early 2000.
Risks. Because the Corporation's business is highly reliant on various types
of computer technologies, disruptions caused by Year 2000 failures have the
potential to have a material impact on the Corporation's operations, liquidity,
and financial condition. Due primarily to the general uncertainty of the Year
2000 readiness of some third-party providers, at this time the Corporation
cannot with substantial certainty determine whether or not consequences of Year
2000 failures will have a material impact on the Corporation's results of
operations, liquidity or financial condition. Based on the current project
status and extensive testing completed and planned, the Corporation expects any
internal Year 2000 system failure will be handled in the normal course of
business and will not have a significant impact on the Corporation. It is more
likely that any impact will result from a third-party that the Corporation
conducts business with directly or indirectly. A likely worst case scenario
would involve major disruption of the telecommunications network, a major
disruption in the supply of electrical power, failure of one or more of the
primary financial switching networks or, in the United Kingdom, failure of the
primary data servicing provider. Revenues could be negatively impacted if Year
2000 failures prevent the Corporation or other entities from processing
customer transactions and cause customers to curtail credit card spending for a
period of time.
Contingency Plans. The Corporation has a standing contingency plan that
addresses various types of business interruptions. This plan is tested and
updated on a regular basis. The Corporation has developed and will continue to
refine contingency plans to address possible negative impacts specific to the
Year 2000 problem. Round table testing of contingency plans has been conducted
for all major business areas and plans will continue to be reviewed and
challenged throughout 1999. Contingency plans for critical third-party
providers were completed by June 30, 1999. The Corporation maintains a standing
contingency plan to address liquidity and capital needs. A plan specific to
Year 2000 implications has been completed. This plan will continue to be
modified as necessary based on identified or perceived market risks.
Command centers have been established for the purpose of managing any
disruptions which may occur. These command centers provide monitoring of
internal and external events and communication channels with all company
locations, vendors and government officials. They will serve as the information
source to senior management for decision making if the need arises. Multiple
walkthroughs of potential events will be conducted prior to year-end as an
education exercise for those who will staff the centers.
Safe Harbor for Forward-Looking Statements. The above disclosure on Year 2000
issues includes forward-looking statements concerning the Corporation's future
operations, expenses and financial performance. Such statements are subject to
risks and uncertainties that may cause the Corporation's actual operations and
performance to differ materially from those set forth in such forward-looking
statements. Factors which could cause the Corporation's actual results to
differ materially from those projected by the Corporation
S-24
<PAGE>
include, but are not limited to, the following: failure of third parties
providing software, telecommunications, data networks, and other products or
services to the Corporation to become Year 2000 compliant; insufficient staff
and other technical resources; unexpected difficulties in implementing system
enhancements; disruptions in the overall consumer credit market due to Year
2000 problems; and disruptions in capital markets due to Year 2000 problems.
DESCRIPTION OF SERIES PROVISIONS
The Certificates and the Collateral Interest will be issued pursuant to the
Agreement, as supplemented by the supplement relating to the Certificates (the
"Series 1999-H Supplement"). Pursuant to the Agreement, the Seller and the
Trustee may execute further Series Supplements in order to issue additional
Series. The following summary of Series 1999-H does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all of the
provisions of the Agreement and the Series 1999-H Supplement. See "Description
of the Certificates" in the accompanying Prospectus for additional information
concerning the Certificates, the Collateral Interest, the Series 1999-H
Supplement and the Agreement.
General
The Class A Certificates, the Class B Certificates and the Collateral
Interest will represent the right to receive certain payments from the assets
of the Trust, including the right to the applicable allocation percentage of
all cardholder payments on the Receivables in the Trust. Each Class A
Certificate represents the right to receive quarterly (or, in certain limited
circumstances, monthly) payments of interest at the Class A Certificate Rate
for the related Interest Period and payments of principal on the Scheduled
Payment Date, or on each Distribution Date with respect to the Rapid
Amortization Period, to the extent of the Class A Investor Interest, funded
from collections of Finance Charge Receivables and annual membership fees and
Principal Receivables, respectively, allocated to the Class A Investor Interest
and certain other available amounts. Each Class B Certificate represents the
right to receive quarterly (or, in certain limited circumstances, monthly)
payments of interest at the applicable Class B Certificate Rate for the related
Interest Period, and payments of principal on the Scheduled Payment Date, or on
each Distribution Date with respect to the Rapid Amortization Period after the
Class A Certificates have been paid in full, to the extent of the Class B
Investor Interest, funded from collections of Finance Charge Receivables and
annual membership fees and Principal Receivables, respectively, allocated to
the Class B Investor Interest and certain other available amounts. In addition
to representing the right to payment from collections of Finance Charge
Receivables, annual membership fees and Principal Receivables, each Class A
Certificate also represents the right to receive payments from Excess Spread,
funds on deposit in the Principal Funding Account (in an amount not to exceed
the Class A Investor Interest), the Interest Funding Account and the Reserve
Account and certain investment earnings thereon, Reallocated Principal
Collections and Shared Principal Collections and certain other available
amounts. In addition to representing the right to payment from collections of
Finance Charge Receivables, annual membership fees and Principal Receivables,
each Class B Certificate also represents the right to receive payments from
Excess Spread, funds on deposit in the Principal Funding Account (to the extent
such funds exceed the Class A Investor Interest and in an amount not to exceed
the Class B Investor Interest), the Interest Funding Account and the Reserve
Account and certain investment earnings thereon, Reallocated Collateral
Principal Collections and Shared Principal Collections and certain other
available amounts. Payments of interest and principal will be made on each
Interest Payment Date and Distribution Date, respectively, on which such
amounts are due to Certificateholders in whose names the Certificates were
registered on the last business day of the calendar month preceding such
Interest Payment Date or Distribution Date (each, a "Record Date").
The Seller will own the Seller Interest. The holder of the Seller Interest
will receive certain payments from the assets of the Trust, including a
percentage (the "Seller Percentage") of all cardholder payments on the
Receivables in the Trust equal to 100% minus the sum of the applicable Investor
Percentages for all Series of certificates then outstanding. The Seller
Interest may be transferred in whole or in part subject to certain limitations
and conditions set forth in the Agreement, and, at the discretion of the
Seller, the Seller Interest may be held either in an uncertificated form or in
the form of a Seller Certificate. See "Description of the Certificates--Certain
Matters Regarding the Seller and the Servicer" in the accompanying Prospectus.
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<PAGE>
Application will be made to list the Certificates on the Luxembourg Stock
Exchange; however, no assurance can be given that such listing will be
obtained. Certificateholders should consult with Bankers Trust Luxembourg S.A.,
the Luxembourg listing agent for the Certificates, 14 Boulevard F.D. Roosevelt,
L-2450 Luxembourg, phone number (352) 46 02 41, for the status of such listing.
The Class A Certificates and the Class B Certificates initially will be
represented by certificates registered in the name of Cede, as nominee of DTC.
Unless and until Definitive Certificates are issued, all references in this
Prospectus Supplement to actions by Class A Certificateholders and/or Class B
Certificateholders shall refer to actions taken by DTC upon instructions from
its Participants and all references in this Prospectus Supplement to
distributions, notices, reports and statements to Class A Certificateholders
and/or Class B Certificateholders shall refer to distributions, notices,
reports and statements to DTC or Cede, as the registered holder of the Class A
Certificates and the Class B Certificates, as the case may be, for distribution
to Certificate Owners in accordance with DTC procedures. Certificateholders may
hold their Certificates through DTC (in the United States) or Cedelbank or
Euroclear (in Europe) if they are customers or participants of such systems, or
indirectly through organizations that are customers or participants in such
systems. Cede, as nominee for DTC, will hold the global Certificates. Cedelbank
and Euroclear will hold omnibus positions on behalf of the Cedelbank Customers
and the Euroclear Participants, respectively, through customers' securities
accounts in Cedelbank's and Euroclear's names on the books of their respective
Depositaries which in turn will hold such positions in customers' securities
accounts in the Depositaries' names on the books of DTC. See "Description of
the Certificates--General," "--Book-Entry Registration" and "--Definitive
Certificates" in the accompanying Prospectus.
New Issuances
The Agreement provides that the holder of the Seller Interest may have one or
more new Series issued by notifying the Trustee as described under "Description
of the Certificates--New Issuances" in the accompanying Prospectus.
Interest Payments
Interest will accrue on the Class A Certificates at the Class A Certificate
Rate and on the Class B Certificates at the Class B Certificate Rate from the
Closing Date. Interest with respect to the Certificates will be distributed
quarterly on the 15th day of each January, April, July and October (or, if such
15th day is not a business day, the next succeeding business day) (each, an
"Interest Payment Date"), commencing on October 15, 1999; provided, however,
that commencing on the first Distribution Date with respect to the Rapid
Amortization Period, each Distribution Date will be an "Interest Payment Date."
For purposes of this Prospectus Supplement and the accompanying Prospectus, a
"business day" is, unless otherwise indicated, any day other than a Saturday, a
Sunday or a day on which banking institutions in New York, New York or Newark,
Delaware are authorized or obligated by law or executive order to be closed.
Interest payments on the Class A Certificates and the Class B Certificates on
any Interest Payment Date will be calculated for each of the related Interest
Periods on the outstanding principal balance of the Class A Certificates and
the outstanding principal balance of the Class B Certificates, as applicable,
as of the preceding Record Date, except that interest with respect to the first
Interest Period for the first Interest Payment Date will accrue at the
applicable Certificate Rate on the initial outstanding principal balance of the
Class A Certificates and the initial outstanding principal balance of the Class
B Certificates, as applicable, from the Closing Date. On each Transfer Date,
interest with respect to the Certificates will be deposited into the Interest
Funding Account for payment to Class A Certificateholders and Class B
Certificateholders on each Interest Payment Date. Interest due on the
Certificates but not paid on any Interest Payment Date will be payable on the
next succeeding Interest Payment Date together with additional interest (the
"Additional Interest") on such amount at the applicable Certificate Rate plus
2% per annum (such amount with respect to the Class A Certificates, the "Class
A Additional Interest," and such amount with respect to the Class B
Certificates, the "Class B Additional Interest"). Such Additional Interest
shall accrue on the same basis as interest on the Certificates,
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<PAGE>
and shall accrue from the Interest Payment Date such overdue interest became
due, to but excluding the Interest Payment Date on which such Additional
Interest is paid. Interest to be deposited in the Interest Funding Account with
respect to the Class A Certificates on any Transfer Date will be paid from
Class A Available Funds for the related Monthly Period and, to the extent such
Class A Available Funds are insufficient to pay such interest, from Excess
Spread and Reallocated Principal Collections (to the extent available) for such
Monthly Period. Interest to be deposited in the Interest Funding Account with
respect to the Class B Certificates on any Transfer Date will be paid from
Class B Available Funds for the related Monthly Period and, to the extent such
Class B Available Funds are insufficient to pay such interest, from Excess
Spread and Reallocated Collateral Principal Collections (to the extent
available) for such Monthly Period remaining after certain other payments have
been made with respect to the Class A Certificates.
"Class A Available Funds" means, with respect to any Monthly Period, an
amount equal to the sum of (a) the Class A Floating Allocation of collections
of Finance Charge Receivables and annual membership fees allocated to the
Investor Interest and deposited in the Finance Charge Account with respect to
such Monthly Period (excluding the portion of collections of Finance Charge
Receivables attributable to Interchange that is allocable to Servicer
Interchange), (b) an amount equal to the product of (i) the Class A Account
Percentage and (ii) the Principal Funding Investment Proceeds, if any, with
respect to the related Transfer Date, (c) Interest Funding Investment Proceeds,
if any, with respect to the related Transfer Date and (d) amounts, if any, to
be withdrawn from the Reserve Account which are required to be included in
Class A Available Funds pursuant to the Series 1999-H Supplement with respect
to such Transfer Date. "Class A Account Percentage" means, with respect to any
date of determination, the percentage equivalent of a fraction, the numerator
of which is the aggregate amount on deposit in the Principal Funding Account
with respect to Class A Certificates and the denominator of which is the
aggregate amount on deposit in the Principal Funding Account with respect to
Class A Certificates and the Class B Certificates, in each case as of the last
day of the preceding Monthly Period. "Class B Available Funds" means, with
respect to any Monthly Period, an amount equal to the sum of (a) the Class B
Floating Allocation of collections of Finance Charge Receivables and annual
membership fees allocated to the Investor Interest and deposited in the Finance
Charge Account with respect to such Monthly Period (excluding the portion of
collections of Finance Charge Receivables attributable to Interchange that is
allocable to Servicer Interchange), (b) an amount equal to the product of (i)
the Class B Account Percentage and (ii) the Principal Funding Investment
Proceeds, if any, with respect to the related Transfer Date and (c) amounts, if
any, to be withdrawn from the Reserve Account which are required to be included
in Class B Available Funds pursuant to the Series 1999-H Supplement with
respect to such Transfer Date. "Class B Account Percentage" means, with respect
to any date of determination, the percentage equivalent of a fraction, the
numerator of which is the aggregate amount on deposit in the Principal Funding
Account with respect to Class B Certificates and the denominator of which is
the aggregate amount on deposit in the Principal Funding Account with respect
to Class A Certificates and the Class B Certificates, in each case as of the
last day of the preceding Monthly Period.
The Class A Certificates will accrue interest from and including the Closing
Date through but excluding October 15, 1999, and with respect to each Interest
Period thereafter, at a rate of 0.21% per annum above LIBOR prevailing on the
related LIBOR Determination Date with respect to each such period. The Class B
Certificates will accrue interest from and including the Closing Date through
but excluding October 15, 1999, and with respect to each Interest Period
thereafter, at a rate of 0.48% per annum above LIBOR prevailing on the related
LIBOR Determination Date with respect to each such period.
The Trustee will determine LIBOR on August 16, 1999 for the period from and
including the Closing Date through but excluding October 15, 1999, and for each
Interest Period thereafter, on the second London business day prior to each
Interest Payment Date, commencing October 13, 1999 (each, a "LIBOR
Determination Date"). For purposes of calculating LIBOR, a "London business
day" is any business day on which dealings in deposits in United States dollars
are transacted in the London interbank market.
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<PAGE>
For each Interest Period commencing on or after October 15, 1999, the related
LIBOR Determination Date shall be the LIBOR Determination Date prior to the
later of (i) the most recent Interest Payment Date preceding the first day of
such Interest Period and (ii) the Interest Payment Date occurring on the first
day of such Interest Period.
"LIBOR" means, as of any LIBOR Determination Date, the rate for deposits in
United States dollars for a three-month period (or, commencing on the first
Distribution Date with respect to the Rapid Amortization Period, 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 the Reference
Banks at approximately 11:00 a.m., London time, on that day to prime banks in
the London interbank market for a three-month period (or, commencing on the
first Distribution Date with respect to the Rapid Amortization Period, for a
one-month period). The Trustee will request the principal London office of each
of the Reference 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 Servicer, 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 three-month period (or,
commencing on the first Distribution Date with respect to the Rapid
Amortization Period, for a one-month period).
"Telerate Page 3750" means the display page currently so designated on the
Dow Jones Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"Reference Banks" means four major banks in the London interbank market
selected by the Servicer.
The Class A Certificate Rate and the Class B Certificate Rate applicable to
the then current and immediately preceding Interest Period may be obtained by
telephoning the Trustee at its Corporate Trust Office at (212) 815-5738.
Interest to be deposited into the Interest Funding Account with respect to
the Certificates will be calculated on the basis of the actual number of days
in the related Interest Period and a 360-day year.
Principal Payments
On each Transfer Date relating to the Revolving Period (which begins on the
Closing Date and ends at the commencement of the Controlled Accumulation Period
or, if earlier, the Rapid Amortization Period), collections of Principal
Receivables allocable to the Investor Interest will, subject to certain
limitations, including the allocation of any Reallocated Principal Collections
with respect to the related Monthly Period to pay the Class A Required Amount
and the Class B Required Amount, be treated as Shared Principal Collections.
On each Transfer Date relating to the Controlled Accumulation Period, the
Trustee will deposit in the Principal Funding Account an amount equal to the
least of (a) Available Investor Principal Collections with respect to such
Transfer Date, (b) the applicable Controlled Deposit Amount and (c) the
Adjusted Investor Interest prior to any deposits on such date. Amounts in the
Principal Funding Account will be paid first to Class A Certificateholders (in
an amount not to exceed the Class A Investor Interest) and then to Class B
Certificateholders (to the extent such funds exceed the Class A Investor
Interest and in an amount not to exceed the Class B Investor Interest), in each
case, on the Scheduled Payment Date, and lastly to the Collateral Interest
Holder (to the extent such funds exceed the sum of the Class A Investor
Interest and the Class B Investor
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Interest and in an amount not to exceed the Collateral Interest Amount) on the
Transfer Date preceding the Scheduled Payment Date (in each case, unless paid
earlier due to the commencement of the Rapid Amortization Period). During the
Controlled Accumulation Period, the portion of Available Investor Principal
Collections not applied to Class A Monthly Principal, Class B Monthly Principal
or Collateral Monthly Principal on a Transfer Date will generally be treated as
Shared Principal Collections.
"Available Investor Principal Collections" means, with respect to any Monthly
Period, an amount equal to the sum of (a) (i) collections of Principal
Receivables received during such Monthly Period and certain other amounts
allocable to the Investor Interest, minus (ii) the amount of Reallocated
Principal Collections with respect to such Monthly Period used to fund the
Required Amount, plus (b) any Shared Principal Collections with respect to
other Series in Group One that are allocated to the Series of the Trust
represented by the Certificates and the Collateral Interest ("Series 1999-H").
On each Distribution Date with respect to the Rapid Amortization Period, the
Class A Certificateholders will be entitled to receive Available Investor
Principal Collections for the related Monthly Period in an amount up to the
Class A Investor Interest until the earliest of the date the Class A
Certificates are paid in full, the Series 1999-H Termination Date and the Trust
Termination Date. After payment in full of the Class A Investor Interest, the
Class B Certificateholders will be entitled to receive, on each Distribution
Date with respect to the Rapid Amortization Period, Available Investor
Principal Collections for the related Monthly Period in an amount up to the
Class B Investor Interest until the earliest of the date the Class B
Certificates are paid in full, the Series 1999-H Termination Date and the Trust
Termination Date. After payment in full of the Class B Investor Interest, the
Collateral Interest Holder will be entitled to receive on each Transfer Date,
Available Investor Principal Collections until the earliest of the date the
Collateral Interest is paid in full, the Series 1999-H Termination Date and the
Trust Termination Date. See "--Pay Out Events" below for a discussion of events
which might lead to the commencement of the Rapid Amortization Period.
Postponement of Controlled Accumulation Period
Upon written notice to the Trustee, the Servicer may elect to postpone the
commencement of the Controlled Accumulation Period, and extend the length of
the Revolving Period, subject to certain conditions including those set forth
below. The Servicer may make such election only if the Accumulation Period
Length (determined as described below) is less than twelve months. On the
Determination Date immediately preceding the March 2003 Distribution Date, and
each Determination Date thereafter, until the Controlled Accumulation Period
begins, the Servicer will determine the "Accumulation Period Length," which is
the number of whole months expected to be required to fully fund the Principal
Funding Account no later than the Scheduled Payment Date, based on (a) the
expected monthly collections of Principal Receivables expected to be
distributable to the certificateholders of all Series (excluding certain other
Series), assuming a principal payment rate no greater than the lowest monthly
principal payment rate on the Receivables for the preceding twelve months and
(b) the amount of principal expected to be distributable to certificateholders
of all Series (excluding certain other Series) which are not expected to be in
their revolving periods during the Controlled Accumulation Period; provided,
however, that the calculation of Accumulation Period Length may be changed at
any time if the Rating Agency Condition is satisfied. If the Accumulation
Period Length is less than twelve months, the Servicer may, at its option,
postpone the commencement of the Controlled Accumulation Period such that the
number of months included in the Controlled Accumulation Period will be equal
to or exceed the Accumulation Period Length. The effect of the foregoing
calculation is to permit the reduction of the length of the Controlled
Accumulation Period based on the investor interest of certain other Series
which are scheduled to be in their revolving periods during the Controlled
Accumulation Period and on increases in the principal payment rate occurring
after the Closing Date. The length of the Controlled Accumulation Period will
not be determined to be less than one month.
"Rating Agency Condition" means the notification in writing by each Rating
Agency to the Seller, the Servicer and the Trustee that a proposed action will
not result in any Rating Agency reducing or withdrawing its then existing
rating of the investor certificates of any outstanding Series or Class of a
Series with respect to which it is a Rating Agency.
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Subordination
The Class B Certificates and the Collateral Interest will be subordinated to
the extent necessary to fund certain payments with respect to the Class A
Certificates. In addition, the Collateral Interest will be subordinated to the
extent necessary to fund certain payments with respect to the Class B
Certificates. Certain principal payments otherwise allocable to the Class B
Certificateholders may be reallocated to cover amounts in respect of the Class
A Certificates and the Class B Investor Interest may be reduced if the
Collateral Interest Amount is equal to zero. Similarly, certain principal
payments allocable to the Collateral Interest may be reallocated to cover
amounts in respect of the Class A Certificates and the Class B Certificates and
the Collateral Interest Amount may be reduced. To the extent the Class B
Investor Interest is reduced, the percentage of collections of Finance Charge
Receivables allocated to the Class B Certificates in subsequent Monthly Periods
will be reduced. Moreover, to the extent the amount of such reduction in the
Class B Investor Interest is not reimbursed, the amount of principal
distributable to, and the amounts available to be distributed with respect to
interest on, the Class B Certificateholders will be reduced. See "--Allocation
Percentages,""--Reallocation of Cash Flows" and "--Application of Collections--
Excess Spread" in this Prospectus Supplement.
Allocation Percentages
Pursuant to the Agreement, with respect to each Monthly Period the Servicer
will allocate among the Investor Interest, the investor interest for all other
Series issued and outstanding and the Seller Interest, all amounts collected on
Finance Charge Receivables, all amounts collected on Principal Receivables and
all Default Amounts with respect to such Monthly Period. Each "Monthly Period"
will be the period from and including the first day of a calendar month to and
including the last day of such calendar month (other than the initial Monthly
Period, which will commence on and include the Closing Date and end on and
include September 30, 1999).
Collections of Finance Charge Receivables and Default Amounts at any time and
collections of Principal Receivables during the Revolving Period will be
allocated to the Investor Interest based on the Floating Investor Percentage.
The "Floating Investor Percentage" means, with respect to any Monthly Period,
the percentage equivalent of a fraction, the numerator of which is the Adjusted
Investor Interest as of the close of business on the last day of the preceding
Monthly Period (or with respect to the first Monthly Period, the initial
Investor Interest) and the denominator of which is the greater of (x) the
aggregate amount of Principal Receivables as of the close of business on the
last day of the preceding Monthly Period (or with respect to the first calendar
month in the first Monthly Period, the aggregate amount of Principal
Receivables as of the close of business on the day immediately preceding the
Closing Date and with respect to the second calendar month in the first Monthly
Period, the aggregate amount of Principal Receivables as of the close of
business on the last day of the first calendar month in the first Monthly
Period) and (y) the sum of the numerators used to calculate the Investor
Percentages for allocations with respect to Finance Charge Receivables, Default
Amounts or Principal Receivables, as applicable, for all outstanding Series on
such date of determination; provided, however, that with respect to any Monthly
Period in which an Addition Date occurs or in which a Removal Date occurs on
which, if any Series has been paid in full, Principal Receivables in an
aggregate amount approximately equal to the initial investor interest of such
Series are removed from the Trust, the amount in clause (x) above shall be (i)
the aggregate amount of Principal Receivables in the Trust as of the close of
business on the last day of the prior Monthly Period for the period from and
including the first day of such Monthly Period to but excluding the related
Addition Date or Removal Date and (ii) the aggregate amount of Principal
Receivables in the Trust as of the beginning of the day on the related Addition
Date or Removal Date after adjusting for the aggregate amount of Principal
Receivables added to or removed from the Trust on the related Addition Date or
Removal Date, as the case may be, for the period from and including the related
Addition Date or Removal Date to and including the last day of such Monthly
Period. Such amounts so allocated will be further allocated between the Class A
Certificateholders, Class B Certificateholders and the Collateral Interest
Holder based on the Class A Floating Allocation, the Class B Floating
Allocation and the Collateral Floating Allocation, respectively. The "Class A
Floating Allocation" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
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numerator of which is equal to the Class A Adjusted Investor Interest as of the
close of business on the last day of the preceding Monthly Period (or with
respect to the first Monthly Period, as of the Closing Date) and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day. The "Class B Floating Allocation" means, with respect
to any Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the Class B
Adjusted Investor Interest as of the close of business on the last day of the
preceding Monthly Period (or with respect to the first Monthly Period, as of
the Closing Date) and the denominator of which is equal to the Adjusted
Investor Interest as of the close of business on such day. The "Collateral
Floating Allocation" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is equal to the Collateral Interest Adjusted Amount as of
the close of business on the last day of the preceding Monthly Period (or with
respect to the first Monthly Period, as of the Closing Date) and the
denominator of which is equal to the Adjusted Investor Interest as of the close
of business on such day.
Collections of Principal Receivables during the Controlled Accumulation
Period and Rapid Amortization Period will be allocated to the Investor Interest
based on the Fixed Investor Percentage. The "Fixed Investor Percentage" means,
with respect to any Monthly Period, the percentage equivalent of a fraction,
the numerator of which is the Investor Interest as of the close of business on
the last day of the Revolving Period and the denominator of which is the
greater of (x) the aggregate amount of Principal Receivables as of the close of
business on the last day of the prior Monthly Period and (y) the sum of the
numerators used to calculate the Investor Percentages for allocations with
respect to Principal Receivables for all outstanding Series for such Monthly
Period; provided, however, that with respect to any Monthly Period in which an
Addition Date occurs or in which a Removal Date occurs on which, if any Series
has been paid in full, Principal Receivables in an aggregate amount
approximately equal to the initial investor interest of such Series are removed
from the Trust, the amount in clause (x) above shall be (i) the aggregate
amount of Principal Receivables in the Trust as of the close of business on the
last day of the prior Monthly Period for the period from and including the
first day of such Monthly Period to but excluding the related Addition Date or
Removal Date and (ii) the aggregate amount of Principal Receivables in the
Trust at the beginning of the day on the related Addition Date or Removal Date
after adjusting for the aggregate amount of Principal Receivables added to or
removed from the Trust on the related Addition Date or Removal Date, as the
case may be, for the period from and including the related Addition Date or
Removal Date to and including the last day of such Monthly Period. Such amounts
so allocated will be further allocated between the Class A Certificateholders,
the Class B Certificateholders and the Collateral Interest Holder based on the
Class A Fixed Allocation, the Class B Fixed Allocation and the Collateral Fixed
Allocation, respectively. The "Class A Fixed Allocation" means, with respect to
any Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the Class A
Investor Interest as of the close of business on the last day of the Revolving
Period, and the denominator of which is equal to the Investor Interest as of
the close of business on the last day of the Revolving Period. The "Class B
Fixed Allocation" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is equal to the Class B Investor Interest as of the close of
business on the last day of the Revolving Period, and the denominator of which
is equal to the Investor Interest as of the close of business on the last day
of the Revolving Period. The "Collateral Fixed Allocation" means, with respect
to any Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is equal to the Collateral
Interest Amount as of the close of business on the last day of the Revolving
Period, and the denominator of which is equal to the Investor Interest as of
the close of business on the last day of the Revolving Period.
"Class A Investor Interest" for any date means an amount equal to (a) the
aggregate initial principal amount of the Class A Certificates, minus (b) the
aggregate amount of principal payments made to Class A Certificateholders prior
to such date, minus (c) the excess, if any, of the aggregate amount of Class A
Investor Charge-Offs for all Transfer Dates preceding such date over the
aggregate amount of any reimbursements of Class A Investor Charge-Offs for all
Transfer Dates preceding such date; provided, however, that the Class A
Investor Interest may not be reduced below zero.
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"Class B Investor Interest" for any date means an amount equal to (a) the
aggregate initial principal amount of the Class B Certificates, minus (b) the
aggregate amount of principal payments made to Class B Certificateholders prior
to such date, minus (c) the aggregate amount of Class B Investor Charge-Offs
for all prior Transfer Dates, minus (d) the aggregate amount of Reallocated
Class B Principal Collections for all prior Transfer Dates for which the
Collateral Interest Amount has not been reduced, minus (e) an amount equal to
the aggregate amount by which the Class B Investor Interest has been reduced to
fund the Class A Investor Default Amount on all prior Transfer Dates as
described under "--Defaulted Receivables; Investor Charge-Offs" in this
Prospectus Supplement, and plus (f) the aggregate amount of Excess Spread
allocated and available on all prior Transfer Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and
(e); provided, however, that the Class B Investor Interest may not be reduced
below zero.
"Collateral Interest Amount" for any date means an amount equal to (a)
$75,000,000 (the "Collateral Interest Initial Amount"), minus (b) the aggregate
amount of principal payments made to the Collateral Interest Holder prior to
such date, minus (c) the aggregate amount of Collateral Charge-Offs for all
prior Transfer Dates, minus (d) the aggregate amount of Reallocated Principal
Collections for all prior Transfer Dates, minus (e) an amount equal to the
aggregate amount by which the Collateral Interest Amount has been reduced to
fund the Class A Investor Default Amount and the Class B Investor Default
Amount on all prior Transfer Dates as described under "--Defaulted Receivables;
Investor Charge-Offs" in this Prospectus Supplement, and plus (f) the aggregate
amount of Excess Spread allocated and available on all prior Transfer Dates for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(c), (d) and (e); provided, however, that the Collateral Interest Amount may
not be reduced below zero.
"Investor Interest," for any date of determination, means an amount equal to
the sum of (a) the Class A Investor Interest, (b) the Class B Investor Interest
and (c) the Collateral Interest Amount.
"Class A Adjusted Investor Interest," for any date of determination, means an
amount equal to the Class A Investor Interest, minus the funds on deposit in
the Principal Funding Account on such date (up to the Class A Investor
Interest).
"Class B Adjusted Investor Interest," for any date of determination, means an
amount equal to the Class B Investor Interest, minus the funds on deposit in
the Principal Funding Account in excess of the Class A Investor Interest on
such date (up to the Class B Investor Interest).
"Collateral Interest Adjusted Amount," for any date of determination, means
an amount equal to the Collateral Interest Amount, minus the funds on deposit
in the Principal Funding Account in excess of the sum of the Class A Investor
Interest and the Class B Investor Interest on such date (up to the Collateral
Interest Amount).
"Adjusted Investor Interest," for any date of determination, means the sum of
(a) the Class A Adjusted Investor Interest, (b) the Class B Adjusted Investor
Interest and (c) the Collateral Interest Adjusted Amount.
Reallocation of Cash Flows
With respect to each Transfer Date, the Servicer will determine the amount
(the "Class A Required Amount"), which will be equal to the amount, if any, by
which the sum of (a) Class A Monthly Interest due on the related Distribution
Date and overdue Class A Monthly Interest and Class A Additional Interest, if
any, (b) the Class A Servicing Fee for the related Monthly Period and overdue
Class A Servicing Fee, if any, and (c) the Class A Investor Default Amount, if
any, for the related Monthly Period exceeds the Class A Available Funds for the
related Monthly Period. If the Class A Required Amount is greater than zero,
Excess Spread allocated to Series 1999-H and available for such purpose will be
used to fund the Class A Required Amount with respect to such Transfer Date. If
such Excess Spread is insufficient to fund the Class A Required Amount, first,
Reallocated Collateral Principal Collections and, then, Reallocated Class B
Principal Collections will be used to fund the remaining Class A Required
Amount. If Reallocated Principal Collections with respect to the
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related Monthly Period, together with Excess Spread, are insufficient to fund
the remaining Class A Required Amount for such related Monthly Period, then the
Collateral Interest Amount (after giving effect to reductions for any
Collateral Charge-Offs and Reallocated Principal Collections on such Transfer
Date) will be reduced by the amount of such excess (but not by more than the
Class A Investor Default Amount for such Monthly Period). In the event that
such reduction would cause the Collateral Interest Amount to be a negative
number, the Collateral Interest Amount will be reduced to zero, and the Class B
Investor Interest (after giving effect to reductions for any Class B Investor
Charge-Offs and any Reallocated Class B Principal Collections for which the
Collateral Interest Amount was not reduced on such Transfer Date) will be
reduced by the amount by which the Collateral Interest Amount would have been
reduced below zero (but not by more than the excess of the Class A Investor
Default Amount, if any, for such Monthly Period over the amount of such
reduction, if any, of the Collateral Interest Amount with respect to such
Monthly Period). In the event that such reduction would cause the Class B
Investor Interest to be a negative number, the Class B Investor Interest will
be reduced to zero and the Class A Investor Interest will be reduced by the
amount by which the Class B Investor Interest would have been reduced below
zero (but not by more than the excess, if any, of the Class A Investor Default
Amount for such Monthly Period over the amount of the reductions, if any, of
the Collateral Interest Amount and the Class B Investor Interest with respect
to such Monthly Period). Any such reduction in the Class A Investor Interest
will have the effect of slowing or reducing the return of principal and
interest to the Class A Certificateholders. In such case, the Class A
Certificateholders will bear directly the credit and other risks associated
with their interests in the Trust. See "--Defaulted Receivables; Investor
Charge-Offs" in this Prospectus Supplement.
With respect to each Transfer Date, the Servicer will determine the amount
(the "Class B Required Amount"), which will be equal to the sum of (a) the
amount, if any, by which the sum of (i) Class B Monthly Interest due on the
related Distribution Date and overdue Class B Monthly Interest and Class B
Additional Interest, if any, and (ii) the Class B Servicing Fee for the related
Monthly Period and overdue Class B Servicing Fee, if any, exceeds the Class B
Available Funds for the related Monthly Period and (b) the Class B Investor
Default Amount, if any, for the related Monthly Period. If the Class B Required
Amount is greater than zero, Excess Spread allocated to Series 1999-H not
required to pay the Class A Required Amount or reimburse Class A Investor
Charge-Offs will be used to fund the Class B Required Amount with respect to
such Transfer Date. If such Excess Spread is insufficient to fund the Class B
Required Amount, Reallocated Collateral Principal Collections not required to
fund the Class A Required Amount for the related Monthly Period will be used to
fund the remaining Class B Required Amount. If such Reallocated Collateral
Principal Collections with respect to the related Monthly Period are
insufficient to fund the remaining Class B Required Amount, then the Collateral
Interest Amount (after giving effect to reductions for any Collateral Charge-
Offs and Reallocated Principal Collections on such Transfer Date and after any
adjustments made thereto for the benefit of the Class A Certificateholders)
will be reduced by the amount of such deficiency (but not by more than the
Class B Investor Default Amount for such Monthly Period). In the event that
such a reduction would cause the Collateral Interest Amount to be a negative
number, the Collateral Interest Amount will be reduced to zero, and the Class B
Investor Interest will be reduced by the amount by which the Collateral
Interest Amount would have been reduced below zero (but not by more than the
excess of the Class B Investor Default Amount for such Monthly Period over the
amount of such reduction of the Collateral Interest Amount), and the Class B
Certificateholders will bear directly the credit and other risks associated
with their interests in the Trust. See "--Defaulted Receivables; Investor
Charge-Offs" in this Prospectus Supplement.
Reductions of the Class A Investor Interest or Class B Investor Interest
described above shall be reimbursed by, and the Class A Investor Interest or
Class B Investor Interest increased to the extent of, Excess Spread available
for such purposes on each Transfer Date. See "--Application of Collections--
Excess Spread" in this Prospectus Supplement. When such reductions of the Class
A Investor Interest and Class B Investor Interest have been fully reimbursed,
reductions of the Collateral Interest Amount shall be reimbursed until
reimbursed in full in a similar manner.
"Required Amount" for any Monthly Period means the sum of (a) the Class A
Required Amount and (b) the Class B Required Amount, each for such Monthly
Period.
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"Reallocated Class B Principal Collections" for any Monthly Period means
collections of Principal Receivables allocable to the Class B Investor Interest
for such Monthly Period in an amount not to exceed the amount applied to fund
the Class A Required Amount, if any; provided, however, that such amount will
not exceed the Class B Investor Interest after giving effect to any Class B
Investor Charge-Offs for the related Transfer Date.
"Reallocated Collateral Principal Collections" for any Monthly Period means
collections of Principal Receivables allocable to the Collateral Interest
Amount for such Monthly Period in an amount not to exceed the amount applied to
fund the Class A Required Amount and the Class B Required Amount, if any;
provided, however, that such amount will not exceed the Collateral Interest
Amount after giving effect to any Collateral Charge-Offs for the related
Transfer Date.
"Reallocated Principal Collections" for any Monthly Period means the sum of
(a) the Reallocated Class B Principal Collections for such Monthly Period, if
any, and (b) the Reallocated Collateral Principal Collections for such Monthly
Period, if any.
Application of Collections
Allocations. Except as otherwise provided below, the Servicer will deposit
into the Collection Account, no later than the second business day following
the date of processing, any payment collected by the Servicer on the
Receivables. On the same day as any such deposit is made, the Servicer will
make the deposits and payments to the accounts and parties as indicated below;
provided, however, that for as long as MBNA remains the Servicer under the
Agreement and (a)(i) the Servicer provides to the Trustee a letter of credit
covering the risk of collection of the Servicer and (ii) the Seller shall not
have received a notice from the Rating Agency that such letter of credit would
result in the lowering of such Rating Agency's then-existing rating of any
Series then outstanding or (b) the Servicer has and maintains a certificate of
deposit rating of P-1 by Moody's and of A-1 by Standard & Poor's and deposit
insurance provided by either BIF or SAIF, then the Servicer may make such
deposits and payments on the business day immediately prior to the Distribution
Date (the "Transfer Date") in an amount equal to the net amount of such
deposits and payments which would have been made had the conditions of this
proviso not applied.
With respect to Series 1999-H, and notwithstanding anything in the Agreement
to the contrary, whether the Servicer is required to make monthly or daily
deposits from the Collection Account into the Finance Charge Account or the
Principal Account, with respect to any Monthly Period, (i) the Servicer will
only be required to deposit collections from the Collection Account into the
Finance Charge Account or the Principal Account up to the required amount to be
deposited into any such deposit account or, without duplication, distributed on
or prior to the related Distribution Date to the Certificateholders or to the
Collateral Interest Holder and (ii) if at any time prior to such Distribution
Date the amount of collections deposited in the Collection Account exceeds the
amount required to be deposited pursuant to clause (i) above, the Servicer,
subject to certain limitations, will be permitted to withdraw the excess from
the Collection Account.
Payment of Interest, Fees and Other Items. On each Transfer Date, the
Trustee, acting pursuant to the Servicer's instructions, will apply the Class A
Available Funds, Class B Available Funds and Collateral Available Funds in the
Finance Charge Account in the following priority:
(a) On each Transfer Date, an amount equal to the Class A Available Funds
will be distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for the related
Distribution Date, plus the amount of any overdue Class A Monthly
Interest and Class A Additional Interest thereon, if any, will be
deposited into the Interest Funding Account for distribution to Class A
Certificateholders on the related Interest Payment Date;
(ii) an amount equal to the Class A Servicing Fee for the related
Monthly Period, plus the amount of any overdue Class A Servicing Fee,
will be paid to the Servicer;
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(iii) an amount equal to the Class A Investor Default Amount, if any,
for the related Monthly Period will be treated as a portion of
Available Investor Principal Collections and deposited into the
Principal Account for such Transfer Date; and
(iv) the balance, if any, will constitute a portion of Excess Spread
and will be allocated and distributed as described under "--Excess
Spread" in this Prospectus Supplement.
(b) On each Transfer Date, an amount equal to the Class B Available Funds
will be distributed in the following priority:
(i) an amount equal to Class B Monthly Interest for the related
Distribution Date, plus the amount of any overdue Class B Monthly
Interest and Class B Additional Interest thereon, if any, will be
deposited into the Interest Funding Account for distribution to Class B
Certificateholders on the related Interest Payment Date;
(ii) an amount equal to the Class B Servicing Fee for the related
Monthly Period, plus the amount of any overdue Class B Servicing Fee,
will be paid to the Servicer; and
(iii) the balance, if any, will constitute a portion of Excess Spread
and will be allocated and distributed as described under "--Excess
Spread" in this Prospectus Supplement.
(c) On each Transfer Date, an amount equal to the Collateral Available
Funds will be distributed in the following priority:
(i) if MBNA or The Bank of New York is no longer the Servicer, an
amount equal to the Collateral Interest Servicing Fee, plus the amount
of any overdue Collateral Interest Servicing Fee, for the related
Monthly Period will be paid to the Servicer; and
(ii) the balance, if any, will constitute a portion of Excess Spread
and will be allocated and distributed as described under "--Excess
Spread" in this Prospectus Supplement.
"Class A Monthly Interest" with respect to any Distribution Date will equal
the product of (a) the Class A Certificate Rate for the related Interest
Period, (b) the actual number of days in such Interest Period divided by 360
and (c) the outstanding principal balance of the Class A Certificates as of the
related Record Date; provided, however, with respect to the first Distribution
Date, Class A Monthly Interest will be equal to the interest accrued on the
initial outstanding principal balance of the Class A Certificates at the
applicable Class A Certificate Rate for the period from and including the
Closing Date through but excluding October 15, 1999.
"Class B Monthly Interest" with respect to any Distribution Date will equal
the product of (a) the Class B Certificate Rate for the related Interest
Period, (b) the actual number of days in such Interest Period divided by 360
and (c) the outstanding principal balance of the Class B Certificates as of the
related Record Date; provided, however, with respect to the first Distribution
Date, Class B Monthly Interest will be equal to the interest accrued on the
initial outstanding principal balance of the Class B Certificates at the
applicable Class B Certificate Rate for the period from and including the
Closing Date through but excluding October 15, 1999.
"Collateral Available Funds" means, with respect to any Monthly Period, an
amount equal to the Collateral Floating Allocation of collections of Finance
Charge Receivables and annual membership fees allocated to the Investor
Interest with respect to such Monthly Period (excluding the portion of
collections of Finance Charge Receivables attributable to Interchange that is
allocable to Servicer Interchange).
"Excess Spread" means, with respect to any Transfer Date, an amount equal to
the sum of the amounts described in clause (a)(iv), clause (b)(iii) and clause
(c)(ii) above.
Excess Spread. On each Transfer Date, the Trustee, acting pursuant to the
Servicer's instructions, will apply Excess Spread with respect to the related
Monthly Period, to make the following distributions in the following priority:
(a) an amount equal to the Class A Required Amount, if any, with respect
to such Transfer Date will be used to fund the Class A Required Amount;
provided, however, that in the event the Class A Required
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Amount for such Transfer Date exceeds the amount of Excess Spread, such
Excess Spread shall be applied first to pay amounts due with respect to
such Transfer Date pursuant to clause (a)(i) above under "--Payment of
Interest, Fees and Other Items," second to pay amounts due with respect to
such Transfer Date pursuant to clause (a)(ii) above under "--Payment of
Interest, Fees and Other Items" and third to pay amounts due with respect
to such Transfer Date pursuant to clause (a)(iii) above under "--Payment of
Interest, Fees and Other Items;"
(b) an amount equal to the aggregate amount of Class A Investor Charge-
Offs which have not been previously reimbursed will be deposited into the
Principal Account and treated as a portion of Available Investor Principal
Collections for such Transfer Date as described under "--Payments of
Principal" below;
(c) an amount equal to the Class B Required Amount, if any, with respect
to such Transfer Date will be used to fund the Class B Required Amount and
will be applied first to pay amounts due with respect to such Transfer Date
pursuant to clause (b)(i) above under "--Payment of Interest, Fees and
Other Items," second to pay amounts due with respect to such Transfer Date
pursuant to clause (b)(ii) above under "--Payment of Interest, Fees and
Other Items" and third, the amount remaining, up to the Class B Investor
Default Amount, will be deposited into the Principal Account and treated as
a portion of Available Investor Principal Collections for such Transfer
Date as described under "--Payments of Principal" below;
(d) an amount equal to the aggregate amount by which the Class B Investor
Interest has been reduced below the initial Class B Investor Interest for
reasons other than the payment of principal to the Class B
Certificateholders (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) will be deposited
into the Principal Account and treated as a portion of Available Investor
Principal Collections for such Transfer Date as described under "--Payments
of Principal" below;
(e) an amount equal to the Collateral Minimum Monthly Interest for such
Transfer Date, plus the amount of any Collateral Minimum Monthly Interest
previously due but not distributed to the Collateral Interest Holder on a
prior Transfer Date, will be distributed to the Collateral Interest Holder
for distribution in accordance with the agreement among MBNA and the
Collateral Interest Holder relating to the transfer of the Collateral
Interest to the Collateral Interest Holder (the "Transfer Agreement");
(f) if MBNA or The Bank of New York is the Servicer, an amount equal to
the Collateral Interest Servicing Fee, plus the amount of any overdue
Collateral Interest Servicing Fee, for the related Monthly Period will be
paid to the Servicer;
(g) an amount equal to the aggregate Collateral Default Amount, if any,
for such Transfer Date will be deposited into the Principal Account and
treated as a portion of Available Investor Principal Collections for such
Transfer Date as described under "--Payments of Principal" below;
(h) an amount equal to the aggregate amount by which the Collateral
Interest Amount has been reduced for reasons other than the payment of
principal to the Collateral Interest Holder (but not in excess of the
aggregate amount of such reductions which have not been previously
reimbursed) will be deposited into the Principal Account and treated as a
portion of Available Investor Principal Collections for such Transfer Date
as described under "--Payments of Principal" below;
(i) on each Transfer Date from and after the Reserve Account Funding
Date, but prior to the date on which the Reserve Account terminates as
described under "--Reserve Account" in this Prospectus Supplement, an
amount up to the excess, if any, of the Required Reserve Account Amount
over the Available Reserve Account Amount shall be deposited into the
Reserve Account; and
(j) the balance, if any, after giving effect to the payments made
pursuant to subparagraphs (a) through (i) above shall be distributed to the
Collateral Interest Holder.
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"Collateral Minimum Monthly Interest" with respect to any Transfer Date will
equal one-twelfth of the product of (a) 8.50% per annum or such lesser amount
as may be designated in the Transfer Agreement (the "Collateral Minimum Rate")
and (b) the Collateral Interest Initial Amount less the aggregate amount
distributed to the Collateral Interest Holder in respect of Collateral Monthly
Principal for all prior Transfer Dates; provided, however, that with respect to
the first Transfer Date, Collateral Minimum Monthly Interest will be equal to
the interest accrued on the Collateral Interest Initial Amount at the
Collateral Minimum Rate for the period from and including the Closing Date
through but excluding October 15, 1999. Interest on the Collateral Interest
will be calculated on the basis of a 360-day year and twelve 30-day months.
Payments of Principal. On each Transfer Date, the Trustee, acting pursuant to
the Servicer's instructions, will distribute Available Investor Principal
Collections (see "--Principal Payments" above) on deposit in the Principal
Account in the following priority:
(a) on each Transfer Date with respect to the Revolving Period, all such
Available Investor Principal Collections will be treated as Shared
Principal Collections and applied as described under "Description of Series
Provisions--Shared Principal Collections" in this Prospectus Supplement and
"Description of the Certificates--Shared Principal Collections" in the
accompanying Prospectus;
(b) on each Transfer Date with respect to the Controlled Accumulation
Period and the Rapid Amortization Period, all such Available Investor
Principal Collections will be distributed or deposited in the following
priority:
(i) an amount equal to Class A Monthly Principal will be deposited in
the Principal Funding Account (during the Controlled Accumulation
Period) or distributed (on the related Distribution Date) to the Class
A Certificateholders (during the Rapid Amortization Period);
(ii) an amount equal to Class B Monthly Principal will be, after an
amount equal to the Class A Investor Interest has been deposited in the
Principal Funding Account (taking into account deposits to be made on
such Transfer Date), deposited in the Principal Funding Account (during
the Controlled Accumulation Period) or, after the Class A Investor
Interest has been paid in full (taking into account payments to be made
on the related Distribution Date), distributed (on the related
Distribution Date) to the Class B Certificateholders (during the Rapid
Amortization Period); and
(iii) an amount equal to Collateral Monthly Principal will be, after
an amount equal to the sum of the Class A Investor Interest and the
Class B Investor Interest has been deposited in the Principal Funding
Account, deposited in the Principal Funding Account (during the
Controlled Accumulation Period) or, after the Class A Investor Interest
and the Class B Investor Interest has been paid in full (taking into
account distributions to be made on the related Distribution Date),
distributed (on such Transfer Date) to the Collateral Interest Holder
(during the Rapid Amortization Period);
(c) on each Transfer Date with respect to the Controlled Accumulation
Period and the Rapid Amortization Period, the balance of Available Investor
Principal Collections not applied pursuant to (b) above, if any, will be
treated as Shared Principal Collections and applied as described under
"Description of Series Provisions--Shared Principal Collections" in this
Prospectus Supplement and "Description of the Certificates--Shared
Principal Collections" in the accompanying Prospectus.
"Class A Monthly Principal" with respect to any Transfer Date relating to (a)
the Controlled Accumulation Period, prior to the deposit in full of an amount
equal to the Class A Investor Interest in the Principal Funding Account, or (b)
the Rapid Amortization Period, prior to the payment in full of the Class A
Investor Interest, will equal the least of (i) the Available Investor Principal
Collections on deposit in the Principal Account with respect to such Transfer
Date, (ii) for each Transfer Date with respect to the Controlled Accumulation
Period, the Controlled Deposit Amount for such Transfer Date and (iii) the
Class A Adjusted Investor Interest prior to any deposits on such Transfer Date.
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"Class B Monthly Principal" with respect to any Transfer Date relating to (a)
the Controlled Accumulation Period, beginning with the Transfer Date on which
an amount equal to the Class A Investor Interest has been deposited in the
Principal Funding Account (after taking into account deposits to be made on
such Transfer Date), or (b) the Rapid Amortization Period, beginning with the
Transfer Date immediately preceding the Distribution Date on which the Class A
Certificates will be paid in full (after taking into account payments to be
made on the related Distribution Date), will equal the least of (i) the
Available Investor Principal Collections on deposit in the Principal Account
with respect to such Transfer Date (minus the portion of such Available
Investor Principal Collections applied to Class A Monthly Principal on such
Transfer Date), (ii) for each Transfer Date with respect to the Controlled
Accumulation Period, the Controlled Deposit Amount for such Transfer Date
(minus the Class A Monthly Principal with respect to such Transfer Date) and
(iii) the Class B Adjusted Investor Interest prior to any deposits on such
Transfer Date.
"Collateral Monthly Principal" with respect to any Transfer Date relating to
the Controlled Accumulation Period, beginning with the Transfer Date on which
an amount equal to the sum of (i) the Class A Investor Interest and (ii) the
Class B Investor Interest has been deposited in the Principal Funding Account
(after taking into account deposits to be made on such Transfer Date), or with
respect to any Transfer Date relating to the Rapid Amortization Period,
beginning with the Transfer Date immediately preceding the Distribution Date on
which the Class B Certificates will be paid in full (after taking into account
payments to be made on the related Distribution Date), will equal the least of
(i) the Available Investor Principal Collections on deposit in the Principal
Account with respect to such Transfer Date (minus the portion of such Available
Investor Principal Collections applied to Class A Monthly Principal and Class B
Monthly Principal on such Transfer Date), (ii) for each Transfer Date with
respect to the Controlled Accumulation Period, the Controlled Deposit Amount
for such Transfer Date (minus the sum of the Class A Monthly Principal and the
Class B Monthly Principal with respect to such Transfer Date) and (iii) the
Collateral Interest Adjusted Amount prior to any deposits on such Transfer
Date.
"Controlled Accumulation Amount" means for any Transfer Date with respect to
the Controlled Accumulation Period, $83,333,333.33; provided, however, that if
the commencement of the Controlled Accumulation Period is delayed as described
above under "--Postponement of Controlled Accumulation Period," the Controlled
Accumulation Amount may be higher than the amount stated above for each
Transfer Date with respect to the Controlled Accumulation Period and will be
determined by the Servicer in accordance with the Agreement based on the
principal payment rates for the Accounts and on the investor interests of other
Series (other than certain excluded Series) which are scheduled to be in their
revolving periods and then scheduled to create Shared Principal Collections
during the Controlled Accumulation Period.
"Accumulation Shortfall" means (a) on the first Transfer Date with respect to
the Controlled Accumulation Period, the excess, if any, of the Controlled
Accumulation Amount for such Transfer Date over the amount deposited in the
Principal Funding Account on such Transfer Date and (b) on each subsequent
Transfer Date with respect to the Controlled Accumulation Period, the excess,
if any, of the applicable Controlled Accumulation Amount for such subsequent
Transfer Date plus any Accumulation Shortfall for the prior Transfer Date over
the amount deposited in the Principal Funding Account on such subsequent
Transfer Date.
Shared Principal Collections
Collections of Principal Receivables for any Monthly Period allocated to the
Investor Interest will first be used to cover, with respect to any Monthly
Period during the Controlled Accumulation Period, deposits of the applicable
Controlled Deposit Amount to the Principal Funding Account or the Distribution
Account, and during the Rapid Amortization Period, payments to the
Certificateholders and the Collateral Interest Holder. The Servicer will
determine the amount of collections of Principal Receivables for any Monthly
Period allocated to the Investor Interest remaining after covering required
payments to the Certificateholders and the Collateral Interest Holder and any
similar amount remaining for any other Series in Group One ("Shared Principal
Collections"). The Servicer will allocate the Shared Principal Collections to
cover any scheduled or permitted principal distributions to certificateholders
and deposits to principal funding accounts, if any, for any
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Series in Group One which have not been covered out of the collections of
Principal Receivables allocable to such Series and certain other amounts for
such Series ("Principal Shortfalls"). Shared Principal Collections will not be
used to cover investor charge-offs for any Series. If Principal Shortfalls
exceed Shared Principal Collections for any Monthly Period, Shared Principal
Collections will be allocated pro rata among the applicable Series in Group One
based on the relative amounts of Principal Shortfalls. To the extent that
Shared Principal Collections exceed Principal Shortfalls, the balance will,
subject to certain limitations, be paid to the holder of the Seller Interest.
Defaulted Receivables; Investor Charge-Offs
On or before each Transfer Date, the Servicer will calculate the Aggregate
Investor Default Amount for the preceding Monthly Period. The term "Aggregate
Investor Default Amount" means, for any Monthly Period, the sum of the Investor
Default Amounts for such Monthly Period. The term "Investor Default Amount"
means, for any Receivable, the product of (a) the Floating Investor Percentage
on the day the applicable Account became a Defaulted Account and (b) the
aggregate amount of Principal Receivables (other than Ineligible Receivables)
in such account on the day such Account became a Defaulted Account (the
"Default Amount"). A portion of the Aggregate Investor Default Amount will be
allocated to the Class A Certificateholders (the "Class A Investor Default
Amount") on each Transfer Date in an amount equal to the product of the Class A
Floating Allocation applicable during the related Monthly Period and the
Aggregate Investor Default Amount for such Monthly Period. A portion of the
Aggregate Investor Default Amount will be allocated to the Class B
Certificateholders (the "Class B Investor Default Amount") on each Transfer
Date in an amount equal to the product of the Class B Floating Allocation
applicable during the related Monthly Period and the Aggregate Investor Default
Amount for such Monthly Period. A portion of the Aggregate Investor Default
Amount will be allocated to the Collateral Interest Holder (the "Collateral
Default Amount") on each Transfer Date in an amount equal to the product of the
Collateral Floating Allocation applicable during the related Monthly Period and
the Aggregate Investor Default Amount for such Monthly Period.
On each Transfer Date, if the Class A Investor Default Amount for such
Transfer Date exceeds the amount of Class A Available Funds, Excess Spread and
Reallocated Principal Collections available to fund such amount with respect to
the Monthly Period immediately preceding such Transfer Date as described under
"--Application of Collections--Excess Spread" in this Prospectus Supplement,
the Collateral Interest Amount (after giving effect to reductions for any
Collateral Charge-Offs and any Reallocated Principal Collections on such
Transfer Date) will be reduced by the amount of such excess, but not more than
the lesser of the Class A Investor Default Amount and the Collateral Interest
Amount (after giving effect to reductions for any Collateral Charge-Offs and
any Reallocated Principal Collections on such Transfer Date) for such Transfer
Date. In the event that such reduction would cause the Collateral Interest
Amount to be a negative number, the Collateral Interest Amount will be reduced
to zero, and the Class B Investor Interest (after giving effect to reductions
for any Class B Investor Charge-Offs and any Reallocated Class B Principal
Collections on such Transfer Date for which the Collateral Interest Amount is
not reduced) will be reduced by the amount by which the Collateral Interest
Amount would have been reduced below zero. In the event that such reduction
would cause the Class B Investor Interest to be a negative number, the Class B
Investor Interest will be reduced to zero, and the Class A Investor Interest
will be reduced by the amount by which the Class B Investor Interest would have
been reduced below zero, but not more than the Class A Investor Default Amount
for such Transfer Date (a "Class A Investor Charge-Off"), which will have the
effect of slowing or reducing the return of principal and interest to the Class
A Certificateholders. If the Class A Investor Interest has been reduced by the
amount of any Class A Investor Charge-Offs, it will be reimbursed on any
Transfer Date (but not by an amount in excess of the aggregate Class A Investor
Charge-Offs) by the amount of Excess Spread allocated and available for such
purpose as described under "--Application of Collections--Excess Spread" in
this Prospectus Supplement.
On each Transfer Date, if the Class B Investor Default Amount for such
Transfer Date exceeds the amount of Excess Spread and Reallocated Collateral
Principal Collections which are allocated and available to fund such amount
with respect to the Monthly Period preceding such Transfer Date as described
under "--Application of Collections--Excess Spread" in this Prospectus
Supplement, the Collateral Interest Amount
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(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and after giving effect
to any adjustments with respect thereto as described in the preceding
paragraph) will be reduced by the amount of such excess but not more than the
lesser of the Class B Investor Default Amount and the Collateral Interest
Amount (after giving effect to reductions for any Collateral Charge-Offs and
any Reallocated Principal Collections on such Transfer Date and after giving
effect to any adjustments with respect thereto as described in the preceding
paragraph) for such Transfer Date. In the event that such reduction would cause
the Collateral Interest Amount to be a negative number, the Collateral Interest
Amount will be reduced to zero and the Class B Investor Interest will be
reduced by the amount by which the Collateral Interest Amount would have been
reduced below zero, but not more than the Class B Investor Default Amount for
such Transfer Date (a "Class B Investor Charge-Off"). The Class B Investor
Interest will also be reduced by the amount of Reallocated Class B Principal
Collections in excess of the Collateral Interest Amount (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Collateral
Principal Collections on such Transfer Date) and the amount of any portion of
the Class B Investor Interest allocated to the Class A Certificates to avoid a
reduction in the Class A Investor Interest. The Class B Investor Interest will
thereafter be reimbursed (but not in excess of the unpaid principal balance of
the Class B Certificates) on any Transfer Date by the amount of Excess Spread
allocated and available for that purpose as described under "--Application of
Collections--Excess Spread" in this Prospectus Supplement.
On each Transfer Date, if the Collateral Default Amount for such Transfer
Date exceeds the amount of Excess Spread which is allocated and available to
fund such amount as described under "--Application of Collections--Excess
Spread" in this Prospectus Supplement, the Collateral Interest Amount will be
reduced by the amount of such excess but not more than the lesser of the
Collateral Default Amount and the Collateral Interest Amount for such Transfer
Date (a "Collateral Charge-Off"). The Collateral Interest Amount will also be
reduced by the amount of Reallocated Principal Collections and the amount of
any portion of the Collateral Interest Amount allocated to the Class A
Certificates to avoid a reduction in the Class A Investor Interest or to the
Class B Certificates to avoid a reduction in the Class B Investor Interest. The
Collateral Interest Amount will thereafter be reimbursed on any Transfer Date
by the amount of Excess Spread allocated and available for that purpose as
described under "--Application of Collections--Excess Spread" in this
Prospectus Supplement.
Principal Funding Account
Pursuant to the Series 1999-H Supplement, the Trustee will establish and
maintain with a Qualified Institution the principal funding account as a
segregated trust account held for the benefit of the Certificateholders and the
Collateral Interest Holder (the "Principal Funding Account"). During the
Controlled Accumulation Period, the Trustee at the direction of the Servicer
shall transfer collections in respect of Principal Receivables (other than
Reallocated Principal Collections) and Shared Principal Collections from other
Series, if any, allocated to the Series 1999-H Certificates from the Principal
Account to the Principal Funding Account as described under "--Application of
Collections" in this Prospectus Supplement.
Funds on deposit in the Principal Funding Account will be invested to the
following Transfer Date by the Trustee at the direction of the Servicer in
Permitted Investments. Investment earnings (net of investment losses and
expenses) on funds on deposit in the Principal Funding Account (the "Principal
Funding Investment Proceeds") will be deposited in the Finance Charge Account
and included in Class A Available Funds and Class B Available Funds for such
Interest Period. If, for any Transfer Date, the Principal Funding Investment
Proceeds are less than the Covered Amount, the amount of such deficiency (the
"Reserve Draw Amount") shall be withdrawn, to the extent required and
available, from the Reserve Account and deposited in the Finance Charge Account
and included as Class A Available Funds or Class B Available Funds, as
applicable, for such Transfer Date.
"Covered Amount" means, with respect to any Transfer Date, the sum of (a)
with respect to the Class A Certificates, the product of (i) a fraction, the
numerator of which is the actual number of days in such Interest Period and the
denominator of which is 360, (ii) the Class A Certificate Rate in effect with
respect to such Interest Period and (iii) the aggregate amount on deposit in
the Principal Funding Account with respect to Class
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A Monthly Principal as of the Record Date immediately preceding such Transfer
Date, and (b) with respect to the Class B Certificates, the product of (i) a
fraction, the numerator of which is the actual number of days in such Interest
Period and the denominator of which is 360, (ii) the Class B Certificate Rate
in effect with respect to such Interest Period and (iii) the aggregate amount
on deposit in the Principal Funding Account with respect to Class B Monthly
Principal as of the Record Date immediately preceding such Transfer Date.
Interest Funding Account
Pursuant to the Series 1999-H Supplement, the Trustee will establish and
maintain with a Qualified Institution the interest funding account as a
segregated trust account held for the benefit of the Certificateholders (the
"Interest Funding Account"). On each Transfer Date, the Trustee, acting
pursuant to the Servicer's instructions, will transfer collections in respect
of Finance Charge Receivables from the Finance Charge Account to the Interest
Funding Account as described under "--Application of Collections" in this
Prospectus Supplement. All amounts on deposit in the Interest Funding Account
on any Transfer Date (after giving effect to any deposits to, or withdrawals
from, the Interest Funding Account to be made on such Transfer Date) will be
invested to the following Transfer Date by the Trustee at the direction of the
Servicer in Permitted Investments. The interest and other investment income
(net of investment expenses and losses) earned on such investments will be
deposited in the Finance Charge Account and treated as Class A Available Funds.
Reserve Account
Pursuant to the Series 1999-H Supplement, the Trustee will establish and
maintain with a Qualified Institution the reserve account as a segregated trust
account held for the benefit of the Certificateholders and the Collateral
Interest Holder (the "Reserve Account"). The Reserve Account is established to
assist with the subsequent distribution of interest on the Certificates during
the Controlled Accumulation Period and on the first Transfer Date with respect
to the Rapid Amortization Period. On each Transfer Date from and after the
Reserve Account Funding Date, but prior to the termination of the Reserve
Account, the Trustee, acting pursuant to the Servicer's instructions, will
apply Excess Spread allocated to the Certificates (to the extent described
above under "--Application of Collections--Excess Spread" in this Prospectus
Supplement) to increase the amount on deposit in the Reserve Account (to the
extent such amount is less than the Required Reserve Account Amount). The
"Reserve Account Funding Date" will be the Transfer Date with respect to the
Monthly Period which commences no later than three months prior to the
commencement of the Controlled Accumulation Period, or such earlier date as the
Servicer may determine. The "Required Reserve Account Amount" for any Transfer
Date on or after the Reserve Account Funding Date will be equal to (a) 0.5% of
the outstanding principal balance of the Class A Certificates or (b) any other
amount designated by the Seller; provided, however, that if such designation is
of a lesser amount, the Seller shall have provided the Servicer, the Collateral
Interest Holder and the Trustee with evidence that the Rating Agency Condition
has been satisfied and the Seller shall have delivered to the Trustee a
certificate of an authorized officer of the Seller to the effect that, based on
the facts known to such officer at such time, in the reasonable belief of the
Seller, such designation will not cause a Pay Out Event or an event that, after
the giving of notice or the lapse of time, would cause a Pay Out Event to occur
with respect to Series 1999-H. On each Transfer Date, after giving effect to
any deposit to be made to, and any withdrawal to be made from, the Reserve
Account on such Transfer Date, the Trustee will withdraw from the Reserve
Account an amount equal to the excess, if any, of the amount on deposit in the
Reserve Account over the Required Reserve Account Amount and shall distribute
such excess to the Collateral Interest Holder. Any amounts withdrawn from the
Reserve Account and distributed to the Collateral Interest Holder as described
above will not be available for distribution to the Certificateholders.
Provided that the Reserve Account has not terminated as described below, all
amounts on deposit in the Reserve Account on any Transfer Date (after giving
effect to any deposits to, or withdrawals from, the Reserve Account to be made
on such Transfer Date) will be invested to the following Transfer Date by the
Trustee at the direction of the Servicer in Permitted Investments. The interest
and other investment income (net of investment expenses and losses) earned on
such investments will be retained in the Reserve Account (to the
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extent the amount on deposit is less than the Required Reserve Account Amount)
or deposited in the Finance Charge Account and treated as Class A Available
Funds.
On or before each Transfer Date with respect to the Controlled Accumulation
Period and on the first Transfer Date with respect to the Rapid Amortization
Period, a withdrawal will be made from the Reserve Account, and the amount of
such withdrawal will be deposited in the Finance Charge Account and included as
Class A Available Funds or Class B Available Funds, as provided in the Series
1999-H Supplement, for such Transfer Date in an aggregate amount equal to the
lesser of (a) the Available Reserve Account Amount with respect to such
Transfer Date and (b) the Reserve Draw Amount with respect to such Transfer
Date; provided, however, that the amount of such withdrawal shall be reduced to
the extent that funds otherwise would be available to be deposited in the
Reserve Account on such Transfer Date. On each Transfer Date, the amount
available to be withdrawn from the Reserve Account (the "Available Reserve
Account Amount") will be equal to the lesser of the amount on deposit in the
Reserve Account (before giving effect to any deposit to be made to the Reserve
Account on such Transfer Date) and the Required Reserve Account Amount for such
Transfer Date.
The Reserve Account will be terminated upon the earliest to occur of (a) the
termination of the Trust pursuant to the Agreement, (b) the first Transfer Date
with respect to the Rapid Amortization Period and (c) the Transfer Date
immediately preceding the Scheduled Payment Date. Upon the termination of the
Reserve Account, all amounts on deposit therein (after giving effect to any
withdrawal from the Reserve Account on such date as described above) will be
distributed to the Collateral Interest Holder. Any amounts withdrawn from the
Reserve Account and distributed to the Collateral Interest Holder as described
above will not be available for distribution to the Certificateholders.
Pay Out Events
As described above, the Revolving Period will continue through March 31, 2003
(unless such date is postponed as described under "--Postponement of Controlled
Accumulation Period" in this Prospectus Supplement), unless a Pay Out Event
occurs prior to such date. A "Pay Out Event" refers to any of the following
events:
(a) failure on the part of the Seller (i) to make any payment or deposit
on the date required under the Agreement or the Series 1999-H Supplement
(or within the applicable grace period which shall not exceed five days) or
(ii) to observe or perform in any material respect any other covenants or
agreements of the Seller set forth in the Agreement or the Series 1999-H
Supplement, which failure has a material adverse effect on the
Certificateholders (which determination shall be made without reference to
whether any funds are available under the Collateral Interest) and which
continues unremedied for a period of 60 days after written notice of such
failure, requiring the same to be remedied, and continues to materially and
adversely affect the interests of the Certificateholders (which
determination shall be made without reference to whether any funds are
available under the Collateral Interest) for such period;
(b) any representation or warranty made by the Seller in the Agreement or
the Series 1999-H Supplement, or any information required to be given by
the Seller to the Trustee to identify the Accounts proves to have been
incorrect in any material respect when made or delivered and which
continues to be incorrect in any material respect for a period of 60 days
after written notice of such failure, requiring the same to be remedied,
and as a result of which the interests of the Certificateholders are
materially and adversely affected (which determination shall be made
without reference to whether any funds are available under the Collateral
Interest) and continue to be materially and adversely affected for such
period; provided, however, that a Pay Out Event pursuant to this
subparagraph (b) shall not be deemed to occur thereunder if the Seller has
accepted reassignment of the related Receivable or all such Receivables, if
applicable, during such period (or such longer period as the Trustee may
specify) in accordance with the provisions of the Agreement;
(c) the average of the Portfolio Yields for any three consecutive Monthly
Periods is less than the average of the Base Rates for such period;
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(d) a failure by the Seller to convey Receivables arising under
Additional Accounts, or Participations, to the Trust when required by the
Agreement;
(e) any Servicer Default occurs which would have a material adverse
effect on the Certificateholders;
(f) insufficient moneys available to pay the Investor Interest on the
Scheduled Payment Date;
(g) certain events of insolvency, conservatorship or receivership
relating to the Seller;
(h) the Seller becomes unable for any reason to transfer Receivables to
the Trust in accordance with the provisions of the Agreement; or
(i) the Trust becomes an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
In the case of any event described in clause (a), (b) or (e) above, a Pay Out
Event will be deemed to have occurred with respect to the Certificates only if,
after any applicable grace period, either the Trustee or the Certificateholders
and the Collateral Interest Holder evidencing interests aggregating not less
than 50% of the Investor Interest, by written notice to the Seller and the
Servicer (and to the Trustee if given by the Certificateholders) declare that a
Pay Out Event has occurred with respect to the Certificates as of the date of
such notice. In the case of any event described in clause (g), (h) or (i), a
Pay Out Event with respect to all Series then outstanding, and in the case of
any event described in clause (c), (d) or (f), a Pay Out Event with respect to
only the Certificates, will be deemed to have occurred without any notice or
other action on the part of the Trustee or the Certificateholders or all
certificateholders, as appropriate, immediately upon the occurrence of such
event. On the date on which a Pay Out Event is deemed to have occurred, the
Rapid Amortization Period will commence. In such event, distributions of
principal to the Certificateholders and the Collateral Interest Holder will
begin on the first Distribution Date following the month in which such Pay Out
Event occurred. If, because of the occurrence of a Pay Out Event, the Rapid
Amortization Period begins on or prior to February 29, 2004, Certificateholders
and the Collateral Interest Holder may begin receiving distributions of
principal earlier than they otherwise would have, which may shorten the average
life of the Certificates and the Collateral Interest.
See "Description of the Certificates--Pay Out Events" in the accompanying
Prospectus for an additional discussion of the consequences of an insolvency,
conservatorship or receivership of the Seller.
Servicing Compensation and Payment of Expenses
The share of the Servicing Fee allocable to the Investor Interest with
respect to any Transfer Date (the "Investor Servicing Fee") shall be equal to
one-twelfth of the product of (a) 2.0% and (b) the Adjusted Investor Interest
as of the last day of the Monthly Period preceding such Transfer Date;
provided, however, with respect to the first Transfer Date, the Investor
Servicing Fee shall be equal to $2,388,888.89. On each Transfer Date, but only
if MBNA or The Bank of New York is the Servicer, Servicer Interchange with
respect to the related Monthly Period that is on deposit in the Finance Charge
Account shall be withdrawn from the Finance Charge Account and paid to the
Servicer in payment of a portion of the Investor Servicing Fee with respect to
such Monthly Period. The "Servicer Interchange" for any Monthly Period for
which MBNA or The Bank of New York is the Servicer will be an amount equal to
the portion of collections of Finance Charge Receivables allocated to the
Investor Interest with respect to such Monthly Period that is attributable to
Interchange; provided, however, that Servicer Interchange for a Monthly Period
shall not exceed one-twelfth of the product of (i) the Adjusted Investor
Interest, as of the last day of such Monthly Period and (ii) 0.75%; provided
further, however, that with respect to the first Transfer Date, the Servicer
Interchange may equal but shall not exceed $895,833.33. In the case of any
insufficiency of Servicer Interchange on deposit in the Finance Charge Account,
a portion of the Investor Servicing Fee with respect to such Monthly Period
will not be paid to the extent of such insufficiency and in no event shall the
Trust, the Trustee, the Certificateholders or the Collateral Interest Holder be
liable for the share of the Servicing Fee to be paid out of Servicer
Interchange.
The share of the Investor Servicing Fee allocable to the Class A
Certificateholders with respect to any Transfer Date (the "Class A Servicing
Fee") shall be equal to one-twelfth of the product of (a) the Class A
S-43
<PAGE>
Floating Allocation, (b) 1.25%, or if MBNA or The Bank of New York is not the
Servicer, 2.0% (the "Net Servicing Fee Rate") and (c) the Adjusted Investor
Interest as of the last day of the Monthly Period preceding such Transfer Date;
provided, however, that with respect to the first Transfer Date, the Class A
Servicing Fee shall be equal to $1,269,097.22. The share of the Investor
Servicing Fee allocable to the Class B Certificateholders with respect to any
Transfer Date (the "Class B Servicing Fee") shall be equal to one-twelfth of
the product of (a) the Class B Floating Allocation, (b) the Net Servicing Fee
Rate and (c) the Adjusted Investor Interest as of the last day of the Monthly
Period preceding such Transfer Date; provided, however, that with respect to
the first Transfer Date, the Class B Servicing Fee shall be equal to
$111,979.17. The share of the Investor Servicing Fee allocable to the
Collateral Interest Holder with respect to any Transfer Date (the "Collateral
Interest Servicing Fee", together with the Class A Servicing Fee and the Class
B Servicing Fee, the "Certificateholder Servicing Fee") shall be equal to one-
twelfth of the product of (a) the Collateral Floating Allocation, (b) the Net
Servicing Fee Rate and (c) the Adjusted Investor Interest as of the last day of
the Monthly Period preceding such Transfer Date; provided, however, that with
respect to the first Transfer Date, the Collateral Interest Servicing Fee shall
be equal to $111,979.17. The remainder of the Servicing Fee shall be paid by
the holder of the Seller Interest or other Series (as provided in the related
Series Supplements) or, to the extent of any insufficiency of Servicer
Interchange as described above, not be paid. In no event shall the Trust, the
Trustee, the Certificateholders or the Collateral Interest Holder be liable for
the share of the Servicing Fee to be paid out of Servicer Interchange. The
Class A Servicing Fee and the Class B Servicing Fee shall be payable to the
Servicer solely to the extent amounts are available for distribution in respect
thereof as described under "--Application of Collections--Payment of Interest,
Fees and Other Items" in this Prospectus Supplement.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Receivables including, without
limitation, payment of the fees and disbursements of the Trustee and
independent certified public accountants and other fees which are not expressly
stated in the Agreement to be payable by the Trust, the Certificateholders or
the Collateral Interest Holder other than federal, state and local income and
franchise taxes, if any, of the Trust.
Reports to Certificateholders
On each Transfer Date, the Trustee will forward to each Certificateholder of
record, a statement prepared by the Servicer setting forth the items described
in "Description of the Certificates--Reports to Certificateholders" in the
accompanying Prospectus. In addition, such statement will include certain
information regarding the Principal Funding Account and the Collateral
Interest, if any, for such Transfer Date.
Amendments
In addition to being subject to amendment pursuant to any other provisions
relating to amendments in either the Agreement or the Series 1999-H Supplement,
the Series 1999-H Supplement may be amended by the Seller without the consent
of the Servicer, the Trustee or any Certificateholder if the Seller provides
the Trustee with (a) an opinion of counsel to the effect that such amendment or
modification would reduce the risk that the Trust would be treated as taxable
as a publicly traded partnership pursuant to section 7704 of the Internal
Revenue Code of 1986, as amended (the "Code") and (b) a certificate that such
amendment or modification would not materially and adversely affect any
Certificateholder, provided, however, that no such amendment shall be deemed
effective without the Trustee's consent, if the Trustee's rights, duties and
obligations under the Series 1999-H Supplement are thereby modified. Promptly
after the effectiveness of any such amendment, the Seller shall deliver a copy
of such amendment to each of the Servicer, the Trustee and each Rating Agency
described in the Series 1999-H Supplement.
S-44
<PAGE>
ERISA CONSIDERATIONS
General
Subject to the considerations described below and in the accompanying
Prospectus, the Certificates may be purchased by, on behalf of, or with "plan
assets" of any employee benefit or other plan that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended (each, a "Plan"). Any Plan
fiduciary that proposes to cause a Plan to acquire any of the Certificates
should consult with its counsel with respect to the potential consequences
under ERISA and the Code of the Plan's acquisition and ownership of such
Certificates. See "ERISA Considerations" in the accompanying Prospectus.
Section 406 of ERISA and Section 4975 of the Code prohibit Plans from
engaging in certain transactions involving "plan assets" with persons that are
"parties in interest" under ERISA or "disqualified persons" under the Code
(collectively, "Parties in Interest") with respect to the Plan. A violation of
these "prohibited transaction" rules may generate excise tax and other
liabilities under ERISA and Section 4975 of the Code for such persons, unless a
statutory, regulatory or administrative exemption is available. Plans that are
governmental plans (as defined in Section 3(32) of ERISA) and certain church
plans (as defined in Section 3(33) of ERISA) are not subject to ERISA
requirements.
Class A Certificates
The U.S. Department of Labor (the "DOL") has issued an individual exemption,
Prohibited Transaction Exemption 98-13 (Exemption Application No. D-10304), 63
Fed. Reg. 17020 (April 7, 1998), to MBNA (the "Exemption") relating to (1) the
initial purchase, the holding and the subsequent resale by Plans of senior
certificates representing an undivided interest in a credit card trust with
respect to which MBNA is the sponsor; and (2) the servicing, operation and
management of such trust, provided that the general conditions and certain
other conditions set forth in the Exemption are satisfied. The Exemption will
apply to the acquisition, holding and resale of the Class A Certificates by, on
behalf of, or with "plan assets" of a Plan, provided that certain conditions
(certain of which are described below) are met.
Among the conditions which must be satisfied for the Exemption to apply are
the following:
(1) The acquisition of the Class A Certificates by a Plan is on terms
(including the price for such Class A Certificates) that are at least as
favorable to the investing Plan as they would be in an arm's-length
transaction with an unrelated party;
(2) The rights and interests evidenced by the Class A Certificates
acquired by the Plan are not subordinated to the rights and interests
evidenced by other certificates of the Trust;
(3) The Class A Certificates acquired by the Plan have received a rating
at the time of such acquisition in one of the two highest generic rating
categories from a Rating Agency, provided that, notwithstanding such
rating, credit support is provided to the Class A Certificates through a
senior-subordinated structure or other form of third-party credit support
which, at a minimum, represents 5% of the outstanding principal balance of
the Class A Certificates at the time of such acquisition;
(4) The Trustee is not an affiliate of the Underwriters, the Seller, the
Servicer, any obligor whose receivables constitute more than 0.5% of the
fair market value of the aggregate undivided interest in the Trust
allocated to Series 1999-H, or any of their respective affiliates (the
"Restricted Group");
(5) The sum of all payments made to and retained by the Underwriters in
connection with the distribution of the Class A Certificates represents not
more than reasonable compensation for underwriting such Class A
Certificates; the consideration received by the Seller as a consequence of
the assignment of Receivables to the Trust, to the extent allocable to the
Class A Certificates, represents not more than the fair market value of
such Receivables; and the sum of all payments made to and retained by the
Servicer, to the extent allocable to the Class A Certificates, represents
not more than reasonable compensation for
S-45
<PAGE>
the Servicer's services under the Agreement and reimbursement of the
Servicer's reasonable expenses in connection therewith;
(6) The Plan investing in the Class A Certificates is an "accredited
investor" as defined in Rule 501(a)(1) of Regulation D of the Securities
and Exchange Commission under the Securities Act of 1933, as amended;
(7) The Trustee is a substantial financial institution or trust company
experienced in trust activities, is familiar with its duties,
responsibilities and liabilities as a fiduciary under ERISA and, as the
legal owner of (or holder of a perfected security interest in) the
Receivables, enforces all the rights created in favor of the
Certificateholders, including Plans;
(8) Prior to the issuance of any new Series, confirmation is received
from the Rating Agencies that such issuance will not result in the
reduction or withdrawal of the then current rating of the Class A
Certificates held by any Plan pursuant to the Exemption;
(9) To protect against fraud, chargebacks or other dilution of the
Receivables, the Agreement and the Rating Agencies require the Seller to
maintain a Seller Interest of not less than 2% of the principal balance of
the receivables contained in the Trust;
(10) Each Receivable is an Eligible Receivable, based on criteria of the
Rating Agencies and as specified in the Agreement, and the Agreement
requires that any change in the terms of the cardholder agreements must be
made applicable to the comparable segment of accounts owned or serviced by
MBNA which are part of the same program or have the same or substantially
similar characteristics;
(11) The Agreement limits the number of newly originated Accounts to be
designated to the Trust, unless the Rating Agencies otherwise consent in
writing, to the following: (a) with respect to any three-month period, 15%
of the number of existing Accounts designated to the Trust as of the first
day of such period, and (b) with respect to any twelve-month period, 20% of
the number of existing Accounts designated to the Trust as of the first day
of such twelve-month period;
(12) The Agreement requires the Seller to deliver an opinion of counsel
semi-annually confirming the validity and perfection of the transfer of
Receivables in newly originated Accounts to the Trust if such an opinion is
not delivered with respect to each interim addition; and
(13) The Agreement requires the Seller and the Trustee to receive
confirmation from each Rating Agency that such Rating Agency will not
reduce or withdraw its then current rating of the Class A Certificates as a
result of (a) a proposed transfer of Receivables in newly originated
Accounts to the Trust, or (b) the transfer of Receivables in all newly
originated Accounts added to the Trust during the preceding three-month
period (beginning at quarterly intervals specified in the Agreement and
ending in the calendar month prior to the date such confirmation is
issued), provided that a Rating Agency confirmation shall not be required
under clause (b) for any three-month period in which any additions of
Receivables in newly originated Accounts occurred only after receipt of
prior Rating Agency confirmation pursuant to clause (a).
The Seller believes that the Exemption will apply to the acquisition and
holding of the Class A Certificates by Plans and that all conditions of the
Exemption, other than those within the control of the investors, will be met.
Class B Certificates
A violation of the prohibited transaction rules could occur if the Class B
Certificates were to be purchased with "plan assets" of any Plan if the Seller,
the Trustee, any Underwriter of the Class B Certificates or any of their
affiliates were a Party in Interest with respect to such Plan, unless a
statutory, regulatory or administrative exemption is available or an exemption
applies under a regulation (the "Plan Asset Regulation") issued by the DOL. The
Seller, the Trustee, the Underwriters and their affiliates are likely to be
Parties in Interest with respect to many Plans. Before purchasing the Class B
Certificates, a Plan fiduciary or other Plan investor should consider whether a
prohibited transaction might arise by reason of the relationship between the
Plan and the Seller, the Trustee, any Underwriter of the Class B Certificates
or any of their affiliates and consult their counsel regarding the purchase in
light of the considerations described below and in the accompanying Prospectus.
S-46
<PAGE>
Under certain circumstances, the Plan Asset Regulation treats the assets of
an entity in which a Plan holds an equity interest as "plan assets" of such
Plan. Because the Class B Certificates will represent beneficial interests in
the Trust, and despite the agreement of the Seller and the Certificate Owners to
treat the Certificates as debt instruments, the Class B Certificates are likely
to be considered equity interests in the Trust for purposes of the Plan Asset
Regulation, with the result that the assets of the Trust are likely to be
treated as "plan assets" of the investing Plans for the purposes of ERISA and
Section 4975 of the Code, unless the exception for "publicly-offered securities"
is applicable as described in the accompanying Prospectus. It is anticipated
that the Class B Certificates will meet the criteria for treatment as "publicly-
offered securities" as described in the accompanying Prospectus. No restrictions
will be imposed on the transfer of the Class B Certificates. It is expected that
the Class B Certificates will be held by at least 100 Independent Investors at
the conclusion of the initial public offering made hereby although no assurance
can be given, and no monitoring or other measures will be taken to ensure, that
such condition is met. The Class B Certificates will be sold as part of an
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, and then will be timely registered under the Exchange
Act.
If the foregoing exception under the Plan Asset Regulation were not satisfied
transactions involving the Trust and Parties in Interest with respect to a Plan
that purchases or holds Class B Certificates might be prohibited under Section
406 of ERISA and/or Section 4975 of the Code and result in excise tax and other
liabilities under ERISA and Section 4975 of the Code unless an exemption were
available. The five DOL class exemptions described in the accompanying
Prospectus may not provide relief for all transactions involving the assets of
the Trust even if they would otherwise apply to the purchase of Class B
Certificates by a Plan. However, because the DOL has designated the Exemption
as an "underwriter exemption," an insurance company investing solely assets of
its general account may be able to acquire and hold the Class B Certificates,
provided that (i) the Class A Certificates are eligible for relief under the
Exemption and (ii) such acquisition and holding satisfies the conditions
applicable under Sections I and III of DOL Prohibited Transaction Class
Exemption 95-60 (Class Exemption for Certain Transactions Involving Insurance
Company General Accounts). See "--Class A Certificates" above and "ERISA
Considerations" in the accompanying Prospectus.
Consultation with Counsel
In light of the foregoing, fiduciaries or other persons contemplating
purchasing the Certificates on behalf or with "plan assets" of any Plan should
consult their own counsel regarding whether the Trust assets represented by the
Certificates would be considered "plan assets," the consequences that would
apply if the Trust's assets were considered "plan assets," and the availability
of exemptive relief from the prohibited transaction rules, in the case of the
Class A Certificates, under the Exemption or, in the case of the Class B
Certificates, under the Plan Asset Regulation or, with respect to an insurance
company general account investor, the Exemption and Sections I and III of DOL
Prohibited Transaction Class Exemption 95-60.
Finally, Plan fiduciaries and other Plan investors should consider the
fiduciary standards under ERISA or other applicable law in the context of the
Plan's particular circumstances before authorizing an investment of a portion
of the Plan's assets in the Certificates. Accordingly, among other factors,
Plan fiduciaries and other Plan investors should consider whether the
investment (i) satisfies the diversification requirement of ERISA or other
applicable law, (ii) is in accordance with the Plan's governing instruments,
and (iii) is prudent in light of the "Risk Factors" and other factors discussed
in the accompanying Prospectus.
S-47
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement as
supplemented by a terms agreement relating to the Class A Certificates
(together, the "Class A Underwriting Agreement") between the Seller and the
Class A Underwriters named below (the "Class A Underwriters"), and the terms
and conditions set forth in an underwriting agreement as supplemented by a
terms agreement relating to the Class B Certificates (together, the "Class B
Underwriting Agreement," and together with the Class A Underwriting Agreement,
the "Underwriting Agreement") between the Seller and the Class B Underwriter
named below (the "Class B Underwriter," and together with the Class A
Underwriters, the "Underwriters"), the Seller has agreed to sell to the
Underwriters, and each of the Underwriters has severally agreed to purchase,
the principal amount of the Certificates set forth opposite its name:
<TABLE>
<CAPTION>
Principal Amount of
Class A Underwriters Class A Certificates
- -------------------- --------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................... $212,500,000
J.P. Morgan Securities Inc. ............................... 212,500,000
Banc One Capital Markets, Inc. ............................ 212,500,000
Salomon Smith Barney Inc. ................................. 212,500,000
------------
Total................................................... $850,000,000
============
</TABLE>
<TABLE>
<CAPTION>
Principal Amount of
Class B Underwriter Class B Certificates
- ------------------- --------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................... $75,000,000
===========
</TABLE>
In the Class A Underwriting Agreement, the Class A Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
Class A Certificates offered hereby if any of the Class A Certificates are
purchased. In the Class B Underwriting Agreement, the Class B Underwriter has
agreed, subject to the terms and conditions set forth therein, to purchase all
of the Class B Certificates offered hereby if any of the Class B Certificates
are purchased. The Underwriters have agreed to reimburse the Seller for certain
expenses of the issuance and distribution of the Certificates.
The Class A Underwriters propose initially to offer the Class A Certificates
to the public at 100% of their principal amount and to certain dealers at such
price less concessions not in excess of 0.135% of the principal amount of the
Class A Certificates. The Class A Underwriters may allow, and such dealers may
reallow, concessions not in excess of 0.10% of the principal amount of the
Class A Certificates to certain brokers and dealers. After the initial public
offering, the public offering price and other selling terms may be changed by
the Class A Underwriters.
The Class B Underwriter proposes initially to offer the Class B Certificates
to the public at 100% of their principal amount and to certain dealers at such
price less concessions not in excess of 0.150% of the principal amount of the
Class B Certificates. The Class B Underwriter may allow, and such dealers may
reallow, concessions not in excess of 0.10% of the principal amount of the
Class B Certificates to certain brokers and dealers. After the initial public
offering, the public offering price and other selling terms may be changed by
the Class B Underwriter.
We will receive proceeds of approximately $922,437,500 from the sale of the
Certificates (representing 99.725% of the principal amount of each Class A
Certificate and 99.70% of the principal amount of each Class B Certificate)
after paying the underwriting discount of $2,562,500 (representing 0.275% of
the principal amount of each Class A Certificate and 0.30% of the principal
amount of each Class B Certificate). The underwriting discount will be 1.55%
for Class B Certificates sold to various noninstitutional investors. To the
extent Class B Certificates are sold to these investors, the actual Class B
underwriting discount will be more than, and the proceeds to the Seller from
the sales of Class B Certificates will be less than, the amounts shown above.
Additional offering expenses are estimated to be $800,000.
S-48
<PAGE>
Each Underwriter has represented and agreed that:
(a) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation
to the Certificates in, from or otherwise involving the United Kingdom;
(b) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue or
sale of the Certificates to a person who is of a kind described in Article
11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may otherwise
lawfully be issued or passed on;
(c) if it is an authorized person under Chapter III of part I of the
Financial Services Act 1986, it has only promoted and will only promote (as
that term is defined in Regulation 1.02(2) of the Financial Services
(Promotion of Unregulated Schemes) Regulations 1991) to any person in the
United Kingdom the scheme described in this Prospectus Supplement and the
accompanying Prospectus if that person is of a kind described either in
Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of
the Financial Services (Promotion of Unregulated Schemes) Regulations 1991;
and
(d) it is a person of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996.
The Seller will indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act, or contribute to payments the
Underwriters may be required to make in respect thereof.
The Underwriters may engage in over-allotment transactions, stabilizing
transactions, syndicate covering transactions and penalty bids with respect to
the Certificates in accordance with Regulation M under the Exchange Act. Over-
allotment transactions involve syndicate sales in excess of the offering size,
which creates a syndicate short position. Stabilizing transactions permit bids
to purchase the Certificates so long as the stabilizing bids do not exceed a
specified maximum. Syndicate covering transactions involve purchases of the
Certificates in the open market after the distribution has been completed in
order to cover syndicate short positions. Penalty bids permit the Underwriters
to reclaim a selling concession from a syndicate member when the Certificates
originally sold by such syndicate member are purchased in a syndicate covering
transaction. Such over-allotment transactions, stabilizing transactions,
syndicate covering transactions and penalty bids may cause the prices of the
Certificates to be higher than they would otherwise be in the absence of such
transactions. Neither the Seller nor the Underwriters represent that the
Underwriters will engage in any such transactions or that such transactions,
once commenced, will not be discontinued without notice at any time.
S-49
<PAGE>
INDEX OF TERMS FOR PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
Accounts............................................................. S-14
Accumulation Period Length........................................... S-29
Accumulation Shortfall............................................... S-38
Additional Interest.................................................. S-26
Adjusted Investor Interest........................................... S-32
Aggregate Investor Default Amount.................................... S-39
Agreement............................................................ S-14
Available Investor Principal Collections............................. S-29
Available Reserve Account Amount..................................... S-42
Bank Portfolio....................................................... S-14
Base Rate............................................................ S-20
business day......................................................... S-26
Cedelbank............................................................ S-12
Certificateholder Servicing Fee...................................... S-44
Certificateholders................................................... S-19
Certificates......................................................... S-5
Class A Account Percentage........................................... S-27
Class A Additional Interest.......................................... S-26
Class A Adjusted Investor Interest................................... S-32
Class A Available Funds.............................................. S-27
Class A Certificate Rate............................................. S-5
Class A Certificateholders........................................... S-19
Class A Certificates................................................. S-5
Class A Fixed Allocation............................................. S-31
Class A Floating Allocation.......................................... S-30
Class A Investor Charge-Off.......................................... S-39
Class A Investor Default Amount...................................... S-39
Class A Investor Interest............................................ S-31
Class A Monthly Interest............................................. S-35
Class A Monthly Principal............................................ S-37
Class A Required Amount.............................................. S-32
Class A Servicing Fee................................................ S-43
Class A Underwriters................................................. S-48
Class A Underwriting Agreement....................................... S-48
Class B Account Percentage........................................... S-27
Class B Additional Interest.......................................... S-26
Class B Adjusted Investor Interest................................... S-32
Class B Available Funds.............................................. S-27
Class B Certificate Rate............................................. S-5
Class B Certificateholders........................................... S-19
Class B Certificates................................................. S-5
Class B Fixed Allocation............................................. S-31
Class B Floating Allocation.......................................... S-31
Class B Investor Charge-Off.......................................... S-40
Class B Investor Default Amount...................................... S-39
Class B Investor Interest............................................ S-32
Class B Monthly Interest............................................. S-35
Class B Monthly Principal............................................ S-38
Class B Required Amount.............................................. S-33
Class B Servicing Fee................................................ S-44
Class B Underwriter.................................................. S-48
Class B Underwriting Agreement....................................... S-48
Closing Date......................................................... S-5
Code................................................................. S-44
Collateral Available Funds........................................... S-35
Collateral Charge-Off................................................ S-40
Collateral Default Amount............................................ S-39
Collateral Fixed Allocation.......................................... S-31
Collateral Floating Allocation....................................... S-31
Collateral Interest.................................................. S-6
Collateral Interest Adjusted Amount.................................. S-32
Collateral Interest Amount........................................... S-32
Collateral Interest Holder........................................... S-20
Collateral Interest Initial Amount................................... S-32
Collateral Interest Servicing Fee.................................... S-44
Collateral Minimum Monthly Interest.................................. S-37
Collateral Minimum Rate.............................................. S-37
Collateral Monthly Principal......................................... S-38
Controlled Accumulation Amount....................................... S-38
Controlled Accumulation Period....................................... S-11
Controlled Deposit Amount............................................ S-19
Covered Amount....................................................... S-40
Cut-Off Date......................................................... S-16
Default Amount....................................................... S-39
Distribution Date.................................................... S-5
DOL.................................................................. S-45
DTC.................................................................. S-12
ERISA................................................................ S-45
Euroclear............................................................ S-12
Excess Spread........................................................ S-35
Exemption............................................................ S-45
Finance Charge Receivables........................................... S-7
Fixed Investor Percentage............................................ S-31
Floating Investor Percentage......................................... S-30
Group One............................................................ S-12
Interest Period...................................................... S-5
Interest Funding Account............................................. S-41
Interest Funding Investment Proceeds................................. S-21
Interest Payment Date................................................ S-5, S-26
Investor Default Amount.............................................. S-39
Investor Interest.................................................... S-32
Investor Servicing Fee............................................... S-43
Legal Final Maturity................................................. S-6
LIBOR................................................................ S-28
LIBOR Determination Date............................................. S-5, S-27
London business day.................................................. S-27
MBNA................................................................. S-14
Minimum Aggregate Principal Receivables.............................. S-17
</TABLE>
S-50
<PAGE>
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
Minimum Seller Interest................................................... S-17
Monthly Period............................................................ S-30
Net Servicing Fee Rate.................................................... S-44
OCMS...................................................................... S-14
Pay Out Event............................................................. S-42
Parties in Interest....................................................... S-45
Plan...................................................................... S-45
Plan Asset Regulation..................................................... S-46
Portfolio Yield........................................................... S-20
Principal Funding Account................................................. S-40
Principal Funding Account Balance......................................... S-20
Principal Funding Investment Proceeds..................................... S-40
Principal Receivables..................................................... S-7
Principal Shortfalls...................................................... S-39
Project................................................................... S-23
Rapid Amortization Period................................................. S-11
Rating Agency Condition................................................... S-29
Reallocated Class B Principal Collections................................. S-34
Reallocated Collateral Principal Collections.............................. S-34
Reallocated Principal Collections......................................... S-34
Receivables............................................................... S-14
Record Date............................................................... S-25
Reference Banks........................................................... S-28
Required Amount........................................................... S-33
Required Reserve Account Amount........................................... S-41
Reserve Account........................................................... S-41
Reserve Account Funding Date.............................................. S-41
Reserve Draw Amount....................................................... S-40
Restricted Group.......................................................... S-45
Revolving Period.......................................................... S-11
Scheduled Payment Date.................................................... S-6
Seller.................................................................... S-14
Seller Interest........................................................... S-7
Seller Percentage......................................................... S-25
Series 1999-H............................................................. S-29
Series 1999-H Supplement.................................................. S-25
Series 1999-H Termination Date............................................ S-6
Servicer Interchange...................................................... S-43
Shared Principal Collections.............................................. S-38
Telerate Page 3750........................................................ S-28
Transfer Agreement........................................................ S-36
Transfer Date............................................................. S-34
Trust..................................................................... S-5
Trust Portfolio........................................................... S-16
Trustee................................................................... S-14
Underwriters.............................................................. S-48
Underwriting Agreement.................................................... S-48
</TABLE>
S-51
<PAGE>
ANNEX I
OTHER SERIES ISSUED AND OUTSTANDING
The table below sets forth the principal characteristics of the other Series
previously issued by the Trust that are currently outstanding, all of which are
in Group One. For more specific information with respect to any Series, any
prospective investor should contact MBNA at (800) 362-6255 or (302) 456-8588.
MBNA will provide, without charge, to any prospective purchaser of the
Certificates, a copy of the Disclosure Documents for any previous publicly-
issued Series.
1. Series 1994-A
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$661,200,000
Class A Certificate Rate................One-Month LIBOR plus 0.17% per annum
Initial Class B Investor Interest................................$34,200,000
Class B Certificate Rate................One-Month LIBOR plus 0.37% per annum
Class A Controlled Accumulation Amount..........................$55,100,000*
Class A Scheduled Payment Date.................August 1999 Distribution Date
Class B Scheduled Payment Date..............September 1999 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$64,600,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1994-A Termination Date................January 2002 Distribution Date
Series Issuance Date..........................................August 4, 1994
</TABLE>
2. Series 1994-B
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$870,000,000
Class A Certificate Rate....Thirteen-week Treasury Bill plus 0.45% per annum
Initial Class B Investor Interest................................$45,000,000
Class B Certificate Rate................One-Month LIBOR plus 0.35% per annum
Class A Controlled Accumulation Amount..........................$72,500,000*
Class A Scheduled Payment Date.................August 1999 Distribution Date
Class B Scheduled Payment Date..............September 1999 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$85,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1994-B Termination Date................January 2002 Distribution Date
Series Issuance Date.........................................August 18, 1994
</TABLE>
3. Series 1994-C
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$870,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.25% per annum
Initial Class B Investor Interest................................$45,000,000
Class B Certificate Rate................One-Month LIBOR plus 0.45% per annum
Class A Controlled Accumulation Amount..........................$72,500,000*
Class A Scheduled Payment Date................October 2001 Distribution Date
Class B Scheduled Payment Date...............November 2001 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$85,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1994-C Termination Date..................March 2004 Distribution Date
Series Issuance Date........................................October 26, 1994
</TABLE>
A-1
<PAGE>
4. Series 1994-E
<TABLE>
<S><C>
Initial Investor Interest.......................................$500,000,000
Current Investor Interest as of July 31, 1999...................$700,000,000
Maximum Investor Interest.......................................$700,000,000
Certificate Rate......................................Commercial Paper Index
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Cash Collateral Amount...................................$20,000,000
Series Issuance Date.......................................December 15, 1994
</TABLE>
5. Series 1995-A
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$500,250,000
Class A Certificate Rate................One-Month LIBOR plus 0.27% per annum
Initial Class B Investor Interest................................$25,875,000
Class B Certificate Rate................One-Month LIBOR plus 0.45% per annum
Class A Controlled Accumulation Amount..........................$41,687,500*
Class A Scheduled Payment Date.................August 2004 Distribution Date
Class B Scheduled Payment Date..............September 2004 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$48,875,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1995-A Termination Date................January 2007 Distribution Date
Series Issuance Date..........................................March 22, 1995
</TABLE>
6. Series 1995-B
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$652,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.16% per annum
Initial Class B Investor Interest................................$33,750,000
Class B Certificate Rate................One-Month LIBOR plus 0.32% per annum
Class A Controlled Accumulation Amount..........................$54,375,000*
Class A Scheduled Payment Date....................May 2000 Distribution Date
Class B Scheduled Payment Date...................June 2000 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$63,750,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1995-B Termination Date................October 2002 Distribution Date
Series Issuance Date............................................May 23, 1995
</TABLE>
7. Series 1995-C
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$500,250,000
Class A Certificate Rate.....................................6.45% per annum
Initial Class B Investor Interest................................$25,875,000
Class B Certificate Rate................One-Month LIBOR plus 0.42% per annum
Class A Controlled Accumulation Amount..........................$41,687,500*
Class A Scheduled Payment Date...................June 2005 Distribution Date
Class B Scheduled Payment Date...................July 2005 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$48,875,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1995-C Termination Date...............February 2008 Distribution Date
Series Issuance Date...........................................June 29, 1995
</TABLE>
A-2
<PAGE>
8. Series 1995-D
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$435,000,000
Class A Certificate Rate.....................................6.05% per annum
Initial Class B Investor Interest................................$22,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.29% per annum
Class A Controlled Accumulation Amount..........................$36,250,000*
Class A Scheduled Payment Date...................June 2000 Distribution Date
Class B Scheduled Payment Date...................July 2000 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$42,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1995-D Termination Date...............November 2002 Distribution Date
Series Issuance Date...........................................June 29, 1995
</TABLE>
9. Series 1995-E
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$435,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.22% per annum
Initial Class B Investor Interest................................$22,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.32% per annum
Class A Controlled Accumulation Amount..........................$36,250,000*
Class A Scheduled Payment Date.................August 2002 Distribution Date
Class B Scheduled Payment Date..............September 2002 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$42,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1995-E Termination Date................January 2005 Distribution Date
Series Issuance Date..........................................August 2, 1995
</TABLE>
10. Series 1995-F
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$455,000,000
Class A Certificate Rate.....................................6.60% per annum
Initial Class B Investor Interest................................$18,750,000
Class B Certificate Rate.....................................6.75% per annum
Class A Controlled Accumulation Amount.......................$37,916,666.67*
Class A Scheduled Payment Date.................August 2000 Distribution Date
Class B Scheduled Payment Date..............September 2000 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$26,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1995-F Termination Date................January 2003 Distribution Date
Series Issuance Date.........................................August 30, 1995
</TABLE>
A-3
<PAGE>
11. Series 1995-G
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$435,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.21% per annum
Initial Class B Investor Interest................................$22,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.33% per annum
Class A Controlled Accumulation Amount..........................$36,250,000*
Class A Scheduled Payment Date................October 2002 Distribution Date
Class B Scheduled Payment Date...............November 2002 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$42,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1995-G Termination Date..................March 2005 Distribution Date
Series Issuance Date......................................September 27, 1995
</TABLE>
12. Series 1995-I
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$652,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.17% per annum
Initial Class B Investor Interest................................$33,750,000
Class B Certificate Rate................One-Month LIBOR plus 0.27% per annum
Class A Controlled Accumulation Amount..........................$54,375,000*
Class A Scheduled Payment Date................October 2000 Distribution Date
Class B Scheduled Payment Date...............November 2000 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$63,750,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1995-I Termination Date..................March 2003 Distribution Date
Series Issuance Date........................................October 26, 1995
</TABLE>
13. Series 1995-J
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$435,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.23% per annum
Initial Class B Investor Interest................................$22,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.35% per annum
Class A Controlled Accumulation Amount..........................$36,250,000*
Class A Scheduled Payment Date...............November 2002 Distribution Date
Class B Scheduled Payment Date...............December 2002 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$42,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1995-J Termination Date..................April 2005 Distribution Date
Series Issuance Date.......................................November 21, 1995
</TABLE>
A-4
<PAGE>
14. Series 1996-A
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$609,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.21% per annum
Initial Class B Investor Interest................................$31,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.34% per annum
Class A Controlled Accumulation Amount..........................$50,750,000*
Class A Scheduled Payment Date...............February 2003 Distribution Date
Class B Scheduled Payment Date..................March 2003 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$59,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-A Termination Date...................July 2005 Distribution Date
Series Issuance Date.......................................February 28, 1996
</TABLE>
15. Series 1996-B
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$435,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.26% per annum
Initial Class B Investor Interest................................$22,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.37% per annum
Class A Controlled Accumulation Amount..........................$36,250,000*
Class A Scheduled Payment Date..................March 2006 Distribution Date
Class B Scheduled Payment Date..................April 2006 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$42,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-B Termination Date.................August 2008 Distribution Date
Series Issuance Date..........................................March 26, 1996
</TABLE>
16. Series 1996-C
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$435,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.14% per annum
Initial Class B Investor Interest................................$22,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.28% per annum
Class A Controlled Accumulation Amount..........................$36,250,000*
Class A Scheduled Payment Date..................March 2001 Distribution Date
Class B Scheduled Payment Date..................April 2001 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$42,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-C Termination Date.................August 2003 Distribution Date
Series Issuance Date..........................................March 27, 1996
</TABLE>
A-5
<PAGE>
17. Series 1996-D
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$850,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.15% per annum
Initial Class B Investor Interest................................$75,000,000
Class B Certificate Rate................One-Month LIBOR plus 0.29% per annum
Class A Controlled Accumulation Amount.......................$70,833,333.33*
Class A Scheduled Payment Date..................April 2001 Distribution Date
Class B Scheduled Payment Date....................May 2001 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$75,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-D Termination Date..............September 2003 Distribution Date
Series Issuance Date.............................................May 1, 1996
</TABLE>
18. Series 1996-E
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.17% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate................One-Month LIBOR plus 0.31% per annum
Class A Controlled Accumulation Amount..........................$53,125,000*
Class A Scheduled Payment Date....................May 2003 Distribution Date
Class B Scheduled Payment Date...................June 2003 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-E Termination Date................October 2005 Distribution Date
Series Issuance Date............................................May 21, 1996
</TABLE>
19. Series 1996-F
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$705,000,000
Initial Collateral Interest......................................$45,000,000
Current Investor Interest as of July 31, 1999.................$1,000,000,000
Maximum Investor Interest.....................................$1,000,000,000
Certificate Rate......................................Commercial Paper Index
Annual Servicing Fee Percentage...............................2.0% per annum
Series Issuance Date...........................................June 25, 1996
</TABLE>
20. Series 1996-G
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$425,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.18% per annum
Initial Class B Investor Interest................................$37,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.35% per annum
Class A Controlled Accumulation Amount.......................$35,416,666.67*
Class A Scheduled Payment Date...................July 2006 Distribution Date
Class B Scheduled Payment Date.................August 2006 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$37,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-G Termination Date...............December 2008 Distribution Date
Series Issuance Date...........................................July 17, 1996
</TABLE>
A-6
<PAGE>
21. Series 1996-H
<TABLE>
<S><C>
Initial Class A Investor Interest.............................$1,020,000,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.10% per annum
Initial Class B Investor Interest................................$90,000,000
Class B Certificate Rate..............Three-Month LIBOR plus 0.27% per annum
Class A Controlled Accumulation Amount..........................$85,000,000*
Class A Scheduled Payment Date.................August 2001 Distribution Date
Class B Scheduled Payment Date..............September 2001 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$90,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-H Termination Date................January 2004 Distribution Date
Series Issuance Date.........................................August 14, 1996
</TABLE>
22. Series 1996-I
<TABLE>
<S><C>
Initial Class A Deutsche Mark ("DM") Investor Interest......DM 1,000,000,000
Initial Class A Investor Interest............................$666,444,518.49
Class A Certificate Rate...........Three-Month DM LIBOR plus 0.09% per annum
Class A Floating Dollar Rate.........Three-Month LIBOR plus 0.115% per annum
Initial Class B Investor Interest................................$58,804,000
Class B Certificate Rate..........Not to Exceed Three-Month LIBOR plus 0.50%
per annum
Class A Controlled Accumulation Amount.......................$55,537,043.21*
Class A Scheduled Payment Date............................September 19, 2001
Class B Scheduled Payment Date................October 2001 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$58,804,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-I Termination Date.............................February 18, 2004
Series Issuance Date......................................September 25, 1996
</TABLE>
23. Series 1996-J
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$850,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.15% per annum
Initial Class B Investor Interest................................$75,000,000
Class B Certificate Rate................One-Month LIBOR plus 0.36% per annum
Class A Controlled Accumulation Amount.......................$70,833,333.33*
Class A Scheduled Payment Date..............September 2003 Distribution Date
Class B Scheduled Payment Date................October 2003 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$75,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-J Termination Date...............February 2006 Distribution Date
Series Issuance Date......................................September 19, 1996
</TABLE>
A-7
<PAGE>
24.Series 1996-K
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$850,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.13% per annum
Initial Class B Investor Interest................................$75,000,000
Class B Certificate Rate................One-Month LIBOR plus 0.35% per annum
Class A Controlled Accumulation Amount.......................$70,833,333.34*
Class A Scheduled Payment Date................October 2003 Distribution Date
Class B Scheduled Payment Date...............November 2003 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$75,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-K Termination Date..................March 2006 Distribution Date
Series Issuance Date........................................October 24, 1996
</TABLE>
25.Series 1996-L
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$425,000,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.03% per annum
Initial Class B Investor Interest................................$37,500,000
Class B Certificate Rate..............Three-Month LIBOR plus 0.24% per annum
Class A Controlled Accumulation Amount.......................$35,416,666.67*
Class A Scheduled Payment Date...............November 1999 Distribution Date
Class B Scheduled Payment Date...............December 1999 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$37,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-L Termination Date...............November 2001 Distribution Date
Series Issuance Date........................................December 3, 1996
</TABLE>
26.Series 1996-M
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$425,000,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.13% per annum
Initial Class B Investor Interest................................$37,500,000
Class B Certificate Rate..............Three-Month LIBOR plus 0.35% per annum
Class A Controlled Accumulation Amount.......................$35,416,666.67*
Class A Scheduled Payment Date...............November 2006 Distribution Date
Class B Scheduled Payment Date...............December 2006 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$37,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1996-M Termination Date..................April 2009 Distribution Date
Series Issuance Date.......................................November 26, 1996
</TABLE>
A-8
<PAGE>
27. Series 1997-A
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$525,000,000
Class A Certificate Rate............Three-Month LIBOR minus 0.075% per annum
Initial Class B Investor Interest................................$46,350,000
Class B Certificate Rate..............Three-Month LIBOR plus 0.27% per annum
Controlled Accumulation Amount..................................$47,612,500*
Scheduled Payment Date.......................February 2000 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$46,350,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-A Termination Date...................July 2002 Distribution Date
Series Issuance Date........................................January 30, 1997
</TABLE>
28. Series 1997-B
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$850,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.16% per annum
Initial Class B Investor Interest................................$75,000,000
Class B Certificate Rate................One-Month LIBOR plus 0.35% per annum
Controlled Accumulation Amount...............................$83,333,333.34*
Scheduled Payment Date..........................March 2012 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Class C Investor Interest................................$75,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-B Termination Date.................August 2014 Distribution Date
Series Issuance Date.......................................February 27, 1997
</TABLE>
29. Series 1997-C
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.11% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate................One-Month LIBOR plus 0.30% per annum
Controlled Accumulation Amount..................................$57,812,500*
Scheduled Payment Date..........................March 2004 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-C Termination Date.................August 2006 Distribution Date
Series Issuance Date..........................................March 26, 1997
</TABLE>
30. Series 1997-D
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$387,948,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.05% per annum
Initial Class B Investor Interest................................$34,231,000
Class B Certificate Rate..........Not to Exceed Three-Month LIBOR plus 0.50%
per annum
Controlled Accumulation Amount...............................$38,034,166.67*
Scheduled Payment Date............................May 2007 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Class C Investor Interest................................$34,231,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-D Termination Date................October 2009 Distribution Date
Series Issuance Date............................................May 22, 1997
</TABLE>
A-9
<PAGE>
31. Series 1997-E
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.08% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate..............Three-Month LIBOR plus 0.28% per annum
Controlled Accumulation Amount..................................$57,812,500*
Scheduled Payment Date..........................April 2002 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-E Termination Date..............September 2004 Distribution Date
Series Issuance Date.............................................May 8, 1997
</TABLE>
32. Series 1997-F
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$600,000,000
Class A Certificate Rate.....................................6.60% per annum
Initial Class B Investor Interest................................$53,000,000
Class B Certificate Rate................One-Month LIBOR plus 0.29% per annum
Controlled Accumulation Amount...............................$54,416,666.67*
Scheduled Payment Date...........................June 2002 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$53,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-F Termination Date...............November 2004 Distribution Date
Series Issuance Date...........................................June 18, 1997
</TABLE>
33. Series 1997-G
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$460,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.15% per annum
Initial Class B Investor Interest................................$40,600,000
Class B Certificate Rate................One-Month LIBOR plus 0.36% per annum
Controlled Accumulation Amount...............................$41,716,666.67*
Scheduled Payment Date...........................June 2004 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$40,600,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-G Termination Date...............November 2006 Distribution Date
Series Issuance Date...........................................June 18, 1997
</TABLE>
34. Series 1997-H
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$507,357,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.07% per annum
Initial Class B Investor Interest................................$44,770,000
Class B Certificate Rate..........Not to Exceed Three-Month LIBOR plus 0.50%
per annum
Controlled Accumulation Amount...............................$49,741,416.67*
Scheduled Payment Date......................September 2007 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Class C Investor Interest................................$44,770,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-H Termination Date...............February 2010 Distribution Date
Series Issuance Date..........................................August 6, 1997
</TABLE>
A-10
<PAGE>
35. Series 1997-I
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate.....................................6.55% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate................One-Month LIBOR plus 0.31% per annum
Controlled Accumulation Amount..................................$57,812,500*
Scheduled Payment Date.........................August 2004 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-I Termination Date................January 2007 Distribution Date
Series Issuance Date.........................................August 26, 1997
</TABLE>
36. Series 1997-J
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.12% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate................One-Month LIBOR plus 0.30% per annum
Controlled Accumulation Amount..................................$57,812,500*
Scheduled Payment Date......................September 2004 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-J Termination Date...............February 2007 Distribution Date
Series Issuance Date......................................September 10, 1997
</TABLE>
37. Series 1997-K
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.12% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate................One-Month LIBOR plus 0.32% per annum
Controlled Accumulation Amount..................................$57,812,500*
Scheduled Payment Date.......................November 2005 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-K Termination Date..................April 2008 Distribution Date
Series Issuance Date........................................October 22, 1997
</TABLE>
38. Series 1997-L
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$511,000,000
Class A Certificate Rate.............Three-Month LIBOR minus 0.01% per annum
Initial Class B Investor Interest................................$45,100,000
Class B Certificate Rate..........Not to Exceed Three-Month LIBOR plus 0.50%
per annum
Controlled Accumulation Amount...............................$46,341,666.67*
Scheduled Payment Date.......................November 2002 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$45,100,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-L Termination Date..................April 2005 Distribution Date
Series Issuance Date.......................................November 13, 1997
</TABLE>
A-11
<PAGE>
39. Series 1997-M
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.11% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate..............Three-Month LIBOR plus 0.27% per annum
Controlled Accumulation Amount..................................$57,812,500*
Scheduled Payment Date........................October 2002 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-M Termination Date..................March 2005 Distribution Date
Series Issuance Date........................................November 6, 1997
</TABLE>
40. Series 1997-N
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$765,000,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.07% per annum
Initial Class B Investor Interest................................$67,500,000
Class B Certificate Rate..............Three-Month LIBOR plus 0.23% per annum
Controlled Accumulation Amount..................................$69,375,000*
Scheduled Payment Date.......................November 2000 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$67,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-N Termination Date...............November 2002 Distribution Date
Series Issuance Date........................................December 9, 1997
</TABLE>
41. Series 1997-O
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$425,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.17% per annum
Initial Class B Investor Interest................................$37,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.35% per annum
Controlled Accumulation Amount...............................$38,541,666.67*
Scheduled Payment Date.......................December 2007 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$37,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1997-O Termination Date....................May 2010 Distribution Date
Series Issuance Date.......................................December 23, 1997
</TABLE>
42. Series 1998-A
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.11% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate..Not to Exceed One-Month LIBOR plus 0.50% per annum
Controlled Accumulation Amount..................................$57,812,500*
Scheduled Payment Date..........................March 2003 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1998-A Termination Date.................August 2005 Distribution Date
Series Issuance Date..........................................March 18, 1998
</TABLE>
A-12
<PAGE>
43. Series 1998-B
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$550,000,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.09% per annum
Initial Class B Investor Interest................................$48,530,000
Class B Certificate Rate..........Not to Exceed Three-Month LIBOR plus 0.50%
per annum
Controlled Accumulation Amount..................................$49,877,500*
Scheduled Payment Date..........................April 2008 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$48,530,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1998-B Termination Date..............September 2010 Distribution Date
Series Issuance Date..........................................April 14, 1998
</TABLE>
44. Series 1998-C
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.08% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate................One-Month LIBOR plus 0.25% per annum
Controlled Accumulation Amount..................................$62,500,000*
Scheduled Payment Date...........................June 2003 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1998-C Termination Date...............November 2005 Distribution Date
Series Issuance Date...........................................June 24, 1998
</TABLE>
45. Series 1998-D
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$475,000,000
Class A Certificate Rate.....................................5.80% per annum
Initial Class B Investor Interest................................$42,000,000
Class B Certificate Rate................One-Month LIBOR plus 0.25% per annum
Controlled Accumulation Amount...............................$46,583,333.33*
Scheduled Payment Date...........................July 2003 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$42,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1998-D Termination Date...............December 2005 Distribution Date
Series Issuance Date...........................................July 30, 1998
</TABLE>
46. Series 1998-E
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$750,000,000
Class A Certificate Rate.............Three-Month LIBOR plus 0.145% per annum
Initial Class B Investor Interest................................$66,200,000
Class B Certificate Rate..............Three-Month LIBOR plus 0.33% per annum
Controlled Accumulation Amount...............................$73,533,333.33*
Scheduled Payment Date..........................April 2008 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$66,200,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1998-E Termination Date..............September 2010 Distribution Date
Series Issuance Date.........................................August 11, 1998
</TABLE>
A-13
<PAGE>
47. Series 1998-F
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$425,000,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.10% per annum
Initial Class B Investor Interest................................$37,500,000
Class B Certificate Rate..............Three-Month LIBOR plus 0.28% per annum
Controlled Accumulation Amount...............................$41,666,666.67*
Scheduled Payment Date......................September 2005 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$37,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1998-F Termination Date...............February 2008 Distribution Date
Series Issuance Date.........................................August 26, 1998
</TABLE>
48. Series 1998-G
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.13% per annum
Initial Class B Investor Interest............................... $56,250,000
Class B Certificate Rate............... One-Month LIBOR plus 0.40% per annum
Controlled Accumulation Amount................................. $57,812,500*
Scheduled Payment Date..................... September 2006 Distribution Date
Annual Servicing Fee Percentage.............................. 2.0% per annum
Initial Collateral Interest..................................... $56,250,000
Other Enhancement for the Class A Certificates..... Subordination of Class B
Certificates
Series 1998-G Termination Date.............. February 2009 Distribution Date
Series Issuance Date..................................... September 10, 1998
</TABLE>
49. Series 1998-H
<TABLE>
<S><C>
Initial Class A Investor Interest.............................. $470,000,000
Initial Collateral Interest..................................... $30,000,000
Current Investor Interest as of July 31, 1999.................. $500,000,000
Maximum Investor Interest...................................... $500,000,000
Certificate Rate..................................... Commercial Paper Index
Annual Servicing Fee Percentage.............................. 2.0% per annum
Series Issuance Date..................................... September 29, 1998
</TABLE>
50. Series 1998-I
<TABLE>
<S><C>
Initial Class A Investor Interest.............................. $637,500,000
Class A Certificate Rate............... One-month LIBOR plus 0.26% per annum
Initial Class B Investor Interest............................... $56,250,000
Class B Certificate Rate............... One-month LIBOR plus 0.51% per annum
Controlled Accumulation Amount................................. $57,812,500*
Scheduled Payment Date....................... October 2001 Distribution Date
Annual Servicing Fee Percentage.............................. 2.0% per annum
Initial Collateral Interest..................................... $56,250,000
Other Enhancement for the Class A Certificates..... Subordination of Class B
Certificates
Series 1998-I Termination Date............... October 2003 Distribution Date
Series Issuance Date....................................... October 22, 1998
</TABLE>
A-14
<PAGE>
51. Series 1998-J
<TABLE>
<S><C>
Initial Class A Investor Interest.............................. $660,000,000
Class A Certificate Rate.................................... 5.25% per annum
Initial Class B Investor Interest............................... $45,000,000
Class B Certificate Rate.................................... 5.65% per annum
Controlled Accumulation Amount................................. $58,750,000*
Scheduled Payment Date..................... September 2003 Distribution Date
Annual Servicing Fee Percentage.............................. 2.0% per annum
Initial Collateral Interest..................................... $45,000,000
Other Enhancement for the Class A Certificates..... Subordination of Class B
Certificates
Series 1998-J Termination Date.............. February 2006 Distribution Date
Series Issuance Date....................................... October 29, 1998
</TABLE>
52. Series 1998-K
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate................One-Month LIBOR plus 0.24% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate................One-Month LIBOR plus 0.49% per annum
Controlled Accumulation Amount..................................$57,812,500*
Scheduled Payment Date.........................August 2002 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1998-K Termination Date................January 2005 Distribution Date
Series Issuance Date.......................................November 24, 1998
</TABLE>
53. Series 1998-L
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$231,250,000
Initial Collateral Interest......................................$18,750,000
Current Investor Interest as of July 31, 1999...................$250,000,000
Maximum Investor Interest.......................................$250,000,000
Certificate Rate......................................Commercial Paper Index
Annual Servicing Fee Percentage...............................2.0% per annum
Series Issuance Date.......................................December 22, 1998
</TABLE>
54. Series 1999-A
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$425,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.14% per annum
Initial Class B Investor Interest................................$37,500,000
Class B Certificate Rate................One-Month LIBOR plus 0.37% per annum
Controlled Accumulation Amount...............................$41,666,666,67*
Scheduled Payment Date.......................February 2004 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$37,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1999-A Termination Date...................July 2006 Distribution Date
Series Issuance Date..........................................March 25, 1999
</TABLE>
A-15
<PAGE>
55. Series 1999-B
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate.....................................5.90% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate.....................................6.20% per annum
Controlled Accumulation Amount..................................$62,500,000*
Scheduled Payment Date..........................March 2009 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1999-B Termination Date.................August 2011 Distribution Date
Series Issuance Date..........................................March 26, 1999
</TABLE>
56. Series 1999-C
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$799,500,000
Class A Certificate Rate..............Three-Month LIBOR plus 0.19% per annum
Initial Class B Investor Interest................................$70,550,000
Class B Certificate Rate..........Not to Exceed Three-Month LIBOR plus 0.50%
per annum
Controlled Accumulation Amount...............................$78,383,333.33*
Scheduled Payment Date............................May 2004 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$70,550,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1999-C Termination Date................October 2006 Distribution Date
Series Issuance Date............................................May 18, 1999
</TABLE>
57. Series 1999-D
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$425,000,000
Class A Certificate Rate................One-Month LIBOR plus 0.19% per annum
Initial Class B Investor Interest................................$37,500,000
Class B Certificate Rate.....................................6.50% per annum
Controlled Accumulation Amount...............................$41,666,666.67*
Scheduled Payment Date...........................June 2006 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$37,500,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1999-D Termination Date...............November 2008 Distribution Date
Series Issuance Date............................................June 3, 1999
</TABLE>
A-16
<PAGE>
58. Series 1999-E
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$850,000,000
Class A Certificate Rate...............One-Month LIBOR plus 0.125% per annum
Initial Class B Investor Interest................................$75,000,000
Class B Certificate Rate................One-Month LIBOR plus 0.32% per annum
Controlled Accumulation Amount...............................$83,333,333.33*
Scheduled Payment Date...........................June 2002 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$75,000,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1999-E Termination Date...................June 2004 Distribution Date
Series Issuance Date............................................July 7, 1999
</TABLE>
59. Series 1999-F
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$509,400,000
Class A Certificate Rate............Three-Month LIBOR minus 0.125% per annum
Initial Class B Investor Interest................................$44,950,000
Class B Certificate Rate..........Not to Exceed Three-Month LIBOR plus 0.50%
per annum
Controlled Accumulation Amount...............................$49,941,666.67*
Scheduled Payment Date.........................August 2004 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$44,950,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1999-F Termination Date................January 2007 Distribution Date
Series Issuance Date..........................................August 3, 1999
</TABLE>
60. Series 1999-G
<TABLE>
<S><C>
Initial Class A Investor Interest...............................$637,500,000
Class A Certificate Rate.....................................6.35% per annum
Initial Class B Investor Interest................................$56,250,000
Class B Certificate Rate.....................................6.60% per annum
Controlled Accumulation Amount..................................$62,500,000*
Scheduled Payment Date...........................July 2004 Distribution Date
Annual Servicing Fee Percentage...............................2.0% per annum
Initial Collateral Interest......................................$56,250,000
Other Enhancement for the Class A Certificates......Subordination of Class B
Certificates
Series 1999-G Termination Date...............December 2006 Distribution Date
Series Issuance Date...........................................July 29, 1999
</TABLE>
- --------
* Subject to change if the commencement of the Accumulation Period or
Controlled Accumulation Period, as applicable, is delayed.
A-17
<PAGE>
MBNA Master Credit Card Trust II
Issuer
[LOGO OF MBNA AMERICA APPEARS HERE]
MBNA America Bank, National Association
Seller and Servicer
SERIES 1999-H
$700,000,000
Class A Floating Rate Asset Backed Certificates
$75,000,000
Class B Floating Rate Asset Backed Certificates
----------------
PROSPECTUS SUPPLEMENT
----------------
Underwriters of the Class A Certificates
Merrill Lynch & Co. J.P. Morgan & Co.
Banc One Capital Markets, Inc.
Salomon Smith Barney
Underwriter of the Class B Certificates
Merrill Lynch & Co.
You should rely only on the information contained or
incorporated by reference in this Prospectus Supplement and
the accompanying Prospectus. We have not authorized anyone to
provide you with different information.
We are not offering the Certificates in any state where the
offer is not permitted.
We do not claim the accuracy of the information in this
Prospectus Supplement and the accompanying Prospectus as of
any date other than the dates stated on their respective
covers.
Dealers will deliver a Prospectus Supplement and Prospectus
when acting as underwriters of the Certificates and with
respect to their unsold allotments or subscriptions. In
addition, all dealers selling the Certificates will deliver a
Prospectus Supplement and Prospectus until November 2, 1999.
[RECYCLE LOGO] This document is printed entirely on recycled paper.
