SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the period from January 1, 2001 to December 31, 2001.
Commission file number 333-85463, 333-998
World Financial Network National Bank, on behalf
of World Financial Network Credit Card Master Trust
(Exact name of registrant as specified in its charter)
|
United States |
|
34-1610866 |
|
(State or other jurisdiction) |
|
(I.R.S. employer identification no.) |
|
of incorporation or organization) |
|
|
|
800 TechCenter Drive |
|
Gahanna, Ohio 43230 |
|
(Address of principal executive offices) |
|
|
|
(614) 729-4000 |
|
(Phone number) |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K (Not Applicable)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Series 1996-A, Class A, Class B; Series 1996-B, Class A, Class B; and Series 1999-A Class A.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(c) of the Securities Exchange Act 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý No o
Aggregate market value of voting stock held by nonaffiliates of the registrant. $ 0
No documents have been incorporated by reference in this Form 10-K.
In no action letters issued to a variety of issuers of pass-through securities representing ownership interests in trusts established by financial and retailing institutions, whose principal assets are receivables generated under consumer credit accounts owned by such institutions and transferred to such trusts, the Division of Corporation Finance has stated that it would not raise any objection if the servicer of the trust, on behalf of the trust, files its Annual Report on Form 10-K in accordance with a specified format. See, e.g., Sears Credit Account Master Trust II (August 24, 1995), Mercantile Credit Card Master Trust (August 23, 1995); Banc One Credit Card Master Trust (May 26, 1995); Household Affinity Credit Card Master Trust I (April 29, 1994); Sears Credit Account Master Trust I (December 23, 1993); First Deposit Master Trust (December 23, 1993); Discover Card Trust 1993 B (April 9, 1993); Prime Credit Master Trust (January 29, 1993); Private Label Credit Card Master Trust (May 20, 1992); and Chase Manhattan Credit Card Trust 1990-A (March 22, 1991).
The World Financial Network Credit Card Master Trust (the “Trust”) was formed pursuant to a Pooling and Servicing Agreement dated as of January 17, 1996, first amended and restated as of September 17, 1999, and restated a second time as of August 1, 2001 (the “Pooling Agreement”), between WFN Credit Company, LLC as transferor (“WFNCC”), World Financial Network National Bank, as servicer (“WFNNB”), and BNY Midwest Trust Company, as Trustee. The Trust was formed for the purpose of acquiring certain trust assets and issuing asset-backed certificates under the Pooling Agreement and one or more supplements thereto. The property of the Trust includes receivables arising under private label credit card programs for a number of national retail and catalogue entities.
2
On May 9, 1996, the Trust issued: $445,500,000 6.70% Class A Asset Backed Certificates, Series 1996-A; $46,750,000 7.00% Class B Asset Backed Certificates, Series 1996-A; $283,500,000 6.95% Class A Asset Backed Certificates, Series 1996-B, and $29,750,000 7.20% Class B Asset Backed Certificates, Series 1996-B. On September 17, 1999, the Trust issued $473,400,000 1 Month Libor plus 0.33% variable rate Class A Asset Backed Certificates. All of the above Certificates are registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended.
WFNNB, on behalf of the Trust, has prepared and filed this Annual Report on Form 10-K in substantially the form to which the Division of Corporation Finance, in the no action letters referred to above, has stated that it would not object.
The Trust acquires credit card receivables (the “Receivables”) originated through a number of private label credit card programs of national retail and catalogue entities. The Receivables are originated or acquired by the Servicer and subsequently sold to the Transferor, which in turn transfers the Receivables to the Trust pursuant to the Pooling Agreement for the purpose of issuing asset backed certificates.
The Trust has issued four series of certificates - Series 1996-A, Series 1996-B, Series 1996-VFC, and Series 1999-A. The Series 1996-A certificates matured and were paid off in 2001. The Series 1996-B Class A Certificates, Series 1996-B Class B Certificates and Series 1999-A Class A Certificates were publicly issued. The Series 1996-B Class D Certificates are held by WFNCC. The Series 1996-VFC Certificates and Series 1999-A, Class B Certificates have been privately placed. Each outstanding Series includes one or more classes of certificates as well as certain Collateral Interests. In addition, the Trust has issued to WFNCC the World Financial Network Master Trust Collateral Certificate (the “Collateral Certificate”), which represents an undivided interest in the Receivables. WFNCC subsequently transferred the Collateral Certificate to the World Financial Network Credit Card Master Note Trust pursuant to a transfer and servicing and agreement. The Transferor is required under the Pooling Agreement to maintain a minimum 4% interest in the Trust Portfolio (6% November through January) (the “Transferor’s Interest”).
The Bank services the receivables pursuant to the Pooling Agreement and is compensated for acting as the servicer.
There is nothing to report with regard to this item.
There is nothing to report with regard to this item.
There is nothing to report with regard to this item.
3
PART II
To the knowledge of the Bank and the Trust, there is an over the counter market in the Trust’s Series 1996-B, Class A and Class B, and Series 1999-A, Class A Certificates. The frequency of such transactions varies from year to year.
The selected financial data has been omitted since the required information is included in the financial statements.
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The Pooling and Servicing Agreement was amended and restated a second time as of August 1, 2001, between WFN Credit Company, LLC as transferor (the “Transferor”), World Financial Network National Bank as servicer (the “Servicer”), and BNY Midwest Trust Company as trustee (the “Trustee”). As of August 1, 2001, the Trust issued the World Financial Network Credit Card Master Trust Collateral Certificate (the “Collateral Certificate”) to WFN Credit Company, LLC, which in turn assigned the Collateral Certificate to the World Financial Network Master Note Trust. The World Financial Network Master Note Trust subsequently issued certain asset backed notes.
The Trust has sold four series of certificates representing an undivided interest in the Trust Portfolio. In addition, the Trust has sold certain Collateral Interests in the Trust Portfolio as well as the Collateral Certificate. The Transferor is required under the Pooling Agreement to maintain a minimum 4% interest in the Trust Portfolio (6% November through January). The following series of certificates have been issued by the Trust and are outstanding as of December 31, 2001 (dollars in thousands):
|
|
|
|
|
|
% of Trust |
|
|
|
|
Description |
|
$ Issued |
|
Portfolio |
|
|
|
|
Series 1996-B, Class A |
|
$ |
283,500 |
|
12.5 |
% |
|
|
Series 1996-B, Class B |
|
29,750 |
|
1.3 |
% |
|
|
|
Series 1996-B, Class D |
|
8,861 |
|
0.4 |
% |
|
|
|
Series 1996-VFC |
|
286,000 |
|
12.6 |
% |
|
|
|
Series 1999-A, Class A |
|
473,400 |
|
20.8 |
% |
|
|
|
Series 1999-A, Class B |
|
51,600 |
|
2.3 |
% |
|
|
|
Collateral Certificate |
|
900,000 |
|
39.6 |
% |
|
|
|
|
|
|
|
|
|
|
4
The Series 1996-B, Class A and Class B certificates have been distributed to the public under prospectuses dated April 9, 1996. The Series 1999-A, Class A certificates have been distributed to the public under a prospectus dated September 3, 1999.
The Bank is the originator and puchaser of the receivables, continues to service the receivables for the Trust and receives a fee for providing such servicing. Under the Pooling Agreement, new receivables generated under the specified proprietary credit card programs are required to be sold to the Trust on a daily basis. If there are insufficient new receivables to maintain the required minimum receivables level in the Trust, principal collections are retained by the Trust for the benefit of the certificateholders or until new receivables are available for purchase.
To manage our direct risk from market interest rates, we actively monitor the interest rates to minimize the impact that changes in interest rates have on the fair value of assets, net income and cash flow. To achieve this objective, we manage our exposure to fluctuations in market interest rates through the use of fixed rate debt instruments to the extent that reasonably favorable rates are obtainable with such arrangements. In addition, we have entered into derivative financial instruments, interest rate swaps, to mitigate our interest rate risk and to effectively lock the interest rate on a portion of our variable rate debt.
Cross Reference Sheet
|
Caption |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
To the World Financial Network Credit Card Master Trust
We have audited the accompanying statements of assets and liabilities arising from cash transactions of the World Financial Network Credit Card Master Trust (the “Trust”) as of December 31, 2001 and 2000, and the related statements of distributable income arising from cash transactions for the years then ended. These financial statements are the responsibility of the management of the Trust. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As described in Note 1 to the financial statements, these financial statements were prepared on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.
In our opinion, such financial statements present fairly, in all material respects, the assets and liabilities arising from cash transactions of the Trust as of December 31, 2001 and 2000, and its distributable income arising from cash transactions for the years then ended on the basis of accounting described in Note 1.
|
By: |
|
|
|
|
|
|
|
|
Deloitte & Touche LLP |
|
|
|
Columbus, Ohio |
|
|
|
March 26, 2002 |
|
6
II-2
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
STATEMENTS OF ASSETS AND LIABILITIES ARISING FROM CASH TRANSACTIONS
|
|
|
Year Ended December 31, |
|
|||||
|
|
|
|
2001 |
|
2000 |
|
||
|
Assets |
|
|
(in thousands of dollars) |
|
||||
|
Cash Available for Distribution |
|
$ |
373,914 |
|
$ |
310,660 |
|
|
|
|
|
|
|
|
|
|||
|
Credit Card Receivables |
|
2,275,302 |
|
2,202,444 |
|
|||
|
|
|
|
|
|
|
|||
|
Total Assets |
|
$ |
2,649,216 |
|
$ |
2,513,104 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
||
|
Liabilities |
|
|
|
|
|
|
||
|
Income to be Distributed |
|
$ |
373,914 |
|
$ |
310,660 |
|
|
|
|
|
|
|
|
|
|||
|
Asset-backed Certificates: |
|
|
|
|
|
|||
|
Series 1996-A |
|
— |
|
506,174 |
|
|||
|
Series 1996-B |
|
322,111 |
|
322,111 |
|
|||
|
Series 1996-VFC |
|
286,000 |
|
512,500 |
|
|||
|
Series 1999-A |
|
525,000 |
|
525,000 |
|
|||
|
Collateral Certificate |
|
900,000 |
|
— |
|
|||
|
Collateral Interest |
|
150,750 |
|
236,096 |
|
|||
|
Transferor’s Interest |
|
91,441 |
|
100,563 |
|
|||
|
|
|
|
|
|
|
|||
|
Total Liabilities |
|
$ |
2,649,216 |
|
$ |
2,513,104 |
|
|
|
|
|
|
|
|
|
|||
See accompanying Notes to Financial Statements.
7
II-3
WORLD FINANCIAL NETWORK CREDIT CARD MASTER TRUST
STATEMENTS OF DISTRIBUTABLE INCOME ARISING FROM CASH TRANSACTIONS
|
|
|
For The |
|
For The |
|
||
|
|
|
Year Ended |
|
Year Ended |
|
||
|
|
|
December 31, 2001 |
|
December 31, 2000 |
|
||
|
|
|
(in thousands of dollars) |
|
||||
|
Distributable Income |
|
|
|
|
|
||
|
Allocable to Principal |
|
$ |
3,771,493 |
|
$ |
3,622,309 |
|
|
Allocable to Interest |
|
543,204 |
|
520,412 |
|
||
|
|
|
|
|
|
|
||
|
Total Distributable Income |
|
$ |
4,314,697 |
|
$ |
4,142,721 |
|
|
|
|||||||