<PAGE> 1
Filed Pursuant to rule 424(b)(2)
Registration 333-52583
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH 10, 1999
--------------------
[FLEET LOGO]
FLEET CREDIT CARD MASTER TRUST II
(FORMERLY ADVANTA CREDIT CARD MASTER TRUST II)
ISSUER
FLEET BANK (RI), NATIONAL ASSOCIATION
SELLER AND SERVICER
$498,000,000 CLASS A ASSET BACKED CERTIFICATES, SERIES 1999-A
$45,000,000 CLASS B ASSET BACKED CERTIFICATES, SERIES 1999-A
<TABLE>
<CAPTION>
Class A Certificates Class B Certificates
----------------------------- -----------------------------
<S> <C> <C>
Principal amount $498,000,000 $45,000,000
Certificate rate One-Month LIBOR plus 0.11% One-Month LIBOR plus 0.33%
annually annually
Interest paid Monthly, beginning Monthly, beginning
May 17, 1999 May 17, 1999
Expected final distribution date March 15, 2002 March 15, 2002
Legal final maturity September 15, 2004 September 15, 2004
Price to public per certificate 100% 100%
Underwriting discount per certificate 0.225% 0.275%
Proceeds to seller per certificate 99.775% 99.725%
</TABLE>
The total price to public is $543,000,000, the total amount of the
underwriting discount is $1,244,250. The total amount of proceeds plus
accrued interest and before deduction of expenses is $541,755,750.
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-10 IN THIS
PROSPECTUS SUPPLEMENT AND PAGE 8 IN THE PROSPECTUS.
The certificates are not deposits and neither the certificates nor the
underlying accounts or receivables are insured or guaranteed by the Federal
Deposit Insurance Corporation or any other governmental agency.
The certificates will represent interests in the trust only and will not
represent interests in or obligations of Fleet Bank (RI), National Association
or any of its affiliates.
CREDIT ENHANCEMENT:
- - The Class B certificates will be subordinated to the Class A certificates.
- - The Trust is also issuing $57,000,000 of Class C interests. The Class C
interests will be subordinated to both the Class A certificates and the Class
B certificates.
- - The Seller will establish a cash collateral account in the amount of
$9,000,000.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE CERTIFICATES OR DETERMINED THAT
THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Underwriters of the Class A Certificates
LEHMAN BROTHERS
BEAR, STEARNS & CO. INC.
J. P. MORGAN & CO.
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
Underwriter of the Class B Certificates
LEHMAN BROTHERS
March 15, 1999
<PAGE> 2
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
We provide information to you about the Series 1999-A certificates in two
separate documents that progressively provide more detail: (a) the accompanying
prospectus, which provides general information, some of which may not apply to
your Series 1999-A certificates and (b) this prospectus supplement, which
describes the specific terms of your Series 1999-A certificates. This prospectus
supplement may be used to sell the Class A certificates and the Class B
certificates only if accompanied by the prospectus.
This prospectus supplement and the prospectus relate to the offering of
Class A certificates and Class B certificates only. The Class C interests are
not offered by this prospectus supplement and prospectus.
IF THE TERMS OF YOUR CERTIFICATES VARY BETWEEN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS, YOU SHOULD RELY ON THE INFORMATION IN THIS
PROSPECTUS SUPPLEMENT.
We include cross references in this prospectus supplement and the
accompanying prospectus to captions in these materials where you can find
further related discussions. The following table of contents and the table of
contents in the accompanying prospectus provide the pages on which these
captions are located.
You can find a listing of the pages where capitalized terms used in this
prospectus supplement and the accompanying prospectus are defined under the
caption "Index of Principal Terms" beginning on page S-49 in this document and
under the caption "Index of Principal Terms" beginning on page 66 in the
accompanying prospectus.
------------------------
S-2
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY OF TERMS...................... S-4
The Trust........................... S-4
The Trustee......................... S-4
Seller and Servicer................. S-4
Seller........................... S-4
Servicer......................... S-4
The Bank......................... S-4
The Receivables..................... S-4
Offered Securities.................. S-4
Certificates..................... S-4
Distribution Dates............... S-4
Interest......................... S-5
Principal........................ S-5
Class C Interests................... S-5
Credit Enhancement.................. S-5
Cash Collateral Account.......... S-5
Subordination of Classes......... S-5
The Sellers' Interest............... S-6
Allocations......................... S-6
Among Series..................... S-6
Among Classes.................... S-6
Application Of Collections.......... S-6
Finance Charge Collections....... S-6
Excess Spread and Excess Finance
Charges........................ S-7
Principal Collections............ S-7
Pay Out Events...................... S-7
Optional Repurchase................. S-8
Registration........................ S-8
Tax Status.......................... S-8
ERISA Considerations................ S-8
Certificate Ratings................. S-9
Exchange Listing.................... S-9
Additional Information.............. S-9
RISK FACTORS.......................... S-10
Ability To Resell Series 1999-A
Certificates Not Assured......... S-10
Credit Enhancement May Not Be
Sufficient To Prevent Loss....... S-10
Class B Certificates Are
Subordinated To The Class A
Certificates; Trust Assets May Be
Diverted From Class B To Pay
Class A.......................... S-10
Ratings Can Be Lowered Or Withdrawn
After You Purchase Your
Certificates And The Market Value
Of Your Certificates May Be
Reduced.......................... S-11
INTRODUCTION.......................... S-12
THE BANK'S CREDIT CARD ACTIVITIES..... S-12
General............................. S-12
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Billing and Payment................. S-13
Delinquency and Loss Experience..... S-13
Interchange......................... S-15
Impact of the Year 2000 Issue....... S-15
THE RECEIVABLES....................... S-16
MATURITY ASSUMPTIONS.................. S-20
RECEIVABLE YIELD CONSIDERATIONS....... S-22
DESCRIPTION OF THE CERTIFICATES....... S-23
General............................. S-23
Registration of Certificates........ S-24
Interest Payments................... S-24
Principal Payments.................. S-26
Postponement of Accumulation
Period........................... S-28
Subordination....................... S-29
Allocation Percentages.............. S-29
Reallocation of Cash Flows.......... S-32
Application of Collections.......... S-33
Principal Funding Account........... S-38
Reserve Account..................... S-39
Paired Series....................... S-40
Shared Collections of Principal
Receivables...................... S-40
The Cash Collateral Account......... S-41
Allocation of Investor Default
Amount........................... S-41
Optional Repurchase................. S-43
Pay Out Events...................... S-43
Servicing Compensation and Payment
of Expenses...................... S-44
FEDERAL INCOME TAX CONSEQUENCES....... S-45
ERISA CONSIDERATIONS.................. S-45
Class A Certificates................ S-45
Class B Certificates................ S-46
Consultation with Counsel........... S-46
UNDERWRITING.......................... S-46
LEGAL MATTERS......................... S-48
INDEX OF PRINCIPAL TERMS.............. S-49
OTHER SERIES ISSUED................... I-1
RECEIVABLES IN ADDITIONAL ACCOUNTS
CONVEYED TO THE TRUST............... II-1
</TABLE>
S-3
<PAGE> 4
SUMMARY OF TERMS
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS DOCUMENT AND DOES NOT
CONTAIN ALL OF THE INFORMATION THAT YOU NEED TO CONSIDER IN MAKING YOUR
INVESTMENT DECISION. THIS SUMMARY PROVIDES GENERAL, SIMPLIFIED DESCRIPTIONS OF
MATTERS WHICH, IN SOME CASES, ARE HIGHLY TECHNICAL AND COMPLEX. MORE DETAIL IS
PROVIDED IN OTHER SECTIONS OF THIS DOCUMENT AND IN THE PROSPECTUS.
DO NOT RELY UPON THIS SUMMARY FOR A FULL UNDERSTANDING OF THE MATTERS YOU NEED
TO CONSIDER IN CONNECTION WITH ANY POTENTIAL INVESTMENT IN THE SERIES 1999-A
CERTIFICATES. TO UNDERSTAND ALL OF THE TERMS OF THE OFFERING OF THE SERIES
1999-A CERTIFICATES, READ CAREFULLY THIS ENTIRE DOCUMENT AND THE ACCOMPANYING
PROSPECTUS.
THE TRUST
Fleet Credit Card Master Trust II will issue the certificates.
The trust has issued numerous series of certificates, will issue the Series
1999-A certificates and expects to issue additional series. The certificates of
each series will represent an ownership interest in the assets of the trust.
THE TRUSTEE
The trustee is Bankers Trust Company.
SELLER AND SERVICER
SELLER
Fleet Bank (RI), National Association originates and acquires credit card
accounts. As seller, the bank sells the receivables to the trust.
SERVICER
The bank also is the servicer. As the servicer, the bank collects payments on
the receivables and allocates the collections among the interests in the trust.
THE BANK
The bank is a special purpose credit card bank. Its principal offices are
located at 111 Westminster Street, Providence, Rhode Island 02903. The telephone
number is (401) 278-5451.
THE RECEIVABLES
The primary assets of the trust are receivables in MasterCard(R) and VISA(R)(1)
revolving credit card accounts. The receivables consist of principal receivables
and finance charge receivables.
The following information is as of January 31, 1999:
-- Principal receivables in the trust: $9,533,439,465.
-- Finance charge receivables in the trust:
$247,439,796.
-- Accounts designated to the trust: 6,421,340.
See "The Receivables" in this prospectus supplement.
OFFERED SECURITIES
CERTIFICATES
Fleet Credit Card Master Trust II is offering:
-- $498,000,000 of Class A certificates; and
-- $45,000,000 of Class B certificates.
The Series 1999-A certificates include both Class A and Class B.
Beneficial interests in these certificates may be purchased in minimum
denominations of $1,000 and integral multiples of $1,000.
The seller expects that the trust will issue the Series 1999-A certificates on
March 23, 1999.
DISTRIBUTION DATES
The first distribution date will be May 17, 1999. Distribution dates for the
Series 1999-A certificates will be the 15th day of each month if the 15th day is
a business day. If the 15th is not a business day, the distribution date will be
the following business day.
- ---------------
(1) MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Inc. and VISA U.S.A., Inc. respectively.
S-4
<PAGE> 5
INTEREST
Interest on the Series 1999-A certificates will be paid on each distribution
date.
You may obtain the interest rates for the current interest period and the
immediately preceding interest period by telephoning the trustee at (800)
735-7777.
Class A
The Class A certificates will bear interest at LIBOR as determined each month
plus 0.11% per annum.
Class B
The Class B certificates will bear interest at LIBOR as determined each month
plus 0.33% per annum.
See "Description of the Certificates--Interest Payments" in this prospectus
supplement for a description of how and when LIBOR will be determined.
PRINCIPAL
The seller expects that principal on the Series 1999-A certificates will be
distributed on the dates noted below; however, principal may, in fact, be
distributed earlier or later. You will not be entitled to any premium for early
or late payment of principal.
If certain adverse events known as pay out events occur, principal may be
distributed earlier than expected.
If collections of the credit card receivables are less than expected or are
collected more slowly than expected, then principal repayment may be delayed.
Class A
The seller expects that principal of the Class A certificates will be
distributed on the March 2002 distribution date.
Class B
The seller expects that principal of the Class B certificates will be
distributed on the March 2002 distribution date; however, no principal will be
paid on the Class B certificates unless the Class A certificates are paid in
full.
Accumulation Period
We are scheduled to begin accumulating collections of principal receivables on
June 1, 2001 for later distribution to you. The servicer may, however, elect to
delay the beginning of the accumulation period to a date not later than February
1, 2002.
See "Description of the Certificates--Principal Payments," and "--Postponement
of Accumulation Period" in this prospectus supplement.
Legal Final Maturity
If the Series 1999-A certificates are not paid on their expected final
distribution dates, collections of receivables will continue to be used to pay
principal on the Series 1999-A certificates until the certificates are paid or
until September 15, 2004, whichever occurs first. September 15, 2004 is the
legal final maturity date for Series 1999-A.
See "Maturity Assumptions," and "Description of the Certificates--Allocation
Percentages," and "--Principal Payments" in this prospectus supplement.
CLASS C INTERESTS
At the same time as the Series 1999-A certificates are issued, the trust will
issue $57,000,000 of Class C floating rate asset backed interests as part of
Series 1999-A. The Class C interests are not offered by this document.
CREDIT ENHANCEMENT
CASH COLLATERAL ACCOUNT
The Seller will establish a cash collateral account to provide credit
enhancement for the Series 1999-A certificates and the Class C interests.
$9,000,000 will be deposited into the cash collateral account when the Series
1999-A certificates are issued. The cash collateral account will be used to make
payments on the Series 1999-A certificates and the Class C interests if
collections of receivables allocated to Series 1999-A are insufficient to make
required payments.
SUBORDINATION OF CLASSES
The Class C interests and the Class B certificates are subordinated to the Class
A certificates.
The Class C interests are also subordinated to the Class B certificates.
S-5
<PAGE> 6
See "Description of the Certificates--Reallocation of Cash Flows," "--The Cash
Collateral Account" and "--Allocation of Investor Default Amount" in this
prospectus supplement.
THE SELLERS' INTEREST
The interest in the trust not represented by your series or by any other series
is the sellers' interest. The sellers' interest is represented by the seller
certificates, including the bank certificate and any supplemental certificates.
The bank certificate is held by the bank. The bank may sell a portion of the
sellers' interest to other investors. If a portion of the sellers' interest is
sold to anyone other than the seller or its affiliates, the interest will be
represented by a supplemental certificate. No supplemental certificates are
currently outstanding.
The sellers' interest does not provide credit enhancement for your series or any
other series.
ALLOCATIONS
AMONG SERIES
Each month the bank, as servicer, will allocate collections received among:
-- Series 1999-A;
-- other outstanding series; and
-- the sellers' interest in the trust.
The amount allocated to your series will be determined based mainly upon the
ratio of the invested amount of your series to the total amount of principal
receivables in the trust.
You are entitled to receive payments of interest and principal only from
collections and other trust assets allocated to your series.
The invested amount is the primary basis for allocations to your series. The
invested amount is the sum of the Class A invested amount, the Class B invested
amount and the Class C invested amount.
At the time of issuance of the Series 1999-A certificates, the invested amount
for Series 1999-A will be $600,000,000.
AMONG CLASSES
From the amounts allocated to your series, the servicer will further allocate
among the Class A certificates, the Class B certificates and the Class C
interests on the basis of the invested amount of each class. Initially the
invested amount of each class will be equal to the original principal amount of
such class.
See "Description of the Certificates--Allocation Percentages" in this prospectus
supplement.
The invested amount of a series or a class will decline as a result of the
accumulation of principal collections in the principal funding account or
principal payments. The invested amount also may decline if collections of
receivables allocated to your series are not sufficient to make certain required
payments and there is not enough money in the cash collateral account to make
such payments. If the invested amount of your series or class declines, there
may be a reduction in amounts allocated and available for payment to you.
For a description of the events which may lead to these reductions, see
"Description of the Certificates--Reallocation of Cash Flows" in this prospectus
supplement.
APPLICATION OF COLLECTIONS
FINANCE CHARGE COLLECTIONS
-- Collections of finance charge receivables and certain other amounts
allocated to the Class A certificates will be used to pay interest on the
Class A certificates, to pay Class A's portion of the servicing fee and to
cover Class A's portion of receivables that are written off as
uncollectible. Any remaining amount will become excess spread and be
applied as described below.
-- Collections of finance charge receivables allocated to the Class B
certificates will be used to pay interest on the Class B certificates and
to pay Class B's portion of the servicing fee. Any remaining amount will
become excess spread and be applied as described below.
-- Collections of finance charge receivables allocated to the Class C
interests will be used to pay Class C's portion of the servicing fee if the
bank or the trustee is no longer the servicer. Any remaining amount will
become excess spread and be applied as described below.
See "Description of the Certificates--Application of Collections--Payment of
Interest, Fees and Other Items" in this prospectus supplement.
S-6
<PAGE> 7
EXCESS SPREAD AND EXCESS FINANCE CHARGES
Each month the excess spread and excess finance charges will be used in the
following order of priority:
-- first to make up deficiencies with respect to Class A,
-- then to make up deficiencies with respect to Class B, including covering
Class B's portion of receivables written off as uncollectible,
-- then to pay interest on the Class C interests,
-- then to pay Class C's portion of the servicing fee, or, if the bank or the
trustee is no longer the servicer, then to pay any portion of Class C's
servicing fee not paid as described above under "-- Finance Charge
Collections,"
-- then to cover Class C's portion of receivables that are written off as
uncollectible,
-- then to reimburse any previous reductions in the Class C invested amount,
-- then to make a deposit to the cash collateral account if the amount in the
cash collateral account is less than required,
-- then, in limited circumstances, to fund a reserve account to cover interest
payment shortfalls for Class A,
-- then, if needed, to make a deposit into the spread account created for the
benefit of the Class C interests,
-- then, if applicable, to pay amounts due to the cash collateral depositor,
and
-- finally to other series or to the holders of the seller certificates.
See "Description of the Certificates--Application of Collections--Excess Spread;
Excess Finance Charges" in this prospectus supplement.
PRINCIPAL COLLECTIONS
So long as no pay out event has occurred, your series' share of principal
collections, including shared principal collections from other series, will be
applied each month as follows:
-- First, principal collections allocated to the Class C interests and the
Class B certificates may be reallocated, if necessary, to make required
payments on the Class A certificates and the Class B certificates which
were not made from finance charge collections, excess spread, excess
finance charges or amounts on deposit in the cash collateral account.
-- During the revolving period, no principal will be paid to you or
accumulated in a trust account.
-- During the accumulation period, principal collections will be deposited in
a trust account, up to a controlled deposit amount, for payment first to
the Class A certificateholders and then to the Class B certificateholders
on the expected final distribution date.
-- Following payment of the Series 1999-A certificates, principal collections
will be used to pay the Class C interests.
-- Any remaining principal collections will be first made available to other
series and then paid to the holders of the seller certificates or deposited
in the excess funding account.
If a pay out event occurs, the rapid amortization period will begin and all of
your series' share of principal collections, except amounts required to be
reallocated, will be applied each month to pay principal on your series. Class A
will be paid first, then Class B and then the Class C interests.
See "Description of the Certificates--Principal Payments," "--Application of
Collections" and "--Shared Collections of Principal Receivables" in this
prospectus supplement.
PAY OUT EVENTS
Pay out events are adverse events that result in the end of the revolving period
or the accumulation period and the beginning of a rapid amortization period. If
a pay out event occurs, collections of principal receivables will be used each
month to pay principal first on the Class A certificates, then on the Class B
certificates and then on the Class C interests.
S-7
<PAGE> 8
The following are pay out events:
-- the seller fails to make required payments, fails to make required
deposits, or violates other covenants and agreements;
-- the representations and warranties of the seller are materially incorrect;
-- the seller does not transfer additional assets to the trust when required;
-- the yield on the trust portfolio, after taking into account the amount of
the receivables that are written off as uncollectible allocated to Series
1999-A, averaged over any three consecutive months is less than the
weighted average interest rate for Series 1999-A, calculated by taking into
account the interest rate for Class A, Class B and Class C, plus the
servicing fee rate for Series 1999-A averaged over the same three months;
-- certain defaults of the servicer;
-- the Class A certificates and the Class B certificates are not paid in full
on their expected final distribution date;
-- the occurrence of certain events of insolvency or receivership relating to
the seller, including any additional sellers;
-- the seller is unable to transfer receivables to the trust as required under
the pooling and servicing agreement; or
-- the trust becomes an "investment company" under the Investment Company Act
of 1940.
For a more detailed discussion of the pay out events, see "Description of the
Certificates--Pay Out Events" in this prospectus supplement. In addition, see
"Description of the Certificates--Trust Pay Out Events" in the accompanying
prospectus.
OPTIONAL REPURCHASE
The bank has the option to repurchase your certificates when the invested amount
for your series has been reduced to 5% or less of the initial invested amount.
See "Description of the Certificates--Optional Repurchase" in this prospectus
supplement and "Risk Factors--If Optional Repurchase Occurs, it Will Result in
an Early Return of Principal and a Reinvestment Risk" in the accompanying
prospectus.
REGISTRATION
The Series 1999-A certificates will be in book-entry form and will be registered
in the name of Cede & Co., as the nominee of The Depository Trust Company.
Except in certain limited circumstances, you will not receive a definitive
certificate representing your interest.
See "Description of the Certificates--Definitive Certificates" in the
accompanying prospectus.
You may elect to hold your certificates through DTC in the United States, or
Cedelbank, societe anonyme or the Euroclear System in Europe.
See "Description of the Certificates--Book-Entry Registration" and "--Definitive
Certificates" in the accompanying prospectus.
TAX STATUS
Orrick, Herrington & Sutcliffe LLP, as special tax counsel to the bank, is of
the opinion that under existing law your certificates will be characterized as
debt for federal income tax purposes. By your acceptance of a Series 1999-A
certificate, you will agree to treat your certificates as debt for federal,
state and local income and franchise tax purposes.
See "Federal Income Tax Consequences" in the accompanying prospectus for
additional information concerning the application of federal income tax laws.
ERISA CONSIDERATIONS
Subject to important considerations described under "ERISA Considerations" in
this prospectus supplement and the accompanying prospectus, the Class A
certificates are eligible for purchase by persons investing assets of employee
benefit plans or individual retirement accounts.
The Class B certificates are not eligible for purchase by persons investing
assets of employee benefit plans or individual retirement accounts.
S-8
<PAGE> 9
CERTIFICATE RATINGS
The Class A certificates will be rated in the highest rating category by at
least one nationally recognized rating organization and the Class B certificates
will be rated in one of the three highest rating categories by at least one
nationally recognized rating organization.
See "Risk Factors--Ratings Can Be Lowered or Withdrawn After You Purchase Your
Certificates And The Market Value Of Your Certificates May Be Reduced" in this
prospectus supplement.
EXCHANGE LISTING
We will apply to list the Class A certificates and the Class B certificates on
the Luxembourg Stock Exchange. We cannot guaranty that the application for the
listing will be accepted. You should consult with Bankers Trust Luxembourg S.A.,
the Luxembourg listing agent for the certificates, 14 Boulevard F.D. Roosevelt,
L-2450 Luxembourg, phone number (352) 46 02 41, to determine whether or not the
Series 1999-A certificates are listed on the Luxembourg Stock Exchange.
ADDITIONAL INFORMATION
For more information, you can call (215) 444-6800 and direct your inquiries to
the Fleet Credit Card Securitization Department.
S-9
<PAGE> 10
RISK FACTORS
In the accompanying prospectus you will find a section called "Risk Factors."
The information in that section applies generally to all series, including
yours. The information in this section applies more specifically to your series.
You should consider the risk factors discussed under the caption "Risk Factors"
in the prospectus and the risk factors discussed below in this section before
deciding whether to purchase any of the Series 1999-A certificates.
ABILITY TO RESELL SERIES
1999-A
CERTIFICATES NOT ASSURED If you purchase Series 1999-A certificates, you
may not be able to sell them. There is currently
no secondary market for the certificates. A
secondary market for your certificates may not
develop. If a secondary market does develop, it
may not continue or it may not provide sufficient
liquidity to allow you to resell all or a part of
your certificates if you want to do so. The
underwriters of the Class A certificates and the
underwriter of the Class B certificates may
assist in resales of the certificates, but they
are not required to do so.
CREDIT ENHANCEMENT MAY NOT BE
SUFFICIENT TO PREVENT LOSS Credit enhancement provided for your series of
certificates is limited. The only sources of
payment for your certificates are the assets of
the trust allocated to your series. If problems
develop with the receivables, such as an increase
in losses on the receivables or if there are
problems in the collection and transfer of the
receivables to the trust, it is possible that you
may not receive the full amount of interest and
principal that you would otherwise receive.
See "Description of the
Certificates--Subordination," "--Allocation
Percentages," "--Reallocation of Cash Flows,"
"--Allocation of Investor Default Amount" and
"--The Cash Collateral Account" in this
prospectus supplement.
CLASS B CERTIFICATES ARE
SUBORDINATED TO THE CLASS A
CERTIFICATES; TRUST ASSETS
MAY BE
DIVERTED FROM CLASS B TO PAY
CLASS A If you purchase a Class B certificate, your right
to receive principal payments is subordinated to
the payment in full of the Class A certificates.
No principal will be paid to you until the full
amount of principal has been paid on the Class A
certificates.
In addition, if Class A's share of collections of
finance charge receivables and certain other
amounts allocated to Series 1999-A, excess
spread, excess finance charges, funds in the cash
collateral account and Class C's share of
principal collections are not sufficient to make
all required payments for the Class A
certificates, collections of principal
receivables allocated to Class B may be diverted
to Class A. If this occurs, the Class B invested
amount and future allocations to Class B would be
reduced.
Also, if Class A's share of losses on the
receivables exceeds the collections and credit
enhancement available to cover those losses, and
the Class C invested amount is reduced to zero,
the Class B invested amount will be reduced to
avoid reducing the Class A invested amount. If
this occurs, the Class B invested amount and
future allocations to Class B would be reduced.
S-10
<PAGE> 11
As a result of the subordination, you may receive
payments of interest or principal later than you
expect or you may not receive the full amount of
expected principal and interest.
RATINGS CAN BE LOWERED OR
WITHDRAWN AFTER YOU PURCHASE
YOUR CERTIFICATES AND THE
MARKET
VALUE OF YOUR CERTIFICATES
MAY
BE REDUCED The ratings assigned to the Series 1999-A
certificates are based upon many factors,
including the credit quality of the receivables
and the amount of credit enhancement provided.
The ratings are not a recommendation to purchase,
hold or sell any of the Series 1999-A
certificates. The ratings also are not intended
and should not be relied upon to determine the
marketability of the Series 1999-A
certificates, the market value of the Series
1999-A certificates or whether the Series 1999-A
certificates are a suitable investment for you.
Any rating agency may lower its rating or
withdraw its rating entirely if, in the sole
judgment of the rating agency, the credit quality
of the certificates has declined or is in
question. If any rating assigned to your
certificates is lowered or withdrawn, the market
value of your certificates may be reduced.
S-11
<PAGE> 12
INTRODUCTION
The following provisions of this Prospectus Supplement contain more
detailed information concerning the asset backed certificates offered hereby.
The certificates will be issued by Fleet Credit Card Master Trust II (the
"TRUST") pursuant to the terms of an Amended and Restated Pooling and Servicing
Agreement dated as of December 1, 1993, as amended and restated as of May 23,
1994 (as further amended and in effect from time to time, the "MASTER POOLING
AND SERVICING AGREEMENT") originally between a predecessor in interest to Fleet
Bank (RI), National Association, as Seller and Servicer, and Bankers Trust
Company, as trustee (together with any successors, the "TRUSTEE"). Fleet Bank
(RI) National Association (the "BANK"), in its capacity as Seller under the
Master Pooling and Servicing Agreement and the Series Supplements, is referred
to as the "SELLER," and in its capacity as servicer, the Bank is referred to as
the "SERVICER." The term "SELLER" also includes any Additional Sellers as
described under the caption "Description of the Certificates--The Bank
Certificates; Additional Sellers" in the Prospectus. The term "SERVICER" also
refers to any successor to the Bank, as Servicer.
The Bank is an indirect, wholly-owned subsidiary of Fleet Financial Group
("FFG"). See "The Bank and Fleet Financial Group" in the accompanying
Prospectus. On March 14, 1999, FFG and BankBoston Corporation announced that
they have reached an agreement to merge.
The Trust will issue $498,000,000 of its Class A Floating Rate Asset Backed
Certificates, Series 1999-A (the "CLASS A CERTIFICATES"), $45,000,000 of its
Class B Floating Rate Asset Backed Certificates, Series 1999-A (the "CLASS B
CERTIFICATES") and $57,000,000 of Class C Floating Rate Asset Backed Interests,
Series 1999-A (the "CLASS C INTERESTS"). The Class A Certificates and the Class
B Certificates are, collectively, the "SERIES 1999-A CERTIFICATES" or the
"CERTIFICATES." The Series 1999-A Certificates and the Class C Interests are,
collectively, the "SERIES 1999-A INTERESTS." The Series in which the Series
1999-A Interests are issued is known as "SERIES 1999-A." The date on which the
Series 1999-A Interests are issued is the "CLOSING DATE." The Closing Date is
expected to be March 23, 1999.
The Series 1999-A Interests will be issued pursuant to the Master Pooling
and Servicing Agreement and the Series 1999-A Supplement (the "SERIES
SUPPLEMENT"). The Master Pooling and Servicing Agreement, together with the
Series Supplement, is the "POOLING AND SERVICING AGREEMENT." Certain terms
relating to the Class C Interests will be set forth in the Class C Supplemental
Agreement between the Bank, as Seller and Servicer, and the Trustee and dated as
of the Closing Date (the "CLASS C SUPPLEMENTAL AGREEMENT").
Series 1999-A will be the nineteenth Series issued by the Trust. Of such
Series, fourteen, including Series 1999-A, will be outstanding on the Closing
Date. Series 1999-A will be the fourteenth Series outstanding included in a
group of Series ("GROUP ONE") issued by the Trust from time to time. See Annex
I. Annex I is hereby incorporated into this Prospectus Supplement by reference.
Additional Series are expected to be issued from time to time by the Trust.
The Certificates offered by this Prospectus Supplement and the accompanying
Prospectus are investment grade asset-backed securities within the meaning of
the Securities Act of 1933, as amended (the "ACT") and the rules promulgated
thereunder.
THE BANK'S CREDIT CARD ACTIVITIES
GENERAL
The Bank, as the survivor of a November 14, 1997 merger between the Bank
and Fleet Bank (Delaware), National Association, was, prior to the Transfer on
February 20, 1998, the owner of a portfolio of credit card accounts originated
or acquired by the Bank or its predecessor (the "FLEET "B" CREDIT CARD
PORTFOLIO"). As discussed in the Prospectus under the caption "The Bank's Credit
Card Activities," on February 20, 1998, Advanta National Bank transferred to the
Bank the ownership interest in substantially all of the accounts in the Advanta
Consumer Credit Card Portfolio. Those accounts transferred to the Bank from
Advanta National Bank plus accounts acquired or originated by the Bank since the
Transfer are herein referred to as the "FLEET "A" CREDIT CARD PORTFOLIO." The
total "FLEET CREDIT CARD PORTFOLIO" includes the Fleet "B"
S-12
<PAGE> 13
Credit Card Portfolio and the Fleet "A" Credit Card Portfolio. All Accounts
assigned to the Trust prior to January 31, 1999 were selected from the Fleet "A"
Credit Card Portfolio. Accounts selected from the Fleet "B" Credit Card
Portfolio were first added to the Trust as of January 31, 1999. In the future
the Bank expects to select accounts for assignment to the Trust from the entire
Fleet Credit Card Portfolio.
As of December 31, 1998, the Fleet Credit Card Portfolio included
receivables which were transferred to Fleet Credit Card Master Trust I in an
aggregate amount equal to approximately $563 million ("MASTER TRUST I SALES").
As of December 31, 1998, the Fleet Credit Card Portfolio also included
approximately $9,460 million of receivables which were transferred to the Fleet
Credit Card Master Trust II (the "MASTER TRUST II SALES").
Additional Accounts have been designated for inclusion in the Trust from
time to time as set forth in Annex II. Annex II is hereby incorporated into this
Prospectus Supplement by reference.
As of December 31, 1998, the Fleet "B" Credit Card Portfolio represented
approximately 15% of the total amount of receivables in the Fleet Credit Card
Portfolio.
The Bank is a member of VISA U.S.A. Inc. and has been granted an interim
license for principal membership in MasterCard International Incorporated. The
Bank expects to be a full member of MasterCard International Incorporated by the
end of March 1999.
BILLING AND PAYMENT
The majority of the accounts in the Fleet Credit Card Portfolio are subject
to finance charges at prime indexed or London interbank offered rate indexed
variable rates ranging from 3.9% to 22.9% for purchases and cash advances. For
more information, see "The Bank's Credit Card Activities--Billing and Payments"
in the accompanying Prospectus.
DELINQUENCY AND LOSS EXPERIENCE
The following tables set forth the delinquency and loss experience for the
Fleet Credit Card Portfolio beginning on February 20, 1998. Information prior to
February 20, 1998 is shown pro forma as if the Bank had purchased the Advanta
Consumer Credit Card Portfolio as of the beginning of 1996.
The Accounts in the Trust Portfolio were, prior to February 20, 1998,
selected from accounts in the Advanta Consumer Credit Card Portfolio and for the
period from February 20, 1998 to January 31, 1999 were selected from the Fleet
"A" Credit Card Portfolio. Commencing on January 31, 1999, Accounts added to the
Trust have been selected from the Fleet "B" Credit Card Portfolio as well as the
Fleet "A" Credit Card Portfolio. In each case, the Accounts selected must meet
the requirements of Eligible Accounts in the Pooling and Servicing Agreement.
See "Description of the Certificates--Representations, Warranties and Covenants"
and "--Addition of Accounts" in the Prospectus. See also "The Receivables" in
this Prospectus Supplement.
S-13
<PAGE> 14
There can be no assurance that the delinquency and loss experience for the
Receivables will be similar to the historical experience set forth in the
following tables.
DELINQUENCY EXPERIENCE
FLEET CREDIT CARD PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-----------------------------------------
1998(1) 1997(1) 1996(1)
----------- ----------- -----------
<S> <C> <C> <C>
Receivables Outstanding(2)(3)....................... $14,524,541 $13,937,589 $15,347,191
Receivables Contractually Delinquent as a Percentage
of Receivables Outstanding(2):
30-59 days........................................ 1.58% 1.77% 1.56%
60-89 days........................................ 1.07% 1.13% 1.03%
90 or more days................................... 2.29% 2.39% 2.14%
----------- ----------- -----------
Total............................................... 4.94% 5.29% 4.73%
=========== =========== ===========
</TABLE>
- ------------
(1) Includes the receivables transferred in connection with the Master Trust I
Sales and Master Trust II Sales.
(2) Receivables Outstanding and Receivables Contractually Delinquent include the
Fleet "A" Credit Card Portfolio and Fleet "B" Credit Card Portfolio
beginning on February 20, 1998. Information prior to February 20, 1998 is
shown pro forma as if the Bank had purchased the Advanta Consumer Credit
Card Portfolio as of the beginning of 1996. Receivables Outstanding and
Receivables Contractually Delinquent related to the credit card portfolio
acquired by FFG as a result of the purchase of NatWest Bank, N.A. are
included beginning in June, 1997.
(3) Receivables Outstanding consists of all amounts due from cardholders as
posted to the accounts.
LOSS EXPERIENCE
FLEET CREDIT CARD PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-----------------------------------------
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Average Receivables Outstanding(1)(2)(3)............ $14,380,316 $13,950,913 $14,266,600
Gross Losses(2)(4).................................. $ 1,034,996 $ 1,052,527 $ 572,511
Recoveries(2)....................................... $ 91,664 $ 84,439 $ 28,059
Net Losses.......................................... $ 943,332 $ 968,088 $ 544,452
Net Losses as a Percentage of Average Receivables
Outstanding....................................... 6.56%(5) 6.94%(5) 3.82%(5)
</TABLE>
- ------------
(1) Includes the receivables transferred in connection with the Master Trust I
Sales and Master Trust II Sales.
(2) Average Receivables Outstanding, Gross Losses and Recoveries include the
Fleet "A" Credit Card Portfolio and Fleet "B" Credit Card Portfolio
beginning on February 20, 1998. Information prior to February 20, 1998 is
shown pro forma as if the Bank had purchased the Advanta Consumer Credit
Card Portfolio as of the beginning of 1996. Average Receivables Outstanding,
Gross Losses and Recoveries related to the credit card portfolio acquired by
FFG as a result of the purchase of NatWest Bank, N.A. are included beginning
in June, 1997.
(3) Average Receivables Outstanding is the sum of receivables outstanding at the
beginning and end of each month during the period indicated, divided by
twice the number of months in the period indicated.
(4) Gross Losses are presented net of adjustments made pursuant to the Bank's
normal servicing procedures, including removal of incorrect or disputed
finance charges and reversal of annual cardholder fees on cardholder
accounts which have been closed. Losses do not include accrued finance
charges that have been charged-off or fraud losses.
(5) Beginning in August 1996, a new charge-off methodology related to bankrupt
credit card accounts was adopted and, as of October 1, 1998, further changes
to such methodology were adopted and commencing on October 1, 1998, the Bank
revised its policy concerning the charge-off of delinquent accounts. See
"The Bank's Credit Card Activities--Delinquencies" in the Prospectus.
S-14
<PAGE> 15
The causes of the increase in the charge-offs from 1996 to 1997 include the
following factors: continuing increases in the level of consumer bankruptcies,
the seasoning of the portfolio and a general trend in the credit card industry
towards higher gross charge-offs. A number of initiatives have been undertaken
to stem losses, including improving the collection process by further
customizing collection methods, more quickly identifying and intervening on
potentially troubled accounts by means of advanced computer-based behavior
prediction programs and tightening underwriting standards.
In February 1999, the Federal Financial Institutions Examination Council
adopted a revised policy statement on the classifications of retail credit. The
revised policy statement provides uniform guidelines for charge-off of loans to
delinquent, bankrupt and deceased borrowers and for reaging, extending,
deferring or rewriting of delinquent accounts. The guidelines are to be
implemented by June 30, 1999, unless programming resources are required, in
which case they must be implemented by December 31, 2000. The Bank, as Servicer,
will accelerate charge-off of some delinquent loans when it implements the
guidelines but does not expect implementation to have an effect upon the payment
of principal and interest on the Certificates. This statement is a
forward-looking statement, subject to certain risks and uncertainties.
INTERCHANGE
In respect of Interchange attributed to the cardholder charges for
merchandise and services in the Accounts, the Bank will be required, pursuant to
the terms of the Pooling and Servicing Agreement, to transfer to the Trust on
the Business Day immediately preceding the Distribution Date an amount equal to
one-twelfth of 1.25% of the outstanding balance of the Principal Receivables
allocable to Series 1999-A at the end of the last day of the preceding Monthly
Period.
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 project for Fleet Financial Group ("FFG"), the Bank's holding
company, is directed by a Year 2000 Executive Management Steering Committee
consisting of its President and Vice Chairmen. They provide direct oversight of
the Year 2000 initiative and are updated monthly on the project's progress. The
Bank's Board of Directors receives project updates on a quarterly basis.
The Bank has completed its assessment of Year 2000 issues and arranged for
the required resources to complete the necessary remediation efforts. The Bank
will utilize both internal and external resources to reprogram, or replace, and
test the software and hardware for Year 2000 modifications.
The Bank is in the process of remediating, testing and returning to
production its applications. This activity continues to track in accordance with
the original plan and the Bank had substantially completed the remediation and
testing of mission critical applications as of the end of 1998. The Bank has
established a separate test environment to accommodate its Year 2000 testing
activity and the anticipated need to test with its customers and other third
parties during 1999.
The Bank relies on several third party service providers for key business
processes. It continues to work closely with these companies to monitor the
progress of their Year 2000 efforts. On behalf of the Bank, FFG's executive
management has conducted on-site visits with its most critical service providers
to discuss and assess their Year 2000 readiness. In addition, FFG is receiving
written and verbal verification from its significant third party service
providers and vendors as to their Year 2000 readiness.
The Bank began Year 2000 testing with several of these key vendors in the
third quarter of 1998 and plans to complete testing by the end of the second
quarter of 1999. Validation of Year 2000 readiness of all the Bank's vendors
continues with a particular focus on the readiness and alternatives, where
possible, for vendors that have been identified as critical.
While the Bank continues to discuss these matters with, obtain written
certification from and test the systems of such other companies as to the Year
2000 compliance, there can be no assurance that any potential impact associated
with incompatible systems after December 31, 1999 would not have a material
adverse effect on the Bank's business, financial condition or results of
operations.
FFG and the Bank have established business continuity plans. The
corporation is in the process of assessing these plans for the possible impact
of Year 2000 anticipated failures. It will adjust its existing
S-15
<PAGE> 16
business continuity plans where appropriate and possible for those scenarios
that may have the most severe impact on its operations. This activity is
expected to be substantially complete by the end of the first quarter in 1999.
THE RECEIVABLES
The Receivables in the first Accounts designated to the Trust (the "INITIAL
ACCOUNTS") were conveyed to the Trust on December 3, 1993 (the "INITIAL CLOSING
DATE"). The Initial Accounts were selected from Advanta National Bank's consumer
credit card portfolio satisfying criteria set forth in the Pooling and Servicing
Agreement (the "CRITERIA") as applied on October 31, 1993 (the "INITIAL CUT-OFF
DATE"). Receivables in accounts designated to the Trust after the Initial
Accounts (the "ADDITIONAL ACCOUNTS") have been conveyed to the Trust from time
to time since the Initial Closing Date as set forth in Annex II. Such
Receivables were generated from Additional Accounts selected from the Advanta
Consumer Credit Card Portfolio prior to February 20, 1998, and from the Fleet
"A" Credit Card Portfolio from February 20, 1998 to January 31, 1999, and
commencing on January 31, 1999, Additional Accounts have been selected from the
entire Fleet Credit Card Portfolio, including both the Fleet "A" Credit Card
Portfolio and the Fleet "B" Credit Card Portfolio. In each case such Additional
Accounts are required to satisfy the Criteria as applied on the relevant cut-off
date (the "RELEVANT CUT-OFF DATE"). The Initial Accounts and the Receivables
therein and all Additional Accounts and the Receivables therein and any
additional Receivables generated by such Accounts conveyed to the Trust are
hereinafter referred to as the "TRUST PORTFOLIO." The Bank has broad discretion
in selecting accounts that will be designated as Additional Accounts. The
Criteria are the requirements for an account to qualify as an "ELIGIBLE ACCOUNT"
and are set forth in the accompanying Prospectus. In order to meet the Criteria,
each Account must, on the Relevant Cut-Off Date, among other things, have been
in existence and maintained by the Bank, have a cardholder with a billing
address in the United States, its territories or possessions or a military
address, and, except under certain circumstances, not be an account the credit
card or cards with respect to which have been reported to the Bank as having
been lost or stolen. See "Description of the Certificates--Representations,
Warranties and Covenants" in the accompanying Prospectus.
Cardholders whose accounts are included in the Fleet Credit Card Portfolio
have billing addresses in all 50 states, the District of Columbia, Puerto Rico,
Guam, the Virgin Islands and certain foreign countries. As noted above, Eligible
Accounts must, as of the Relevant Cut-Off Date, have a billing address in the
United States, its territories or possessions or a military address and, as
shown in this section in the table captioned "Geographic Distribution of
Accounts and Receivables--Trust Portfolio," as of January 31, 1999, 99.9% of the
Accounts and 99.8% of the Receivables had billing addresses in one of the 50
states or the District of Columbia.
Pursuant to the Pooling and Servicing Agreement, the Seller may be
obligated (subject to certain limitations and conditions) to designate
Additional Accounts to be included as Accounts and to convey to the Trust all
Receivables of such Additional Accounts, or may elect to automatically designate
Additional Accounts and convey the Receivables therein whether such Receivables
are then existing or thereafter created. See "Description of the Certificates
- --General" and "--Addition of Accounts" in the accompanying Prospectus. These
accounts must meet the Criteria set forth above as of the Relevant Cut-Off Date.
Throughout the term of the Trust, the Accounts from which the Receivables arise
will be the existing MasterCard and VISA accounts designated by the Seller on
the Relevant Cut-Off Date (plus any Additional Accounts subsequently designated
as described above). In addition, as of the Relevant Cut-Off Date and on the
date any new Receivables are created, the Seller will represent and warrant to
the Trust that the Receivables are Eligible Receivables. See "Description of the
Certificates -- Representations, Warranties and Covenants" in the accompanying
Prospectus.
The Receivables (including receivables in the Additional Accounts the
receivables of which are expected to be conveyed to the Trust during the period
from January 31, 1999 through the Closing Date), as of January 31, 1999, totaled
$10,423,512,824 in 6,755,911 Accounts. The Accounts had an average credit limit
S-16
<PAGE> 17
of $6,653. The percentage of the aggregate total Receivables balance to the
aggregate total credit limit was 23.7%. The average age of the Accounts was
approximately 38.7 months.
The Receivables balance as of January 31, 1999 (not including receivables
to be added to the Trust thereafter) totaled $9,780,879,261. The Receivables
balance as of March 9, 1999, (including Receivables then in the Trust and
receivables in Additional Accounts expected to be added thereafter through the
Closing Date) totaled $9,521,294,749. As of March 9, 1999, the balance of
Receivables in the Trust which were 30 days or more contractually delinquent was
$448,532,480.
The following tables summarize the Trust Portfolio (including receivables
in the Additional Accounts the receivables of which are expected to be conveyed
to the Trust during the period from January 31, 1999 through the Closing Date)
by various criteria as of the close of business on January 31, 1999. Because the
future composition of the Trust Portfolio may change over time, these tables are
not necessarily indicative of future results.
COMPOSITION BY ACCOUNT BALANCE
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE
NUMBER TOTAL NUMBER OF TOTAL
ACCOUNT BALANCE RANGE OF ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
--------------------- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
Credit balance.............................. 143,842 2.1% $ (14,957,969) (0.1)%
$0.00....................................... 3,088,176 45.7 0 0.0
$0.01 to $1,000.00.......................... 1,050,636 15.6 356,510,299 3.4
$1,000.01 to $2,500.00...................... 723,016 10.7 1,245,291,107 11.9
$2,500.01 to $5,000.00...................... 1,022,715 15.2 3,800,962,862 36.5
$5,000.01 to $7,500.00...................... 516,690 7.6 3,151,010,954 30.2
Over $7,500.00.............................. 210,836 3.1 1,884,695,571 18.1
--------- ----- --------------- -----
Total.................................. 6,755,911 100.0% $10,423,512,824 100.0%
========= ===== =============== =====
</TABLE>
COMPOSITION BY CREDIT LIMIT
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE
NUMBER TOTAL NUMBER OF TOTAL
CREDIT LIMIT BALANCE OF ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
-------------------- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
$0.00 to $1,000.00.......................... 47,453 0.7% $ 10,642,492 0.1%
$1,000.01 to $2,500.00...................... 489,306 7.2 391,602,637 3.8
$2,500.01 to $5,000.00...................... 2,064,441 30.6 2,824,627,521 27.1
$5,000.01 to $7,500.00...................... 2,216,226 32.8 3,462,710,117 33.2
Over $7,500.00.............................. 1,938,485 28.7 3,733,930,057 35.8
--------- ----- --------------- -----
Total.................................. 6,755,911 100.0% $10,423,512,824 100.0%
========= ===== =============== =====
</TABLE>
S-17
<PAGE> 18
COMPOSITION BY PERIOD OF DELINQUENCY
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERIOD OF DELINQUENCY PERCENTAGE OF PERCENTAGE
(DAYS CONTRACTUALLY NUMBER TOTAL NUMBER OF TOTAL
DELINQUENT) OF ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
--------------------- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
Not Delinquent.............................. 6,486,329 96.0% $ 9,373,928,222 89.9%
1 to 29 days................................ 166,220 2.5 595,592,028 5.7
30 to 59 days............................... 39,636 0.6 156,648,672 1.5
60 to 89 days............................... 21,693 0.3 96,356,576 0.9
90 to 119 days.............................. 16,012 0.2 74,956,364 0.7
120 to 149 days............................. 13,040 0.2 62,384,533 0.6
150 to 179 days............................. 11,461 0.2 55,637,208 0.6
180 or more................................. 1,520 0.0 8,009,221 0.1
--------- ----- --------------- -----
Total.................................. 6,755,911 100.0% $10,423,512,824 100.0%
========= ===== =============== =====
</TABLE>
COMPOSITION BY ACCOUNT AGE
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE
NUMBER TOTAL NUMBER OF TOTAL
AGE (IN MONTHS) OF ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
--------------- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
Not more than 6 Months....................... 386,221 5.7% $ 1,101,707,911 10.6%
Over 6 Months to 12 Months................... 1,118,381 16.5 2,124,311,011 20.4
Over 12 Months to 24 Months.................. 1,433,131 21.2 1,785,409,575 17.1
Over 24 Months to 36 Months.................. 1,267,685 18.8 1,456,226,053 14.0
Over 36 Months to 48 Months.................. 925,151 13.7 1,320,760,548 12.7
Over 48 Months to 60 Months.................. 700,509 10.4 1,208,244,142 11.6
Over 60 Months to 84 Months.................. 356,836 5.3 618,583,484 5.9
Over 84 Months............................... 567,997 8.4 808,270,100 7.7
--------- ----- --------------- -----
Total................................... 6,755,911 100.0% $10,423,512,824 100.0%
========= ===== =============== =====
</TABLE>
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<PAGE> 19
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS AND RECEIVABLES
TRUST PORTFOLIO(1)
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE
NUMBER TOTAL NUMBER OF TOTAL
STATE OF ACCOUNTS OF ACCOUNTS RECEIVABLES RECEIVABLES
----- ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
Alabama................................ 69,764 1.0% $ 107,840,317 1.0%
Alaska................................. 9,783 0.1 16,652,811 0.2
Arizona................................ 99,431 1.5 160,086,156 1.5
Arkansas............................... 52,724 0.8 90,783,959 0.9
California............................. 878,055 13.1 1,350,459,648 13.0
Colorado............................... 110,815 1.6 160,369,133 1.5
Connecticut............................ 147,512 2.2 249,730,252 2.4
Delaware............................... 17,974 0.3 25,956,795 0.2
District of Columbia................... 12,012 0.2 18,748,966 0.2
Florida................................ 406,906 6.0 634,415,615 6.1
Georgia................................ 138,010 2.0 219,163,879 2.1
Hawaii................................. 22,768 0.3 39,193,873 0.4
Idaho.................................. 26,858 0.4 39,356,273 0.4
Illinois............................... 264,316 3.9 384,689,999 3.7
Indiana................................ 124,027 1.8 178,264,059 1.7
Iowa................................... 75,009 1.1 107,019,666 1.0
Kansas................................. 64,503 1.0 102,501,028 1.0
Kentucky............................... 71,404 1.1 108,594,232 1.0
Louisiana.............................. 84,721 1.3 127,972,390 1.2
Maine.................................. 21,272 0.3 42,256,069 0.4
Maryland............................... 137,735 2.0 203,362,983 2.0
Massachusetts.......................... 261,507 3.9 410,911,004 3.9
Michigan............................... 217,892 3.2 326,324,887 3.1
Minnesota.............................. 138,285 2.0 192,524,490 1.8
Mississippi............................ 36,422 0.5 55,077,723 0.5
Missouri............................... 130,759 1.9 201,561,604 1.9
Montana................................ 17,557 0.3 23,015,321 0.2
Nebraska............................... 38,076 0.6 52,587,269 0.5
Nevada................................. 51,227 0.8 90,783,649 0.9
New Hampshire.......................... 42,522 0.6 70,924,542 0.7
New Jersey............................. 275,660 4.1 420,759,349 4.0
New Mexico............................. 30,473 0.5 45,728,597 0.4
New York............................... 631,147 9.3 1,029,438,585 9.9
North Carolina......................... 129,041 1.9 195,965,572 1.9
North Dakota........................... 13,147 0.2 18,115,220 0.2
Ohio................................... 257,156 3.8 392,983,367 3.8
Oklahoma............................... 73,148 1.1 118,216,316 1.1
Oregon................................. 76,217 1.1 112,102,018 1.1
Pennsylvania........................... 292,153 4.3 418,006,232 4.0
Rhode Island........................... 51,066 0.8 82,032,671 0.8
South Carolina......................... 58,490 0.9 89,575,769 0.9
South Dakota........................... 13,301 0.2 18,364,151 0.2
Tennessee.............................. 102,195 1.5 156,580,869 1.5
Texas.................................. 446,703 6.6 749,528,032 7.2
Utah................................... 37,714 0.6 51,721,131 0.5
Vermont................................ 13,868 0.2 21,608,461 0.2
Virginia............................... 170,259 2.5 267,187,667 2.6
Washington............................. 127,740 1.9 190,768,757 1.8
West Virginia.......................... 29,153 0.4 42,827,624 0.4
Wisconsin.............................. 137,034 2.0 177,594,964 1.7
Wyoming................................ 10,510 0.2 15,945,381 0.2
All Others............................. 9,890 0.1 17,333,499 0.2
--------- ----- --------------- -----
Total............................. 6,755,911 100.0% $10,423,512,824 100.0%
========= ===== =============== =====
</TABLE>
- ------------
(1) All data as of January 31, 1999 (including Receivables then in the Trust and
Receivables in Additional Accounts to be added thereafter through the
Closing Date).
S-19
<PAGE> 20
MATURITY ASSUMPTIONS
The Pooling and Servicing Agreement provides that the holders of the Class
A Certificates (the "CLASS A CERTIFICATEHOLDERS") will not receive payments of
principal until the March 2002 Distribution Date (the "CLASS A EXPECTED FINAL
DISTRIBUTION DATE"), on which date it is expected that the full principal amount
of the Class A Certificates will be paid; however, payment may begin prior to
such date if a Pay Out Event occurs that results in the start of the Rapid
Amortization Period. The Pooling and Servicing Agreement also provides that the
holders of the Class B Certificates (the "CLASS B CERTIFICATEHOLDERS," and
together with the Class A Certificateholders, the "CERTIFICATEHOLDERS") will not
receive payments of principal until the March 2002 Distribution Date (the "CLASS
B EXPECTED FINAL DISTRIBUTION DATE"), on which date it is expected that the full
principal amount of the Class B Certificates will be paid; however, principal
payments may begin prior to such date if a Pay Out Event occurs that results in
the start of the Rapid Amortization Period. No principal payments will be made
to the Class B Certificateholders unless the Class A Investor Amount is paid in
full. Unless and until a Pay Out Event occurs, on each Distribution Date for the
Accumulation Period, monthly deposits of principal equal to the least of (a)
Available Investor Principal Collections and (b) the sum of (i) the Controlled
Accumulation Amount for such Distribution Date and (ii) any Deficit Controlled
Accumulation Amount for the immediately preceding Distribution Date (such sum,
the "CONTROLLED DEPOSIT AMOUNT") and (c) the Invested Amount will be made into
the Principal Funding Account.
Although it is anticipated that a single principal payment will be made to
Class A Certificateholders in an amount equal to the Class A Investor Amount on
the Class A Expected Final Distribution Date and that a single principal payment
will also be made to Class B Certificateholders in an amount equal to the Class
B Investor Amount on the Class B Expected Final Distribution Date, no assurance
can be given in that regard.
In addition to Pay Out Events which apply to all Series, other Pay Out
Events may occur with respect to Series 1999-A only, either automatically or
after specified notice, upon (a) failure of the Seller to make certain payments
or transfers of funds for the benefit of the Certificateholders within the time
periods stated in the Pooling and Servicing Agreement, (b) material breaches of
certain representations, warranties or covenants of the Seller, (c)(i) if the
Seller Amount is less than the Required Seller Amount on the last day of any
Monthly Period (as determined on the third Business Day preceding the following
Distribution Date (the "DETERMINATION DATE")), the failure of the Seller to
convey Receivables in Additional Accounts to the Trust such that the Seller
Amount is at least equal to the Required Seller Amount by the tenth Business Day
following such Determination Date, or (ii) if the aggregate amount of Principal
Receivables is less than the Required Principal Balance on the last day of any
Monthly Period (as determined on the following Determination Date), the failure
of the Seller to convey Receivables in Additional Accounts to the Trust such
that the aggregate Principal Receivables in the Trust are at least equal to the
Required Principal Balance by the tenth Business Day following such
Determination Date, (d) the average of the Net Portfolio Yield for any three
consecutive Monthly Periods being a rate which is less than the Base Rate
averaged over such period, (e) the occurrence of a Servicer Default having a
material adverse effect on the Certificateholders, or (f) failure to pay in full
(i) the Class A Investor Amount on the Class A Expected Final Distribution Date
or (ii) the Class B Investor Amount on the Class B Expected Final Distribution
Date.
The term "NET PORTFOLIO YIELD" for any Monthly Period, means the annualized
percentage equivalent of a fraction, the numerator of which is the sum of (a)
the amount of collections of Finance Charge Receivables during such Monthly
Period allocable to the Certificates and to the Class C Interests, including any
other amounts that are to be treated as collections of Finance Charge
Receivables under the Pooling and Servicing Agreement, after subtracting
therefrom the Investor Default Amount for such Monthly Period, plus (b) the
amount of any Principal Funding Investment Proceeds for such Distribution Date,
plus (c) the amount of funds, if any, to be withdrawn from the Reserve Account
that, pursuant to the Series Supplement, are required to be included in Class A
Available Funds with respect to such Distribution Date, and the denominator of
which is the Investor Amount as of the last day of the prior Monthly Period.
For any Monthly Period, the "BASE RATE" will be equal to the annualized
percentage equivalent of a fraction, the numerator of which is equal to the sum
of (i) the Class A Monthly Interest, (ii) the Class B Monthly Interest, (iii)
the Class C Monthly Interest and (iv) the Monthly Servicing Fee, each for the
S-20
<PAGE> 21
related Distribution Date and the denominator of which is the Investor Amount as
of the last day of the preceding Monthly Period.
A Pay Out Event occurs, with respect to Series 1999-A and all other Series,
automatically upon (a) the occurrence of an Insolvency Event relating to the
Seller (including any Additional Seller), (b) the Trust becoming an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or (c) the inability of the Seller (including any Additional Seller) to transfer
Receivables to the Trust in accordance with the Pooling and Servicing Agreement.
There can be no assurance that a Pay Out Event will not occur. See "Description
of the Certificates--Pay Out Events" in this Prospectus Supplement.
Upon the occurrence of a Pay Out Event which applies to Series 1999-A or to
all Series, a Rapid Amortization Period will begin. The "RAPID AMORTIZATION
PERIOD" means the period beginning with the occurrence of a Pay Out Event and
ending on the earlier of (i) the payment in full of the Class A Investor Amount,
the Class B Investor Amount and the Class C Invested Amount and (ii) the Series
1999-A Termination Date. During the Rapid Amortization Period, first the Class A
Certificateholders and then, following the payment in full of the Class A
Investor Amount, the Class B Certificateholders and then, following the payment
in full of the Class B Investor Amount, the holders of the Class C Interests
(the "CLASS C INTEREST HOLDERS") will be entitled to receive monthly payments of
principal equal to the Available Investor Principal Collections received by the
Trust during the related Monthly Period (plus the principal amount on deposit in
the Principal Funding Account) until the Class A Investor Amount, Class B
Investor Amount, or Class C Invested Amount, as applicable, is paid in full.
Allocations of Principal Receivables will be based on the Principal Allocation
Percentage. See "Description of the Certificates--Allocation Percentages" in
this Prospectus Supplement.
The following table sets forth the highest and lowest cardholder monthly
payment rates and the average of the cardholder monthly payment rates for the
Fleet Credit Card Portfolio. Information prior to February 20, 1998 is pro forma
as if the Bank had purchased the Advanta Consumer Credit Card Portfolio as of
the beginning of 1996. The rates are calculated as a percentage of the total
opening monthly account balances during the periods shown. Payments shown in the
table include amounts which would be deemed payments of Principal Receivables
and Finance Charge Receivables on the Accounts.
MONTHLY PAYMENT RATES
FLEET CREDIT CARD PORTFOLIO
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1998(1) 1997(1) 1996(1)
------- ------- -------
<S> <C> <C> <C>
Lowest...................................................... 10.84% 9.93% 8.56%
Highest..................................................... 12.36% 12.29% 10.28%
Monthly Average............................................. 11.57% 11.09% 9.55%
</TABLE>
- ------------
(1) Payment rate calculations include collections of both the Fleet "A" Credit
Card Portfolio and Fleet "B" Credit Card Portfolio beginning on February 20,
1998. Information prior to February 20, 1998 is shown pro forma as if the
Bank had purchased the Advanta Consumer Credit Card Portfolio as of the
beginning of 1996. Collections related to the credit card portfolio acquired
by FFG as a result of the purchase of NatWest Bank, N.A. are included
beginning in June, 1997.
The amount of collections on Receivables may vary from month to month due
to seasonal variations, general economic conditions, changes in tax law and
payment habits of individual cardholders. There can be no assurance that
collections of Principal Receivables from the Trust Portfolio, and thus the rate
at which Certificateholders could expect to accumulate or receive payments of
principal on their Certificates during the Accumulation Period or the Rapid
Amortization Period, will be similar to the historical experience set forth
above. In addition, the ability of the Certificateholders to be paid the
applicable Class A Investor Amount or the Class B Investor Amount on the Class A
Expected Final Distribution Date and the Class B Expected Final Distribution
Date, respectively, may be dependent upon the availability of Shared Principal
Collections. Since the Trust, as a master trust, may issue additional Series
from time to time, there can be no assurance
S-21
<PAGE> 22
that the issuance of additional Series or the terms of any additional Series
might not have an impact on the timing of payments received by
Certificateholders. Further, if a Pay Out Event occurs, the average life and
maturity of the Series 1999-A Certificates could be significantly reduced.
RECEIVABLE YIELD CONSIDERATIONS
The following table provides yield information for each of the years ended
December 31, 1998, 1997 and 1996. Information prior to February 20, 1998 is
shown pro forma as if the Bank had purchased the Advanta Consumer Credit Card
Portfolio as of the beginning of 1996.
The historical yield figures in the table are calculated on an accrual
basis. Collections on the Receivables will be on a cash basis and may not
reflect the historical yield experience in the table. For example, during
periods of increasing delinquencies accrual yields may exceed cash yields as
amounts collected on credit card receivables lag behind amounts accrued and
billed to cardholders. Conversely, as delinquencies decrease, cash yields may
exceed accrual yields as amounts collected in a current period may include
amounts accrued during prior periods. Yield on both an accrual and a cash basis
will be affected by numerous factors, including the finance charges on the
Receivables, the amount of the annual cardholder fees and other fees and
charges, changes in the delinquency rate on the Receivables, the percentage of
cardholders who pay their balances in full each month and do not incur finance
charges and any restrictions which may be imposed by future legislation or
regulations. There can be no assurance that the revenue from finance charges and
fees for the Receivables will be similar to the historical experience set forth
below. See "Risk Factors" in the accompanying Prospectus.
REVENUE FROM FINANCE CHARGES AND FEES
FLEET CREDIT CARD PORTFOLIO(1)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1998(2) 1997(2) 1996(2)
------- ------- -------
<S> <C> <C> <C>
Average Monthly Accrued Fees and Charges(3)(4)(5)........... $36.07 $36.99 $30.12
Average Account Balance(3)(6)............................... 2,798 2,783 2,778
Yield From Fees and Charges(4)(5)........................... 15.47% 15.95% 13.01%
</TABLE>
- ------------
(1) The amounts shown do not include revenue attributed to Interchange.
(2) Includes the receivables transferred in connection with the Master Trust I
Sales and Master Trust II Sales.
(3) Average Monthly Accrued Fees and Charges and Average Account Balances
include information from both the Fleet "A" Credit Card Portfolio and Fleet
"B" Credit Card Portfolio beginning on February 20, 1998. Information prior
to February 20, 1998 is shown pro forma as if the Bank had purchased the
Advanta Consumer Credit Card Portfolio as of the beginning of 1996. Fees,
charges and account balances related to the credit card portfolio acquired
by FFG as a result of the purchase of NatWest Bank, N.A. are included
beginning in June, 1997.
(4) Fees and Charges are comprised of finance charges, annual cardholder fees
and certain other service charges.
(5) Average Monthly Accrued Fees and Charges and Yield from Fees and Charges are
presented net of adjustments made pursuant to normal servicing procedures,
including removal of incorrect or disputed finance charges and reversal of
finance charges accrued on charged-off accounts.
(6) Average Account Balance includes purchases, cash advances and billed and
unpaid finance and other charges, and is calculated based on the average of
the opening monthly account balances for accounts with balances during the
periods shown.
The yields shown in the above table are comprised of three components:
finance charges, annual cardholder fees and other service charges, such as late
charges. The yield related to annual cardholder fees (on those accounts that
assess such fees) and other service charges varies with the type and volume of
activity in and the balance of each account. The Bank currently assesses annual
cardholder fees of $10 to $50 for certain of its credit card accounts. Most
accounts included in the Fleet Credit Card Portfolio and originated since March
1987 do not carry an annual cardholder fee. See "The Banks' Credit Card
Activities" in the accompanying Prospectus. As account balances increase, an
annual cardholder fee, which remains constant, represents a smaller percentage
of the aggregate account balance.
S-22
<PAGE> 23
The increase in yields demonstrated in the above tables from 1996 to 1997
is the result of actions taken by the Bank's predecessor as Seller and Servicer
to improve the revenue produced by its credit card business. Several risk based
repricing initiatives were implemented by Advanta National Bank in 1996 and
1997. The Bank has not implemented risk-based repricing initiatives in the Fleet
"B" Credit Card Portfolio. In May 1997, the average percentage rate on a
majority of receivables in the Advanta Consumer Credit Card Portfolio was
increased on average from 200 to 300 basis points. In addition, late, overlimit
and nonsufficient funds fees, cash advance fees, and certain other fees were
either increased or added. Due to scaled down marketing efforts, there was also
a lower percentage of teaser rate credit cards in the Advanta Consumer Credit
Card Portfolio in 1997 as compared to prior years.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued pursuant to the Master Pooling and
Servicing Agreement filed as an exhibit to the Registration Statement of which
the Prospectus is a part. Pursuant to the Master Pooling and Servicing
Agreement, the Seller and the Trustee may execute further supplements thereto in
order to issue additional Series. See "Description of the Certificates--New
Issuances" in the accompanying Prospectus. The Trustee will provide a copy of
the Master Pooling and Servicing Agreement (without exhibits or schedules),
including any relevant Series Supplement, to Certificateholders without charge
upon written request. The following summary, together with information contained
elsewhere in this Prospectus Supplement and the Prospectus, describes the
material terms of the Certificates contained in the Pooling and Servicing
Agreement. The following summary is qualified in its entirety by reference to
the Pooling and Servicing Agreement.
GENERAL
The Certificates and the Class C Interests will represent undivided
interests in the Trust Assets, including the right to a floating percentage (in
the case of collections of Principal Receivables during the Revolving Period and
in the case of collections of Finance Charge Receivables and Defaulted
Receivables at all times) or a resettable fixed/floating percentage (in the case
of collections of Principal Receivables during the Accumulation Period or the
Rapid Amortization Period) (each, the "SERIES PERCENTAGE") of cardholder
payments on the Receivables. See "--Allocation Percentages" in this Prospectus
Supplement. For any Monthly Period, the portion of the Principal Receivables and
any amounts on deposit in, credited to or held in the Excess Funding Account
represented by the Certificates and the Class C Interests (the "INVESTED
AMOUNT") will be equal to $600,000,000 on the Closing Date (the "INITIAL
INVESTED AMOUNT"), minus the principal amount on deposit in the Principal
Funding Account, minus the amount of principal payments paid to the
Certificateholders and the Class C Interest Holders (collectively, the "SERIES
1999-A HOLDERS") (other than principal payments made to the Class C Interest
Holders from amounts withdrawn from the Spread Account for the purpose of
reimbursing previous reductions in the Class C Invested Amount) and minus any
unreimbursed reductions in the Invested Amount for reasons other than principal
payments. See "Description of the Certificates--Defaulted Receivables; Rebates
and Fraudulent Charges" in the accompanying Prospectus and "Description of the
Certificates--Allocation of Investor Default Amount" in this Prospectus
Supplement. Each Certificate represents the right to receive monthly payments of
interest for each Interest Period at the applicable Certificate Rate from
collections of Finance Charge Receivables and certain other amounts and, in
certain circumstances, amounts withdrawn from the Cash Collateral Account and
the Reserve Account (provided that amounts withdrawn from the Reserve Account
are only available to the Class A Certificates) and Reallocated Principal
Collections, and deposits or payments of principal during the Accumulation
Period or the Rapid Amortization Period funded from collections of Principal
Receivables allocated to Series 1999-A (plus certain other amounts specified
herein, including, during the Accumulation Period, certain collections of
Principal Receivables otherwise allocable to other Series, to the extent such
collections are not needed to make payments to or for the benefit of such other
Series).
The Seller holds the interest in the Principal Receivables and the amounts
on deposit in, credited to or held in the Excess Funding Account, if any (the
"SELLER AMOUNT"), not represented by the Certificates, the Class C Interests and
the certificates of and uncertificated interests in other Series, if any. The
Seller holds
S-23
<PAGE> 24
an undivided interest in the Trust (the "SELLERS' INTEREST"), including the
right to a percentage (the "SELLER PERCENTAGE") of all cardholder payments on
the Receivables.
During the Revolving Period, the Invested Amount will remain constant
except in certain limited circumstances. See "Description of the
Certificates--Defaulted Receivables; Rebates and Fraudulent Charges" in the
accompanying Prospectus and "Description of the Certificates--Allocation of
Investor Default Amount" in this Prospectus Supplement. The amount of Principal
Receivables, however, will vary each day as new Principal Receivables are
created and others are paid. The Seller Amount will fluctuate daily, therefore,
to reflect the changes in the amount of the Principal Receivables. During the
Accumulation Period or the Rapid Amortization Period, the Invested Amount will
decline for each Monthly Period as cardholder payments of Principal Receivables
are collected and deposited in the Principal Funding Account or paid to the
Certificateholders or the Class C Interest Holders.
The interest of the Certificateholders in the Trust will terminate
following the earliest of (i) the day after the Distribution Date on which the
Investor Amount is paid in full, (ii) the September 2004 Distribution Date and
(iii) the termination of the Trust (the earliest of (i), (ii) and (iii) being
the "SERIES 1999-A TERMINATION DATE"). All principal and interest will be due
and payable no later than the Series 1999-A Termination Date. See "Description
of the Certificates--Final Payment of Principal and Interest; Termination" in
the accompanying Prospectus.
REGISTRATION OF CERTIFICATES
The Certificates initially will be represented by certificates registered
in the name of Cede & Co., as the nominee of The Depository Trust Company
("DTC"). No person acquiring a beneficial interest in the Certificates (a
"CERTIFICATE OWNER") will be entitled to receive a definitive certificate
representing such person's interest (a "DEFINITIVE CERTIFICATE"), except in the
event that Definitive Certificates are issued under the limited circumstances
described in the Prospectus. Investor Certificateholders may elect to hold their
Investor Certificates through DTC (in the United States) or Cedelbank or
Euroclear (in Europe). See "Description of the Certificates--Definitive
Certificates" in the accompanying Prospectus.
INTEREST PAYMENTS
Interest will accrue on the Certificates at the applicable Class A
Certificate Rate or Class B Certificate Rate from the date of the initial
issuance of the Certificates. Interest payments on the Certificates will be made
on May 17, 1999 and on the 15th day of each month thereafter, or if any such day
is not a Business Day, on the next succeeding Business Day (each a "DISTRIBUTION
DATE"). Interest payments on the Certificates on any Distribution Date will be
calculated on the outstanding principal amount of the Class A Certificates or
the Class B Certificates, as applicable, as of the preceding Record Date (or, in
the case of the first Distribution Date, as of the Closing Date) based upon the
applicable Certificate Rate for the related Interest Period. Class A Monthly
Interest and Class B Monthly Interest due but not paid on any Distribution Date
will be payable on the next succeeding Distribution Date together with
additional interest on such amount at the applicable Certificate Rate plus 2.0%.
Interest on the Class A Certificates and the Class B Certificates will be
calculated on the basis of the actual number of days in the related Interest
Period and a 360-day year. The Class A Certificates will bear interest at the
rate of 0.11% per annum above the London interbank offered quotations for United
States dollar deposits ("LIBOR") for a period of the Designated Maturity
determined as set forth below (the "CLASS A CERTIFICATE RATE"). The Class B
Certificates will bear interest at the rate of 0.33% per annum above LIBOR for a
period of the Designated Maturity determined as set forth below (the "CLASS B
CERTIFICATE RATE").
The "INTEREST PERIOD" for 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 May 16, 1999, the day preceding the initial Distribution Date. The term
"BUSINESS DAY" means any day other than a Saturday, Sunday or day on which
banking institutions in New York, New York, Providence, Rhode Island (or for the
determination of LIBOR, London, England) or any other state where the principal
executive offices of the Bank or any Additional Seller or the Trustee are
S-24
<PAGE> 25
located, are authorized or obligated by law, executive order or governmental
decree to be closed. The "MONTHLY PERIOD" for any Distribution Date will be the
immediately preceding calendar month, except for the initial Monthly Period,
which will begin on the Closing Date and end on April 30, 1999). The "RECORD
DATE" for any Distribution Date will be the last Business Day of the month
preceding such Distribution Date.
The Trustee will determine LIBOR on March 19, 1999 for the period from the
Closing Date through May 16, 1999, and for each Interest Period thereafter, on
the second Business Day prior to every Distribution Date on which such Interest
Period begins, commencing with the May 1999 Distribution Date (each a "LIBOR
DETERMINATION DATE").
"LIBOR" means, as of any LIBOR Determination Date, the rate for deposits in
United States dollars for a period of the Designated Maturity which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such date. If such rate
does not appear on Telerate Page 3750, the rate for that LIBOR Determination
Date will be determined on the basis of the rates at which deposits in United
States dollars are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on that day to prime banks in the London interbank market for a
period of the Designated Maturity. The Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that LIBOR Determination
Date will be the arithmetic mean of the quotations. If fewer than two quotations
are provided as requested, the rate for that LIBOR Determination Date will be
the arithmetic mean of the rates quoted by the Reference Banks, selected by the
Servicer, at approximately 11:00 a.m., New York City time, on that day for loans
in United States dollars to leading European banks for a period of the
Designated Maturity.
"DESIGNATED MATURITY" means, as of any LIBOR Determination Date, one month;
provided, that LIBOR for the initial Interest Period will be determined by
straight-line interpolation (based on the actual number of days in the initial
Interest Period) between two rates determined in accordance with the definition
of LIBOR, one of which will be determined for a Designated Maturity of one month
and the other of which will be determined for a Designated Maturity of two
months.
"TELERATE PAGE 3750" means the display page currently so designated on the
Dow Jones Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"REFERENCE BANKS" means three major banks in the London interbank market
selected by the Servicer.
The determination of LIBOR by the Trustee and the Trustee's subsequent
calculation of the applicable Certificate Rate for the relevant Interest Periods
shall (in the absence of manifest error) be final and binding on each
Certificateholder. The Class A Certificate Rate or Class B Certificate Rate
applicable to the then current and the immediately preceding Interest Periods
may be obtained by telephoning the Trustee at its Corporate Trust Office at
(800) 735-7777.
On each Distribution Date, Class A Monthly Interest and Class A Monthly
Interest previously due but not distributed to the Class A Certificateholders
will be paid to the Class A Certificateholders from Class A Available Funds for
the related Monthly Period. To the extent Class A Available Funds for such
Monthly Period are insufficient to pay such interest, Excess Spread, and, if
necessary, amounts designated by another Series for allocation to Series within
Group One and which, pursuant to the Master Pooling and Servicing Agreement and
any related supplement, are allocable to Series 1999-A ("EXCESS FINANCE
CHARGES"), funds on deposit in the Cash Collateral Account and Reallocated
Principal Collections allocable first to the Class C Invested Amount and then to
the Class B Invested Amount will be used to make such payments.
"CLASS A AVAILABLE FUNDS" means, for any Monthly Period, an amount equal to
the sum of (a) the Class A Floating Percentage of collections of Finance Charge
Receivables allocated to the Series 1999-A Certificates for such Monthly Period
(including certain other amounts that are to be treated as collections of
Finance Charge Receivables in accordance with the Pooling and Servicing
Agreement), (b) the amount of Principal Funding Investment Proceeds, if any, for
such Distribution Date and (c) the amount of funds, if any, to be withdrawn from
the Reserve Account that, pursuant to the Series Supplement, are required to be
included in Class A Available Funds for such Distribution Date.
S-25
<PAGE> 26
On each Distribution Date, Class B Monthly Interest and Class B Monthly
Interest previously due but not distributed to the Class B Certificateholders
will be paid to the Class B Certificateholders from Class B Available Funds for
the related Monthly Period. To the extent Class B Available Funds for such
Monthly Period are insufficient to pay such interest, Excess Spread and Excess
Finance Charges allocated to Series 1999-A and, if necessary, funds on deposit
in the Cash Collateral Account and Reallocated Principal Collections allocable
to the Class C Invested Amount (in each case to the extent not used to make
distributions for the Class A Certificates) will be used to make such payment.
"CLASS B AVAILABLE FUNDS" means, for any Monthly Period, an amount equal to
the Class B Floating Percentage of collections of Finance Charge Receivables
allocated to the Series 1999-A Certificates for such Monthly Period (including
certain other amounts that are to be treated as collections of Finance Charge
Receivables in accordance with the Pooling and Servicing Agreement).
"CLASS A MONTHLY INTEREST" means, for any Distribution Date, an amount
equal to the product of (i)(A) a fraction, the numerator of which is the actual
number of days in the period from and including the preceding Distribution Date
to but excluding such Distribution Date and the denominator of which is 360,
times (B) the Class A Certificate Rate and (ii) the outstanding principal amount
of the Class A Certificates as of the preceding Record Date; provided, however,
with respect to the first Distribution Date, Class A Monthly Interest shall be
equal to the interest accrued on the outstanding principal amount of the Class A
Certificates at the applicable Class A Certificate Rate for the period from the
Closing Date through May 16, 1999 (calculated on the basis of the actual number
of days in such period and a year of 360 days).
"CLASS B MONTHLY INTEREST" means, for any Distribution Date, an amount
equal to the product of (i)(A) a fraction, the numerator of which is the actual
number of days in the period from and including the preceding Distribution Date
to but excluding such Distribution Date and the denominator of which is 360,
times (B) the Class B Certificate Rate and (ii) the outstanding principal amount
of the Class B Certificates as of the preceding Record Date; provided, however,
with respect to the first Distribution Date, Class B Monthly Interest shall be
equal to the interest accrued on the outstanding principal amount of the Class B
Certificates at the applicable Class B Certificate Rate for the period from the
Closing Date through May 16, 1999 (calculated on the basis of the actual number
of days in such period and a year of 360 days).
"CLASS C AVAILABLE FUNDS" means, for any Monthly Period, an amount equal to
the Class C Floating Percentage of the collections of Finance Charge Receivables
allocated to Series 1999-A (including any amounts that are to be treated as
collections of Finance Charge Receivables in accordance with the Pooling and
Servicing Agreement).
"CLASS C MONTHLY INTEREST" means, for any Distribution Date, an amount
equal to the product of (i) (A) a fraction, the numerator of which is the actual
number of days in the period from and including the preceding Distribution Date
to but excluding such Distribution Date and the denominator of which is 360,
times (B) the Class C Interest Rate and (ii) the outstanding principal amount of
the Class C Interests as of the preceding Record Date; provided, however, with
respect to the first Distribution Date, Class C Monthly Interest shall be equal
to the interest accrued on the outstanding principal amount of the Class C
Interests at the applicable Class C Interest Rate for the period from the
Closing Date through May 16, 1999 (calculated on the basis of the actual number
of days in such period and a year of 360 days).
"CLASS C INTEREST RATE" means a rate specified in the Class C Supplemental
Agreement such rate not to exceed LIBOR for a period of the Designated Maturity
plus 2.0% per annum.
PRINCIPAL PAYMENTS
During the period (the "REVOLVING PERIOD") that begins on the Closing Date
and ends on the day before the earlier of (i) the start of the Accumulation
Period, or (ii) the start of the Rapid Amortization Period, no principal
payments will be made to or for the benefit of the Certificateholders or
deposited into an account to be accumulated and subsequently used to pay the
Certificateholders. On each Distribution Date for the Revolving Period,
collections of Principal Receivables allocable to the undivided interest in the
assets of the Trust represented by the Certificates and the Class C Interests
will, subject to certain limitations, including
S-26
<PAGE> 27
the allocation of any Reallocated Principal Collections for the related Monthly
Period to pay the Class A Required Amount or the Class B Required Amount, be
treated as Shared Principal Collections. See "Description of the
Certificates--Shared Principal Collections" in the accompanying Prospectus.
The accumulation period for the Series 1999-A Interests (the "ACCUMULATION
PERIOD") is scheduled to begin at the close of business on May 31, 2001. Subject
to the conditions described in this Prospectus Supplement under "--Postponement
of Accumulation Period," the beginning of the Accumulation Period may be delayed
to no later than the close of business on January 31, 2002. The first principal
payment will be made to the Class A Certificateholders on the earlier of the (i)
March 2002 Distribution Date ("CLASS A EXPECTED FINAL DISTRIBUTION DATE") or
(ii) the Distribution Date in the month following the month in which the Rapid
Amortization Period begins. Principal is also expected to be paid to the Class B
Certificateholders on the March 2002 Distribution Date (the "CLASS B EXPECTED
FINAL DISTRIBUTION DATE"); however, if the amount on deposit in the Principal
Funding Account is not sufficient to pay the Certificates in full, it will be
applied first to pay the Class A Certificates. No principal will be payable to
the Class B Certificateholders unless the Class A Investor Amount is paid in
full or funds are available with which to make such payment in full. No
principal will be payable to the Class C Interest Holders unless the Class A
Investor Amount and the Class B Investor Amount are paid in full.
On each Distribution Date for the Accumulation Period prior to the date on
which the Class A Investor Amount and the Class B Investor Amount are paid in
full, an amount equal to the least of (a) Available Investor Principal
Collections on deposit in the Collection Account for such Distribution Date, (b)
the applicable Controlled Deposit Amount for such Distribution Date and (c) the
sum of the Class A Invested Amount and the Class B Invested Amount, will be
deposited in the Principal Funding Account for payment to the Class A
Certificateholders and the Class B Certificateholders. Amounts deposited into
the Principal Funding Account during the Accumulation Period to pay principal of
the Certificates will be paid first to the Class A Certificateholders and then
Class B Certificateholders, on the Class A Expected Final Distribution Date and
the Class B Expected Final Distribution Date or, if earlier, the first
Distribution Date in the Rapid Amortization Period.
On the first Distribution Date (i) for the Accumulation Period, following
the Distribution Date on which the Class B Investor Amount has been paid in
full, or (ii) for the Rapid Amortization Period, on which the Class B Investor
Amount has been paid in full (the "CLASS C PRINCIPAL COMMENCEMENT DATE"),
amounts equal to the least of (a) Available Investor Principal Collections on
deposit in the Collection Account for such Distribution Date (minus the portion
of such Available Investor Principal Collections applied to Class A Monthly
Principal or Class B Monthly Principal on such Distribution Date), and (b) the
Class C Invested Amount will be paid to the Class C Interest Holders until the
Class C Invested Amount has been paid in full.
"AVAILABLE INVESTOR PRINCIPAL COLLECTIONS" means, for any Monthly Period,
an amount equal to the sum of (a)(i) an amount equal to the product of
collections of Principal Receivables for such Monthly Period and the Principal
Allocation Percentage for such Monthly Period, minus (ii) the amount of
Reallocated Principal Collections for such Monthly Period used to fund the Class
A Required Amount or the Class B Required Amount plus (b) any Shared Principal
Collections from other Series in Group One that are allocated to Series 1999-A,
plus (c) any other amounts which pursuant to the Series Supplement are to be
treated as Available Investor Principal Collections for the related Distribution
Date, plus (d) the proceeds of any draw on the Spread Account in respect of the
Class C Investor Default Amount (which proceeds will only be used to make
principal payments on the Class C Interests).
On each Distribution Date for the Rapid Amortization Period until the Class
A Investor Amount has been paid in full or the Series 1999-A Termination Date
occurs, the Class A Certificateholders will be entitled to receive Available
Investor Principal Collections in an amount up to the Class A Investor Amount.
After payment in full of the Class A Investor Amount, the Class B
Certificateholders will be entitled to receive, on each such Distribution Date,
Available Investor Principal Collections until the earlier of the date the Class
B Investor Amount is paid in full and the Series 1999-A Termination Date. After
payment in full of the Class B Investor Amount, the Class C Interest Holders
will be entitled to receive, on each such Distribution
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<PAGE> 28
Date, Available Investor Principal Collections until the earlier of the date the
Class C Invested Amount is paid in full and the Series 1999-A Termination Date.
"CLASS A MONTHLY PRINCIPAL" for any Distribution Date for the Accumulation
Period or the Rapid Amortization Period will equal the least of (i) the
Available Investor Principal Collections on deposit in the Collection Account
with respect to such Distribution Date, (ii) for each Distribution Date for the
Accumulation Period (and on or prior to the Class A Expected Final Distribution
Date), the Controlled Deposit Amount for such Distribution Date and (iii) the
Class A Invested Amount on such Distribution Date.
"CLASS B MONTHLY PRINCIPAL" for any Distribution Date, beginning with the
Class B Principal Commencement Date, will equal the least of (i) the Available
Investor Principal Collections on deposit in the Collection Account with respect
to such Distribution Date (minus the portion of such Available Investor
Principal Collections applied to Class A Monthly Principal on such Distribution
Date), (ii) for each Distribution Date with respect to the Accumulation Period,
the Controlled Deposit Amount for such Distribution Date (minus the portion of
such Controlled Deposit Amount for such Distribution Date applied to Class A
Monthly Principal on such Distribution Date) and (iii) the Class B Invested
Amount on such Distribution Date.
"CLASS C MONTHLY PRINCIPAL" means for any Distribution Date, beginning with
the Class C Principal Commencement Date, an amount equal to the least of (i) the
Available Investor Principal Collections on deposit in the Collection Account
with respect to such Distribution Date (minus the portion of such Available
Investor Principal Collections applied to Class A Monthly Principal and Class B
Monthly Principal on such Distribution Date) and (ii) the Class C Invested
Amount on such Distribution Date.
"CONTROLLED ACCUMULATION AMOUNT" means (a) for any Distribution Date for
the Accumulation Period, the sum of the Class A Initial Invested Amount and the
Class B Initial Invested Amount divided by nine (subject to upward adjustment in
connection with the postponement of the Accumulation Period).
"DEFICIT CONTROLLED ACCUMULATION AMOUNT" means (a) on the first
Distribution Date for the Accumulation Period the excess, if any, of the
Controlled Accumulation Amount for such Distribution Date over the amount
distributed from the Collection Account as Class A Monthly Principal and Class B
Monthly Principal for such Distribution Date and (b) on each subsequent
Distribution Date for the Accumulation Period the excess, if any, of the
Controlled Deposit Amount for such subsequent Distribution Date over the amount
distributed from the Collection Account as Class A Monthly Principal and Class B
Monthly Principal for such subsequent Distribution Date.
"CONTROLLED DEPOSIT AMOUNT" means, for any Distribution Date relating to
the Accumulation Period, an amount equal to the sum of (i) the Controlled
Accumulation Amount on such Distribution Date and (ii) any Deficit Controlled
Accumulation Amount for the immediately preceding Distribution Date.
POSTPONEMENT OF ACCUMULATION PERIOD
Upon written notice to the Trustee, the Servicer may elect to postpone the
start of the Accumulation Period and extend the length of the Revolving Period,
subject to certain conditions, including those set forth below. The Servicer may
make such election only if the Accumulation Period Length (determined as
described below) is less than nine months. On each Determination Date, until the
Accumulation Period begins, the Servicer will determine the "ACCUMULATION PERIOD
LENGTH," which is the number of months expected to be required to fully fund the
Principal Funding Account to pay the Class A Investor Amount no later than the
Class A Expected Final Distribution Date and the Class B Investor Amount no
later than the Class B Expected Final Distribution Date, based on (a) the
monthly collections of Principal Receivables expected to be distributable to the
Certificateholders of all Series, assuming a principal payment rate no greater
than the lowest monthly principal payment rate on the Receivables for the
preceding 12 months and (b) the amount of principal expected to be distributable
to certificateholders of Series which are not expected to be in their revolving
periods during the Accumulation Period. If the Accumulation Period Length is
less than nine months, the Servicer may, at its option, postpone the start of
the Accumulation Period such that the
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<PAGE> 29
number of months included in the Accumulation Period will be equal to or exceed
the Accumulation Period Length. The effect of the foregoing calculation is to
permit the reduction of the length of the Accumulation Period based on the
investor interest of certain other Series that are scheduled to be in their
revolving periods during the Accumulation Period and on increases in the
principal payment rate occurring after the Closing Date. The length of the
Accumulation Period will not be less than one month.
SUBORDINATION
The Class B Certificateholders' Interest and the Class C Interests will be
subordinated to the extent necessary to fund certain payments with respect to
the Class A Certificates. In addition, the Class C Interests will be
subordinated to the extent necessary to fund certain payments with respect to
the Class B Certificates. Certain principal payments otherwise allocable to the
Class B Certificateholders may be reallocated to the Class A Certificateholders
and the Class B Invested Amount may be reduced. Similarly, certain principal
payments allocable to the Class C Interests may be reallocated to the Class A
Certificateholders and the Class B Certificateholders and the Class C Invested
Amount may be reduced. 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. See "--Allocation Percentages,"
"--Reallocation of Cash Flows," and "--Application of Collections--Excess
Spread; Excess Finance Charges" in this Prospectus Supplement.
ALLOCATION PERCENTAGES
Pursuant to the Pooling and Servicing Agreement, the Servicer will allocate
among the Class A Certificates, the Class B Certificates, the Class C Interests,
the certificateholders' interest for all other Series issued and outstanding and
the Sellers' Interest, all collections of Finance Charge Receivables, Principal
Receivables and the Defaulted Amount for each Monthly Period. Each "MONTHLY
PERIOD" will be the period from and including the first day of a calendar month
to and including the last day of such calendar month (other than the initial
Monthly Period which will start on the Closing Date and end on April 30, 1999).
Collections of Finance Charge Receivables and the Defaulted Amount with
respect to any Monthly Period will be allocated to Series 1999-A based on the
Floating Allocation Percentage. The "FLOATING ALLOCATION PERCENTAGE" means, for
any Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Invested Amount as of
the last day of the preceding Monthly Period (or with respect to the first
Monthly Period, the Initial Invested Amount) and the denominator of which is the
greater of (1) the sum of (x) the total amount of the Principal Receivables in
the Trust as of such day (or with respect to the first Monthly Period, the total
amount of Principal Receivables in the Trust on the Closing Date) and (y) the
principal amount on deposit in the Excess Funding Account as of such day and (2)
the sum of the numerators used to calculate the Series Percentages for Finance
Charge Receivables or Defaulted Receivables, as applicable, for all Series of
certificates then outstanding; provided, however, that such ratio is subject to
adjustment to give effect to designations of Additional Accounts. Such amounts
so allocated will be further allocated between the Class A Certificateholders,
the Class B Certificateholders and the Class C Interest Holders in accordance
with the Class A Floating Percentage, the Class B Floating Percentage and the
Class C Floating Percentage, respectively.
The "CLASS A FLOATING PERCENTAGE" means, for any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is equal to the Class A Invested Amount as of the close
of business on the last day of the preceding Monthly Period (or with respect to
the first Monthly Period, the Class A Initial Invested Amount) and the
denominator of which is equal to the Invested Amount as of the close of business
on such day (or for the first Monthly Period, the Initial Invested Amount).
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<PAGE> 30
The "CLASS B FLOATING PERCENTAGE" means, for any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is equal to the Class B Invested Amount as of the close
of business on the last day of the preceding Monthly Period (or with respect to
the first Monthly Period, the Class B Initial Invested Amount) and the
denominator of which is equal to the Invested Amount as of the close of business
on such day (or for the first Monthly Period, the Initial Invested Amount).
The "CLASS C FLOATING PERCENTAGE" means, for any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is equal to the Class C Invested Amount as of the close
of business on the last day of the preceding Monthly Period (or with respect to
the first Monthly Period, the Class C Initial Invested Amount) and the
denominator of which is equal to the Invested Amount as of the close of business
on such day (or for the first Monthly Period, the Initial Invested Amount).
Collections of Principal Receivables will be allocated to Series 1999-A
based on the Principal Allocation Percentage. The "PRINCIPAL ALLOCATION
PERCENTAGE" means, for any Monthly Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is (a)
during the Revolving Period, the Invested Amount as of the last day of the
immediately preceding Monthly Period (or, in the case of the first Monthly
Period, the Closing Date) and (b) during the Accumulation Period or the Rapid
Amortization Period, the Invested Amount as of the last day of the Revolving
Period or if the numerator has been reduced as described below in this paragraph
during an Accumulation Period and a Rapid Amortization Period begins, as of the
last day of the Accumulation Period and the denominator of which is the greater
of (i) the sum of the total amount of Principal Receivables in the Trust as of
the last day of the immediately preceding Monthly Period and the principal
amount on deposit in the Excess Funding Account as of such last day (or, in the
case of the first Monthly Period, the Closing Date) and (ii) the sum of the
numerators used to calculate the Series Percentages applicable to Principal
Receivables for all Series outstanding as of the date as to which such
determination is being made; provided, however, that during the Accumulation
Period, on any date, at the option of the Servicer, the numerator of the
Principal Allocation Percentage may be reduced below the numerator used in the
previous Monthly Period, to an amount not less than the greater of (x) the
Invested Amount as of the last day of the immediately preceding Monthly Period
(less the amount of any distributions of principal made to Series 1999-A
Certificateholders since the last day of the immediately preceding Monthly
Period) and (y) an amount that if used as the numerator of the Principal
Allocation Percentage for the reminder of the Accumulation Period, based on
certain assumptions set forth in the Series Supplement, would assure that
Available Investor Principal Collections for Series 1999-A would equal at least
125% of the Controlled Accumulation Amount for each Monthly Period for so long
as the Invested Amount is greater than zero; provided further, however, that
such ratio is subject to adjustment to give effect to designations of Additional
Accounts.
Such amounts allocated to Series 1999-A will be further allocated between
the Class A Certificates, the Class B Certificates and the Class C Interests
based on the Class A Principal Percentage, the Class B Principal Percentage and
the Class C Principal Percentage. The "CLASS A PRINCIPAL PERCENTAGE" means, for
any Monthly Period, (a) during the Revolving Period, the percentage equivalent
(which shall never exceed 100%) of a fraction, the numerator of which is equal
to the Class A Invested Amount as of the last day of the immediately preceding
Monthly Period (or, in the case of the first Monthly Period, the Closing Date),
and the denominator of which is equal to the Invested Amount as of such day (or,
in the case of the first Monthly Period, the Closing Date) and (b) after the
Revolving Period, the percentage equivalent (which shall never exceed 100%) of a
fraction, the numerator of which is the Class A Invested Amount as of the last
day of the Revolving Period, and the denominator of which is the Invested Amount
as of such last day.
The "CLASS B PRINCIPAL PERCENTAGE" means, for any Monthly Period, (i)
during the Revolving Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the Class B Invested
Amount as of the last day of the immediately preceding Monthly Period (or, in
the case of the first Monthly Period, the Closing Date) and the denominator of
which is the Invested Amount as of such day (or, in the case of the first
Monthly Period, the Closing Date) and (ii) after the Revolving Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of
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<PAGE> 31
which is the Class B Invested Amount as of the last day of the Revolving Period,
and the denominator of which is the Invested Amount as of such last day.
The "CLASS C PRINCIPAL PERCENTAGE" means, for any Monthly Period, (i)
during the Revolving Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the Class C Invested
Amount as of the last day of the immediately preceding Monthly Period (or in the
case of the first Monthly Period, the Closing Date) and the denominator of which
is the Invested Amount as of such day (or, in the case of the first Monthly
Period, the Closing Date) and (ii) after the Revolving Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is the Class C Invested Amount as of the last day of the
Revolving Period, and the denominator of which is the Invested Amount as of such
day.
As used herein, the following terms have the meanings indicated:
"CLASS A INVESTED AMOUNT" for any date means an amount equal to (i)
$498,000,000 (the "CLASS A INITIAL INVESTED AMOUNT"), minus (ii) the aggregate
amount of principal payments made to the Class A Certificateholders on or prior
to such date, minus (iii) the excess, if any, of the aggregate amount of Class A
Investor Charge-Offs for all prior Distribution Dates over the aggregate amount
of any reimbursements of Class A Investor Charge-Offs for all Distribution Dates
prior to such date, and minus (iv) the principal amount on deposit in the
Principal Funding Account on such date (the "PRINCIPAL FUNDING ACCOUNT
BALANCE"), but not in excess of the Class A Initial Invested Amount.
"CLASS B INVESTED AMOUNT" for any date means an amount equal to (i)
$45,000,000 (the "CLASS B INITIAL INVESTED AMOUNT"), minus (ii) the aggregate
amount of principal payments made to Class B Certificateholders on or prior to
such date, minus (iii) the aggregate amount of Class B Investor Charge-Offs for
all prior Distribution Dates, minus (iv) the aggregate amount of Reallocated
Principal Collections for all prior Distribution Dates which have been used to
fund the Class A Required Amount with respect to such Distribution Dates
(excluding any Reallocated Principal Collections that have resulted in a
reduction of the Class C Invested Amount), minus (v) an amount equal to the
amount by which the Class B Invested Amount has been reduced to fund the Class A
Investor Default Amount on all prior Distribution Dates as described under
"--Allocation of Investor Default Amount," in this Prospectus Supplement, and
plus (vi) the aggregate amount of Excess Spread and Excess Finance Charges
allocated to Series 1999-A and applied on all prior Distribution Dates for the
purpose of reimbursing amounts deducted pursuant to the foregoing clauses (iii),
(iv) and (v) and minus (vii) the positive difference, if any, between the
Principal Funding Account Balance and the Class A Investor Amount on such date;
provided, however, that the Class B Invested Amount may not be reduced below
zero.
"CLASS C INVESTED AMOUNT" for any date means an amount equal to (i)
$57,000,000 (the "CLASS C INITIAL INVESTED AMOUNT"), minus (ii) the aggregate
amount of principal payments (other than principal payments made to the Class C
Interest Holders from amounts withdrawn from the Spread Account for the purpose
of reimbursing previous reductions in the Class C Invested Amount) made with
respect to the Class C Interests prior to such date, minus (iii) the aggregate
amount of Reallocated Principal Collections allocable to the Class C Invested
Amount for all prior Distribution Dates which have been used to fund the Class A
Required Amount or the Class B Required Amount, minus (iv) an amount equal to
the aggregate amount by which the Class C Invested Amount has been reduced to
fund the Class A Investor Default Amount and the Class B Investor Default Amount
on all prior Distribution Dates as described under "--Allocation of Investor
Default Amount" in this Prospectus Supplement minus (v) an amount equal to the
product of the Class C Floating Percentage and the Investor Default Amount (the
"CLASS C INVESTOR DEFAULT AMOUNT") with respect to any Distribution Date that is
not funded out of Excess Spread and Excess Finance Charges allocated to Series
1999-A and available for such purpose on such Distribution Date, and plus (vi)
the aggregate amount of Excess Spread and Excess Finance Charges allocated and
available to reimburse amounts deducted pursuant to the foregoing clauses (iii),
(iv) and (v); provided, however, that the Class C Invested Amount may not be
reduced below zero.
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<PAGE> 32
"INVESTED AMOUNT," for any date means an amount equal to the sum of the
Class A Invested Amount, the Class B Invested Amount and the Class C Invested
Amount.
"CLASS A INVESTOR AMOUNT" for any date means an amount equal to the sum of
the Class A Invested Amount plus the Principal Funding Account Balance (but not
in excess of the Class A Initial Invested Amount).
"CLASS B INVESTOR AMOUNT" for any date means an amount equal to the sum of
the Class B Invested Amount plus the positive difference, if any, between the
Principal Funding Account Balance and the Class A Investor Amount on such date.
"INVESTOR AMOUNT," for any date means an amount equal to the sum of the
Class A Investor Amount, the Class B Investor Amount and the Class C Invested
Amount.
"SERIES INVESTOR AMOUNT" for any date means an amount equal to the
numerator of the Principal Allocation Percentage on such date.
REALLOCATION OF CASH FLOWS
With respect to each Distribution Date, on each Determination Date, the
Servicer will determine the amount (the "CLASS A REQUIRED AMOUNT"), which will
be equal to the amount, if any, by which (a) the sum of (i) Class A Monthly
Interest for such Distribution Date, (ii) any Class A Monthly Interest
previously due but not paid to the Class A Certificateholders on a prior
Distribution Date, (iii) any Class A Additional Interest and any Class A
Additional Interest previously due but not paid to the Class A
Certificateholders on a prior Distribution Date, (iv) the Class A Servicing Fee
for such Distribution Date and any unpaid Class A Servicing Fee and (v) the
Class A Investor Default Amount, if any, for such Distribution Date exceeds (b)
the Class A Available Funds. If the Class A Required Amount is greater than
zero, Excess Spread and Excess Finance Charges allocated to Series 1999-A and
available for such purpose will be used to fund the Class A Required Amount for
such Distribution Date. If such Excess Spread and Excess Finance Charges are
insufficient to fund the Class A Required Amount, amounts, if any, on deposit in
the Cash Collateral Account will then be used to fund the remaining Class A
Required Amount. If such Excess Spread and Excess Finance Charges and amounts,
if any, on deposit in the Cash Collateral Account are insufficient to fund the
Class A Required Amount, collections of Principal Receivables allocable first to
the Class C Interests and then to the Class B Certificates for the related
Monthly Period ("REALLOCATED PRINCIPAL COLLECTIONS") will then be used to fund
the remaining Class A Required Amount. If Reallocated Principal Collections with
respect to the related Monthly Period, together with Excess Spread and Excess
Finance Charges allocated to Series 1999-A and amounts, if any, on deposit in
the Cash Collateral Account are insufficient to fund the Class A Required Amount
for such related Monthly Period, then the Class C Invested Amount will be
reduced by the amount of such excess (but not by more than the Class A Investor
Default Amount for such Distribution Date). In the event that such reduction
would cause the Class C Invested Amount to be a negative number, the Class C
Invested Amount will be reduced to zero, and the Class B Invested Amount will be
reduced by the amount by which the Class C Invested Amount would have been
reduced below zero (but not by more than the excess of the Class A Investor
Default Amount, if any, for such Distribution Date over the amount of such
reduction, if any, of the Class C Invested Amount with respect to such
Distribution Date). In the event that such reduction would cause the Class B
Invested Amount to be a negative number, the Class B Invested Amount will be
reduced to zero, and the Class A Invested Amount will be reduced by the amount
by which the Class B Invested Amount would have been reduced below zero (but not
by more than the excess, if any, of the Class A Investor Default Amount for such
Distribution Date over the amount of the reductions, if any, of the Class C
Invested Amount and the Class B Invested Amount with respect to such
Distribution Date as described above). Any such reduction in the Class A
Invested Amount may have the effect of slowing or reducing the return of
principal and interest to the Class A Certificateholders. In such case, the
Class A Certificateholders will bear directly the credit and other risks
associated with their interest in the Trust. See "--Allocation of Investor
Default Amount" in this Prospectus Supplement.
With respect to each Distribution Date, on each Determination Date, the
Servicer will determine the amount (the "CLASS B REQUIRED AMOUNT"), which will
be equal to the sum of (a) the amount, if any, by
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<PAGE> 33
which the sum of (i) Class B Monthly Interest for such Distribution Date, (ii)
any Class B Monthly Interest previously due but not paid to the Class B
Certificateholders on a prior Distribution Date, (iii) any Class B Additional
Interest and any Class B Additional Interest previously due but not paid to
Class B Certificateholders on a prior Distribution Date and (iv) the Class B
Servicing Fee for such Distribution Date and any unpaid Class B Servicing Fee,
exceeds the Class B Available Funds and (b) the Class B Investor Default Amount
for such Distribution Date. If the Class B Required Amount is greater than zero,
Excess Spread and Excess Finance Charges allocated to Series 1999-A not required
to pay the Class A Required Amount or reimburse Class A Investor Charge-Offs
will be used to fund the Class B Required Amount with respect to such
Distribution Date. If such Excess Spread and Excess Finance Charges available to
fund the remaining Class B Required Amount with respect to such Distribution
Date are less than the Class B Required Amount, amounts, if any, on deposit in
the Cash Collateral Account not required to fund the Class A Required Amount
will then be used to fund the remaining Class B Required Amount. If such Excess
Spread and Excess Finance Charges and amounts, if any, on deposit in the Cash
Collateral Account are insufficient to pay the Class B Required Amount,
Reallocated Principal Collections allocable to the Class C Interests not
required to pay the Class A Required Amount will then be used to fund the
remaining Class B Required Amount. If such Reallocated Principal Collections
allocable to the Class C Interests are insufficient to fund the remaining Class
B Required Amount, then the Class C Invested Amount remaining after any
adjustments made for the benefit of the Class A Certificateholders will be
reduced by the amount of such insufficiency (but not by more than the Class B
Investor Default Amount for such Distribution Date). In the event that such a
reduction would cause the Class C Invested Amount to be a negative number, the
Class C Invested Amount will be reduced to zero, and the Class B Invested Amount
will be reduced by the amount by which the Class C Invested Amount would have
been reduced below zero (but not by more than the excess of the Class B Investor
Default Amount for such Distribution Date over the amount of such reduction of
the Class C Invested Amount). Any such reduction in the Class B Invested Amount
may have the effect of slowing or reducing the return of principal and interest
to the Class B Certificateholders. In such case, the Class B Certificateholders
will bear directly the credit and other risks associated with their interests in
the Trust. See "--Allocation of Investor Default Amount" in this Prospectus
Supplement.
Reductions of the Class A Invested Amount or Class B Invested Amount will
thereafter be reimbursed and the Class A Invested Amount or Class B Invested
Amount increased to the extent of Excess Spread and Excess Finance Charges and
Reallocated Principal Collections available for such purposes on each
Distribution Date. See "--Application of Collections--Excess Spread; Excess
Finance Charges" in this Prospectus Supplement. When such reductions of the
Class A Invested Amount and Class B Invested Amount have been fully reimbursed,
reductions of the Class C Invested Amount will be reimbursed until reimbursed in
full in a similar manner.
APPLICATION OF COLLECTIONS
Application of Collections to the Collection Account. Except under the
conditions described in the accompanying Prospectus under "Description of the
Certificates--Application of Collections," the Servicer will apply, or will
instruct the Trustee to apply, on or prior to the close of business on the
second Business Day following the date of processing of any collections, all
collections and other funds to be deposited into the Collection Account that are
allocated to the Certificates and the Class C Interests as follows:
(1) during the Revolving Period, an amount equal to the Floating
Allocation Percentage of the collections of Finance Charge Receivables
processed on such date will be allocated to the Certificates and the Class
C Interests, and of that allocation, the following amounts will be
deposited and retained in the Collection Account: (A) prior to the LIBOR
Determination Date occurring in the current Monthly Period, the entire
amount of such allocation and (B) on and after such LIBOR Determination
Date, the difference between (x) Monthly Interest for the related
Distribution Date (plus, if the Bank is not the Servicer, the Monthly
Servicing Fee for such Monthly Period) and (y) the amounts previously
deposited in the Collection Account for such Monthly Period pursuant to
this clause (1);
(2) during the Accumulation Period or Rapid Amortization Period, an
amount equal to the Floating Allocation Percentage of the collections of
Finance Charge Receivables processed on such date will be
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<PAGE> 34
allocated to the Certificates and the Class C Interests and deposited and
retained in the Collection Account;
(3) during the Revolving Period, an amount equal to the Principal
Allocation Percentage of collections of Principal Receivables processed on
such date will be allocated to the Certificates and the Class C Interests
and first, if any other Principal Sharing Series in Group One is
outstanding and in its amortization period or accumulation period, retained
in the Collection Account for application, to the extent necessary, to
other Series in Group One on the related Distribution Date, and second paid
to the holders of the Seller Certificates; provided that such amount will
be paid to the holders of the Seller Certificates only if the Seller Amount
is greater than the Required Seller Amount and the aggregate amount of
Principal Receivables is greater than the Required Principal Balance and
otherwise will be deposited in the Excess Funding Account until the Seller
Amount is greater than the Required Seller Amount and the aggregate amount
of Principal Receivables is greater than the Required Principal Balance and
the remainder will be paid to the holders of the Seller Certificates;
provided further, that if and for so long as the Available Cash Collateral
Amount is less than the Required Cash Collateral Amount, an amount equal to
the sum of (x) the Class C Principal Percentage of the product of the
Principal Allocation Percentage and the collections of Principal
Receivables and (y) the Class B Principal Percentage of the product of the
Principal Allocation Percentage and the collections of Principal
Receivables ("SUBORDINATE PRINCIPAL COLLECTIONS") will be deposited and
retained in the Collection Account;
(4) during the Accumulation Period, an amount equal to the Principal
Allocation Percentage of collections of Principal Receivables processed on
such date (for any such date, a "PERCENTAGE ALLOCATION") will be allocated
to the Certificates and the Class C Interests and deposited and retained in
the Collection Account; provided, however, that if the sum of such
Percentage Allocations with respect to the same Monthly Period exceeds the
Controlled Deposit Amount for the related Distribution Date, or for any
Monthly Period related to any Distribution Date falling on or after the
Class C Principal Commencement Date, the sum of such Percentage Allocation
exceeds the Class C Invested Amount, then such excess shall not be treated
as a Percentage Allocation and shall be first, if any other Principal
Sharing Series in Group One is outstanding and in its amortization period
or accumulation period, retained in the Collection Account for application,
to the extent necessary, as Shared Principal Collections to other Series in
Group One on the related Distribution Date, and second paid to the holders
of the Seller Certificates only if the Seller Amount on such Date of
Processing is greater than the Required Seller Amount and the aggregate
amount of Principal Receivables is greater than the Required Principal
Balance and otherwise will be deposited in the Excess Funding Account until
the Seller Amount is greater than the Required Seller Amount and the
aggregate amount of Principal Receivables is greater than the Required
Principal Balance and the remainder will be paid to the holders of the
Seller Certificates; provided further, however, that if and for so long as
the Available Cash Collateral Amount is less than the Required Cash
Collateral Amount, Subordinate Principal Collections will be deposited and
retained in the Collection Account; and
(5) during the Rapid Amortization Period, an amount equal to the
Principal Allocation Percentage of the collections of Principal Receivables
processed on such date will be allocated to the Certificates and the Class
C Interests and deposited and retained in the Collection Account; provided,
however, that after the date on which an amount of such collections equal
to the Investor Amount has been deposited into the Collection Account and
allocated to the Certificates and the Class C Interests, such amount in
excess of the Investor Amount will be first, if any other Principal Sharing
Series in Group One is outstanding and in its amortization period or
accumulation period, retained in the Collection Account for application, to
the extent necessary, as Shared Principal Collections to other Series in
Group One on the related Distribution Date, and second paid to the holders
of the Seller Certificates only if the Seller Amount is greater than the
Required Seller Amount and the aggregate amount of Principal Receivables is
greater than the Required Principal Balance and otherwise will be deposited
in the Excess Funding Account until the Seller Amount is greater than the
Required Seller Amount and the aggregate amount
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of Principal Receivables is greater than the Required Principal Balance and
the remainder will be paid to the holders of the Seller Certificates.
Withdrawals from Series Accounts. On or before each Distribution Date, the
Servicer will direct the Trustee to make the following withdrawals from the
following Series Accounts:
(1) on each Distribution Date all Principal Funding Investment Proceeds
then on deposit in the Principal Funding Account will be withdrawn from the
Principal Funding Account and deposited into the Collection Account for
distribution as a portion of Class A Available Funds for such Distribution
Date;
(2) on each Distribution Date after the Reserve Account Funding Date,
all net investment income accrued since the preceding Distribution Date on
funds on deposit in the Reserve Account will be retained in the Reserve
Account (to the extent that the amount on deposit in the Reserve Account is
less than the Required Reserve Account Amount) and the balance, if any,
will be deposited in the Collection Account for distribution as collections
of Finance Charge Receivables allocable to the Certificateholders and the
Class C Interest Holders; and
(3) on or before each Distribution Date for the Accumulation Period and
on the first Distribution Date for the Rapid Amortization Period, if
applicable, an amount equal to the lesser of (a) the Available Reserve
Account Amount for such Distribution Date and (b) the excess, if any, of a
portion of the Class A Monthly Interest determined in accordance with the
Series Supplement over the Principal Funding Investment Proceeds for such
Distribution Date (provided, that the amount of such withdrawal will be
reduced to the extent that funds otherwise would be available to be
deposited in the Reserve Account on such Distribution Date) will be
withdrawn from the Reserve Account and deposited in the Collection Account
for distribution as a portion of Class A Available Funds for such
Distribution Date.
Payment of Interest, Fees and Other Items. On each Distribution Date, the
Trustee, acting pursuant to the Servicer's instructions, will apply the Class A
Available Funds, Class B Available Funds and Class C Available Funds (see
"--Interest Payments" above) in the following priority:
(A) On each Distribution Date, an amount equal to the Class A Available
Funds for such Distribution Date will be withdrawn from the Collection
Account and distributed in the following priority:
(1) an amount equal to Class A Monthly Interest for such Distribution
Date, plus the amount of any Class A Monthly Interest previously due but
not paid to the Class A Certificateholders on a prior Distribution Date,
plus any additional interest with respect to Class A Monthly Interest
that was due but not paid to the Class A Certificateholders on a prior
Distribution Date at a rate equal to the Class A Certificate Rate plus
2% per annum ("CLASS A ADDITIONAL INTEREST"), and any Class A Additional
Interest previously due but not distributed to the Class A
Certificateholders on a prior Distribution Date will be distributed to
the Class A Certificateholders;
(2) an amount equal to the Class A Servicing Fee for such
Distribution Date, plus the amount of any Class A Servicing Fee
previously due but not distributed to the Servicer on a prior
Distribution Date, will be distributed to the Servicer;
(3) an amount equal to the Class A Investor Default Amount for such
Distribution Date will be treated as a portion of Available Investor
Principal Collections for such Distribution Date; and
(4) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as described under "--Excess Spread; Excess
Finance Charges" below.
(B) On each Distribution Date, an amount equal to the Class B Available
Funds with respect to such Distribution Date will be withdrawn from the
Collection Account and distributed in the following priority:
(1) an amount equal to Class B Monthly Interest for such Distribution
Date, plus the amount of any Class B Monthly Interest previously due but
not paid to the Class B Certificateholders on a prior Distribution Date,
plus any additional interest with respect to Class B Monthly Interest
that
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was due but not paid to the Class B Certificateholders on a prior
Distribution Date at a rate equal to the Class B Certificate Rate plus
2% per annum ("CLASS B ADDITIONAL INTEREST"), and any Class B Additional
Interest previously due but not distributed to the Class B
Certificateholders on a prior Distribution Date will be distributed to
the Class B Certificateholders;
(2) an amount equal to the Class B Servicing Fee for such
Distribution Date, plus the amount of any Class B Servicing Fee
previously due but not distributed to the Servicer on a prior
Distribution Date, will be distributed to the Servicer; and
(3) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as described under "--Excess Spread; Excess
Finance Charges" below.
(C) On each Distribution Date, an amount equal to the Class C Available
Funds with respect to such Distribution Date will be withdrawn from the
Collection Account and distributed in the following priority:
(1) if the Bank or the Trustee is no longer the Servicer, an amount
equal to the Class C Servicing Fee for such Distribution Date, plus the
amount of any Class C Servicing Fee previously due but not distributed
to the Servicer on a prior Distribution Date, will be distributed to the
Servicer; and
(2) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as described under "--Excess Spread; Excess
Finance Charges" below.
"EXCESS SPREAD" means, with respect to any Distribution Date, an amount
equal to the sum of the amounts described in clause (A)(4) above, clause (B)(3)
above and clause (C)(2) above under "--Payment of Interest, Fees and Other
Items" in this Prospectus Supplement.
Excess Spread; Excess Finance Charges. On each Distribution Date, the
Trustee, acting pursuant to the Servicer's instructions, will apply Excess
Spread and Excess Finance Charges allocated to Series 1999-A with respect to the
related Monthly Period to make the following distributions in the following
priority:
(1) an amount equal to any deficiency pursuant to clauses (A) (1), (2)
and (3) above under "--Payment of Interest, Fees and Other Items" will be
used to fund such deficiency, provided, that in the event such deficiency
exceeds the amount of Excess Spread and Excess Finance Charges allocated to
Series 1999-A, such Excess Spread and Excess Finance Charges shall be
applied first to pay amounts due on such Distribution Date pursuant to
clause (A)(1) above under "--Payment of Interest, Fees and Other Items,"
second to pay the Class A Servicing Fee pursuant to clause (A)(2) above
under "--Payment of Interest, Fees and Other Items" and third to pay the
Class A Investor Default Amount for such Distribution Date pursuant to
clause (A)(3) above under "--Payment of Interest, Fees and Other Items";
(2) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed will be treated as a
portion of Available Investor Principal Collections for such Distribution
Date as described under "--Payments of Principal" below;
(3) an amount equal to any deficiency pursuant to clauses (B)(1) and (2)
above under "--Payment of Interest, Fees and Other Items" will be used to
fund such deficiency, provided, that in the event such deficiency for such
Distribution Date exceeds the remaining amount of Excess Spread and Excess
Finance Charges allocated to Series 1999-A, such Excess Spread and Excess
Finance Charges will be applied first to pay amounts due with respect to
such Distribution Date pursuant to clause (B)(1) above under " --Payment of
Interest, Fees and Other Items," and second to pay the Class B Servicing
Fee pursuant to clause (B)(2) above under "--Payment of Interest, Fees and
Other Items";
(4) an amount equal to the Class B Investor Default Amount for such
Distribution Date will be treated as a portion of Available Investor
Principal Collections for such Distribution Date as described under
"--Payments of Principal" below;
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(5) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced pursuant to clauses (iii), (iv) and (v) of
the definition of "Class B Invested Amount" under "--Allocation
Percentages" above (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) will be treated as a
portion of Available Investor Principal Collections for such Distribution
Date;
(6) an amount equal to Class C Monthly Interest for such Distribution
Date, plus the amount of any Class C Monthly Interest previously due but
not paid to the Class C Interest Holders on a prior Distribution Date, plus
any additional interest with respect to Class C Monthly Interest that was
due but not paid to the Class C Interest Holders on a prior Distribution
Date at a rate equal to the Class C Interest Rate plus 2% per annum ("CLASS
C ADDITIONAL INTEREST"), and any Class C Additional Interest previously due
but not distributed to the Class C Certificateholders on a prior
Distribution Date will be distributed to the Class C Interest Holders;
(7) an amount equal to the Class C Servicing Fee for such Distribution
Date (or if neither the Bank nor the Trustee is the Servicer, the amount of
the Class C Servicing Fee due but not paid from Class C Available Funds)
and the amount of any Class C Servicing Fee due but not paid to the
Servicer on a prior Distribution Date will be paid to the Servicer;
(8) an amount equal to the Class C Investor Default Amount for such
Distribution Date will be treated as a portion of Available Investor
Principal Collections for such Distribution Date;
(9) an amount equal to the aggregate amount by which the Class C
Invested Amount has been reduced pursuant to clauses (iii), (iv) and (v) of
the definition of "Class C Invested Amount" under "--Allocation
Percentages" above (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) will be treated as a
portion of Available Investor Principal Collections for such Distribution
Date;
(10) an amount up to the excess, if any, of the Required Cash Collateral
Amount over the remaining Available Cash Collateral Amount (without giving
effect to any deposit to the Cash Collateral Account made on such date)
will be deposited to the Cash Collateral Account;
(11) an amount up to the excess, if any, of the Required Reserve Account
Amount over the principal amount on deposit in the Reserve Account will be
deposited in the Reserve Account;
(12) amounts required to be deposited into the Spread Account pursuant
to the Class C Supplemental Agreement will be deposited into the Spread
Account;
(13) if applicable, an amount equal to the aggregate of any amounts then
due to the depositor of funds into the Cash Collateral Account (or any
successor or assignee thereto) pursuant to an agreement, as amended from
time to time, among the Seller, the Servicer, such depositor and the
Trustee (to the extent such amounts are payable under the terms of such
agreement out of Excess Spread) will be distributed to the depositor or its
designee for application in accordance with such agreement; and
(14) the balance, if any, will constitute a portion of Excess Finance
Charges for such Distribution Date and will be available for allocation to
other Series in Group One or to the holders of the Seller Certificates as
described in "Description of the Certificates--Sharing of Excess Finance
Charges" in the accompanying Prospectus.
Cash Collateral Account; Reallocated Principal Collections. On or before
each Distribution Date after giving effect to the distributions above under
"--Excess Spread; Excess Finance Charges," the Trustee, acting pursuant to the
Servicer's instructions, will apply the Available Cash Collateral Amount on such
Distribution Date and Reallocated Principal Collections for the related Monthly
Period to make the following distributions in the following priority:
(1) if the amount of Excess Spread and Excess Finance Charges allocated
to Series 1999-A for the related Monthly Period is less than the amounts
specified in clauses (1) through (8) above under "--Excess Spread; Excess
Finance Charges," an amount equal to such deficiency, not to exceed the
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Available Cash Collateral Amount, will be withdrawn from the Cash
Collateral Account and distributed to fund such deficiency in the order of
priority set forth in clauses (1) through (8) above under "--Excess Spread;
Excess Finance Charges";
(2) if the sum of (x) the amount of Excess Spread and Excess Finance
Charges allocated to Series 1999-A for the related Monthly Period and (y)
the Available Cash Collateral Amount on such Distribution Date is less than
the Class A Required Amount, Reallocated Principal Collections, up to the
amount of such deficiency, will be withdrawn from the Collection Account
and distributed to fund such deficiency in the order of priority set forth
in clause (1) above under "--Excess Spread; Excess Finance Charges";
(3) if the sum of (x) the amount of Excess Spread and Excess Finance
Charges allocated to Series 1999-A for the related Monthly Period not
required to fund the Class A Required Amount or reimburse Class A Investor
Charge-Offs and (y) the Available Cash Collateral Amount not required to
fund the Class A Required Amount is less than the Class B Required Amount,
Reallocated Principal Collections allocable to the Class C Interests not
required to fund the Class A Required Amount, up to the amount of such
deficiency, will be withdrawn from the Collection Account and distributed
to fund such deficiency in the order of priority set forth in clauses (3)
and (4) above under "--Excess Spread; Excess Finance Charges."
Payments of Principal. On each Distribution Date, the Trustee, acting
pursuant to the Servicer's instructions, will distribute Available Investor
Principal Collections (see "--Principal Payments" above) in the following
priority:
(1) on each Distribution Date for the Revolving Period, all such
Available Investor Principal Collections will be treated as Shared
Principal Collections and applied as described under "Description of the
Certificates--Shared Principal Collections" in the accompanying Prospectus;
(2) on each Distribution Date for the Accumulation Period or the Rapid
Amortization Period, all such Available Investor Principal Collections will
be distributed or deposited in the following priority:
(i) an amount equal to Class A Monthly Principal will be deposited in
the Principal Funding Account for payment to the Class A
Certificateholders on each Distribution Date beginning on the earlier to
occur of the Class A Expected Final Distribution Date or the first
Distribution Date for the Rapid Amortization Period;
(ii) after giving effect to the distribution referred to in clause
(i) above, an amount equal to the Class B Monthly Principal will be
deposited in the Principal Funding Account for payment to the Class B
Certificateholders on each Distribution Date beginning on the earlier to
occur of the Class B Expected Final Payment Date (but only if the Class
A Investor Amount is paid in full on such date) and the first
Distribution Date for the Rapid Amortization Period on which the Class A
Investor Amount is paid in full;
(iii) after giving effect to the distributions referred to in clauses
(i) and (ii) above, for each Distribution Date (y) during the
Accumulation Period, beginning on the first Distribution Date following
the Distribution Date on which the Class B Investor Amount is paid in
full and (z) during the Rapid Amortization Period beginning on the first
Distribution Date on which the Class B Investor Amount is paid in full
(the "CLASS C PRINCIPAL COMMENCEMENT DATE"), an amount equal to Class C
Monthly Principal will be paid to the Class C Interest Holders; and
(iv) the balance, if any, will be treated as Shared Principal
Collections and applied as described under "Description of the
Certificates--Shared Principal Collections" in the accompanying
Prospectus.
PRINCIPAL FUNDING ACCOUNT
Pursuant to the Series Supplement, the Servicer will establish and maintain
the principal funding account as a segregated trust account held for the benefit
of the Class A Certificateholders and the Class B
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Certificateholders (the "PRINCIPAL FUNDING ACCOUNT"). During the Accumulation
Period the Trustee at the direction of the Servicer will transfer Available
Investor Principal Collections to the Principal Funding Account as described
under "--Application of Collections--Payments of Principal" in this Prospectus
Supplement.
Funds on deposit in the Principal Funding Account will be invested by the
Trustee at the direction of the Servicer in Eligible Investments. Investment
earnings (net of investment losses and expenses) on funds on deposit in the
Principal Funding Account (the "PRINCIPAL FUNDING INVESTMENT PROCEEDS") will be
included in Class A Available Funds for each Distribution Date.
RESERVE ACCOUNT
Pursuant to the Series Supplement, the Servicer will establish and maintain
the reserve account as a segregated trust account held for the benefit of the
Class A Certificateholders (the "RESERVE ACCOUNT"). The Reserve Account is
established to assist with the subsequent distribution of interest on the Class
A Certificates during the Accumulation Period. With respect to each Distribution
Date from and after the Reserve Account Funding Date, but prior to the
termination of the Reserve Account, the Trustee, acting pursuant to the
Servicer's instructions, will apply Excess Spread and Excess Finance Charges
allocated to Series 1999-A (to the extent described above under "--Application
of Collections--Excess Spread; Excess Finance Charges") to increase the amount
on deposit in the Reserve Account (to the extent such amount is less than the
Required Reserve Account Amount). The "RESERVE ACCOUNT FUNDING DATE" will be the
Distribution Date for the Monthly Period which begins no later than three months
prior to the Monthly Period in which, as of the related Determination Date, the
Accumulation Period is scheduled to begin, or such earlier date as the Servicer
may determine. The "REQUIRED RESERVE ACCOUNT AMOUNT" for any Distribution Date
on or after the Reserve Account Funding Date will be equal to (a) the product of
(i) 0.5% of the Class A Investor Amount as of the preceding Distribution Date
(after giving effect to all changes therein on such date) and (ii) a fraction,
the numerator of which is the number of Monthly Periods scheduled to be included
in the Accumulation Period as of such date, and the denominator of which is
nine, provided, that if such numerator is one, the Required Reserve Account
Amount will be zero, or (b) any other amount designated by the Seller, provided,
that if such designation is of a lesser amount, the Seller shall have provided
the Servicer and the Trustee with evidence that the Rating Agency Condition has
been satisfied and the Seller shall have delivered to the Trustee a certificate
of an authorized officer to the effect that, based on the facts known to such
officer at such time, in the reasonable belief of the Seller, such designation
will not cause a Pay Out Event or an event that, after the giving of notice or
the lapse of time, would cause a Pay Out Event to occur. On each Distribution
Date, after giving effect to any deposit to be made to, and any withdrawal to be
made from, the Reserve Account, the Trustee will withdraw from the Reserve
Account an amount equal to the excess, if any, of the amount on deposit in the
Reserve Account over the Required Reserve Account Amount and will pay such
amount to the holders of the Seller Certificates.
Provided that the Reserve Account has not terminated as described below,
all amounts on deposit in the Reserve Account with respect to any Distribution
Date (after giving effect to any deposits to, or withdrawals from, the Reserve
Account to be made on such Distribution Date) will be invested by the Trustee at
the direction of the Servicer in Eligible Investments. The interest and other
investment income (net of investment expenses and losses) earned on such
investments will be retained in the Reserve Account (to the extent the amount on
deposit is less than the Required Reserve Account Amount) or deposited in the
Collection Account and treated as collections of Finance Charge Receivables
allocable to Series 1999-A.
On the Determination Date before each Distribution Date for the
Accumulation Period (prior to the Class C Principal Commencement Date) and on
the first Distribution Date for the Rapid Amortization Period, a withdrawal will
be made from the Reserve Account, and the amount of such withdrawal will be
deposited in the Collection Account and included in Class A Available Funds in
an amount equal to the lesser of (a) the Available Reserve Account Amount for
such Distribution Date and (b) the excess, if any, of a portion of the Class A
Monthly Interest determined in accordance with the Pooling and Servicing
Agreement over the Principal Funding Investment Proceeds for such Distribution
Date; provided, that the amount of such withdrawal shall be reduced to the
extent that funds otherwise would be available to be deposited in the
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Reserve Account on such Distribution Date. On each Distribution Date, the amount
available to be withdrawn from the Reserve Account (the "AVAILABLE RESERVE
ACCOUNT AMOUNT") will be equal to the lesser of the amount on deposit in the
Reserve Account (before giving effect to any deposit to be made to the Reserve
Account on such Distribution Date) and the Required Reserve Account Amount for
such Distribution Date.
The Reserve Account will be terminated following the earliest to occur of
(a) the termination of the Trust pursuant to the Pooling and Servicing
Agreement, (b) the date on which the Class A Investor Amount is paid in full and
(c) if the Accumulation Period has not begun, the occurrence of a Pay Out Event
or, if the Accumulation Period has begun, the earlier of the first Distribution
Date with respect to the Rapid Amortization Period and the Class A Expected
Final Distribution Date. Upon the termination of the Reserve Account, all
amounts on deposit therein (after giving effect to any withdrawal from the
Reserve Account on such date as described above) will be distributed to the
holders of the Seller Certificates. Any amounts withdrawn from the Reserve
Account and distributed to the holders of the Seller Certificates as described
above will not be available for distribution to the Certificateholders.
PAIRED SERIES
The Series 1999-A Certificates are subject to being paired with one or more
later issued Series (each, a "PAIRED SERIES") on or after the commencement of
the Accumulation Period or the Rapid Amortization Period. A Paired Series may be
pre-funded with an initial deposit to a funding account or may have a variable
principal amount. Any such funding account will be held for the benefit of such
Paired Series and not for the benefit of the holders of the Series 1999-A
Certificates. Upon payment in full of the Series 1999-A Certificates, assuming
that there have been no unreimbursed charge-offs with respect to any related
Paired Series, the aggregate investor amount of such Paired Series will have
been increased by an amount up to an aggregate amount equal to the Investor
Amount. The issuance of a Paired Series will be subject to the conditions
described under "Description of the Certificates--New Issuances" in the
accompanying Prospectus.
There can be no assurance that the terms of any Paired Series might not
have an impact on the calculation of the Series Percentage or the timing or
amount of payments received by a Certificateholder. The full extent by which the
timing or amount of payments received by a holder of a Series 1999-A Certificate
may be affected will be dependent on a number of factors and will not be readily
determinable by the change that may occur in the Series Percentage.
SHARED COLLECTIONS OF PRINCIPAL RECEIVABLES
To the extent that collections of Principal Receivables allocated to the
Series 1999-A Certificates or the Class C Interests are not needed to make
payments to or for the benefit of the Certificateholders or the Class C Interest
Holders, such collections may be applied to cover principal payments due to or
for the benefit of other Principal Sharing Series in Group One. Any such
application of collections will not result in a reduction of the Invested Amount
of the Series 1999-A Certificates and the Class C Interests.
Similarly, certain collections of Principal Receivables allocated to other
Principal Sharing Series in Group One, to the extent such collections are not
needed to make payments to or for the benefit of the holders of the certificates
and other interests of such other Series ("SHARED PRINCIPAL COLLECTIONS"), will
be applied, if necessary, to cover payments of principal due to holders of the
Series 1999-A Certificates and Class C Interests during the Accumulation Period.
There can be no assurance that such Shared Principal Collections will be
available to cover payments of principal or deposits due on any Distribution
Date for the Accumulation Period. If no such Shared Principal Collections were
available to the Certificates, the Class A Investor Amount might not be paid in
full by the Class A Expected Final Distribution Date and the Class B Investor
Amount might not be paid in full by the Class B Expected Final Distribution
Date. Such Shared Principal Collections may also be allocated to other Series
either currently outstanding or to be issued by the Trust in the future. To the
extent such Shared Principal Collections are allocated to other Series, the pro
rata share of such Shared Principal Collections allocated to Series 1999-A will
be reduced.
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THE CASH COLLATERAL ACCOUNT
A cash collateral account (the "CASH COLLATERAL ACCOUNT") will be held for
the benefit of the Series 1999-A Holders and the depositor to the Cash
Collateral Account, as their interests appear in the Series Supplement. Funds on
deposit in the Cash Collateral Account will be invested in certain Eligible
Investments. On each Distribution Date, all interest and earnings (net of losses
and investment expenses) accrued since the preceding Distribution Date on funds
on deposit in the Cash Collateral Account will be paid to the depositor to the
Cash Collateral Account. The Cash Collateral Account will be funded on the
Closing Date in the initial amount of $9,000,000.
On each Distribution Date, the amount available to be withdrawn from the
Cash Collateral Account (the "AVAILABLE CASH COLLATERAL AMOUNT") will be equal
to the least of (i) the amount on deposit in the Cash Collateral Account (before
giving effect to any deposit to, or withdrawal from, the Cash Collateral Account
on such Distribution Date), (ii) the Required Cash Collateral Amount and (iii)
the Invested Amount as of such date.
The "REQUIRED CASH COLLATERAL AMOUNT" for any Distribution Date means the
greater of (i) the product of (a) the Invested Amount as of such Distribution
Date after taking into account distributions made on such Distribution Date, and
(b) 1.5% and (ii) $6,000,000; provided, however; that (i) if certain withdrawals
are made from the Cash Collateral Account or if a Pay Out Event with respect to
Series 1999-A occurs, the Required Cash Collateral Amount for such Distribution
Date will equal the Required Cash Collateral Amount for the Distribution Date
immediately preceding the occurrence of such withdrawal or Pay Out Event, (ii)
in no event shall the Required Cash Collateral Amount exceed the Invested Amount
on such date, and (iii) the Required Cash Collateral Amount may be reduced
without the consent of the Series 1999-A Holders, if the Seller shall have
received written notice that the Rating Agency Condition has been satisfied for
such reduction and the Seller shall have delivered to the Trustee a certificate
of an authorized officer to the effect that, based on the facts known to such
officer at such time, in the reasonable belief of the Seller, such reduction
will not cause a Pay Out Event with respect to Series 1999-A or an event that,
after the giving of notice or the lapse of time, would constitute a Pay Out
Event with respect to Series 1999-A.
On each Distribution Date, one or more withdrawals may be made from the
Cash Collateral Account in an amount up to the Available Cash Collateral Amount,
to fund the amounts specified in clauses (1) through (8) of "--Application of
Collections--Excess Spread; Excess Finance Charges" above in the order of
priority specified therein.
On each Distribution Date, the Servicer or the Trustee, acting pursuant to
the Servicer's instructions, will apply Excess Spread and Excess Finance Charges
(to the extent described above under "--Application of Collections--Excess
Spread; Excess Finance Charges") to increase the amount on deposit in the Cash
Collateral Account to the extent such amount is less than the Required Cash
Collateral Amount. In addition, if on any Distribution Date the amount on
deposit in the Cash Collateral Account exceeds the Required Cash Collateral
Amount, such excess will be withdrawn and applied in accordance with the Class C
Supplemental Agreement.
ALLOCATION OF INVESTOR DEFAULT AMOUNT
On each Determination Date, the Servicer will calculate the Investor
Default Amount for the preceding Monthly Period. The term "INVESTOR DEFAULT
AMOUNT" means, for any Monthly Period, the product of (i) the Floating
Allocation Percentage with respect to such Monthly Period and (ii) the Defaulted
Amount for such Monthly Period. A portion of the Investor Default Amount will be
allocated to the Class A Certificateholders (the "CLASS A INVESTOR DEFAULT
AMOUNT") on each Distribution Date in an amount equal to the product of the
Class A Floating Percentage applicable during the related Monthly Period and the
Investor Default Amount for such Monthly Period. A portion of the Investor
Default Amount will be allocated to the Class B Certificateholders (the "CLASS B
INVESTOR DEFAULT AMOUNT") in an amount equal to the product of the Class B
Floating Percentage applicable during the related Monthly Period and the
Investor Default Amount for such Monthly Period. A portion of the Investor
Default Amount will be allocated to the Class C Interest Holders (the "CLASS C
INVESTOR DEFAULT AMOUNT") on each Distribution Date in an amount equal to the
S-41
<PAGE> 42
product of the Class C Floating Percentage applicable during the related Monthly
Period and the Investor Default Amount for such Monthly Period. An amount equal
to the Class A Investor Default Amount for each Monthly Period will be paid from
Class A Available Funds, Excess Spread and Excess Finance Charges allocated to
Series 1999-A or from amounts, if any, on deposit in the Cash Collateral Account
and Reallocated Principal Collections and applied as described above under
"--Application of Collections--Payment of Interest, Fees and Other Items,"
"--Application of Collections--Excess Spread; Excess Finance Charges" and
"--Reallocation of Cash Flows." An amount equal to the Class B Investor Default
Amount for each Monthly Period will be paid from Excess Spread and Excess
Finance Charges allocated to Series 1999-A or from amounts, if any, on deposit
in the Cash Collateral Account and Reallocated Principal Collections allocable
to the Class C Invested Amount and applied as described above under
"--Application of Collections--Excess Spread; Excess Finance Charges" and
"--Reallocation of Cash Flows." An amount equal to the Class C Investor Default
Amount for each Monthly Period will be paid from Excess Spread and Excess
Finance Charges allocated to Series 1999-A as described above under
"--Application of Collections--Excess Spread; Excess Finance Charges."
On each Distribution Date, if the Class A Required Amount for such
Distribution Date exceeds the sum of Excess Spread and Excess Finance Charges
allocable to Series 1999-A, amounts, if any, on deposit in the Cash Collateral
Account and Reallocated Principal Collections, the Class C Invested Amount will
be reduced by the amount of such excess, but not by more than the Class A
Investor Default Amount for such Distribution Date. In the event that such
reduction would cause the Class C Invested Amount to be a negative number, the
Class C Invested Amount will be reduced to zero, and the Class B Invested Amount
will be reduced by the amount by which the Class C Invested Amount would have
been reduced below zero, but not by more than the excess, if any, of the Class A
Investor Default Amount for such Distribution Date over the amount of such
reduction, if any, of the Class C Invested Amount with respect to such
Distribution Date. In the event that such reduction would cause the Class B
Invested Amount to be a negative number, the Class B Invested Amount will be
reduced to zero, and the Class A Invested Amount will be reduced by the amount
by which the Class B Invested Amount would have been reduced below zero, but not
by more than the excess, if any, of the Class A Investor Default Amount for such
Distribution Date over the amount of the reductions, if any, of the Class C
Invested Amount and the Class B Invested Amount with respect to such
Distribution Date as described above (a "CLASS A INVESTOR CHARGE-OFF"), which
may have the effect of slowing or reducing the return of principal to the Class
A Certificateholders. If the Class A Invested Amount has been reduced by the
amount of any Class A Investor Charge-Offs, it will thereafter be increased on
any Distribution Date (but not by an amount in excess of the aggregate Class A
Investor Charge-Offs) by the amount of Excess Spread and Excess Finance Charges
allocated to Series 1999-A and available for such purpose as described above
under "--Application of Collections--Excess Spread; Excess Finance Charges."
On each Distribution Date, if the Class B Required Amount for such
Distribution Date exceeds the sum of Excess Spread and Excess Finance Charges
allocable to Series 1999-A and not required to pay the Class A Required Amount,
amounts, if any, on deposit in the Cash Collateral Account not required to pay
the Class A Required Amount and Reallocated Principal Collections allocable to
the Class C Interests and not required to pay the Class A Required Amount, then
the Class C Invested Amount will be reduced by the amount of such excess. In the
event that such reduction would cause the Class C Invested Amount to be a
negative number, the Class C Invested Amount will be reduced to zero, and the
Class B Invested Amount will be reduced by the amount by which the Class C
Invested Amount would have been reduced below zero, but not by more than the
excess, if any, of the Class B Investor Default Amount for such Distribution
Date over the amount of such reduction, if any, of the Class C Invested Amount
with respect to such Distribution Date (a "CLASS B INVESTOR CHARGE-OFF"), which
may have the effect of slowing or reducing the return of principal to the Class
B Certificateholders. If the Class B Invested Amount has been reduced by the
amount of any Class B Investor Charge-Offs, it will thereafter be increased on
any Distribution Date (but not by an amount in excess of the aggregate Class B
Investor Charge-Offs) by the amount of Excess Spread and Excess Finance Charges
allocated to Series 1999-A and available for such purpose as described above
under "--Application of Collections--Excess Spread; Excess Finance Charges."
S-42
<PAGE> 43
OPTIONAL REPURCHASE
On any date occurring on or after the date that the Investor Amount is
reduced to 5% or less of the Initial Invested Amount, the Seller will have the
option (to be exercised in its sole discretion) to repurchase the Certificates
and the Class C Interests. The purchase price of the Certificates and the Class
C Interests will be equal to the Invested Amount on such Distribution Date on
which such purchase occurs (if the purchase is on a Distribution Date and, if
not, the Invested Amount for the Distribution Date following such repurchase)
plus, in each case, accrued and unpaid interest on the Certificates plus accrued
and unpaid interest on the Class C Interests. Following any such repurchase, the
Certificateholders will have no further rights with respect to the Receivables;
provided, however, that such repurchase in no way impacts the
Certificateholders' rights under the federal securities law.
Any such optional repurchase may result in an early repayment of the
Certificateholders' investment without any prepayment penalty and there can be
no assurance that a Certificateholder will be able to invest such early
repayment amount at a similar rate of return.
PAY OUT EVENTS
The Revolving Period will continue through May 31, 2001 (or such later date
resulting from postponement of the Accumulation Period), unless a Pay Out Event
occurs prior to such date. A "PAY OUT EVENT" for Series 1999-A refers to any of
the following events, which are applicable only to Series 1999-A (although other
Series may have similar or identical pay out events):
(a) failure on the part of the Seller (i) to make any payment or deposit
on the date required under the Pooling and Servicing Agreement on or before
the date occurring five Business Days after the date such payment or
deposit is required to be made; or (ii) duly to observe or perform in any
material respect any other covenants or agreements of the Seller in the
Pooling and Servicing Agreement, which failure has a material adverse
effect on the Series 1999-A Holders (which determination will be made
without reference to whether any funds are available pursuant to any credit
enhancement) and continues unremedied for a period of 60 days after written
notice of such failure shall have been given to the Seller by the Trustee,
or to the Seller and the Trustee by Series 1999-A Holders aggregating not
less than 50% of the outstanding principal balance of the Series 1999-A
Interests;
(b) any representation or warranty made by the Seller in the Pooling and
Servicing Agreement or any information required to be given by the Servicer
on behalf of the Seller to identify the Accounts proves to have been
incorrect in any material respect when made or delivered and continues to
be incorrect in any material respect for a period of 60 days after written
notice of such failure shall have been given to the Seller by the Trustee,
or to the Seller and the Trustee by the holders of Series 1999-A Holders
aggregating not less than 50% of the outstanding principal balance of the
Series 1999-A Interests and as a result the interests of the Series 1999-A
Holders are materially and adversely affected (which determination shall be
made without reference to whether any funds are available pursuant to any
credit enhancement); provided, however, that a Pay Out Event shall not be
deemed to have occurred with respect to this subparagraph (b) if the Seller
has accepted reassignment of the related Receivable or all such
Receivables, if applicable, during such period (or such longer period as
the Trustee may specify) in accordance with the provisions of the Pooling
and Servicing Agreement;
(c) with respect to the end of any Monthly Period (i) with respect to
which the Seller Amount is less than the Required Seller Amount, the
failure of the Seller to convey Receivables in Additional Accounts to the
Trust on or prior to the tenth Business Day following the related
Determination Date such that the Seller Amount is at least equal to the
Required Seller Amount or (ii) with respect to which the aggregate
Principal Receivables are less than the Required Principal Balance, the
failure of the Seller to convey Receivables in Additional Accounts to the
Trust on or prior to the tenth Business Day following the related
Determination Date such that the aggregate Principal Receivables are at
least equal to the Required Principal Balance;
S-43
<PAGE> 44
(d) the Net Portfolio Yield averaged over three consecutive Monthly
Periods is less than the Base Rate averaged over such period;
(e) any Servicer Default occurs which would have a material adverse
effect on the holders of the Series 1999-A Interests; or
(f) the Class A Investor Amount shall not be paid in full on the Class A
Expected Final Distribution Date or the Class B Investor Amount shall not
be paid in full on the Class B Expected Final Distribution Date.
A Pay Out Event for all Series refers to any of the following events, which are
applicable to Series 1999-A and other Series:
(g) an Insolvency Event relating to any Seller (including any Additional
Seller);
(h) the Trust becomes an "investment company" within the meaning of the
Investment Company Act of 1940, as amended; or
(i) the inability of any Seller (including any Additional Seller) for
any reason to transfer Receivables to the Trust in accordance with the
provisions of the Pooling and Servicing Agreement.
In the case of any event described in subparagraphs (a), (b) or (e), a Pay
Out Event will be deemed to have occurred only if, after any applicable grace
period described in such clauses, the Trustee or the Series 1999-A Holders
evidencing undivided interests aggregating more than 50% of the aggregate unpaid
principal amount of the Series 1999-A Interests, by written notice to the Seller
and the Servicer (and to the Trustee if given by the Series 1999-A Holders),
declare that a Pay Out Event has occurred with respect to the Series 1999-A
Interests and is continuing as of the date of such notice, and in the case of
any event described in subparagraphs (c), (d), (f), (g), (h), or (i), a Pay Out
Event will be deemed to have occurred without any notice or other action on the
part of the Trustee, or the Series 1999-A Holders immediately upon the
occurrence of such event. Upon the occurrence of a Pay Out Event, the Rapid
Amortization Period will commence. In such event, distributions of principal to
the Series 1999-A Holders in the priority provided for above will begin on the
first Distribution Date following the month in which the Pay Out Event occurred.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The share of the Servicing Fee allocable to the Series 1999-A Interests for
any Distribution Date (the "MONTHLY SERVICING FEE") will be equal to one-twelfth
of the product of (a) 2.0% (the "SERVICING FEE RATE") and (b) the Invested
Amount as of the last day of the Monthly Period preceding such Distribution Date
(the amount calculated pursuant to this clause (b) is referred to as the
"SERVICING BASE AMOUNT"); provided, however, with respect to the first
Distribution Date, the Monthly Servicing Fee will be $500,000.
The share of the Monthly Servicing Fee allocable to the Class A
Certificateholders for any Distribution Date (the "CLASS A SERVICING FEE") will
be equal to one-twelfth of the product of (a) the Class A Floating Percentage,
(b) the Servicing Fee Rate and (c) the Servicing Base Amount; provided, however,
that for the first Distribution Date, the Class A Servicing Fee will be
$415,000. The share of the Monthly Servicing Fee allocable to the Class B
Certificateholders for any Distribution Date (the "CLASS B SERVICING FEE") will
be equal to one-twelfth of the product of (a) the Class B Floating Percentage,
(b) the Servicing Fee Rate and (c) the Servicing Base Amount; provided, however,
that for the first Distribution Date, the Class B Servicing Fee will be $37,500.
The share of the Servicing Fee allocable to the Class C Interest Holders for any
Distribution Date (the "CLASS C SERVICING FEE") will be equal to one-twelfth of
the product of (a) the Class C Floating Percentage, (b) the Servicing Fee Rate
and (c) the Servicing Base Amount; provided, however, that for the first
Distribution Date, the Class C Servicing Fee will be $47,500. The Class A
Servicing Fee, the Class B Servicing Fee and the Class C Servicing Fee shall be
payable to the Servicer solely to the extent amounts are available for
distribution as described under "--Application of Collections--Payment of
Interest, Fees and Other Items," "--Cash Collateral Account; Reallocated
Principal Collections," and "--Excess Spread; Excess Finance Charges" in this
Prospectus Supplement.
S-44
<PAGE> 45
FEDERAL INCOME TAX CONSEQUENCES
Based on the application of existing law to the facts as set forth in the
Pooling and Servicing Agreement and other relevant documents, Orrick, Herrington
& Sutcliffe LLP, special counsel to the Bank ("SPECIAL TAX COUNSEL"), is of the
opinion that the Certificates will properly be treated as indebtedness for
federal income tax purposes. See "Federal Income Tax Consequences" in the
accompanying Prospectus.
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and section 4975 of the Code prohibit certain pension, profit
sharing or other employee benefit plans, individual retirement accounts or
annuities and employee annuity plans and Keogh plans (collectively, "PLANS")
from engaging in certain transactions involving "plan assets" with persons that
are "parties in interest" under ERISA or "disqualified persons" under the Code
(collectively, "PARTIES IN INTEREST") with respect to the Plan. A violation of
these "prohibited transaction" rules may generate excise tax and other
liabilities under ERISA and section 4975 of the Code for such persons, unless a
statutory, regulatory or administrative exemption is available. Plans that are
government plans (as defined in section 3(32) of ERISA) and certain church plans
(as defined in section 3(33) of ERISA) are not subject to ERISA requirements.
CLASS A CERTIFICATES
A violation of the prohibited transaction rules could occur if the Class A
Certificates were to be purchased with "plan assets" of any Plan if the Seller,
the Trustee, any underwriters of such Series or any of their affiliates were a
Party in Interest with respect to such Plan, unless a statutory, regulatory or
administrative exemption is available or an exemption applies under a regulation
(the "PLAN ASSET REGULATION") issued by the Department of Labor ("DOL"). The
Seller, the Trustee, the Underwriters and their affiliates are likely to be
Parties in Interest with respect to many Plans. Before purchasing the Class A
Certificates, a Plan fiduciary or other Plan investor should consider whether a
prohibited transaction might arise by reason of a relationship between the Plan
and the Seller, the Trustee, any Underwriter of such Series or any of their
affiliates and consult their counsel regarding the purchase in light of the
considerations described below and in the accompanying Prospectus.
Under certain circumstances, the Plan Asset Regulation treats the assets in
which a Plan holds an equity interest as "plan assets" of such Plan. Because the
Class A Certificates will represent beneficial interests in the Trust, and
despite the agreement of the Seller and the Certificate Owners to treat the
Class A Certificates as debt instruments, the Class A Certificates are likely to
be considered equity interests in the Trust for purposes of the Plan Asset
Regulation, with the result that the assets of the Trust are likely to be
treated as "plan assets" of the investing Plans for purposes of ERISA and
section 4975 of the Code, unless the exception for "publicly-offered securities"
is applicable as described in the accompanying Prospectus. It is anticipated
that the Class A Certificates will meet the criteria for treatment as
"publicly-offered securities" as described in the accompanying Prospectus. No
restrictions will be imposed on the transfer of the Class A Certificates. It is
expected that the Class A Certificates will be held by at least 100 Independent
Investors at the conclusion of the initial public offering although no assurance
can be given, and no monitoring or other measures will be taken to ensure, that
such condition is met. The Class A Certificates will be sold as part of the
offering pursuant to an effective registration statement under the Act and then
will be timely registered under the Exchange Act.
If the forgoing exception under the Plan Asset Regulation were not
satisfied, transactions involving the Trust and Parties in Interest with respect
to a Plan that purchases or holds Class A Certificates might be prohibited under
section 406 of ERISA and/or section 4975 of the Code and result in excise tax
and other liabilities under ERISA and section 4975 of the Code unless an
exemption were available. The five DoL class exemptions described in the
accompanying Prospectus may not provide relief for all transactions involving
the assets of the Trust even if they would otherwise apply to the purchase of a
Class A Certificate by a Plan.
S-45
<PAGE> 46
CLASS B CERTIFICATES
The Class B Underwriter currently does not expect that the Class B
Certificates will be held by at least 100 such persons and, therefore, does not
expect that such Class B Certificates will qualify as "publicly-offered
securities" under the Plan Asset Regulation. Accordingly, the Class B
Certificates may not be acquired or held by, on behalf of, or with "plan assets"
of any Plan. By its acceptance of a Class B Certificate, each Class B
Certificateholder will be deemed to have represented and warranted that it is
not and will not be subject to the foregoing limitation.
CONSULTATION WITH COUNSEL
In light of the foregoing, fiduciaries or other persons contemplating
purchasing the Class A Certificates on behalf of or with "plan assets" of any
Plan should consult their own counsel regarding whether the Trust's assets
represented by the Class A Certificates would be considered "plan assets," the
consequences that would apply if the Trust's assets were considered "plan
assets," and the possibility of exemptive relief from the prohibited transaction
rules.
Finally, Plan fiduciaries and other Plan investors should consider the
fiduciary standards under ERISA or other applicable law in the context of the
Plan's particular circumstances before authorizing an investment of a portion of
the Plan's assets in the Class A Certificates. Accordingly, among other factors,
Plan fiduciaries and other Plan investors should consider whether the investment
(i) satisfies the diversification requirement of ERISA or other applicable law,
(ii) is in accordance with the Plan's governing instruments, and (iii) is
prudent in light of the "Risk Factors" and other factors discussed in this
Prospectus Supplement and the accompanying Prospectus.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
relating to the Class A Certificates and the Class B Certificates, the
"UNDERWRITING AGREEMENT"), the Bank has agreed to sell to the underwriters named
below (the "CLASS A UNDERWRITERS"), and each of the Class A Underwriters has
agreed to purchase from the Bank, the principal amount of Class A Certificates
set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF
CLASS A UNDERWRITERS CLASS A CERTIFICATES
- -------------------- --------------------
<S> <C>
Lehman Brothers Inc. ....................................... $ 99,600,000
Bear, Stearns & Co. Inc. ................................... $ 99,600,000
J.P. Morgan Securities Inc. ................................ $ 99,600,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated .................................. $ 99,600,000
Salomon Smith Barney Inc. .................................. $ 99,600,000
------------
Total............................................. $498,000,000
============
</TABLE>
The Seller has been advised by the Class A Underwriters that the Class A
Underwriters propose initially to offer the Class A Certificates to the public
at the price set forth on the cover page of this Prospectus Supplement and to
certain dealers at such price less a concession not in excess of 0.135% of the
principal amount of the Class A Certificates. The Class A Underwriters may allow
and such dealers may reallow a concession not in excess of 0.075% of the
principal amount of the Class A Certificates to certain other dealers. After the
initial public offering, the public offering price and such concessions may be
changed.
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Bank has agreed to sell to the underwriter named below (the
"CLASS B UNDERWRITER" and together with the Class A Underwriters, the
S-46
<PAGE> 47
"UNDERWRITERS"), and the Class B Underwriter has agreed to purchase from the
Bank, the principal amount of Class B Certificates set forth opposite its name
below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF
CLASS B UNDERWRITER CLASS B CERTIFICATES
- ------------------- --------------------
<S> <C>
Lehman Brothers Inc. ....................................... $45,000,000
</TABLE>
The Seller has been advised by the Class B Underwriter that the Class B
Underwriter proposes initially to offer the Class B Certificates to the public
at the price set forth on the cover page of this Prospectus Supplement and to
certain dealers at such price less a concession not in excess of 0.165% of the
principal amount of the Class B Certificates. The Class B Underwriter may allow
and such dealers may reallow a concession not in excess of 0.085% of the
principal amount of the Class B Certificates to certain other dealers. After the
initial public offering, the public offering price and such concessions may be
changed.
The Underwriters will be compensated as set forth in the following table:
<TABLE>
<CAPTION>
UNDERWRITERS'
DISCOUNTS AND AMOUNT PER
COMMISSION $1,000 OF PRINCIPAL TOTAL AMOUNT
------------------- ------------------- ------------
<S> <C> <C> <C>
Class A Certificates....................... 0.225% $2.25 $1,120,500
Class B Certificates....................... 0.275% $2.75 $ 123,750
----------
Total for Class A and Class B.... $1,244,250
==========
</TABLE>
Additional offering expenses are estimated to be $700,000.
The Seller has agreed that it will indemnify the Underwriters against
certain liabilities, including liabilities under the Act, or contribute to
payments the Underwriters may be required to make in respect thereof.
Each Underwriter has represented and agreed that (a) it has complied and
will comply with all applicable provisions of the Financial Services Act of 1986
and the Public Offers of Securities Regulations 1995 (the "REGULATIONS") with
respect to anything done by it in relation to the Certificates in, from or
otherwise involving the United Kingdom; (b) it has only issued or passed on and
will only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Certificates to a person who is of a kind
described in Article 11(3) of the Financial Services Act of 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on; and (c) if it is an authorized person
under Chapter III of part I of the Financial Services Act 1986, it has only
promoted and will only promote (as that term is defined in Regulation 1.02(2) of
the Financial Services (Promotion of Unregulated Schemes) Regulations 1991) to
any person in the United Kingdom the scheme described in this Prospectus
Supplement and the Prospectus if that person is of a kind described either in
Section 76(2) of the Financial Services Act 1986 or in Regulation 1.04 of the
Financial Services (Promotion of Unregulated Schemes) Regulations 1991; and (d)
it is a person of a kind described in Article 11(3) of the Financial Services
Act 1986 (Investment Advertisements) (Exemptions) Order 1996.
The Underwriters may engage in over-allotment transactions, stabilizing
transactions, syndicate covering transactions and penalty bids with respect to
the Certificates in accordance with regulation M under the Exchange Act.
Over-allotment transactions involve syndicate sales in excess of the offering
size, which creates a syndicate short position. Stabilizing transactions permit
bids to purchase the Certificates so long as the stabilizing bids do not exceed
a specified maximum. Syndicate covering transactions involve purchases of the
Certificates in the open market after the distribution has been completed in
order to cover syndicate short positions. Penalty bids permit the Underwriters
to reclaim a selling concession from a syndicate member when the Certificates
originally sold by such syndicate member are purchased in a syndicate covering
transaction. Such over-allotment transactions, stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the
Certificates to be higher than they would otherwise be in the absence of such
transactions. Neither the Bank nor the Underwriters represents that the
Underwriters will engage in any such transactions or that such transactions,
once commenced, will not be discontinued without notice at any time.
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<PAGE> 48
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates will be
passed upon for the Seller by Linda Morris, Esq., Vice President, Secretary and
General Counsel, Fleet Bank (RI), National Association, and by Orrick,
Herrington & Sutcliffe LLP, Washington, D.C., special counsel to the Seller.
Certain legal matters related to Rhode Island law will be passed upon for the
Seller by Edwards & Angell, Boston, Massachusetts. Certain legal matters
relating to the federal tax consequences of such issuance will be passed upon
for the Seller by Orrick, Herrington & Sutcliffe LLP, Washington, D.C. Certain
matters relating to the issuance of the Certificates will be passed upon for the
Underwriters by Mayer, Brown & Platt, Chicago, Illinois.
S-48
<PAGE> 49
INDEX OF PRINCIPAL TERMS
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Accumulation Period.............. S-27
Accumulation Period Length....... S-28
Act.............................. S-12
Additional Accounts.............. S-16
Available Cash Collateral
Amount......................... S-41
Available Investor Principal
Collections.................... S-27
Available Reserve Account
Amount......................... S-40
Bank............................. S-12
Base Rate........................ S-20
Business Day..................... S-24
Cash Collateral Account.......... S-41
Certificate Owner................ S-24
Certificateholders............... S-20
Certificates..................... S-12
Class A Additional Interest...... S-35
Class A Available Funds.......... S-25
Class A Certificate Rate......... S-24
Class A Certificateholders....... S-20
Class A Certificates............. S-12
Class A Expected Final
Distribution
Date........................... S-20, S-27
Class A Floating Percentage...... S-29
Class A Initial Invested
Amount......................... S-31
Class A Invested Amount.......... S-31
Class A Investor Amount.......... S-32
Class A Investor Charge-off...... S-42
Class A Investor Default
Amount......................... S-41
Class A Monthly Interest......... S-26
Class A Monthly Principal........ S-28
Class A Principal Percentage..... S-30
Class A Required Amount.......... S-32
Class A Servicing Fee............ S-44
Class A Underwriters............. S-46
Class B Additional Interest...... S-36
Class B Available Funds.......... S-26
Class B Certificate Rate......... S-24
Class B Certificateholders....... S-20
Class B Certificates............. S-12
Class B Expected Final
Distribution
Date........................... S-20, S-27
Class B Floating Percentage...... S-30
Class B Initial Invested
Amount......................... S-31
Class B Invested Amount.......... S-31
Class B Investor Amount.......... S-32
Class B Investor Charge-Off...... S-42
Class B Investor Default
Amount......................... S-41
Class B Monthly Interest......... S-26
Class B Monthly Principal........ S-28
Class B Principal Percentage..... S-30
</TABLE>
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Class B Required Amount.......... S-32
Class B Servicing Fee............ S-44
Class B Underwriter.............. S-46
Class C Additional Interest...... S-37
Class C Available Funds.......... S-26
Class C Floating Percentage...... S-30
Class C Initial Invested
Amount......................... S-31
Class C Interest Holders......... S-21
Class C Interest Rate............ S-26
Class C Interests................ S-12
Class C Invested Amount.......... S-31
Class C Investor Default Amount.. S-31, S-41
Class C Monthly Interest......... S-26
Class C Monthly Principal........ S-28
Class C Principal Commencement
Date........................... S-27, S-38
Class C Principal Percentage..... S-31
Class C Servicing Fee............ S-44
Class C Supplemental Agreement... S-12
Closing Date..................... S-12
Controlled Accumulation Amount... S-28
Controlled Deposit Amount........ S-20, S-28
Criteria......................... S-16
Deficit Controlled Accumulation
Amount......................... S-28
Definitive Certificate........... S-24
Designated Maturity.............. S-25
Determination Date............... S-20
Distribution Date................ S-24
DoL.............................. S-45
DTC.............................. S-24
Eligible Account................. S-16
ERISA............................ S-45
Excess Finance Charges........... S-25
Excess Spread.................... S-36
FFG.............................. S-12, S-15
Fleet "A" Credit Card
Portfolio...................... S-12
Fleet "B" Credit Card
Portfolio...................... S-12
Fleet Credit Card Portfolio...... S-12
Floating Allocation Percentage... S-29
Group One........................ S-12
Initial Accounts................. S-16
Initial Closing Date............. S-16
Initial Cut-Off Date............. S-16
Initial Invested Amount.......... S-23
Interest Period.................. S-24
Invested Amount.................. S-23, S-32
Investor Amount.................. S-32
Investor Default Amount.......... S-41
LIBOR............................ S-24, S-25
</TABLE>
S-49
<PAGE> 50
INDEX OF PRINCIPAL TERMS
(CONTINUED)
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
LIBOR Determination Date......... S-25
Master Pooling and Servicing
Agreement...................... S-12
Master Trust I Sales............. S-13
Master Trust II Sales............ S-13
Monthly Period................... S-25, S-29
Monthly Servicing Fee............ S-44
Net Portfolio Yield.............. S-20
Paired Series.................... S-40
Parties in Interest.............. S-45
Pay Out Event.................... S-43
Percentage Allocation............ S-34
Plan Asset Regulation............ S-45
Plans............................ S-45
Pooling and Servicing
Agreement...................... S-12
Principal Allocation
Percentage..................... S-30
Principal Funding Account........ S-39
Principal Funding Account
Balance ....................... S-31
Principal Funding Investment
Proceeds....................... S-39
Rapid Amortization Period........ S-21
Reallocated Principal
Collections.................... S-32
Record Date...................... S-25
Reference Banks.................. S-25
Regulations...................... S-47
Relevant Cut-Off Date............ S-16
Required Cash Collateral
Amount......................... S-41
Required Reserve Account
Amount ........................ S-39
</TABLE>
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Reserve Account.................. S-39
Reserve Account Funding Date..... S-39
Revolving Period................. S-26
Seller........................... S-12
Seller Amount.................... S-23
Seller Percentage................ S-24
Sellers' Interest................ S-24
Series 1999-A.................... S-12
Series 1999-A Certificates....... S-12
Series 1999-A Holders............ S-23
Series 1999-A Interests.......... S-12
Series 1999-A Termination Date... S-24
Series Investor Amount........... S-32
Series Percentage................ S-23
Series Supplement................ S-12
Servicer......................... S-12
Servicing Base Amount............ S-44
Servicing Fee Rate............... S-44
Shared Principal Collections..... S-40
Special Tax Counsel.............. S-45
Subordinate Principal
Collections.................... S-34
Telerate Page 3750............... S-25
Trust............................ S-12
Trust Portfolio.................. S-16
Trustee.......................... S-12
Underwriters..................... S-47
Underwriting Agreement........... S-46
</TABLE>
S-50
<PAGE> 51
ANNEX I
OTHER SERIES ISSUED
The Certificates will be the nineteenth Series to be issued by the Trust.
The table below sets forth the principal characteristics of the thirteen other
Series heretofore issued by the Trust and currently outstanding. Such Series are
the Series 1994-B Certificates, the Series 1995-A Certificates, the Series
1995-B Certificates, the Series 1995-C Certificates, the Series 1995-D
Certificates, the Euro Series 1995-E Certificates, the Series 1995-F
Certificates, the Series 1995-G Certificates, the Series 1996-A Certificates,
the Series 1996-B Certificates, the Series 1996-C Certificates, the Series
1996-D Certificates, the Series 1996-E Certificates and the Series 1998-A
Certificates. Series 1995-B was issued in an offering exempt from the
registration requirements of the Act. Solely for purposes of this Annex I,
"LIBOR" shall mean London interbank offered quotations for United States dollar
deposits determined as set forth in the related Series Supplements.
<TABLE>
<S> <C>
SERIES 1994-B
Initial Invested Amount...................... $450,000,000
Initial Pre-Funded Amount.................... $300,000,000
Invested Amount as of January 31, 1999....... $750,000,000
Class A Certificate Rate..................... One Month LIBOR plus .28% per annum
(capped at 12% per annum)
Class B Certificate Rate..................... One Month LIBOR plus .53% per annum
(capped at 12% per annum)
Collateral Rate.............................. No higher than One Month LIBOR plus 1.00%
per annum
Initial Enhancement Amount................... $75,000,000
Series Servicing Fee Rate.................... 2% per annum
Stated Series 1994-B Termination Date........ October 1, 2001
Series Issuance Date......................... July 19, 1994
SERIES 1995-A
Initial Invested Amount...................... $600,000,000
Initial Pre-Funded Amount.................... $100,000,000
Invested Amount as of January 31, 1999....... $700,000,000
Class A Certificate Rate..................... One Month LIBOR plus .180% per annum
Class B Certificate Rate..................... One Month LIBOR plus .375% per annum
Collateral Rate.............................. No higher than One Month LIBOR plus 1.00%
per annum
Initial Enhancement Amount................... $73,500,000
Series Servicing Fee Rate.................... 2% per annum
Stated Series 1995-A Termination Date........ January 1, 2003
Series Issuance Date......................... January 18, 1995
SERIES 1995-B
Maximum Certificate Investor Amount.......... $600,000,000
Investor Amount as of January 31, 1999....... $600,000,000
Certificate Rate............................. Commercial Paper Index
Initial Enhancement Amount................... $41,000,000
Series Servicing Fee Rate.................... 2% per annum
Stated Series 1995-B Termination Date........ November 1, 2001 (extendible)
Series Issuance Date......................... March 22, 1995
</TABLE>
I-1
<PAGE> 52
<TABLE>
<S> <C>
SERIES 1995-C
Initial Invested Amount...................... $375,000,000
Initial Pre-Funded Amount.................... $200,000,000
Investor Amount as of January 31, 1999....... $575,000,000
Class A Certificate Rate..................... Three Month LIBOR plus .20% per annum
Class B Certificate Rate..................... Three Month LIBOR plus .34% per annum
Collateral Rate.............................. No higher than One Month LIBOR plus 1.00% per
annum
Initial Enhancement Amount................... $60,375,000
Series Servicing Fee Rate.................... 2% per annum
Stated Series 1995-C Termination Date........ January 1, 2005
Series Issuance Date......................... April 27, 1995
SERIES 1995-D
Initial Invested Amount...................... $450,000,000
Initial Pre-Funded Amount.................... $150,000,000
Investor Amount as of January 31, 1999....... $600,000,000
Class A Certificate Rate..................... One Month LIBOR plus .19% per annum
Class B Certificate Rate..................... One Month LIBOR plus .32% per annum
Initial Enhancement Amount................... $63,000,000
Series Servicing Fee Rate.................... 2% per annum
Stated Series 1995-D Termination Date........ February 1, 2004
Series Issuance Date......................... July 25, 1995
SERIES 1995-F
Initial Invested Amount...................... $750,000,000
Initial Pre-Funded Amount.................... $100,000,000
Investor Amount as of January 31, 1999....... $850,000,000
Class A-1 Certificate Rate................... 6.05% per annum
Class A-2 Certificate Rate................... One Month LIBOR plus .19% per annum
Class B Certificate Rate..................... One Month LIBOR plus .30% per annum
Initial Enhancement Amount................... $65,875,000
Series Servicing Fee Rate.................... 2% per annum
Series 1995-F Termination Date............... August 1, 2003
Series Issuance Date......................... November 21, 1995
SERIES 1995-G
Initial Invested Amount...................... $500,000,000
Investor Amount as of January 31, 1999....... $500,000,000
Class A Certificate Rate..................... One Month LIBOR plus .14% per annum
Class B Certificate Rate..................... One Month LIBOR plus .29% per annum
Collateral Rate.............................. No higher than One Month LIBOR plus 1.00% per
annum
Initial Enhancement Amount................... $50,000,000
Series Servicing Fee Rate.................... 2% per annum
Series 1995-G Termination Date............... June 2002 Distribution Date
Series Issuance Date......................... December 15, 1995
</TABLE>
I-2
<PAGE> 53
<TABLE>
<S> <C>
SERIES 1996-A
Initial Invested Amount...................... $400,000,000
Initial Pre-Funded Amount.................... $100,000,000
Investor Amount as of January 31, 1999....... $500,000,000
Class A-1 Certificate Rate................... 6.0% per annum
Class A-2 Certificate Rate................... One Month LIBOR plus .23% per annum
Class B Certificate Rate..................... One Month LIBOR plus .35% per annum
Collateral Rate.............................. No higher than One Month LIBOR plus 1.00% per
annum
Initial Enhancement Amount................... $43,750,000
Series Servicing Fee Rate.................... 2% per annum
Series 1996-A Termination Date............... November 2005 Distribution Date
Series Issuance Date......................... January 18, 1996
SERIES 1996-B
Initial Invested Amount...................... $750,000,000
Investor Amount as of January 31, 1999....... $750,000,000
Class A Certificate Rate..................... Three Month LIBOR plus .230% per annum
Class B Certificate Rate..................... Three Month LIBOR plus .375% per annum
Collateral Rate.............................. No higher than One Month LIBOR plus 1.00% per
annum
Initial Enhancement Amount................... $75,000,000
Series Servicing Fee Rate.................... 2% per annum
Series 1996-B Termination Date............... January 2007 Distribution Date
Series Issuance Date......................... March 26, 1996
SERIES 1996-C
Initial Invested Amount...................... $700,000,000
Investor Amount as of January 31, 1999....... $700,000,000
Class A Certificate Rate..................... Three Month LIBOR plus .120% per annum
Class B Certificate Rate..................... Three Month LIBOR plus .250% per annum
Collateral Rate.............................. No higher than Three Month LIBOR plus 1.00%
per annum
Initial Enhancement Amount................... $70,000,000
Series Servicing Fee Rate.................... 2% per annum
Series 1996-C Termination Date............... November 2003 Distribution Date
Series Issuance Date......................... May 13, 1996
SERIES 1996-D
Initial Invested Amount...................... $575,000,000
Initial Pre-Funded Amount.................... $125,000,000
Investor Amount as of January 31, 1999....... $700,000,000
Class A Certificate Rate..................... One Month LIBOR plus .15% per annum
Class B Certificate Rate..................... One Month LIBOR plus .30% per annum
Collateral Rate.............................. No higher than One Month LIBOR plus 1.00% per
annum
Initial Enhancement Amount................... $70,000,000
Series Servicing Fee Rate.................... 2% per annum
Series 1996-D Termination Date............... June 2005 Distribution Date
Series Issuance Date......................... June 18, 1996
</TABLE>
I-3
<PAGE> 54
<TABLE>
<S> <C>
SERIES 1996-E
Initial Invested Amount...................... $450,000,000
Initial Pre-Funded Amount.................... $50,000,000
Investor Amount as of January 31, 1999....... $500,000,000
Class A Certificate Rate..................... One Month LIBOR plus .10% per annum
Class B Certificate Rate..................... One Month LIBOR plus .33% per annum
Collateral Rate.............................. No higher than One Month LIBOR plus 1.00% per
annum
Initial Enhancement Amount................... $50,000,000
Series Servicing Fee rate.................... 2% per annum
Series 1996-E Termination Date............... May 2004 Distribution Date
Series Issuance Date......................... November 1, 1996
SERIES 1998-A
Initial Invested Amount...................... $862,500,000
Initial Pre-Funded Amount.................... $287,500,000
Investor Amount as of January 31, 1999....... $1,150,000,000
Class A Certificate Rate..................... One Month LIBOR plus .04% per annum
Class B Certificate Rate..................... One Month LIBOR plus .24% per annum
Collateral Rate.............................. No higher than One Month LIBOR plus 1.00% per
annum
Initial Enhancement Amount................... $97,750,000
Series Servicing Fee Rate.................... 2% per annum
Series 1998-A Termination Date............... July 2003 Distribution Date
Series Issuance Date......................... February 6, 1998
</TABLE>
I-4
<PAGE> 55
ANNEX II
RECEIVABLES IN ADDITIONAL ACCOUNTS
CONVEYED TO THE TRUST
<TABLE>
<CAPTION>
NUMBER OF RECEIVABLES
ASSIGNMENT DATE RECEIVABLES ADDITIONAL IN ADDITIONAL
NUMBER TRANSFERRED TO TRUST RELEVANT CUT-OFF DATE ACCOUNTS(1) ACCOUNTS(1)
- ---------- -------------------- --------------------- ----------- -------------
<C> <S> <C> <C> <C>
1 May 16, 1994 March 31, 1994 276,371 $367,091,261
2 July 1, 1994 May 31, 1994 157,629 $202,859,562
3 August 17, 1994 July 31, 1994 226,342 $351,961,171
4 September 23, 1994 August 31, 1994 192,815 $299,924,106
5 November 18, 1994 October 31, 1994 332,866 $406,625,727
6 January 6, 1995 November 30, 1994 217,320 $316,458,944
7 March 15, 1995 February 28, 1995 291,057 $348,693,399
8 April 18, 1995 March 31, 1995 143,714 $168,739,171
9 May 23, 1995 April 30, 1995 98,330 $137,485,579
10 July 18, 1995 June 30, 1995 322,271 $432,984,240
11 August 15, 1995 July 31, 1995 126,338 $188,302,827
12 August 31, 1995 August 11, 1995 67,968 $ 94,548,321
13 November 21, 1995 October 25, 1995 285,122 $491,863,655
14 December 15, 1995 November 26, 1995 265,376 $369,389,253
15 January 18, 1996 December 26, 1995 182,985 $330,263,251
16 February 19, 1996 January 31, 1996 269,467 $560,543,656
17 March 26, 1996 February 29, 1996 150,460 $330,531,723
18 May 1, 1996 March 31, 1996 68,056 $251,797,517
19 May 13, 1996 March 31, 1996 219,150 $499,241,938
20 June 18, 1996 April 30, 1996 244,770 $636,632,670
21 June 30, 1996 May 31, 1996 73,771 $200,155,226
22 September 1, 1996 July 31, 1996 217,130 $640,152,919
23 November 1, 1996 September 30, 1996 151,051 $500,113,079
24 November 1, 1996 September 30, 1996 30,631 $100,564,456
25 November 15, 1996 October 31, 1996 100,603 $250,370,356
26 January 17, 1997 December 31, 1996 118,232 $368,278,729
27 February 14, 1997 January 31, 1997 111,777 $307,635,708
28 March 14, 1997 February 28, 1997 169,598 $400,826,266
29 April 18, 1997 March 31, 1997 204,546 $450,500,767
30 May 14, 1997 April 30, 1997 155,299 $450,053,037
31 June 13, 1997 May 31, 1997 148,940 $241,091,790
32 June 29, 1997 May 31, 1997 5,757 $ 10,065,454
33 September 12, 1997 August 31, 1997 250,570 $499,607,860
34 September 30, 1997 August 31, 1997 218,401 $301,830,170
35 November 14, 1997 October 31, 1997 167,351 $322,443,973
36 December 12, 1997 November 30, 1997 228,234 $203,845,007
37 January 30, 1998 December 31, 1997 492,821 $729,961,299
38 February 13, 1998 January 31, 1998 246,990 $363,909,199
39 April 14, 1998 March 31, 1998 227,285 $907,447,235
40 May 14, 1998 April 30, 1998 249,490 $602,772,032
41 July 1, 1998 May 31, 1998 284,855 $582,539,789
</TABLE>
II-1
<PAGE> 56
<TABLE>
<CAPTION>
NUMBER OF RECEIVABLES
ASSIGNMENT DATE RECEIVABLES ADDITIONAL IN ADDITIONAL
NUMBER TRANSFERRED TO TRUST RELEVANT CUT-OFF DATE ACCOUNTS(1) ACCOUNTS(1)
- ---------- -------------------- --------------------- ----------- -------------
<C> <S> <C> <C> <C>
42 September 1, 1998 July 31, 1998 209,559 $500,442,550
43 October 1, 1998 August 31, 1998 126,098 $364,789,653
44 November 13, 1998 October 31, 1998 276,577 $648,197,959
45 December 14, 1998 November 30, 1998 65,326 $166,800,025
46 December 31, 1998 November 30, 1998 79,855 $210,815,757
47 January 28, 1999 December 31, 1998 77,427 $197,913,305
48 January 31, 1999 December 31, 1998 312,662 $704,718,352
49 February 16, 1999 January 31, 1999 189,409 $393,818,299
50 March 10, 1999 January 31, 1999 145,162 $248,815,264
</TABLE>
- ---------------
(1) The amounts shown are as of the Relevant Cut-Off Date.
II-2
<PAGE> 57
FLEET CREDIT CARD MASTER TRUST II
ISSUER
--------------------
[FLEET LOGO]
FLEET BANK (RI), NATIONAL ASSOCIATION
SELLER AND SERVICER
SERIES 1999-A
$498,000,000
Class A Floating Rate Asset-Backed Certificates
$45,000,000
Class B Floating Rate Asset-Backed Certificates
------------------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------------------
Underwriters of the Class A certificates
LEHMAN BROTHERS
BEAR, STEARNS & CO. INC.
J. P. MORGAN & CO.
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
Underwriter of the Class B certificates
LEHMAN BROTHERS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION.
WE ARE NOT OFFERING THE SERIES 1999-A CERTIFICATES IN ANY STATE WHERE THE OFFER
IS NOT PERMITTED.
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AT
ANY TIME DOES NOT IMPLY THAT THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS IS CORRECT AS OF ANY DATE AFTER THE DATES ON THEIR
COVERS. WE NOTE THAT IF ANY MATERIAL CHANGE OCCURS WHILE THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ARE REQUIRED BY LAW TO BE DELIVERED,
WE WILL UPDATE THE RELEVANT INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS TO INCORPORATE THE MATERIAL CHANGE.
Until June 13, 1999, all dealers that effect transactions in the Class A
certificates or the Class B certificates, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
