Discover 2009 Annual Report Download - page 91

The tables below provide information concerning investors’ interests and related excess spreads at November 30,
2009 (dollars in thousands):
Investors’
Interests(1)
# of Series
Outstanding
Discover Card Master Trust I ......................................................................................................................................... $14,134,204 16
Discover Card Execution Note Trust (DiscoverSeries notes) ................................................................................................. 12,759,358 27
Total investors’ interests............................................................................................................................................. $26,893,562 43
(1) Effective July 31, 2009, all DCMT certificates and all notes issued by DCENT include cash flows derived from merchant discount and interchange revenue earned by Discover card.
3-Month Rolling
Average Excess
Spread(1)(2)
Group excess spread percentage..................................................................................................................................................... 11.43%
DiscoverSeries excess spread percentage .......................................................................................................................................... 10.57%
(1) DCMT certificates refer to the higher of the Group excess spreads (as shown above) or their applicable series excess spreads in assessing whether an economic early amortization has occurred.
DiscoverSeries notes refer to the higher of the Group or DiscoverSeries excess spreads (both of which are shown above) in assessing whether an economic early amortization has occurred.
(2) Discount Series (DCMT 2009-SD), which was issued in September 2009, makes principal collections available for reallocation to other series to cover shortfalls in interest and servicing fees and to
reimburse charge-offs. Three-month rolling average excess spread rates reflected the benefit of these additional collections.
As of November 30, 2009, the balance of cash collateral account loans supporting DCMT, which we had funded, was
$842.4 million and is recorded in amounts due from asset securitization in our consolidated statement of financial
condition at its fair value of $822.6 million. A majority of this funding was obtained through a loan facility entered into
between a consolidated special purpose subsidiary, DRFC Funding LLC, and third-party lenders. At November 30, 2009,
$528.2 million of the DRFC Funding LLC loan facility remains outstanding and is recorded in long-term borrowings in our
consolidated statement of financial condition. Repayment of this loan facility is secured by $792.4 million of cash
collateral account loans at November 30, 2009. This portion of the cash collateral account loans was sold to DRFC
Funding LLC and is not expected to be available to creditors of Discover Financial Services.
The following table summarizes estimated maturities of the cash collateral accounts at November 30, 2009 (dollars in
thousands):
Total
Less Than
One Year
One Year
Through
Three Years
Four Years
Through
Five Years
After Five
Years
Scheduled maturities of cash collateral accounts........................................................... $842,369 $382,895 $311,842 $147,632 $—
Short-Term Borrowings. In the past, we have accessed short-term borrowings through the Federal Reserve’s Term
Auction Facility, term and overnight Federal Funds purchased, and other short-term borrowings with original maturities of
less than one year. However, we had no outstanding short-term borrowings at November 30, 2009.
Long-Term Borrowings and Bank Notes. In 2009, we successfully accessed the unsecured debt market. We issued
$400 million in principal amount of senior unsecured notes in the third quarter of 2009 with a fixed rate of 10.25% that
mature in July 2019. In the fourth quarter of 2009, Discover Bank issued $700 million of subordinated notes with a fixed
interest rate of 8.70% that mature in November 2019.
At November 30, 2009, we had $1.2 billion senior unsecured notes outstanding including $400 million in principal
amount of floating rate senior unsecured notes, which mature in June 2010, and two $400 million fixed rate senior
unsecured notes that mature in June 2017 and July 2019, respectively. At November 30, 2009, we had $700 million in
principal amount of subordinated notes outstanding that mature in November 2019.
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