<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) JUNE 17, 1998
-------------
FIRST USA BANK
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
(AS SERVICER ON BEHALF OF FIRST USA CREDIT CARD MASTER TRUST)
DELAWARE 333-24227 76-0039224
- - ---------------------------- ------------------------ -------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or Identification Number)
organization)
201 NORTH WALNUT STREET, WILMINGTON, DELAWARE 19801
- - -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
302/594-4117
- - -------------------------------------------------------------------------------
Registrant's telephone number, including area code
N/A
- - -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
<PAGE> 2
INFORMATION TO BE INCLUDED IN THE REPORT
Items 1-4. Not Applicable
Item 5. Other Events
On June 17, 1998, the Registrant made available to prospective
investors a series term sheet setting forth a description of
the collateral pool and the proposed structure of $600,000,000
aggregate principal amount of Class A Floating Rate Asset
Backed Certificates, Series 1998-3 and $54,300,000 aggregate
principal amount of Class B Floating Rate Asset Backed
Certificates, Series 1998-3, each of the First USA Credit Card
Master Trust. The series term sheet is attached hereto as
Exhibit 99.01.
Item 6. Not Applicable.
Item 7. Financial Statements and Exhibits
The following exhibit is filed as part of this report:
Exhibit 99.01 Series Term Sheet dated June 17, 1998, with respect to the
proposed issuance of the Class A Floating Rate Asset Backed
Certificates and the Class B Floating Rate Asset Backed
Certificate of the First USA Credit Card Master Trust, Series
1998-3.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST USA BANK
As Servicer
By:/s/ Rebekah Sayers
---------------------------------
Rebekah Sayers
Vice President
Date: June 17, 1998
--------------
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Description Page No.
- - ----------- ----------- --------
99.01 Series 1998-3 Term Sheet 5
Dated June 17, 1998
<PAGE> 1
SUBJECT TO REVISION
SERIES TERM SHEET DATED JUNE 17, 1998
$654,300,000
FIRST USA CREDIT CARD MASTER TRUST
$600,000,000 CLASS A FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1998-3
$54,300,000 CLASS B FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 1998-3
FIRST USA BANK
TRANSFEROR AND SERVICER
------------------------------
THE OFFERED CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ONLY AND
WILL NOT REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF FIRST USA BANK OR ANY
AFFILIATE THEREOF. AN OFFERED CERTIFICATE IS NOT A DEPOSIT AND NEITHER THE
OFFERED CERTIFICATES NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
THIS SERIES TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION ABOUT
THE OFFERED CERTIFICATES; HOWEVER, THIS SERIES TERM SHEET DOES NOT CONTAIN
COMPLETE INFORMATION ABOUT THE OFFERED CERTIFICATES. THE INFORMATION PROVIDED
HEREIN IS PRELIMINARY AND WILL BE SUPERSEDED BY THE INFORMATION CONTAINED IN THE
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. ADDITIONAL INFORMATION WILL BE
CONTAINED IN THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. PURCHASERS ARE URGED
TO READ BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
THIS SERIES TERM SHEET SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SALES OF THE OFFERED CERTIFICATES MAY NOT BE CONSUMMATED UNLESS THE PURCHASER
HAS RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
------------------------------
CREDIT SUISSE FIRST BOSTON
BANC ONE CAPITAL MARKETS, INC.
BEAR, STEARNS & CO. INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
SALOMON SMITH BARNEY
<PAGE> 2
SUMMARY OF TERMS
This Series Term Sheet will be superseded in its entirety by the
information appearing in the Prospectus Supplement, the Prospectus and the
Series 1998-3 Supplement to the Pooling and Servicing Agreement (as amended, the
"Pooling and Servicing Agreement") between First USA Bank (the "Bank"), as
transferor (in such capacity, the "Transferor") and servicer (in such capacity,
the "Servicer"), and The Bank of New York (Delaware), as trustee (the
"Trustee").
Type of Securities............ Class A Floating Rate Asset Backed
Certificates, Series 1998-3 (the "Class A
Certificates") and Class B Floating Rate
Asset Backed Certificates, Series 1998-3
(the "Class B Certificates" and, together
with the Class A Certificates, the "Offered
Certificates").
Trust Assets.................. The property of the First USA Credit Card
Master Trust (the "Trust") includes and will
include receivables (the "Receivables")
arising under certain VISA(R) and
MasterCard(R)* revolving credit card
accounts (the "Accounts") selected by the
Transferor from a portfolio of VISA and
MasterCard accounts owned by the Transferor,
all monies due or to become due in payment
of the Receivables, all proceeds of the
Receivables and all monies on deposit in
certain bank accounts of the Trust (other
than certain investment earnings on such
amounts), Recoveries, the Class A Interest
Rate Swap and any enhancement issued with
respect to any series issued from time to
time by the Trust (each, a "Series") which
will consist of one or more classes of
certificates. The benefits of any
enhancement issued with respect to any other
Series will not be available for the benefit
of the holders of the Certificates and the
holders of the certificates of other Series
will not be entitled to the benefits of any
enhancement for this Series.
Trustee....................... The Bank of New York (Delaware).
Certificateholders'
Interest...................... Each of the Offered Certificates represents an
undivided interest in the Trust. The Trust's
assets will be allocated among the Class A
Certificateholders (the "Class A
Certificateholders' Interest"), the Class B
Certificateholders (the "Class B
Certificateholders' Interest," and together
with the Class A Certificateholders'
Interest, the "Investor Interest"), the
Excess Collateral Holders (the "Excess
Collateral Holders' Interest "), the holders
of other Series previously issued or issued
at some future time pursuant to the Pooling
and Servicing Agreement and the applicable
series supplements to the Pooling and
Servicing Agreement (each, a "Supplement")
and the Transferor (the "Transferor
Interest"), as described below.
- - ---------------
* VISA(R) and MasterCard(R) are registered trademarks of Visa USA Incorporated
and MasterCard International Incorporated, respectively.
2
<PAGE> 3
The aggregate principal amount of the Class A
Certificateholders' Interest and the Class B
Certificateholders' Interest will, except as
otherwise provided herein, remain fixed at
$600,000,000 (the "Class A Invested Amount")
and $54,300,000 (the "Class B Invested
Amount"), respectively. The principal amount
of the Transferor Interest will fluctuate as
the amount of Receivables in the Trust
changes from time to time.
The "Excess Collateral Amount" in the initial
amount of $68,700,000 (which amount
represents 9.5% of the sum of the initial
Class A Invested Amount, the initial Class B
Invested Amount and the initial Excess
Collateral Amount) constitutes enhancement
for the Offered Certificates. Allocations
will be made to the Excess Collateral Amount
and the Excess Collateral Holders will have
voting and certain other rights of a
subordinated class of certificates. The
Excess Collateral together with the Offered
Certificates are referred to herein as the
"Certificates."
The Class A Certificates will represent the
right to receive from the assets of the
Trust allocated to the Class A
Certificateholders' Interest funds up to
(but not in excess of) the amounts required
to make payments of interest on the Class A
Certificates at the Class A Certificate
Rate, and the payment of principal during
the amortization period to the extent of the
Class A Invested Amount (which may be less
than the aggregate unpaid principal amount
of the Class A Certificates, in certain
circumstances).
The Class B Certificates will represent the
right to receive from the assets of the
Trust allocated to the Class B
Certificateholders' Interest funds up to
(but not in excess of) the amounts required
to make payments of interest on the Class B
Certificates at the Class B Certificate
Rate, and the payment of principal during
the amortization period, following the final
principal payment of the Class A Invested
Amount to the holders of the Class A
Certificates, to the extent of the Class B
Invested Amount (which may be less than the
aggregate unpaid principal amount of the
Class B Certificates, in certain
circumstances, if there has been a reduction
of the Class B Invested Amount).
Receivables................... The aggregate amount of Receivables in the
Accounts (including the amount of
Receivables in the additional Accounts added
to the Trust on May 4, 1998 and June 5,
1998), as of the close of business on April
30, 1998, was $29,039,357,820, comprised of
$28,175,168,883 of principal Receivables and
$864,188,937 of finance charge Receivables.
Interest...................... Class A Certificate Rate: One-month LIBOR
plus %.
Class B Certificate Rate: One-month LIBOR
plus %.
3
<PAGE> 4
Interest Payment Dates........ Interest on the Certificates will be
distributed on the 18th day of each calendar
month or, if such day is not a business day,
on the next succeeding business day (each, a
"Distribution Date"), commencing July 20,
1998, in an amount equal to the product of
(a) the actual number of days in the related
Interest Period divided by 360, (b) the
Class A Certificate Rate or the Class B
Certificate Rate, as applicable, and (c) the
outstanding principal amount of the Class A
Certificates or the outstanding principal
amount of the Class B Certificates, as
applicable, as of the last day of the
preceding calendar month (or, in the case of
the July 1998 Distribution Date, as of the
Closing Date). The "Interest Period" with
respect to any Distribution Date will be the
period from the previous Distribution Date
through the day preceding such Distribution
Date, except that the initial Interest
Period will be the period from the Closing
Date through the day preceding the initial
Distribution Date. "LIBOR" means the London
interbank offered quotations for one-month
United States dollar deposits prevailing on
the date that LIBOR is determined. The
Trustee will determine LIBOR on June ,
1998 for the period from the Closing Date
through July 19, 1998 and on the second
business day prior to each Distribution Date
thereafter for the period from and including
such Distribution Date through the day
preceding the next succeeding Distribution
Date.
Principal..................... The principal of the Class A Certificates and
the Class B Certificates is scheduled to be
paid on the Class A Expected Final Payment
Date and the Class B Expected Final Payment
Date, respectively, but may be paid earlier
or later under certain circumstances.
Class A Expected Final
Payment Date............... The June 2001 Distribution Date.
Class B Expected Final
Payment Date............... The June 2001 Distribution Date.
Stated Series Termination
Date.......................... The final distribution of principal and
interest on the Certificates will be made no
later than the February 2004 Distribution
Date (the "Stated Series Termination Date").
After the Stated Series Termination Date,
the Trust will have no further obligation to
pay principal or interest on the
Certificates.
Subordination of the Class B
Certificates and the
Excess Collateral.......... The Class B Certificateholders' Interest will
be subordinated to the extent necessary to
fund certain payments with respect to the
Class A Certificates and the Class A
Interest Rate Swap. In addition, the Excess
Collateral Holders' Interest will be
subordinated to the extent necessary to fund
certain payments with respect to the Class A
Certificates, the Class A Interest Rate Swap
and the Class B Certificates. If the Excess
Collateral
4
<PAGE> 5
Amount is reduced to zero, the Class B
Certificateholders will bear directly the
credit and other risks associated with their
undivided interest in the Trust. To the
extent the Class B Invested Amount is
reduced, the percentage of collections of
finance charge Receivables allocated to the
Class B Certificateholders in subsequent
Monthly Periods will be reduced. Moreover,
to the extent the amount of such reduction
in the Class B Invested Amount is not
reimbursed, the amount of principal
distributable to the Class B
Certificateholders will be reduced.
Class A Interest Rate Swap.... On or before the Closing Date, the Trustee, on
behalf of the Trust, will enter into an
interest rate swap agreement for the benefit
of the Class A Certificates (as such
agreement may be amended, supplemented or
otherwise modified or replaced, the "Class A
Interest Rate Swap") with a financial
institution to be determined prior to the
Closing Date (together with its successors
and assigns in such capacity, the "Class A
Swap Counterparty"). The Class A Interest
Rate Swap will be effective from and
including the Closing Date through and
including the Transfer Date occurring in
June 1999 subject to termination prior to
such date upon the occurrence of certain
events.
In accordance with the terms of the Class A
Interest Rate Swap, the amount payable by
the Class A Swap Counterparty to the Trust
will be, for each Transfer Date with respect
to which the Class A Interest Rate Swap is
in effect, an amount equal to the Class A
Floating Amount. The "Class A Floating
Amount" means an amount equal to the product
of (i) a fraction, the numerator of which is
the actual number of days in the Interest
Period relating to such Transfer Date and
the denominator of which is 360, (ii) the
Class A Swap Floating Rate for the Interest
Period relating to such Transfer Date, and
(iii) the notional amount of the Class A
Interest Rate Swap (the "Class A Notional
Amount"), which will equal the outstanding
principal amount of the Class A Certificates
as of the last day of the preceding month
(or, in the case of the first Distribution
Date, as of the Closing Date). The "Class A
Swap Floating Rate" will equal, with respect
to any Interest Period, % per annum
above LIBOR with respect to the related
Interest Period.
The amount payable by the Trust to the Class A
Swap Counterparty will be, for each Transfer
Date with respect to which the Class A
Interest Rate Swap is in effect, an amount
equal to the Class A Fixed Amount. The
"Class A Fixed Amount" means an amount equal
to one-twelfth (or in the case of the first
Transfer Date a fraction, the numerator of
which is and the denominator of which
is 360) of the product of (a) the Class A
Swap Fixed Rate and (b) the Class A Notional
Amount as of the last day of the preceding
month (or in the case of the first
Distribution Date, as
5
<PAGE> 6
of the Closing Date). The "Class A Swap
Fixed Rate" will equal % per annum.
The "Class A Net Swap Payment" for any
Transfer Date means the amount by which the
Class A Fixed Amount payable by the Trust to
the Class A Swap Counterparty for such date
exceeds the Class A Floating Amount payable
by the Class A Swap Counterparty to the
Trust for such date. The "Class A Net Swap
Receipt" for any Transfer Date means the
amount by which the Class A Floating Amount
payable by the Class A Swap Counterparty to
the Trust for such date exceeds the Class A
Fixed Amount payable by the Trust to the
Class A Swap Counterparty for such date.
With respect to each Transfer Date on or prior
to the termination of the Class A Interest
Rate Swap, the Class A Net Swap Receipt, if
any, will be deposited into the Finance
Charge Account on such Transfer Date by the
Trustee and treated as part of Class A
Available Funds. The Class A Net Swap
Payment, if any, will be paid to the Class A
Swap Counterparty on the related Transfer
Date out of Class A Available Funds and
certain other available amounts allocated to
the Class A Certificates, including Excess
Finance Charge Collections and Reallocated
Principal Collections. Pursuant to the Class
A Interest Rate Swap, the Class A Swap
Counterparty and the Servicer, on behalf of
the Trustee, may at any time agree to
terminate the Class A Interest Rate Swap or
have the Class A Swap Counterparty assign
its rights and obligations under the Class A
Interest Rate Swap to a replacement swap
counterparty.
ERISA Considerations.......... If certain conditions are satisfied, including
that upon completion of the public offering
thereof interests in the Class A
Certificates are held by 100 or more persons
independent of the Transferor and each
other, the Class A Certificates should
qualify as "publicly offered securities" for
purposes of the "plan assets regulation"
issued by the Department of Labor. In such
event, the purchase and holding of Class A
Certificates by an employee benefit plan (or
other entity deemed to hold assets of such a
plan) would not cause the assets of the
Trust to be deemed "plan assets" of any such
plan subject to the prohibited transaction
rules of the Employee Retirement Income
Security Act of 1974, as amended and the
Internal Revenue Code of 1986, as amended.
Further information regarding the status of
the Class A Certificates as publicly offered
securities will be provided in the
Prospectus Supplement. Accordingly, plan
investors contemplating the purchase of
Class A Certificates should consult their
counsel and review "ERISA Considerations" in
the Prospectus and "Summary of Terms--ERISA
Considerations" in the Prospectus Supplement
prior to making any purchase of Class A
Certificates.
6
<PAGE> 7
The Underwriters currently do not expect the
Class B Certificates to qualify as publicly
offered securities and, accordingly, the
Class B Certificates may not be purchased by
employee benefit plans (or entities deemed
to hold assets of such plans, including
without limitation any insurance company
general account deemed to hold plan assets
by reason of a plan's investment in the
general account).
Certificate Ratings........... It is a condition to the issuance of the Class
A Certificates that they be rated in the
highest rating category by at least one
nationally recognized statistical rating
organization (each such rating organization,
a "Rating Agency").
It is a condition to the issuance of the Class
B Certificates that they receive a rating of
at least "A" or its equivalent by at least
one Rating Agency.
Listing....................... Application will be made to list the Offered
Certificates on the Luxembourg Stock
Exchange.
7
<PAGE> 8
RECENT DEVELOPMENTS
The Bank has received approval from the Office of the Comptroller of the
Currency to convert to a national bank charter. It is anticipated that this
conversion will be completed on or about July 1, 1998. In addition, BANC ONE
CORPORATION ("BANC ONE") may seek regulatory approval to expand the operations
of the Bank beyond the credit card business. As a result of the merger of First
USA, Inc. with and into BANC ONE on June 27, 1997 (the "FUSA/BANC ONE Merger"),
the Bank is now an indirect wholly-owned subsidiary of BANC ONE.
BANC ONE intends to consolidate substantially all of its current consumer
credit card operations in the Bank. The Bank expects to add receivables in
accounts originated by Bank One, N.A., Bank One, Arizona, N.A., and other
affiliates thereof to the Trust. Such additions may commence in July 1998
following the completion of the consolidation. Such additions would be subject
to the restrictions on additions of Accounts in the Pooling and Servicing
Agreement.
BANC ONE and First Chicago NBD Corporation ("FCN"), together with BANC ONE
CORPORATION (DE), formerly Hornet Reorganization Corporation, have entered into
an Agreement and Plan of Reorganization, dated as of April 10, 1998 (as the same
may be amended or otherwise modified from time to time, the "BANC ONE/FCN
Agreement"), pursuant to which BANC ONE and FCN will be merged into a new
corporation ("Newco") organized to effect the merger (the "BANC ONE/FCN
Merger"). Newco will be the surviving corporation in the BANC ONE/FCN Merger, at
which time the separate corporate existence of BANC ONE and FCN will cease,
provided that Newco will be renamed BANC ONE CORPORATION. The BANC ONE/FCN
Merger is subject to the satisfaction of the terms and conditions stated in the
BANC ONE/FCN Agreement, which include the approval of the respective
shareholders of BANC ONE and FCN and certain regulatory approvals. Subject to
the satisfaction of such terms and conditions stated in the BANC ONE/FCN
Agreement, the BANC ONE/FCN Merger is targeted to be completed in the fourth
quarter of 1998.
THE BANK'S CREDIT CARD PORTFOLIO
The following tables set forth the delinquency and loss experience for each
of the periods shown for the portfolio of VISA and MasterCard credit card
accounts serviced by the Bank other than certain accounts that were not
designated to have their receivables included in the Trust and which represented
less than 1% of the accounts serviced by the Bank as of March 31, 1998 (the
"Bank Portfolio"). In 1997 the Bank changed its charge-off policy to align it
with that of BANC ONE. For the Trust, this change in charge-off policy was
implemented over the course of a six month period which began in July 1997 and
ended in December 1997. The Bank will now generally charge off an account
immediately prior to the end of the sixth billing cycle after having become
contractually past due. Its prior policy was to charge off accounts immediately
prior to the end of the seventh billing cycle after having become contractually
past due. Receivables Delinquent 95 or more days and Net Losses in the following
tables have been restated to reflect this change in charge-off policy for each
of the periods shown.
As of the close of business on April 30, 1998, the Receivables in the Trust
Portfolio (including the Receivables in the additional Accounts added to the
Trust on May 4, 1998 and June 5, 1998) represented approximately 98.2% of the
Bank Portfolio. The accounts in the Bank Portfolio that are not included in the
Trust Portfolio are primarily newly originated accounts with lower delinquency
and loss rates than the average accounts in the Trust Portfolio which are
generally more seasoned. Therefore, the actual delinquency and loss experience
with respect to the Receivables in the Trust Portfolio may be different from
that set forth below. There can be no assurance that the delinquency and loss
experience for the Trust Portfolio will be similar to the historical experience
set forth below because, among other things, economic and financial conditions
affecting the ability of cardholders to make payments may be different from
those that have prevailed during the periods reflected below.
8
<PAGE> 9
DELINQUENCY EXPERIENCE
BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31, (1)
THREE MONTHS ENDED -----------------------------------------------------
MARCH 31, 1998 1997 1996
------------------------- ------------------------- -------------------------
PERCENTAGE PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL OF TOTAL
RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES RECEIVABLES
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Receivables Outstanding(2).............. $28,660,853 100.00% $28,888,003 100.00% $22,119,202 100.00%
=========== ====== =========== ====== =========== ======
Receivables Delinquent:
35-64 days............................ $ 404,736 1.41% $ 425,464 1.47% $ 359,275 1.62%
65-94 days............................ 273,669 0.95 275,747 0.96 250,468 1.13
95 or more days(3).................... 580,926 2.03 584,050 2.02 475,115 2.15
----------- ------ ----------- ------ ----------- ------
Total............................... $ 1,259,331 4.39% $ 1,285,261 4.45% $ 1,084,858 4.90%
=========== ====== =========== ====== =========== ======
<CAPTION>
AS OF DECEMBER 31, (1)
-------------------------
1995
-------------------------
PERCENTAGE
OF TOTAL
RECEIVABLES RECEIVABLES
----------- -----------
<S> <C> <C>
Receivables Outstanding(2).............. $17,411,514 100.00%
=========== ======
Receivables Delinquent:
35-64 days............................ $ 219,240 1.26%
65-94 days............................ 130,088 0.75
95 or more days(3).................... 231,315 1.32
----------- ------
Total............................... $ 580,643 3.33%
=========== ======
</TABLE>
- - ------------
(1) The information set forth in the table above is stated on a basis
consistent with the Bank's current fiscal year. The Bank changed its
fiscal year end from June 30 to December 31 in connection with the
FUSA/BANC ONE Merger.
(2) The Receivables Outstanding on the accounts consist of all amounts due
from cardholders as posted to the accounts.
(3) The amount of Receivables Delinquent 95 or more days for each of the
periods shown is stated on a basis consistent with the Bank's current
policy of charging off an account immediately prior to the end of the
sixth billing cycle after having become contractually past due. Its prior
policy, which applied during the periods shown above, was to charge off
accounts immediately prior to the end of the seventh billing cycle after
having become contractually past due.
LOSS EXPERIENCE
BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31, (1)
MARCH 31, ----------------------------------------
1998 1997 1996 1995
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Average Receivables Outstanding(2).......... $28,886,506 $24,918,928 $ 18,986,458 $13,497,080
Gross Charge-Offs(3)........................ 419,152 1,350,863 895,267 416,406
Gross Charge-Offs as a percentage of Average
Receivables Outstanding(4)................ 5.88% 5.42% 4.72% 3.09%
Recoveries(5)............................... 45,062 122,234 61,787 23,597
Net Losses(5)............................... 374,090 1,228,629 833,480 392,809
Net Losses as a percentage of Average
Receivables Outstanding(4)................ 5.25% 4.93% 4.39% 2.91%
</TABLE>
- - ------------
(1) The information set forth in the table above is stated on a basis
consistent with the Bank's current fiscal year. The Bank changed its fiscal
year end from June 30 to December 31 in connection with the FUSA/BANC ONE
Merger.
(2) Average Receivables Outstanding is the average daily receivables during the
periods indicated.
(3) Gross Charge-Offs are principal charge-offs before recoveries and do not
include the amount of any reductions in Average Receivables Outstanding due
to fraud, returned goods or customer disputes.
(4) Annualized.
(5) Recoveries are included in the Trust as of July 1, 1996. Net Losses for
each of the periods shown are stated on a basis consistent with the Bank's
current policy of charging off an account immediately prior to the end of
the sixth billing cycle after having become contractually past due. Its
prior policy, which applied during the periods shown above, was to charge
off accounts immediately prior to the end of the seventh billing cycle
after having become contractually past due.
SUMMARY OF MONTHLY PAYMENT RATES
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Bank Portfolio during any month in the period 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.
9
<PAGE> 10
CARDHOLDER MONTHLY PAYMENT RATES
BANK PORTFOLIO
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31, (1)
MARCH 31, -----------------------------
1998 1997 1996 1995
------------ ----- ----- -----
<S> <C> <C> <C> <C>
Lowest Month...................................... 13.38% 11.73% 10.16% 9.86%
Highest Month..................................... 15.49 14.99 11.86 11.73
Monthly Average................................... 14.24 13.03 11.18 10.90
</TABLE>
RECEIVABLE YIELD CONSIDERATIONS
The portfolio yield on the Bank Portfolio for each of the three years
contained in the period ended December 31, 1997 and for the three months ended
March 31, 1998 is set forth in the table below. The portfolio yields in the
table are calculated on an accrual basis. The portfolio yield on Receivables
included in the Trust is calculated on a cash basis. Portfolio yields calculated
on an accrual basis may differ from portfolio yields calculated on a cash basis
due to (a) a lag between when finance charges and fees are charged to cardholder
accounts and when such finance charges and fees are collected and (b) finance
charges and fees that are not ultimately collected from the cardholder. However,
during the three years contained in the period ended December 31, 1997 and for
the three months ended March 31, 1998, portfolio yield on an accrual basis
approximated portfolio yield on a cash basis. Portfolio yield on both an accrual
and a cash basis will also be affected by numerous factors, including changes in
the periodic rates, variations in the rate of payments and new borrowings on the
Accounts, the amount of the Annual Membership Fees and Other Charges, changes in
the delinquency and loss rates on the Receivables and the percentage of
cardholders who pay their balances in full each month and do not incur Periodic
Finance Charges, which may in turn be caused by a variety of factors, including
seasonal variations, the availability of other sources of credit and general
economic conditions. Interchange allocated to the Trust with respect to the
Receivables may vary from the amounts included in the table below because
Interchange will be included in the Trust on an estimated basis by initially
treating 1.3% of collections on the Receivables, other than collections with
respect to Periodic Finance Charges, Annual Membership Fees and Other Charges,
as Discount Receivables.
PORTFOLIO YIELD
BANK PORTFOLIO
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, --------------------------------
1998 1997 1996 1995
------------ ------ ------ ------
<S> <C> <C> <C> <C>
Average account monthly accrued fees and
charges(1)(2)................................ $40.03 $39.90 $36.82 $32.35
Average account balance(3)..................... 2,844 2,959 2,799 2,580
Portfolio yield from fees and charges(1)(4).... 16.89% 16.18% 15.79% 15.04%
</TABLE>
- - ------------
(1) Fees and charges are comprised of Periodic Finance Charges, Interchange,
Annual Membership Fees and Other Charges.
(2) Average account monthly accrued fees and charges are presented net of
adjustments made pursuant to the Bank's normal servicing procedures,
including removal of incorrect or disputed Periodic Finance Charges, and
include Interchange.
(3) Average account balance includes Purchases, Cash Advances and accrued and
unpaid Periodic Finance Charges, Annual Membership Fees and Other Charges
and is calculated based on the average of the month end balances for
accounts with balances.
(4) Annualized.
The increase in portfolio yield for the years ended December 31, 1996 and
December 31, 1997 and for the three months ended March 31, 1998 reflects changes
in the overall pricing distribution of the Bank Portfolio. The
10
<PAGE> 11
accounts in the Bank Portfolio that are not included in the Trust Portfolio are
primarily newly originated accounts with a greater proportion of Receivables
arising pursuant to direct solicitations of low-rate, no annual fee credit
cards, with on average a lower introductory rate, than the average accounts in
the Trust Portfolio, which are more seasoned. Therefore, the actual portfolio
yield with respect to the Receivables in the Trust Portfolio may be different
from that set forth above.
THE RECEIVABLES
The Receivables in the Accounts selected from the Bank Portfolio included
in the Trust on the basis of criteria set forth in the Pooling and Servicing
Agreement (the "Trust Portfolio") (including the additional Accounts added to
the Trust on May 4, 1998 and June 5, 1998), as of the close of business on April
30, 1998, consisted of $28,175,168,883 of principal Receivables and $864,188,937
of finance charge Receivables. On the Closing Date, the Transferor will deposit
$ into the Finance Charge Account, which will be applied as collections
of finance charge Receivables received during the initial Monthly Period and
allocated to Series 1998-3. The Accounts, including such additional Accounts,
had an average principal Receivable balance of $1,598 (including accounts with a
zero balance) and an average credit limit of $8,335. The percentage of the
aggregate total Receivable balance to the aggregate total credit limit was
19.7%.
As of April 30, 1998, cardholders whose Accounts are included in the Trust
Portfolio, including such additional Accounts, had billing addresses in 50
states, the District of Columbia and other United States territories and
possessions. As of April 30, 1998, 75% of the Accounts, including such
additional Accounts, were premium accounts and 25% were standard accounts, and
the aggregate principal Receivable balances of premium accounts and standard
accounts, as a percentage of the aggregate total principal Receivables, were 85%
and 15%, respectively.
The following tables summarize the Trust Portfolio (including the
additional Accounts added to the Trust on May 4, 1998 and June 5, 1998) by
various criteria as of the close of business on April 30, 1998. 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>
PERCENTAGE
OF TOTAL PERCENTAGE OF
ACCOUNT NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
BALANCE RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
------------- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
Credit Balance........................ 403,853 2.3% $ (52,627,488) (0.2)%
No Balance............................ 7,306,422 41.4 -- --
$0.01 to $2,000.00.................... 5,243,789 29.7 3,276,943,006 11.3
$2,000.01 to $5,000.00................ 2,631,196 15.0 9,211,753,957 31.7
$5,000.01 to $10,000.00............... 1,665,118 9.4 11,531,504,732 39.7
$10,000.01 or More.................... 385,571 2.2 5,071,783,613 17.5
---------- ----- --------------- -----
TOTAL....................... 17,635,949 100.0% $29,039,357,820 100.0%
========== ===== =============== =====
</TABLE>
11
<PAGE> 12
COMPOSITION BY CREDIT LIMIT
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE OF
CREDIT NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
LIMIT RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----------- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
$0.00 to $2,000.00.................... 1,508,086 8.6% $ 558,321,733 1.9%
$2,000.01 to $5,000.00................ 4,170,485 23.6 5,450,731,194 18.8
$5,000.01 to $10,000.00............... 6,792,328 38.5 11,624,060,575 40.0
$10,000.01 or More.................... 5,165,050 29.3 11,406,244,318 39.3
---------- ----- --------------- -----
TOTAL....................... 17,635,949 100.0% $29,039,357,820 100.0%
========== ===== =============== =====
</TABLE>
COMPOSITION BY PERIOD OF DELINQUENCY
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
PERIOD OF DELINQUENCY OF TOTAL PERCENTAGE OF
(DAYS CONTRACTUALLY NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
DELINQUENT) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----------- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
Not Delinquent........................ 17,073,043 96.8% $26,551,675,391 91.4%
Up to 34 Days......................... 320,815 1.8 1,266,416,872 4.4
35 to 64 Days......................... 82,110 0.5 369,323,807 1.3
65 to 94 Days......................... 54,500 0.3 269,493,006 0.9
95 or More Days....................... 105,481 0.6 582,448,744 2.0
---------- ----- --------------- -----
TOTAL....................... 17,635,949 100.0% $29,039,357,820 100.0%
========== ===== =============== =====
</TABLE>
COMPOSITION OF ACCOUNTS BY AGE
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE OF
NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
AGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
--- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
Less than or equal to 6 Months........ 3,613,600 20.5% $ 5,223,782,312 18.0%
Over 6 Months to 12 Months............ 3,639,255 20.6 5,399,650,677 18.6
Over 12 Months to 24 Months........... 2,927,973 16.6 4,906,407,143 16.9
Over 24 Months to 36 Months........... 2,887,719 16.4 5,641,594,179 19.4
Over 36 Months to 48 Months........... 2,030,251 11.5 3,796,452,845 13.1
Over 48 Months to 60 Months........... 1,140,241 6.5 1,831,050,303 6.3
Over 60 Months........................ 1,396,910 7.9 2,240,420,361 7.7
---------- ----- --------------- -----
TOTAL....................... 17,635,949 100.0% $29,039,357,820 100.0%
========== ===== =============== =====
</TABLE>
12
<PAGE> 13
COMPOSITION BY GEOGRAPHIC DISTRIBUTION
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE OF
NUMBER OF NUMBER OF AMOUNT OF TOTAL AMOUNT OF
STATE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C>
Alabama................................... 193,223 1.1% $ 339,962,984 1.2%
Alaska.................................... 40,510 0.2 87,353,959 0.3
Arizona................................... 306,197 1.7 520,838,001 1.8
Arkansas.................................. 146,195 0.8 230,080,033 0.8
California................................ 2,155,739 12.2 3,990,288,060 13.8
Colorado.................................. 303,283 1.7 511,980,519 1.8
Connecticut............................... 258,045 1.5 436,480,463 1.5
Delaware.................................. 57,271 0.3 81,552,150 0.3
District of Columbia...................... 33,779 0.2 62,316,782 0.2
Florida................................... 1,165,511 6.6 1,894,573,970 6.5
Georgia................................... 400,424 2.3 738,541,081 2.5
Hawaii.................................... 78,951 0.4 149,844,690 0.5
Idaho..................................... 80,505 0.5 132,768,806 0.5
Illinois.................................. 821,317 4.7 1,262,072,611 4.3
Indiana................................... 286,437 1.6 432,692,386 1.5
Iowa...................................... 26,149 0.1 32,548,993 0.1
Kansas.................................... 169,329 1.0 263,359,461 0.9
Kentucky.................................. 203,109 1.2 293,176,542 1.0
Louisiana................................. 329,660 1.9 507,150,383 1.7
Maine..................................... 75,258 0.4 115,783,268 0.4
Maryland.................................. 390,421 2.2 691,233,293 2.4
Massachusetts............................. 577,343 3.3 804,102,859 2.8
Michigan.................................. 587,784 3.3 973,990,588 3.4
Minnesota................................. 251,332 1.4 341,982,744 1.2
Mississippi............................... 120,783 0.7 197,224,351 0.7
Missouri.................................. 335,591 1.9 503,465,696 1.7
Montana................................... 67,189 0.4 107,636,452 0.4
Nebraska.................................. 110,278 0.6 146,335,956 0.5
Nevada.................................... 139,709 0.8 272,376,750 0.9
New Hampshire............................. 86,195 0.5 139,736,215 0.5
New Jersey................................ 680,326 3.9 1,075,706,037 3.7
New Mexico................................ 114,577 0.6 186,951,278 0.6
New York.................................. 1,292,015 7.3 2,125,076,613 7.3
North Carolina............................ 362,553 2.1 608,148,580 2.1
North Dakota.............................. 39,910 0.2 53,683,168 0.2
Ohio...................................... 725,438 4.1 1,103,542,311 3.8
Oklahoma.................................. 281,681 1.6 432,192,748 1.5
Oregon.................................... 247,718 1.4 424,668,087 1.5
Pennsylvania.............................. 785,426 4.5 1,075,695,906 3.7
Rhode Island.............................. 77,193 0.4 117,441,277 0.4
South Carolina............................ 173,565 1.0 281,359,520 1.0
South Dakota.............................. 42,042 0.2 63,308,094 0.2
Tennessee................................. 215,379 1.2 343,558,048 1.2
Texas..................................... 1,519,876 8.6 2,709,257,510 9.3
Utah...................................... 117,555 0.7 177,291,641 0.6
Vermont................................... 39,067 0.2 60,979,486 0.2
Virginia.................................. 459,782 2.6 798,040,009 2.7
Washington................................ 415,760 2.4 767,194,827 2.6
West Virginia............................. 102,216 0.6 158,632,824 0.5
Wisconsin................................. 67,382 0.4 85,519,995 0.3
Wyoming................................... 35,967 0.2 53,450,342 0.2
Other U.S. territories and possessions.... 43,004 0.3 76,209,473 0.3
---------- ----- --------------- -----
TOTAL............................ 17,635,949 100.0% $29,039,357,820 100.0%
========== ===== =============== =====
</TABLE>
Since the largest number of cardholders (based on billing addresses) whose
accounts were included in the Trust as of April 30, 1998 were in California,
Texas, New York, Florida and Illinois, adverse changes in the economic
conditions in these areas could have a direct impact on the timing and amount of
payments on the Certificates.
13
