<PAGE> 1
SUBJECT TO REVISION
SERIES TERM SHEET DATED OCTOBER 17, 2000
DISCOVER(R) CARD MASTER TRUST I, SERIES 2000-8
$750,000,000 Floating Rate Class A Certificates
$39,474,000 Floating Rate Class B Certificates
DISCOVER BANK
Master Servicer, Servicer and Seller
The certificates represent interests in the Discover Card
Master Trust I. The certificates are not obligations of Discover Bank
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superseded by the information contained in the prospectus supplement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. Discover Bank may not offer or sell the
certificates in any state where the offer or sale is prohibited.
Discover Bank 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 Discover
Bank and may also perform investment banking services for the trust
and Discover Bank.
MORGAN STANLEY DEAN WITTER
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
COMMERZBANK CAPITAL MARKETS
DRESDNER KLEINWORT BENSON
This series term sheet may not be distributed to Private Customers as
defined by the U.K. Securities and Futures Authority.
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This series term sheet will be superseded in its entirety by
the information appearing in the prospectus supplement, the prospectus
and the Series 2000-8 Supplement to the Pooling and Servicing
Agreement.
TITLE OF SECURITIES .................... Discover Card Master Trust I, Series
2000-8 Floating Rate Class A Credit
Card Pass-Through Certificates and
Discover Card Master Trust I, Series
2000-8 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
November 2000.
EXPECTED MATURITY DATES................. Class A Certificates: October 15,
2003, 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 October 15, 2003.
Class B Certificates: October 15,
2003, 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 October
15, 2003. 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
April 15, 2006, or if April 15, 2006
is not a business day, the second
business day following April 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 $98,684,250, which may be
reduced, reinstated or increased from
time to time. The Available
Subordinated Amount will increase by:
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- $3,947,370 after a Supplemental
Credit Enhancement Event, if
Discover Bank has not made an
Effective Alternative Credit
Support Election;
- $35,526,330 after an Effective
Alternative Credit Support
Election, if a Supplemental Credit
Enhancement Event has occurred; or
- $39,473,700 after an Effective
Alternative Credit Support
Election, if a Supplemental Credit
Enhancement Event has not
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 Discover Bank, or
an additional seller, if any, or
reduces this rating below BBB-.
"Effective Alternative Credit Support
Election" will mean an effective
election made by Discover Bank to
change the way in which the trust
allocates finance charge collections
to this Series. To make this
election, Discover Bank must deposit
additional funds into the cash
collateral account discussed below.
CASH COLLATERAL ACCOUNT
(CLASS B CREDIT ENHANCEMENT)............ Discover Bank will arrange to have a
cash collateral account established
and funded with $59,210,550 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 November 2000.
The maximum amount of Credit
Enhancement as of any Distribution
Date will be:
Before a Supplemental Credit
Enhancement Event or 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
$7,894,740; or
After a Supplemental Credit
Enhancement Event but before an
Effective Alternative Credit Support
Election
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- 8.0% of the Series Investor
Interest as of the end of the
preceding month, but not less than
$7,894,740; 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
$7,894,740.
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
$789,474,000 minus
- 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 October
1, 2000 totaled $33,711,081,038.81.
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
4.78% for the Distribution Date in
October 2000.
"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
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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.................... Discover Bank 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................................. Discover Bank expects to list the
certificates on the Luxembourg Stock
Exchange to facilitate trading in
non-U.S. markets.
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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 October 1, 2000, the following five
states had the largest receivables balances :
PERCENTAGE OF TOTAL
RECEIVABLES
STATE BALANCE IN THE ACCOUNTS
----- -----------------------
California..................... 11.0%
Texas.......................... 9.1%
New York....................... 7.0%
Florida........................ 5.9%
Illinois....................... 5.2%
CREDIT LIMIT INFORMATION. As of October 1, 2000, the Accounts had the
following credit limits:
RECEIVABLES PERCENTAGE OF
OUTSTANDING TOTAL RECEIVABLES
CREDIT LIMIT (000'S) OUTSTANDING
------------ ------- -----------
Less than or equal to $1,000.00......... $ 427,309 1.3%
$1,000.01 to $2,000.00.................. $ 1,814,527 5.4%
$2,000.01 to $3,000.00.................. $ 2,121,074 6.3%
Over $3,000.00.......................... $29,348,171 87.0%
----------- ------
Total................................. $33,711,081 100.0%
=========== ======
SEASONING. As of October 1, 2000, 87.0% of the Accounts were at least
24 months old. The ages of Accounts as of October 1, 2000 were distributed as
follows:
PERCENTAGE PERCENTAGE
AGE OF ACCOUNTS OF ACCOUNTS OF BALANCES
--------------- ----------- -----------
Less than 12 Months................ 6.6% 8.6%
12 to 23 Months.................... 6.4% 5.8%
24 to 35 Months.................... 4.6% 3.1%
36 Months and Greater.............. 82.4% 82.5%
------ ------
100.0% 100.0%
====== ======
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SUMMARY CURRENT DELINQUENCY INFORMATION. As of October 1, 2000, the
Accounts had the following delinquency statuses:
AGGREGATE
BALANCES PERCENTAGE
PAYMENT STATUS (000'S) OF BALANCES
-------------- ------- -----------
Current........................... $ 29,401,649 87.2%
1 to 29 Days...................... $ 2,144,371 6.4%
30 to 59 Days..................... $ 783,248 2.3%
60 to 89 Days..................... $ 514,774 1.5%
90 to 119 Days.................... $ 356,551 1.1%
120 to 149 Days................... $ 282,124 0.8%
150 to 179 Days................... $ 228,364 0.7%
------------ ------
$ 33,711,081 100.0%
============ ======
COMPOSITION AND HISTORICAL PERFORMANCE
OF THE DISCOVER CARD PORTFOLIO
GEOGRAPHIC DISTRIBUTION. The Discover Card portfolio is not highly
concentrated geographically. As of August 31, 2000, the following five states
had the largest receivables balances:
PERCENTAGE OF TOTAL RECEIVABLES BALANCE
OF DISCOVER CARD PORTFOLIO
STATE AS OF AUGUST 31, 2000
----- ---------------------
California.................. 11.4%
Texas....................... 8.9%
New York.................... 7.1%
Florida..................... 5.9%
Illinois.................... 5.2%
No other state accounted for more than 5% of the total receivables
balance of the Discover Card portfolio as of August 31, 2000.
CREDIT LIMIT INFORMATION. As of August 31, 2000, 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......... $ 633,830 1.5%
$1,000.01 to $2,000.00.................. $ 2,207,156 5.2%
$2,000.01 to $3,000.00.................. $ 2,495,493 5.9%
Over $3,000.00.......................... $36,909,227 87.4%
----------- ------
Total................................. $42,245,706 100.0%
=========== ======
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SEASONING. As of August 31, 2000, 74.7% 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 August 31, 2000 were distributed as follows:
PERCENTAGE PERCENTAGE
AGE OF ACCOUNTS OF ACCOUNTS OF BALANCES
--------------- ----------- -----------
Less than 12 Months.............. 15.8% 19.6%
12 to 23 Months.................. 9.5% 8.4%
24 to 35 Months.................. 4.1% 2.7%
36 Months and Greater............ 70.6% 69.3%
------ ------
100.0% 100.0%
====== ======
SUMMARY YIELD INFORMATION. Discover Bank calculates the monthly yield
for the Discover Card portfolio 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 overlimit
fees. Aggregate monthly yield is the average of monthly yields annualized for
each period shown. The annualized aggregate monthly yield for the Discover Card
portfolio is summarized as follows:
<TABLE>
<CAPTION>
NINE MONTHS TWELVE MONTHS TWELVE MONTHS ELEVEN MONTHS
ENDED ENDED ENDED ENDED
AUGUST 31, 2000 NOVEMBER 30, 1999 NOVEMBER 30, 1998 NOVEMBER 30, 1997
--------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Aggregate Monthly Yields
Excluding Recoveries 16.20% 17.48% 18.02% 18.19%
Including Recoveries 16.85% 18.26% 18.76% 18.90%
</TABLE>
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 Discover Bank has removed from the trust, are included in the
trust and are treated as finance charge collections.
SUMMARY CURRENT DELINQUENCY INFORMATION. As of August 31, 2000, the
accounts in the Discover Card portfolio had the following delinquency statuses:
AGGREGATE
BALANCES PERCENTAGE
PAYMENT STATUS (000'S) OF BALANCES
-------------- ----------- -----------
Current................................ $37,587,826 89.0%
1 to 29 Days........................... $ 2,318,378 5.5%
30 to 59 Days.......................... $ 838,297 2.0%
60 to 89 Days.......................... $ 558,774 1.3%
90 to 119 Days......................... $ 397,727 0.9%
120 to 149 Days........................ $ 301,262 0.7%
150 to 179 Days........................ $ 243,442 0.6%
----------- ------
$42,245,706 100.0%
=========== ======
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SUMMARY HISTORICAL DELINQUENCY INFORMATION. The accounts in the
Discover Card portfolio had the following historical delinquency rates:
<TABLE>
<CAPTION>
AVERAGE OF NINE MONTHS AVERAGE OF TWELVE MONTHS AVERAGE OF TWELVE MONTHS AVERAGE OF ELEVEN MONTHS
ENDED AUGUST 31, 2000 ENDED NOVEMBER 30, 1999 ENDED NOVEMBER 30, 1998 ENDED NOVEMBER 30, 1997
---------------------- ------------------------ ------------------------ ------------------------
DELINQUENT DELINQUENT DELINQUENT DELINQUENT
AMOUNT AMOUNT AMOUNT AMOUNT
(000'S) PERCENTAGE (000'S) PERCENTAGE (000'S) PERCENTAGE (000'S) PERCENTAGE
-------- ---------- ------- ---------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30-59 Days........ $ 806,055 2.0% $ 791,325 2.6% $ 759,521 2.6% $ 743,464 2.6%
60-89 Days........ $ 526,377 1.3% $ 471,838 1.5% $ 456,059 1.5% $ 432,410 1.5%
90-179 Days....... $ 893,463 2.2% $ 815,619 2.6% $ 853,961 2.9% $ 803,204 2.8%
---------- ---- ---------- ---- ---------- ---- ---------- ----
$2,225,895 5.5% $2,078,782 6.7% $2,069,541 7.0% $1,979,078 6.9%
========== ---- ========== ---- ========== ==== ========== ====
Total.............
</TABLE>
Discover Bank 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.
SUMMARY CHARGE-OFF INFORMATION. The accounts in the Discover Card
portfolio have had the following historical charge-offs:
<TABLE>
<CAPTION>
NINE MONTHS ENDED TWELVE MONTHS ENDED TWELVE MONTHS ENDED ELEVEN MONTHS ENDED
AUGUST 31, 2000 NOVEMBER 30, 1999 NOVEMBER 30, 1998 NOVEMBER 30, 1997
--------------- ----------------- ----------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Average Receivables Outstanding..... $40,403,262 $31,554,086 $29,749,158 $28,403,076
Gross Charge-Offs................... $ 1,508,785 $ 1,955,514 $ 2,215,002 $ 1,891,601
Gross Charge-Offs as an Annualized
Percentage of Average
Receivables Outstanding........... 4.98% 6.20% 7.45% 7.27%
</TABLE>
Average receivables outstanding is the average of the monthly average
amount of receivables outstanding during the periods indicated.
SUMMARY PAYMENT RATE INFORMATION. Discover Bank calculates the monthly
payment rate by dividing monthly cardmember remittances by the cardmember
receivable balance outstanding as of the beginning of the month. Discover Bank
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. The accounts in the Discover Card portfolio have had the following
historical monthly payment rates:
<TABLE>
<CAPTION>
NINE MONTHS ENDED TWELVE MONTHS ENDED TWELVE MONTHS ENDED ELEVEN MONTHS ENDED
AUGUST 31, 2000 NOVEMBER 30, 1999 NOVEMBER 30, 1998 NOVEMBER 30, 1997
--------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Average Monthly Payment Rate 16.40% 16.73% 15.42% 14.51%
Highest Monthly Payment Rate....... 17.25% 17.83% 17.01% 16.31%
Lowest Monthly Payment Rate........ 14.75% 15.19% 13.90% 12.41%
</TABLE>
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