<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 15, 1997
DISCOVER CARD MASTER TRUST I
-------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-23108 51-0020270
-------- ------- ----------
(STATE OF (COMMISSION (IRS EMPLOYER
ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
C/O GREENWOOD TRUST COMPANY
12 READ'S WAY
NEW CASTLE, DELAWARE 19720
- -------------------------------------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (302) 323-7184
--------------
FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT: NOT APPLICABLE
<PAGE> 2
ITEM 5. OTHER EVENTS
SERIES 1997-1. ON OCTOBER 15, 1997, THE REGISTRANT MADE AVAILABLE
TO PROSPECTIVE INVESTORS A SERIES TERM SHEET SETTING FORTH A DESCRIPTION OF THE
COLLATERAL POOL AND THE PROPOSED STRUCTURE OF $500,000,000 AGGREGATE PRINCIPAL
AMOUNT OF SERIES 1997-3 FLOATING RATE CLASS A CREDIT CARD PASS-THROUGH
CERTIFICATES AND $26,316,000 AGGREGATE PRINCIPAL AMOUNT OF SERIES 1997-3
FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH CERTIFICATES OF DISCOVER CARD
MASTER TRUST I. THE SERIES TERM SHEET IS ATTACHED HERETO AS EXHIBIT 99.
ITEM 7. EXHIBITS
EXHIBIT NO. DESCRIPTION
EXHIBIT 99 SERIES TERM SHEET DATED OCTOBER 15, 1997, WITH RESPECT TO THE
PROPOSED ISSUANCE OF THE FLOATING RATE CLASS A CREDIT CARD
PASS-THROUGH CERTIFICATES AND THE FLOATING RATE CLASS B CREDIT
CARD PASS-THROUGH CERTIFICATES OF DISCOVER CARD MASTER TRUST I,
SERIES 1997-3.
PAGE 2
<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.
DISCOVER CARD MASTER TRUST I
(REGISTRANT)
BY: GREENWOOD TRUST COMPANY
(ORIGINATOR OF THE TRUST)
DATE: OCTOBER 15, 1997 BY: /S/ STEVEN L. MAHON
-------------------------------
STEVEN L. MAHON
VICE PRESIDENT, BANK OPERATIONS
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
<S> <C> <C>
EXHIBIT 99 SERIES TERM SHEET DATED OCTOBER 15, 1997, WITH 5
RESPECT TO THE PROPOSED ISSUANCE OF THE FLOATING
RATE CLASS A CREDIT CARD PASS-THROUGH CERTIFICATES
AND THE FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH
CERTIFICATES OF DISCOVER CARD MASTER TRUST I, SERIES
1997-3.
</TABLE>
PAGE 4
<PAGE> 1
Exhibit 99
SUBJECT TO REVISION
SERIES TERM SHEET DATED OCTOBER 15, 1997
DISCOVER(R) CARD MASTER TRUST I, SERIES 1997-3
$500,000,000 FLOATING RATE CLASS A CREDIT CARD PASS-THROUGH CERTIFICATES
$26,316,000 FLOATING RATE CLASS B CREDIT CARD PASS-THROUGH CERTIFICATES
GREENWOOD TRUST COMPANY
MASTER SERVICER, SERVICER AND SELLER
THE INVESTOR CERTIFICATES REPRESENT FRACTIONAL UNDIVIDED INTERESTS IN THE
DISCOVER CARD MASTER TRUST I (THE "TRUST") AND DO NOT REPRESENT INTERESTS IN OR
OBLIGATIONS OF GREENWOOD TRUST COMPANY ("GREENWOOD"). NEITHER THE INVESTOR
CERTIFICATES NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENT
AGENCY.
THIS SERIES TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION WITH
RESPECT TO THE SERIES 1997-3 INVESTOR CERTIFICATES; HOWEVER, THIS SERIES TERM
SHEET DOES NOT CONTAIN COMPLETE INFORMATION WITH RESPECT TO THE OFFERING OF THE
SERIES 1997-3 INVESTOR CERTIFICATES. THE INFORMATION 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 SERIES 1997-3 INVESTOR CERTIFICATES MAY NOT BE CONSUMMATED UNLESS
THE PURCHASER HAS RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS.
MORGAN STANLEY DEAN WITTER
CHASE SECURITIES INC.
DEUTSCHE MORGAN GRENFELL
J.P. MORGAN & CO.
<PAGE> 2
This Series Term Sheet will be superseded in its entirety by the information
appearing in the Prospectus Supplement, the Prospectus and the Series 1997-3
Supplement to the Pooling and Servicing Agreement, dated as of October 1, 1993,
as amended, between Greenwood and U.S. Bank National Association d/b/a First
Bank National Association (successor trustee to Bank of America Illinois,
formerly Continental Bank, National Association), as Trustee (the "Series
Supplement").
<TABLE>
<S> <C>
TITLE OF SECURITIES .................... Discover Card Master Trust I, Series 1997-3 Floating Rate Class A Credit Card Pass-Through
Certificates (the "Class A Certificates") and Discover Card Master Trust I, Series 1997-3
Floating Rate Class B Credit Card Pass-Through Certificates (the "Class B Certificates,"
and together with the Class A Certificates, the "Investor Certificates").
INTEREST ON INVESTOR CERTIFICATES ...... Class A Certificates: LIBOR plus ____% per annum.
Class B Certificates: LIBOR plus ____% per annum.
Interest on the Investor Certificates will be calculated on the basis of the actual number
of days elapsed and a 360-day year; payable on the 15th day of each month (or, if such day
is not a business day, the next succeeding business day), commencing in November 1997.
"LIBOR" will mean the London interbank offered rate for one-month United States dollar
deposits, determined two business days prior to the commencement of each interest accrual
period.
PRINCIPAL ON INVESTOR CERTIFICATES ..... 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, or monthly, under certain
circumstances.
SERIES CUT-OFF DATE .................... October 1, 1997.
CLASS A EXPECTED FINAL PAYMENT DATE .... The Distribution Date in October 2004.
"Distribution Date" will mean the 15th calendar day of each month, or if such day is not a
business day, the next succeeding business day, commencing in November 1997.
CLASS B EXPECTED FINAL PAYMENT DATE .... The Distribution Date in November 2004.
SERIES TERMINATION DATE ................ The first Business Day following the Distribution Date in April 2007.
</TABLE>
2
<PAGE> 3
<TABLE>
<S> <C>
SUBORDINATION OF CLASS B CERTIFICATES .. The Class B Certificates are subordinated in right of payment to the Class A Certificates,
to the extent of the Available Subordinated Amount at the time any such subordinated
payment is made.
AVAILABLE SUBORDINATED AMOUNT .......... Initially $65,789,500, which may be reduced, reinstated or increased from time to time.
The Available Subordinated Amount will be increased following an Effective Alternative
Credit Support Election (as defined below) by $26,315,800.
"Effective Alternative Credit Support Election" will mean an effective election made by
Greenwood under the terms of the Series Supplement to increase the amount on deposit in
the Credit Enhancement Account (as defined below in Credit Enhancement).
CREDIT ENHANCEMENT ..................... Credit Enhancement initially will consist solely of a cash collateral account for the
exclusive direct benefit of the holders of the Class B Certificates (the "Credit
Enhancement Account").
The initial amount of the Credit Enhancement is $39,473,700. The maximum amount of Credit
Enhancement as of any Distribution Date will be the greater of (i) $5,263,160 and (ii) an
amount equal to 7.5% of the Series Investor Interest (as defined below) as of the last day
of the related Due Period (as defined below) (or, following an Effective Alternative
Credit Support Election, the greater of $5,263,160 and an amount equal to 12.5% of the
Series Investor Interest as of the last day of the related Due Period), subject to certain
conditions and limitations.
"Series Investor Interest" will mean $526,316,000 minus (i) the aggregate amount on
deposit with respect to principal collections for the benefit of holders of the Class A
Certificates and Class B Certificates (after giving effect to losses of principal on
investments of funds), (ii) the aggregate amount of principal paid to holders of the Class
A Certificates and Class B Certificates and (iii) the aggregate amount of unreimbursed
investor losses resulting from accounts in which the receivables have been charged off as
uncollectible (after giving effect to all provisions in the Series Supplement to reimburse
such charged-off amounts).
"Due Period" will mean, with respect to any Distribution Date, the calendar month next
preceding the calendar month in which such Distribution Date occurs.
THE RECEIVABLES ........................ The receivables in the Accounts (as defined below) as of October 1, 1997 totaled
$17,908,762,773.20.
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C>
RATING OF THE INVESTOR CERTIFICATES .... It is a condition of issuance that the Class A Certificates be rated in the highest rating
category and that the Class B Certificates be rated at least "A" or the equivalent by
Moody's Investors Service and Standard & Poor's Ratings Services.
ERISA CONSIDERATIONS ................... It is expected that the assets of an ERISA plan that invests in the Class A Certificates
would not be deemed to include an interest in the assets of the Trust. The Class B
Certificates may not be acquired by any employee benefit plan that is subject to ERISA.
LISTING ................................ Application will be made to list the Investor Certificates on the Luxembourg Stock
Exchange.
</TABLE>
COMPOSITION OF THE ACCOUNTS
Information concerning the composition of the accounts from which
receivables are included in the Trust (the "Accounts") is set forth below.
GEOGRAPHIC DISTRIBUTION. As of October 1, 1997, the five states with the
largest receivables balances were as follows:
<TABLE>
<CAPTION>
STATE PERCENTAGE OF TOTAL RECEIVABLES
----- BALANCE IN THE ACCOUNTS
-------------------------------
<S> <C>
California............... 11.7%
Texas.................... 9.2%
New York................. 6.9%
Florida.................. 5.8%
Illinois................. 4.9%
</TABLE>
CREDIT LIMIT INFORMATION. Credit limit information as of October 1, 1997
with respect to the Accounts is as follows:
<TABLE>
<CAPTION>
PERCENTAGE
RECEIVABLES OF TOTAL
OUTSTANDING RECEIVABLES
CREDIT LIMIT (000'S) OUTSTANDING
- ------------ ------- -----------
<S> <C> <C>
Less than or equal to $1,000.00...... $ 306,816 1.7%
$1,000.01 to $2,000.00............... $ 2,595,073 14.5%
$2,000.01 to $3,000.00............... $ 3,001,808 16.8%
Over $3,000.00....................... $12,005,066 67.0%
------------ -----------
Total.............................. $17,908,763 100.0%
============ ===========
</TABLE>
4
<PAGE> 5
SEASONING. As of October 1, 1997, 82.2% of the Accounts were at least 24
months old. The distribution of the age of Accounts as of October 1, 1997 was
as follows:
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
AGE OF ACCOUNTS OF ACCOUNTS OF BALANCES
- --------------- ----------- -----------
<S> <C> <C>
Less than 12 Months.......... 1.9% 1.9%
12 to 23 Months.............. 15.9% 16.3%
24 to 35 Months.............. 12.3% 13.2%
36 Months and Greater........ 69.9% 68.6%
------ ------
100.0% 100.0%
====== ======
</TABLE>
SUMMARY CURRENT DELINQUENCY INFORMATION. Current delinquency information
as of October 1, 1997 with respect to the Accounts is summarized as follows:
<TABLE>
<CAPTION>
AGGREGATE
BALANCES PERCENTAGE
PAYMENT STATUS (000'S) OF BALANCES
- -------------- ------- -----------
<S> <C> <C>
Current............... $15,064,985 84.1%
1 to 29 Days.......... $ 1,438,386 8.0%
30 to 59 Days......... $ 523,757 2.9%
60 to 89 Days......... $ 312,292 1.7%
90 to 119 Days........ $ 228,697 1.3%
120 to 149 Days....... $ 190,051 1.1%
150 to 179 Days....... $ 150,595 0.9%
----------- ------
$17,908,763 100.0%
=========== ======
</TABLE>
5
<PAGE> 6
COMPOSITION AND HISTORICAL PERFORMANCE
OF THE DISCOVER CARD PORTFOLIO
GEOGRAPHIC DISTRIBUTION. The Discover Card Portfolio is not concentrated
geographically. As of August 31, 1997, the five states with the largest
receivables balances were as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL RECEIVABLES BALANCE
OF DISCOVER CARD PORTFOLIO
STATE AS OF AUGUST 31, 1997
----- ---------------------
<S> <C>
California................. 11.3%
Texas...................... 9.3%
New York................... 6.7%
Florida.................... 5.8%
Illinois................... 5.0%
</TABLE>
No other state accounted for more than 5% of the total receivables balance
of the Discover Card Portfolio as of August 31, 1997.
CREDIT LIMIT INFORMATION. Credit limit information as of August 31, 1997
with respect to the Discover Card Portfolio is summarized as follows:
<TABLE>
<CAPTION>
PERCENTAGE
RECEIVABLES OF TOTAL
OUTSTANDING RECEIVABLES
CREDIT LIMIT (000'S) OUTSTANDING
------------ ------------- -----------
<S> <C> <C>
Less than or equal to $1,000.00....... $ 512,164 1.8%
$1,000.01 to $2,000.00................ 4,367,256 15.2%
$2,000.01 to $3,000.00................ 4,058,048 14.1%
Over $3,000.00........................ $19,826,083 68.9%
----------- ------
Total................................ $28,763,551 100.0%
=========== ======
</TABLE>
SEASONING. As of August 31, 1997, 82.4% of the accounts in the Discover
Card Portfolio were at least 24 months old. The distribution of the age of
accounts in the Discover Card Portfolio as of August 31, 1997 was as follows:
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
AGE OF ACCOUNTS OF ACCOUNTS OF BALANCES
--------------- ----------- -----------
<S> <C> <C>
Less than 12 Months................... 6.9% 6.0%
12 to 23 Months....................... 10.7% 11.2%
24 to 35 Months....................... 11.5% 12.0%
36 Months and Greater................. 70.9% 70.8%
------ ------
100.0% 100.0%
====== ======
</TABLE>
6
<PAGE> 7
SUMMARY YIELD INFORMATION. The annualized aggregate monthly yield for the
Discover Card Portfolio is summarized as follows:
<TABLE>
<CAPTION>
EIGHT MONTHS ENDED YEAR ENDED DECEMBER 31,
----------------------------
AUGUST 31, 1997 1996 1995 1994
------------------ ---- ---- ----
<S> <C> <C> <C> <C>
Aggregate Monthly Yields (1)
Excluding Recoveries (2) ...... 18.32% 17.72% 16.95% 16.65%
Including Recoveries (3)........ 18.93% 18.20% 17.39% 17.07%
</TABLE>
- ------------------------------------
(1) Monthly Yield is calculated by dividing monthly finance charges billed by
beginning monthly balance. Monthly finance charges include periodic
finance charges, cash advance item charges, late fees, and as of March 1,
1996, overlimit fees, but exclude certain other items, such as annual
membership fees, if any, which are included in finance charge receivables
for the Trust. Aggregate Monthly Yield is the average of monthly yields
annualized for each period shown.
(2) Monthly Yield excluding any recoveries received with respect to
charged-off accounts.
(3) Monthly Yield including recoveries received with respect to charged-off
accounts. Recoveries received with respect to charged-off accounts (other
than the proceeds of sales of charged-off accounts that have been removed
from the Trust) are included in the Trust and are treated as finance
charge collections.
SUMMARY CURRENT DELINQUENCY INFORMATION. Current delinquency information
as of August 31, 1997 with respect to the Discover Card Portfolio is summarized
as follows:
<TABLE>
<CAPTION>
AGGREGATE
BALANCES PERCENTAGE
PAYMENT STATUS (000'S) OF BALANCES
-------------- ------------ -----------
<S> <C> <C>
Current........................ $24,409,233 84.9%
1 to 29 Days................... $ 2,245,421 7.8%
30 to 59 Days.................. $ 820,578 2.8%
60 to 89 Days.................. $ 457,663 1.6%
90 to 119 Days................. $ 340,814 1.2%
120 to 149 Days................ $ 265,467 0.9%
150 to 179 Days................ $ 224,375 0.8%
----------- ------
$28,763,551 100.0%
=========== ======
</TABLE>
7
<PAGE> 8
SUMMARY HISTORICAL DELINQUENCY INFORMATION. Historical delinquency
information with respect to the Discover Card Portfolio is summarized as
follows:
<TABLE>
<CAPTION>
AVERAGE OF TWELVE MONTHS ENDED DECEMBER 31,
AVERAGE OF EIGHT MONTHS ENDED --------------------------------------------------------
AUGUST 31, 1997 1996 1995
-------------------------------- --------------------------- ---------------------------
DELINQUENT DELINQUENT DELINQUENT
AMOUNT AMOUNT AMOUNT
(000'S) PERCENTAGE(1) (000'S) PERCENTAGE (1) (000'S) PERCENTAGE (1)
--------------- --------------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
30-59 Days.......... $ 743,383 2.6% $ 680,645 2.7% $ 568,382 2.6%
60-89 Days.......... $ 419,647 1.5% $ 361,992 1.4% $ 276,821 1.3%
90-179 Days......... $ 780,000 2.8% $ 593,661 2.3% $ 403,134 1.8%
---------- ---- ---------- ---- ---------- ----
Total............. $1,943,030 6.9% $1,636,298 6.4% $1,248,337 5.7%
========== ==== ========== ==== ========== ====
</TABLE>
<TABLE>
<CAPTION>
AVERAGE OF TWELVE MONTHS ENDED DECEMBER 31,
-------------------------------------------
1994
--------------------------------
DELINQUENT
AMOUNT
(000'S) PERCENTAGE(1)
----------------- -------------
<S> <C> <C>
30-59 Days.......... $405,942 2.2%
60-89 Days.......... $193,582 1.1%
90-179 Days......... $282,080 1.5%
-------- ----
Total............. $881,604 4.8%
======== ====
</TABLE>
- -------------------------------
(1) The percentages are the result of dividing Delinquent Amount by Average
Receivables Outstanding for the applicable period. Delinquent Amount is
the average of the monthly ending balances of delinquent accounts during
the periods indicated. Average Receivables Outstanding is the average of
the monthly average amount of receivables outstanding during the periods
indicated.
SUMMARY CHARGE-OFF INFORMATION. Charge-off information with respect to
the Discover Card Portfolio is summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
EIGHT MONTHS ENDED ----------------------------------------
AUGUST 31, 1997 1996 1995 1994
------------------ ------------ ------------ ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Average Receivable Outstanding(1).............. $28,128,053 $25,542,718 $22,031,829 $18,464,611
Gross Charge-Offs.............................. $ 1,326,721 $ 1,458,450 $ 923,836 $ 680,487
Gross Charge-Offs as a Percentage of
Average Receivables Outstanding(2)............. 7.08% 5.71% 4.19% 3.69%
</TABLE>
- -------------------------------
(1) Average Receivables Outstanding is the average of the monthly average
amount of receivables outstanding during the periods indicated.
(2) Recoveries with respect to charged-off receivables in the Accounts (other
than the proceeds of sales of charged-off accounts that have been removed
from the Trust) are property of the Trust and are treated as finance
charge collections.
SUMMARY PAYMENT RATE INFORMATION (1). The monthly rate of payments in the
Discover Card Portfolio is summarized as follows:
<TABLE>
<CAPTION>
Year Ended December 31
Eight Months Ended ----------------------------
August 31, 1997 1996 1995 1994
------------------ -------- -------- --------
<S> <C> <C> <C> <C>
Average Monthly Payment Rate(2)....... 14.59% 15.24% 16.20% 16.65%
High Monthly Payment Rates............ 16.31% 18.08% 18.97% 17.89%
Low Monthly Payment Rates............. 13.59% 13.33% 13.67% 15.16%
</TABLE>
- -------------------------
(1) Monthly Payment Rate is calculated by dividing monthly cardmember
remittances by the cardmember receivables balance outstanding as of the
beginning of the month.
(2) Average Monthly Payment Rate for a period is equal to the sum of
individual monthly payment rates for the period divided by the number of
months in the period.
8
