<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): June 7, 1999
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 1999-5. On June 7, 1999, 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 1999-5 Floating Rate Class A Credit Card Pass-Through
Certificates and $26,316,000 aggregate principal amount of Series 1999-5
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 June 7, 1999, 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 1999-5.
PAGE 2
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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: June 7, 1999 By: /s/ John J. Coane
-----------------------------------------
John J. Coane
Vice President, Chief Accounting Officer
and Treasurer
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INDEX TO EXHIBITS
Exhibit Description Page
- ------- ----------- ----
Exhibit 99 Series Term Sheet dated June 7, 1999, with respect to 5
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 1999-5.
PAGE 4
<PAGE> 1
EXHIBIT 99
SUBJECT TO REVISION
SERIES TERM SHEET DATED JUNE 7, 1999
DISCOVER(R) CARD MASTER TRUST I, SERIES 1999-5
$500,000,000 FLOATING RATE CLASS A CERTIFICATES
$26,316,000 FLOATING RATE CLASS B CERTIFICATES
GREENWOOD TRUST COMPANY
MASTER SERVICER, SERVICER AND SELLER
THE CERTIFICATES REPRESENT INTERESTS IN THE DISCOVER CARD MASTER TRUST
I. THE CERTIFICATES ARE NOT OBLIGATIONS OF GREENWOOD TRUST COMPANY OR ANY OF ITS
AFFILIATES, AND NEITHER THE CERTIFICATES NOR THE UNDERLYING CREDIT CARD
RECEIVABLES ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY.
THIS SERIES TERM SHEET CONTAINS STRUCTURAL AND COLLATERAL INFORMATION
ABOUT THE CERTIFICATES; HOWEVER, THIS SERIES TERM SHEET DOES NOT CONTAIN
COMPLETE INFORMATION ABOUT THE CERTIFICATES. THE INFORMATION IN THIS SERIES TERM
SHEET IS PRELIMINARY AND WILL BE SUPERSEDED BY THE INFORMATION CONTAINED IN THE
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. YOU SHOULD READ BOTH THE PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS. THE TRUST AND THE DISCOVER CARD PORTFOLIO MAY NOT
PERFORM IN THE FUTURE AS THEY HAVE PERFORMED IN THE PAST. PRICE AND AVAILABILITY
OF THE CERTIFICATES MAY CHANGE WITHOUT NOTICE.
WE HAVE PREPARED THIS SERIES TERM SHEET SOLELY FOR INFORMATIONAL
PURPOSES. THIS SERIES TERM SHEET IS NOT AN OFFER TO BUY OR SELL ANY SECURITY,
NOR IS IT A REQUEST TO PARTICIPATE IN ANY PARTICULAR TRADING STRATEGY. GREENWOOD
MAY NOT OFFER OR SELL THE CERTIFICATES IN ANY STATE WHERE THE OFFER OR SALE IS
PROHIBITED. GREENWOOD WILL NOT SELL YOU ANY OF THE CERTIFICATES UNLESS YOU HAVE
RECEIVED BOTH THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. THE UNDERWRITERS MAY
HOLD OR TRADE SECURITIES OF THE TRUST OR GREENWOOD AND MAY ALSO PERFORM
INVESTMENT BANKING SERVICES FOR THE TRUST AND GREENWOOD.
MORGAN STANLEY DEAN WITTER
BANC ONE CAPITAL MARKETS, INC.
BARCLAYS CAPITAL
COMMERZBANK CAPITAL MARKETS
DEUTSCHE BANK SECURITIES
DRESDNER KLEINWORT BENSON
THIS SERIES TERM SHEET MAY NOT BE DISTRIBUTED TO PRIVATE CUSTOMERS AS
DEFINED BY THE U.K. SECURITIES AND FUTURES AUTHORITY.
<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 1999-5
Supplement to the Pooling and Servicing Agreement.
TITLE OF SECURITIES.................... Discover Card Master Trust I, Series
1999-5 Floating Rate Class A Credit
Card Pass-Through Certificates and
Discover Card Master Trust I, Series
1999-5 Floating Rate Class B Credit
Card Pass-Through Certificates.
INTEREST RATE.......................... Class A Certificates: LIBOR plus ____%
per year.
Class B Certificates: LIBOR plus ___%
per year.
The Trustee will calculate interest on
the Certificates on the basis of the
actual number of days elapsed and a
360-day year.
"LIBOR" will mean the London interbank
offered rate for one-month United
States dollar deposits, determined two
business days before the start of each
interest accrual period.
INTEREST PAYMENT DATES................. The 15th day of each month (or the
next business day), beginning in July
1999.
EXPECTED MATURITY DATES................ Class A Certificates: June 15, 2004
(or the next business day). If an
Amortization Event occurs, the Trust
will pay principal monthly and the
final principal payment may be made
before or after June 15, 2004.
Class B Certificates: July 15, 2004
(or the next business day). If an
Amortization Event occurs, the Trust
will pay principal monthly and the
final payment of principal may be made
either before or after July 15, 2004.
The Trust must generally pay all Class
A principal before it pays any Class B
principal.
An "Amortization Event" is an event
that will cause the Trust to begin
repaying principal on a monthly basis.
SERIES TERMINATION DATE................ The first business day following
December 15, 2006 (or, if December 15,
2006 is not a business day, the second
business day following December 15,
2006). The Series Termination Date is
the last day on which the Trust will
pay principal on the Certificates.
SUBORDINATION OF CLASS B CERTIFICATES
(CLASS A CREDIT ENHANCEMENT)........... The Class B Certificates are
subordinated to the Class A
Certificates, up to a specified dollar
amount, known as the "Available
Subordinated Amount."
AVAILABLE SUBORDINATED AMOUNT.......... Initially $65,789,500, which may be
reduced, reinstated or increased from
time to time. The Available
Subordinated Amount will increase by:
- $2,631,580 after a Supplemental
Credit Enhancement Event, if
Greenwood has not made an Effective
Alternative Credit Support Election;
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<PAGE> 3
- $26,315,800 after an Effective
Alternative Credit Support Election,
if a Supplemental Credit Enhancement
Event has not occurred; or
- $23,684,220 after an Effective
Alternative Credit Support Election,
if a Supplemental Credit Enhancement
Event has occurred.
A "Supplemental Credit Enhancement
Event" will occur the first time
Standard & Poor's Ratings Services
withdraws the long-term debt or
deposit rating of Greenwood (or an
additional seller, if any) or reduces
this rating below BBB-.
"Effective Alternative Credit Support
Election" will mean an effective
election made by Greenwood to change
the way in which the Trust allocates
finance charge collections to this
Series. To make this election,
Greenwood must deposit additional
funds into the cash collateral account
discussed below.
CASH COLLATERAL ACCOUNT
(CLASS B CREDIT ENHANCEMENT).......... Greenwood will arrange to have a cash
collateral account established and
funded with $39,473,700 for the direct
benefit of the Class B investors (the
"Credit Enhancement Account") on the
date the Certificates are issued. The
Trustee may withdraw funds from this
account to reimburse the Class B
investors for amounts that would
otherwise reduce their interest in the
Trust or affect their interest
payments.
The amount on deposit in this account
may decrease or increase on future
Distribution Dates. A "Distribution
Date" is the 15th calendar day of each
month (or the next business day),
beginning in July 1999.
The maximum amount of Credit
Enhancement as of any Distribution
Date will be:
Before an Effective Alternative Credit
Support Election
- 7.5% of the Series Investor Interest
as of the end of the preceding month
(but not less than $5,263,160); or
After an Effective Alternative Credit
Support Election
- 12.5% of the Series Investor
Interest as of the end of the
preceding month (but not less than
$5,263,160).
However, if an Amortization Event has
occurred, the maximum amount of Credit
Enhancement will be the amount on
deposit in the Credit Enhancement
Account on the Distribution Date
immediately before the Amortization
Event occurred.
"Series Investor Interest" will mean
$526,316,000 minus
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- the amount of principal collections
on deposit for the benefit of
investors in this Series (after
giving effect to losses of principal
on investments of these funds),
- the aggregate amount of principal
previously paid to investors in this
Series, and
- the aggregate amount of 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
these charged-off amounts).
THE RECEIVABLES.................... The receivables in the Accounts
included in the Trust as of May 1,
1999 totaled $26,675,706,815.58.
GROUP EXCESS SPREAD................ The Certificates initially will be
included in the "Group One" group of
series. The three-month rolling
average Group Excess Spread Percentage
(as defined below) was 5.25% for the
Distribution Date in May 1999.
"Group Excess Spread Percentage" for
any Distribution Date is a percentage
calculated by multiplying:
- twelve, by
- an amount for all series in Group
One equal to
- the total amount of finance charge
collections, investment income and
other similar collections
allocable to each series for the
prior calendar month, minus
- the total amount of interest and
certain fees payable for each
series and the amount of
receivables allocable to each
series that have been charged off
as uncollectible for the prior
calendar month;
and then dividing the product by an
amount equal to the sum of all
investor interests for each series in
Group One (in each case for the
Distribution Date).
RATING OF THE INVESTOR CERTIFICATES The Trust will only issue the
Certificates if Standard & Poor's has
rated the Class A Certificates "AAA"
and the Class B Certificates at least
"A" and Moody's Investors Service,
Inc. has rated the Class A
Certificates "Aaa" and has rated the
Class B Certificates at least "A2."
ERISA CONSIDERATIONS .............. Greenwood believes that employee
benefit plans subject to ERISA may
acquire Class A Certificates; however,
advisers to these plans should consult
their own counsel. Employee benefit
plans subject to ERISA may not acquire
the Class B Certificates.
LISTING............................ Greenwood expects to list the
Certificates on the Luxembourg Stock
Exchange to facilitate trading in
non-U.S. markets.
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<PAGE> 5
COMPOSITION OF THE ACCOUNTS
We have set forth information below about the Accounts that
are part of the Trust. We provide additional information about all
accounts in the Discover Card portfolio under "Composition and
Historical Performance of the Discover Card Portfolio."
GEOGRAPHIC DISTRIBUTION. As of May 1, 1999, the following five states
had the largest receivables balances :
STATE PERCENTAGE OF TOTAL RECEIVABLES
----- BALANCE IN THE ACCOUNTS
-----------------------
California..................... 11.4%
Texas.......................... 9.3%
New York....................... 6.8%
Florida........................ 5.9%
Illinois....................... 5.0%
CREDIT LIMIT INFORMATION. As of May 1, 1999, the Accounts had the
following credit limits:
PERCENTAGE
RECEIVABLES OF TOTAL
OUTSTANDING RECEIVABLES
(000's) OUTSTANDING
CREDIT LIMIT ----------- -----------
- ------------
Less than or equal to $1,000.00........... $ 562,324 2.1%
$1,000.01 to $2,000.00.................... $ 2,243,599 8.4%
$2,000.01 to $3,000.00.................... $ 2,639,436 9.9%
Over $3,000.00............................ $21,230,348 79.6%
----------- -------
Total................................... $26,675,707 100.0%
=========== ======
SEASONING. As of May 1, 1999, 90.7% of the Accounts were at least 24
months old. The ages of Accounts as of May 1, 1999 were distributed as follows:
PERCENTAGE PERCENTAGE
AGE OF ACCOUNTS OF ACCOUNTS OF BALANCES
--------------- ----------- -----------
Less than 12 Months............... 2.6% 1.3%
12 to 23 Months................... 6.7% 4.8%
24 to 35 Months................... 8.6% 9.2%
36 Months and Greater............. 82.1% 84.7%
------- ------
100.0% 100.0%
====== ======
SUMMARY CURRENT DELINQUENCY INFORMATION. As of May 1, 1999, the
Accounts had the following delinquency statuses:
AGGREGATE
BALANCES PERCENTAGE
PAYMENT STATUS (000's) OF BALANCES
-------------- ----- -----------
Current............................ $23,283,223 87.2%
1 to 29 Days....................... $ 1,637,369 6.1%
30 to 59 Days...................... $ 628,093 2.4%
60 to 89 Days...................... $ 370,696 1.4%
90 to 119 Days..................... $ 288,449 1.1%
120 to 149 Days.................... $ 237,781 0.9%
150 to 179 Days.................... $ 230,096 0.9%
----------- -----
$26,675,707 100.0%
=========== =====
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COMPOSITION AND HISTORICAL PERFORMANCE
OF THE DISCOVER CARD PORTFOLIO
GEOGRAPHIC DISTRIBUTION. The Discover Card portfolio is not
highly concentrated geographically. As of February 28, 1999, the
following five states had the largest receivables balances:
PERCENTAGE OF TOTAL RECEIVABLES BALANCE
OF DISCOVER CARD PORTFOLIO
STATE AS OF FEBRUARY 28, 1999
----- -----------------------
California.................... 11.3%
Texas......................... 9.3%
New York...................... 6.8%
Florida....................... 5.9%
Illinois...................... 5.0%
No other state accounted for more than 5% of the total receivables
balance of the Discover Card portfolio as of February 28, 1999.
CREDIT LIMIT INFORMATION. As of February 28, 1999, the accounts in the
Discover Card portfolio had the following credit limits:
PERCENTAGE
RECEIVABLES OF TOTAL
OUTSTANDING RECEIVABLES
CREDIT LIMIT (000's) OUTSTANDING
------------ ----------- -----------
Less than or equal to $1,000.00....... $ 643,732 2.1%
$1,000.01 to $2,000.00................ $ 2,593,000 8.6%
$2,000.01 to $3,000.00................ $ 2,950,923 9.8%
Over $3,000.00........................ $23,935,484 79.5%
----------- -----
Total............................... $30,123,139 100.0%
=========== ======
SEASONING. As of February 28, 1999, 88.0% of the accounts in the
Discover Card portfolio were at least 24 months old. The ages of the accounts in
the Discover Card portfolio as of February 28, 1999 were distributed as follows:
PERCENTAGE PERCENTAGE
AGE OF ACCOUNTS OF ACCOUNTS OF BALANCES
--------------- ----------- -----------
Less than 12 Months.............. 5.2% 2.5%
12 to 23 Months.................. 6.8% 5.6%
24 to 35 Months.................. 7.9% 8.6%
36 Months and Greater............ 80.1% 83.3%
----- -----
100.0% 100.0%
====== ======
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SUMMARY YIELD INFORMATION. The annualized aggregate monthly yield for
the Discover Card portfolio is summarized as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED ELEVEN MONTHS ENDED TWELVE MONTHS ENDED
FEBRUARY 28, 1999 NOVEMBER 30, 1998 NOVEMBER 30, 1997 DECEMBER 31, 1996
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Aggregate Monthly Yields (1)
Excluding Recoveries (2) 17.61% 18.02% 18.19% 17.72%
Including Recoveries (3) 18.38% 18.76% 18.90% 18.20%
</TABLE>
- ------------------------------
(1) Greenwood calculates the "Monthly Yield" by dividing the monthly finance
charges billed by beginning monthly receivables balance. Monthly finance
charges include periodic finance charges, cash advance item charges, late
fees, and as of March 1, 1996, overlimit fees. "Aggregate Monthly Yield" is
the average of Monthly Yields annualized for each period shown.
(2) Aggregate Monthly Yield excluding any recoveries received with respect to
charged-off accounts.
(3) Aggregate Monthly Yield including recoveries received with respect to
charged-off accounts. Recoveries received with respect to receivables in
the Trust that have been charged off as uncollectible (including the
proceeds of sales of these receivables by the Trust, but excluding proceeds
of sales of charged-off receivables that Greenwood has removed from the
Trust) are included in the Trust and are treated as finance charge
collections.
SUMMARY CURRENT DELINQUENCY INFORMATION. As of February 28, 1999, the
accounts in the Discover Card portfolio had the following delinquency statuses:
AGGREGATE
BALANCES PERCENTAGE
PAYMENT STATUS (000's) OF BALANCES
-------------- ----------- -----------
Current................................... $25,835,408 85.7%
1 to 29 Days.............................. $ 2,126,594 7.1%
30 to 59 Days............................. $ 811,180 2.7%
60 to 89 Days............................. $ 486,161 1.6%
90 to 119 Days............................ $ 389,828 1.3%
120 to 149 Days........................... $ 236,048 0.8%
150 to 179 Days........................... $ 237,920 0.8%
----------- ----
$30,123,139 100.0%
=========== ======
SUMMARY HISTORICAL DELINQUENCY INFORMATION. The accounts in the
Discover Card portfolio had the following historical delinquency rates:
<TABLE>
<CAPTION>
AVERAGE OF THREE MONTHS AVERAGE OF TWELVE MONTHS AVERAGE OF ELEVEN MONTHS AVERAGE OF TWELVE MONTHS
ENDED FEBRUARY 28, 1999 ENDED NOVEMBER 30, 1998 ENDED NOVEMBER 30, 1997 ENDED DECEMBER 31, 1996
----------------------- ----------------------- ------------------------- ---------------------------
DELINQUENT DELINQUENT DELINQUENT DELINQUENT
AMOUNT AMOUNT AMOUNT AMOUNT
(000's) PERCENTAGE(1) (000's) PERCENTAGE (1) (000's) PERCENTAGE (1) (000's) PERCENTAGE(1)
---------- ------------ ---------- ------------ ---------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-59 Days...... $ 848,890 2.8% $ 759,521 2.6% $ 743,464 2.6% $ 680,645 2.7%
60-89 Days...... $ 479,121 1.6% $ 456,059 1.5% $ 432,410 1.5% $ 361,992 1.4%
90-179 Days..... $ 859,881 2.8% $ 853,961 2.9% $ 803,204 2.8% $ 593,661 2.3%
----------- ---- ----------- ---- ----------- ---- ----------- ----
Total........... $ 2,187,892 7.2% $ 2,069,541 7.0% $ 1,979,078 6.9% $ 1,636,298 6.4%
=========== ---- =========== ==== =========== ==== =========== ====
</TABLE>
---------------------------------
(1) Greenwood calculates the percentages by dividing the Delinquent Amount by
the Average Receivables Outstanding for each period. The "Delinquent
Amount" is the average of the monthly ending balances of delinquent
accounts during the periods indicated. The "Average Receivables
Outstanding" is the average of the monthly average amount of receivables
outstanding during the periods indicated.
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SUMMARY CHARGE-OFF INFORMATION. The accounts in the Discover Card
portfolio have had the following historical charge-offs:
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED ELEVEN MONTHS ENDED TWELVE MONTHS ENDED
FEBRUARY 28, 1999 NOVEMBER 30, 1998 NOVEMBER 30, 1997 DECEMBER 31, 1996
----------------- ----------------- ----------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Average Receivables Outstanding(1)... $30,773,814 $ 29,749,158 $ 28,403,076 $ 25,542,718
Gross Charge-Offs.................... $ 546,272 $ 2,215,002 $ 1,891,601 $ 1,458,450
Gross Charge-Offs as an Annualized
Percentage of Average
Receivables Outstanding(2)......... 7.10% 7.45% 7.27% 5.71%
</TABLE>
- ------------------------------
(1) "Average Receivables Outstanding" is the average of the monthly average
amount of receivables outstanding during the periods indicated.
(2) Recoveries received with respect to receivables in the Trust that have been
charged off as uncollectible (including the proceeds of sales of these
receivables by the Trust, but excluding proceeds of sales of charged-off
receivables that Greenwood has removed from the Trust) are included in the
Trust and are treated as finance charge collections.
SUMMARY PAYMENT RATE INFORMATION (1). The accounts in the Discover Card
portfolio have had the following historical monthly payment rates:
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED ELEVEN MONTHS ENDED TWELVE MONTHS ENDED
FEBRUARY 28, 1999 NOVEMBER 30, 1998 NOVEMBER 30, 1997 DECEMBER 31, 1996
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Average Monthly Payment Rate(2) 16.20% 15.42% 14.51% 15.24%
Highest Monthly Payment Rate....... 17.00% 17.01% 16.31% 18.08%
Lowest Monthly Payment Rate...... 15.19% 13.90% 12.41% 13.33%
</TABLE>
- -----------------------
(1) Greenwood calculates the "Monthly Payment Rate" by dividing monthly
cardmember remittances by the cardmember receivable balance outstanding as
of the beginning of the month.
(2) Greenwood calculates the "Average Monthly Payment Rate" for a period by
dividing the sum of individual monthly payment rates for the period by the
number of months in the period.
8
