<PAGE> 1
SUBJECT TO REVISION
SERIES TERM SHEET DATED DECEMBER 7, 2000
DISCOVER(R) CARD MASTER TRUST I, SERIES 2000-9
$500,000,000 ___% CLASS A CERTIFICATES
$26,316,000 ___% 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SHEET IS PRELIMINARY AND WILL BE SUPERSEDED BY THE INFORMATION CONTAINED IN THE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
ABN AMRO INCORPORATED
BANC OF AMERICA SECURITIES LLC
BARCLAYS CAPITAL
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This series term sheet will be superseded in its entirety by the information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 2000-9
Supplement to the Pooling and Servicing Agreement.
<TABLE>
<S> <C>
TITLE OF SECURITIES........................ Discover Card Master Trust I,
Series 2000-9 ___% Class A Credit
Card Pass-Through Certificates
and Discover Card Master Trust I,
Series 2000-9 ___% Class B Credit
Card Pass-Through Certificates.
INTEREST RATE.............................. Class A Certificates: ___% per
year.
Class B Certificates: ___% per
year.
The trustee will calculate
interest on the certificates on
the basis of a 360-day year of
twelve 30-day months.
INTEREST PAYMENT DATES...................... The 15th day of each January and
July, or the next business day,
beginning in July 2001, and at
maturity for the Class B
Certificates.
EXPECTED MATURITY DATES.................... Class A Certificates: January 15,
2006, 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 January 15, 2006.
Class B Certificates: February
15, 2006, 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 February
15, 2006. 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
July 15, 2008, or if July 15,
2008 is not a business day, the
second business day following
July 15, 2008. 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 $44,736,860, which may
be reduced, reinstated or
increased from time to time. The
Available Subordinated Amount
will increase by $26,315,800
after an Effective Alternative
Credit Support Election.
"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,
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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, known as the "Credit
Enhancement Account," established and
funded with $21,052,640 for the direct
benefit of the Class B investors 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 January 2001.
The maximum amount of Credit Enhancement as
of any Distribution Date will be:
Before either an Effective Alternative
Credit Support Election or a Supplemental
Credit Enhancement Event:
. 4.0% of the Series Investor Interest
as of the end of the preceding month,
but not less than $5,263,160; or
Before an Effective Alternative Credit
Support Election but after a Supplemental
Credit Enhancement Event:
. 5.0% 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
. 8.5% 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.
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 -.
"Series Investor Interest" will mean
$526,316,000 minus
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<TABLE>
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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 December 1, 2000 totaled
$33,817,556,119.54.
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, will
be 4.60% for the Distribution Date in
December 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 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.
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<TABLE>
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LISTING.................................... Discover Bank expects to list the
certificates on the Luxembourg Stock
Exchange to facilitate trading in non-U.S.
markets.
</TABLE>
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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 December 1, 2000, the following five
states had the largest receivables balances:
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL RECEIVABLES
STATE BALANCE IN THE ACCOUNTS
----- -----------------------
<S> <C>
California.............................................................................. 10.9%
Texas................................................................................... 9.1%
New York................................................................................ 7.0%
Florida................................................................................. 6.0%
Illinois................................................................................ 5.2%
</TABLE>
CREDIT LIMIT INFORMATION. As of December 1, 2000, the Accounts had the
following credit limits:
<TABLE>
<CAPTION>
PERCENTAGE
RECEIVABLES OF TOTAL
OUTSTANDING RECEIVABLES
CREDIT LIMIT (000's) OUTSTANDING
------------ ------- -----------
<S> <C> <C>
Less than or equal to $1,000.00............................................. $ 410,720 1.2%
$1,000.01 to $2,000.00...................................................... $ 1,691,856 5.0%
$2,000.01 to $3,000.00...................................................... $ 2,014,869 6.0%
Over $3,000.00.............................................................. $ 29,700,111 87.8%
------------- ---------
Total................................................................ $ 33,817,556 100.0%
============= =========
</TABLE>
SEASONING. As of December 1, 2000, 87.9% of the Accounts were at least 24
months old. The ages of Accounts as of December 1, 2000 were distributed as
follows:
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
AGE OF ACCOUNTS OF ACCOUNTS OF BALANCES
--------------- ----------- -----------
<S> <C> <C>
Less than 12 Months..................................................................... 4.6% 5.7%
12 to 23 Months......................................................................... 7.5% 7.9%
24 to 35 Months......................................................................... 4.5% 2.8%
36 Months and Greater................................................................... 83.4% 83.6%
--------- ----------
100.0% 100.0%
======== ==========
</TABLE>
SUMMARY CURRENT DELINQUENCY INFORMATION. As of December 1, 2000, the
Accounts had the following delinquency statuses:
<TABLE>
<CAPTION>
AGGREGATE
BALANCES PERCENTAGE
PAYMENT STATUS (000'S) OF BALANCES
-------------- ------- -----------
<S> <C> <C>
Current........................................................................ $ 29,426,683 87.1%
1 to 29 Days................................................................... $ 2,134,340 6.3%
30 to 59 Days.................................................................. $ 784,060 2.3%
60 to 89 Days.................................................................. $ 540,743 1.6%
90 to 119 Days................................................................. $ 382,037 1.1%
120 to 149 Days................................................................ $ 300,479 0.9%
150 to 179 Days................................................................ $ 249,214 0.7%
-------------- --------
$ 33,817,556 100.0%
============== ========
</TABLE>
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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 August 31, 2000, the following five states
had the largest receivables balances:
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL RECEIVABLES
BALANCE OF DISCOVER CARD PORTFOLIO
STATE AS OF AUGUST 31, 2000
----- ---------------------
<S> <C>
California..................................................................... 11.4%
Texas.......................................................................... 8.9%
New York....................................................................... 7.1%
Florida........................................................................ 5.9%
Illinois....................................................................... 5.2%
</TABLE>
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:
<TABLE>
<CAPTION>
PERCENTAGE
RECEIVABLES OF TOTAL
OUTSTANDING RECEIVABLES
CREDIT LIMIT (000's) OUTSTANDING
------------ ------- -----------
<S> <C> <C>
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%
============= ==========
</TABLE>
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 accounts in the Discover
Card portfolio as of August 31, 2000 were distributed as follows:
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
AGE OF ACCOUNTS OF ACCOUNTS OF BALANCES
--------------- ----------- -----------
<S> <C> <C>
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%
=========== ==========
</TABLE>
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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:
<TABLE>
<CAPTION>
AGGREGATE
BALANCES PERCENTAGE
PAYMENT STATUS (000's) OF BALANCES
-------------- ------- -----------
<S> <C> <C>
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%
============= ==========
</TABLE>
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%
---------- ---- ---------- ---- ---------- ---- ---------- ----
Total.... $2,225,895 5.5% $2,078,782 6.7% $2,069,541 7.0% $1,979,078 6.9%
========== ==== ========== ==== ========== ==== ========== ====
</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:
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<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
--------------- ----------------- ----------------- -----------------
(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 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>
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>
9
