SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
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| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| For the fiscal year ended December 31, 2003 |
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| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) |
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| For the transition period from to |
Commission file number 333-60418, 333-60418-01
WFN Credit Company, LLC
World Financial Network Credit Card Master Note Trust
(Exact name of registrant as specified in its charter)
Delaware |
| 34-1772814 |
(State or other jurisdiction) |
| (I.R.S. employer identification no.) |
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220 West Schrock Road |
| 43801 |
(Address of principal executive offices) |
| (Zip Code) |
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(614) 729-5044 | ||
(Phone number) | ||
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) 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
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)
Indicate by check mark whether the registrant is an accelerated filer (as defined in 12b-2 of the Act). Yes o No ý
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.
PART I
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 Note Trust (the “Trust”) was formed for the purpose of acquiring certain trust assets and issuing asset-backed notes under the Master Indenture dated as of August 1, 2001 (as supplemented from time to time, the “Indenture”) between World Financial Network Credit Card Master Note Trust (the “Issuer”) and BNY Midwest Trust Company (the “Indenture Trustee”) and one or more supplements thereto. The property of the Trust includes World Financial Network Credit Card Master Trust Collateral Certificates (“Collateral Certificates”) representing an undivided interest in receivables and other property related thereto (the “Receivables”), held by the World Financial Network Credit Card Master Trust (the “Master Trust”), arising under private label credit card programs for a number of national retail and catalogue entities.
On August 21, 2001 the Trust issued: $702,000,000 Class A Floating Rate Asset Backed Notes, Series 2001-A; $76,500,000 Class B Floating Rate Asset Backed Notes, Series 2001-A; and $121,500,000 Class C Floating Rate Asset Backed Notes, Series 2001-A. On November 7, 2002 the Trust issued: $468,000,000 Class A Series 2002-A Floating Rate Asset Backed Notes; $51,000,000 Class B Series 2002-A Floating Rate Asset Backed Notes; and $81,000,000 Class C
2
Series 2002-A Floating Rate Asset Backed Notes. On December 18, 2002 the Trust issued the Class A Series 2002-VFN Floating Rate Asset Backed Notes and the Class B Series 2002-VFN Floating Rate Asset Backed Notes. On June 19, 2003 the Trust issued: $100,000,000 Class A-1 Floating Rate Asset Backed Notes, Series 2003-A; and $40,000,000 Class C-1 Floating Rate Asset Backed Notes, Series 2003-A. On August 14, 2003 the Trust issued: $368,000,000 Class A-2 Floating Rate Asset Backed Notes, Series 2003-A; $51,000,000 Class B Floating Rate Asset Backed Notes, Series 2003-A and $41,0000,000 Class C-2 Floating Rate Asset Backed Notes, Series 2003-A.
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.
ITEM 1. BUSINESS
The Trust was formed for the purpose of acquiring certain trust assets and issuing asset-backed Notes under the Indenture. The Trust assets consist of the Collateral Certificates representing an undivided interest in the receivables and other property related thereto, held by the Master Trust.
The Trust has issued four series of notes - Series 2001-A, Series 2002-A, Series 2002-VFN and Series 2003-A. The Series 2001-A Class A Notes, Series 2001-A Class B Notes, Series 2002-A Class A Notes, Series 2002-A Class B Notes, Series 2002-A Class C Notes, Series 2003-A Class A-2 Notes, Series 2003-A Class B Notes, and the Series 2003-A Class C-2 Notes have been publicly issued. The Series 2001-A Class C Notes, Series 2002-VFN, Class A Notes, Series 2003-A Class A-1 Notes, and the Series 2003-A Class C-1 Notes have been privately placed. The Series 2002-VFN, Class B Notes were purchased by the transferor, WFN Credit Company, LLC
ITEM 2. PROPERTIES
There is nothing to report with regard to this item.
ITEM 3. LEGAL PROCEEDINGS
There is nothing to report with regard to this item.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There is nothing to report with regard to this item.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
To the knowledge of the Trust, there is an over the counter market in the Trust’s Series 2001-A Class A and Class B Notes, the Series 2002-A Class A, Class B and Class C Notes, and the Series 2003-A Class A-2 and Class C-2 Notes although the frequency of transactions varies substantially over time.
3
ITEM 6. SELECTED FINANCIAL DATA
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 Trust has sold four series of Notes secured by an undivided interest in the Trust assets. Those Notes are outstanding as of December 31, 2003 (dollars in thousands):
Description |
| $ Issued |
| % of Trust |
| |
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| |
Series 2001-A, Class A |
| $ | 702,000 |
| 27.8 | % |
Series 2001-A, Class B |
| 76,500 |
| 3.0 | % | |
Series 2001-A, Class C |
| 121,500 |
| 4.8 | % | |
Series 2002-A, Class A |
| 468,000 |
| 18.5 | % | |
Series 2002-A, Class B |
| 51,000 |
| 2.0 | % | |
Series 2002-A, Class C |
| 81,000 |
| 3.2 | % | |
Series 2002-VFN |
| 323,699 |
| 12.8 | % | |
Series 2003-A, Class A-1 |
| 100,000 |
| 4.0 | % | |
Series 2003-A, Class A-2 |
| 368,000 |
| 14.6 | % | |
Series 2003-A, Class B |
| 51,000 |
| 2.0 | % | |
Series 2003-A, Class C-1 |
| 40,000 |
| 1.6 | % | |
Series 2003-A, Class C-2 |
| 41,000 |
| 1.6 | % | |
The Series 2001-A Class A Notes and Class B Notes have been publicly issued pursuant to the prospectus supplement dated August 9, 2001, and the prospectus, dated as of August 9, 2001. The Series 2002-A Class A Notes, Class B Notes, and Class C Notes have been publicly issued pursuant to the prospectus supplement dated October 30, 2002 and the prospectus, dated as of October 15, 2002. The Series 2003-A Class A-2 Notes, Class B Notes, and Class C-2 Notes have been publicly issued pursuant to the prospectus supplement dated August 8, 2003 and the prospectus, dated as of August 8, 2003. The Series 2001-A Class C Notes, the Series 2002-VFN Notes, and the Series 2003-A Class A-1 Notes, and Class C-1 Notes have been privately placed.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
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 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 our variable rate debt.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Cross Reference Sheet
Caption |
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Statements of Assets and Liabilities Arising from Cash Transactions as of December 31, 2003 and 2002 |
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5
INDEPENDENT AUDITORS’ REPORT
To the World Financial Network Credit Card Master Note Trust
We have audited the accompanying statements of assets and liabilities arising from cash transactions of the World Financial Network Credit Card Master Note Trust (the “Trust”) as of December 31, 2003 and 2002, 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, 2003 and 2002, and its distributable income arising from cash transactions for the years then ended, on the basis of accounting described in Note 1.
By: | /s/ Deloitte & Touche, LLP |
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| Deloitte & Touche LLP | |
| Columbus, Ohio | |
| March 24, 2004 | |
II-1
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST
STATEMENTS OF ASSETS AND LIABILITIES ARISING FROM CASH TRANSACTIONS
(in thousands of dollars)
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| December 31, 2003 |
| December 31, 2002 |
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Assets |
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Cash Available for Distribution |
| $ | 414,078 |
| $ | 326,309 |
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Credit Card Receivables |
| 2,543,851 |
| 1,804,990 |
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Total Assets |
| $ | 2,957,929 |
| $ | 2,131,299 |
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Liabilities |
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Income to be Distributed |
| $ | 414,078 |
| $ | 326,309 |
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Asset-backed Notes: |
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Series 2001-A |
| 900,000 |
| 900,000 |
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Series 2002-A |
| 600,000 |
| 600,000 |
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Series 2003-A |
| 600,000 |
| — |
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Series 2002-VFN |
| 323,699 |
| 230,058 |
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Transferor’s Interest |
| 120,152 |
| 74,932 |
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Total Liabilities |
| $ | 2,957,929 |
| $ | 2,131,299 |
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See accompanying Notes to Financial Statements.
II-2
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST
STATEMENTS OF DISTRIBUTABLE INCOME ARISING FROM CASH TRANSACTIONS
(in thousands of dollars)
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| Year Ended |
| Year Ended |
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Distributable Income |
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Allocable to Principal |
| $ | 4,381,412 |
| $ | 2,118,795 |
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Allocable to Interest |
| 624,124 |
| 284,291 |
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Total Distributable Income |
| $ | 5,005,536 |
| $ | 2,403,086 |
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Income Distributed |
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Distribution of Principal to Purchase New Receivables |
| $ | 4,016,410 |
| $ | 1,827,704 |
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Interest Paid on Asset Backed Notes |
| 93,096 |
| 51,362 |
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Servicing Fees |
| 40,143 |
| 18,800 |
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Distribution to Purchase New Receivables for Amounts Previously Written-off |
| 201,869 |
| 96,784 |
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Distribution on Transferor’s Interest |
| 239,940 |
| 82,127 |
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Income Distributed |
| $ | 4,591,458 |
| $ | 2,076,777 |
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Excess of Distributable Income over Income Distributed (Distributed January 15, 2004 and January 15, 2003 respectively) |
| $ | 414,078 |
| $ | 326,309 |
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See accompanying Notes to Financial Statements.
II-3
WORLD FINANCIAL NETWORK CREDIT CARD MASTER NOTE TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE 1. General Information and Accounting Policies
The World Financial Network Credit Card Master Note Trust (the “Trust”) was formed for the purpose of acquiring certain trust assets and issuing asset-backed notes under the Master Indenture dated August 1, 2001 between World Financial Network Credit Card Master Note Trust (the “Issuer”) and BNY Midwest Trust Company (the “Indenture Trustee”) and one or more supplements thereto. The property of the Trust includes World Financial Network Credit Card Master Trust Collateral Certificates (“Collateral Certificates”) representing an undivided interest in receivables and related property thereto (the “Receivables”), held by the World Financial Network Master Trust (the “Master Trust”), arising under private label credit card programs for a number of national retail and catalogue entities.
World Financial Network National Bank (the “Bank”) services the Receivables pursuant to the Second Amended and Restated Pooling and Servicing Agreement dated as of August 1, 2001 and pursuant to the Transfer and Servicing Agreement, dated as of August 1, 2001 and is compensated for acting as the servicer. In order to facilitate its servicing functions and minimize administrative burdens and expenses, the Bank retains physical possession of the documents relating to the receivables as custodian for the trustee of the Master Trust and the Trust. The Trust and the Master Trust have no employees.
The financial statements of the Trust are prepared on a cash basis of accounting which differs from financial statements prepared in accordance with accounting principles generally accepted in the United States of America in that interest income and the related assets are recognized when received rather than when earned and distributions to noteholders are recognized when paid rather than when the obligation is incurred. The statement of assets and liabilities arising from cash transactions as of December 31, 2003 reflects the amounts to be distributed on January 15, 2004, which represents the distribution of income received by the Trust for the period December 1 through December 31, 2003.
NOTE 2. Sale of Notes
The Trust may issue from time to time asset-backed notes in one or more Series, which will consist of one or more classes of certificates, representing an undivided ownership interest in the Collateral Certificates. As of December 31, 2003 the Trust had issued and had outstanding the following notes, representing the indicated undivided interest in the Collateral Certificates:
II-4
Description |
| $ Issued |
| % of Trust |
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Series 2001-A, Class A |
| $ | 702,000 |
| 27.8 | % |
Series 2001-A, Class B |
| 76,500 |
| 3.0 | % | |
Series 2001-A, Class C |
| 121,500 |
| 4.8 | % | |
Series 2002-A, Class A |
| $ | 468,000 |
| 18.5 | % |
Series 2002-A, Class B |
| 51,000 |
| 2.0 | % | |
Series 2002-A, Class C |
| 81,000 |
| 3.2 | % | |
Series 2002 VFN |
| 323,699 |
| 12.8 | % | |
Series 2003-A, Class A-1 |
| $ | 100,000 |
| 4.0 | % |
Series 2003-A, Class A-2 |
| $ | 368,000 |
| 14.6 | % |
Series 2003-A, Class B |
| $ | 51,000 |
| 2.0 | % |
Series 2003-A, Class C-1 |
| $ | 40,000 |
| 1.6 | % |
Series 2003-A, Class C-2 |
| $ | 41,000 |
| 1.6 | % |
The Series 2001-A Class A Notes and Class B Notes were publicly issued pursuant to a prospectus supplement dated August 9, 2001, and the prospectus, dated as of August 9, 2001. The Series 2002-A Class A, Class B, and Class C Notes were publicly issued pursuant to a prospectus supplement dated October 30, 2002, and the prospectus dated as of October 15, 2002. The Series 2003-A Class A-2 Notes, Class B Notes and the Class C-2 Notes were publicly issued pursuant to the prospectus supplement dated August 8, 2003, and the prospectus dated August 8, 2003. The Series 2001-A, Class C Notes, Series 2002 VFN Notes, and the Series 2003-A, Class A-1 Notes and Class C-1 Notes were privately placed. Collectively, holders of all Series are referred to as “Noteholders.”
NOTE 3. Principal and Interest Payment
Collections of principal on the receivables are used by the Trust to make principal distributions to Noteholders and to purchase new charge card receivables on a daily basis.
Collections of finance charges on the Receivables, which includes late fees, non-sufficient funds check fees and recoveries of amounts previously written-off, are used to pay interest to the Noteholders, pay servicing fees, to purchase new charge card receivables equal to amounts written-off during the month and to restore certain reserve and cash collateral accounts. Excess finance charge collections, if any, are distributed to the WFN Credit Company LLC.
The distribution date is the 15th day of each month (or, if such day is not a business day, the next following business day).
NOTE 4. Federal Income Taxes
The Trust is not taxable as a corporation for Federal income tax purposes. Accordingly, no provision for income taxes is reflected in the accompanying financial statements.
NOTE 5. Supplementary Financial Data (unaudited)
The following is a summary of distributable income for 2003 and 2002 arising from cash transactions (in thousands of dollars):
II-5
2003 |
| Principal |
| Interest |
| Servicing |
| Defaulted |
| Transferor’s |
| Total |
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Undistributed at December 31, 2002 |
| $ | 291,091 |
| $ | 6,488 |
| $ | 2,700 |
| $ | 13,761 |
| $ | 12,269 |
| $ | 326,309 |
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Quarter Ended: |
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March 31, 2003 |
| 975,589 |
| 20,258 |
| 9,025 |
| 44,297 |
| 62,124 |
| 1,111,293 |
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June 30, 2003 |
| 939,302 |
| 21,756 |
| 10,481 |
| 53,073 |
| 57,402 |
| 1,082,014 |
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September 30, 2003 |
| 1,084,277 |
| 26,484 |
| 10,750 |
| 52,995 |
| 66,191 |
| 1,240,697 |
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December 31, 2003 |
| 1,091,154 |
| 27,551 |
| 11,046 |
| 56,513 |
| 58,959 |
| 1,245,223 |
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Total |
| $ | 4,381,413 |
| $ | 102,537 |
| $ | 44,002 |
| $ | 220,639 |
| $ | 256,945 |
| $ | 5,005,536 |
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2002 |
| Principal |
| Interest |
| Servicing |
| Defaulted |
| Transferor’s |
| Total |
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Undistributed at December 31, 2001 |
| $ | 148,107 |
| $ | 3,876 |
| $ | 1,500 |
| $ | 8,286 |
| $ | 5,736 |
| $ | 167,505 |
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Quarter Ended: |
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March 31, 2002 |
| 446,123 |
| 11,979 |
| 4,500 |
| 23,537 |
| 22,664 |
| 508,803 |
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June 30, 2002 |
| 442,253 |
| 12,130 |
| 4,500 |
| 23,903 |
| 17,864 |
| 500,650 |
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September 30, 2002 |
| 428,875 |
| 12,262 |
| 4,500 |
| 20,400 |
| 20,606 |
| 486,643 |
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December 31, 2002 |
| 653,437 |
| 17,602 |
| 6,500 |
| 34,419 |
| 27,527 |
| 739,485 |
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Total |
| $ | 2,118,795 |
| $ | 57,849 |
| $ | 21,500 |
| $ | 110,545 |
| $ | 94,397 |
| $ | 2,403,086 |
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NOTE 6: Fair Value of Financial Instruments
The fair value of the Trust’s credit card receivables approximate their carrying value due to the short maturity and average interest rates that approximate current market rates.
The fair value of the asset-backed Notes is estimated to be $2,431 million (carrying value of $2,424 million) as of December 31, 2003 and $1,727 million (carrying value of $1,730 million) as of December 31, 2002, based on quoted market prices or current market rates for similar securities with similar remaining maturities and interest rates. (See also Note 7)
NOTE 7: INTEREST SWAPS
In August 2001, the Trust entered into three interest rate swap agreements with JPMorgan Chase Bank (“Morgan”) with a total notional amount of $900 million. The interest rate swaps effectively change the Trust’s interest rate exposure on $702.0 million, $76.5 million, and $121.5 million of asset-backed notes to a fixed rate of approximately 4.87%, 4.87% and 4.92% respectively. In November 2002, the Trust entered into three additional interest rate swap agreements with Morgan with a total notional amount of $600 million. The interest rate swaps effectively change the Trust’s interest rate exposure on $468.0 million, $51.0 million, and $81.0 million of asset-backed notes to a fixed rate of approximately 3.52%, 3.52% and 3.56% respectively.
In June 2003, the Trust entered into two additional interest rate swap agreements with Morgan with a total notional amount of $140.0 million. The
II-6
interest rate swaps effectively change the Trust’s interest rate exposure on $100 million and $40 million for 5 consecutive 1 year terms beginning in June 2003 to a fixed rate as shown in the schedule below. In August 2003, the Trust entered into three additional interest rate swap agreements with Morgan with a total notional amount of $460.0 million. The interest rate swaps effectively change the Trust’s interest rate exposure on $368 million, $51 million and $41 million for 5 consecutive 1 year terms beginning in August 2003 as shown in the schedule below.
(in $000’s) |
| For each period |
| Fixed |
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| From and |
| To but |
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$ | 100,000 |
| June 19, 2003 |
| June 15, 2004 |
| 4.07 | % |
$ | 100,000 |
| June 15, 2004 |
| June 15, 2005 |
| 3.37 | % |
$ | 100,000 |
| June 15, 2005 |
| June 15, 2006 |
| 2.67 | % |
$ | 100,000 |
| June 15, 2006 |
| June 15, 2007 |
| 1.97 | % |
$ | 100,000 |
| June 15, 2007 |
| May 15, 2008 |
| 1.27 | % |
$ | 100,000 |
| May 15, 2008 |
| — |
| 2.68 | % |
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$ | 40,000 |
| June 19, 2003 |
| June 15, 2004 |
| 4.70 | % |
$ | 40,000 |
| June 15, 2004 |
| June 15, 2005 |
| 3.70 | % |
$ | 40,000 |
| June 15, 2005 |
| June 15, 2006 |
| 2.70 | % |
$ | 40,000 |
| June 15, 2006 |
| June 15, 2007 |
| 1.70 | % |
$ | 40,000 |
| June 15, 2007 |
| June 16, 2008 |
| 0.70 | % |
$ | 40,000 |
| June 16, 2008 |
| — |
| 2.70 | % |
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$ | 368,000 |
| August 14, 2003 |
| June 15, 2004 |
| 4.12 | % |
$ | 368,000 |
| June 15, 2004 |
| June 15, 2005 |
| 3.79 | % |
$ | 368,000 |
| June 15, 2005 |
| June 15, 2006 |
| 3.46 | % |
$ | 368,000 |
| June 15, 2006 |
| June 15, 2007 |
| 3.13 | % |
$ | 368,000 |
| June 15, 2007 |
| May 15, 2008 |
| 2.80 | % |
$ | 368,000 |
| May 15, 2008 |
| — |
| 3.47 | % |
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$ | 51,000 |
| August 14, 2003 |
| June 15, 2004 |
| 4.50 | % |
$ | 51,000 |
| June 15, 2004 |
| June 15, 2005 |
| 3.98 | % |
$ | 51,000 |
| June 15, 2005 |
| June 15, 2006 |
| 3.45 | % |
$ | 51,000 |
| June 15, 2006 |
| June 15, 2007 |
| 2.93 | % |
$ | 51,000 |
| June 15, 2007 |
| May 15, 2008 |
| 2.40 | % |
$ | 51,000 |
| May 15, 2008 |
| — |
| 3.45 | % |
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$ | 41,000 |
| August 14, 2003 |
| June 15, 2004 |
| 5.20 | % |
$ | 41,000 |
| June 15, 2004 |
| June 15, 2005 |
| 4.36 | % |
$ | 41,000 |
| June 15, 2005 |
| June 15, 2006 |
| 3.51 | % |
$ | 41,000 |
| June 15, 2006 |
| June 15, 2007 |
| 2.67 | % |
$ | 41,000 |
| June 15, 2007 |
| June 16, 2008 |
| 1.82 | % |
$ | 41,000 |
| June 16, 2008 |
| — |
| 3.51 | % |
Management believes the counterparty will be able to perform under the terms of the interest rate swap agreements. The notional amount of swaps, $900 million, $600 million, $140 million and $460 million as of December 31, 2003 will decrease with a corresponding decrease of the related securitized receivables. The fair value of the interest rate swaps was estimated based on the monies the Trust would receive/(pay) if they terminated the agreements.
II-7
Notional |
| Swap Period |
| Variable Rate |
| Fixed Rate |
| Fair |
| |||||
|
|
|
|
|
|
|
|
|
| |||||
$ | 702.0 |
| August 2, 2001 through |
| USD-LIBOR-BBA |
| 4.870 | % | $ | (17,262 | ) | |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 76.5 |
| August 2, 2001 through |
| USD-LIBOR-BBA |
| 4.870 | % | $ | (1,881 | ) | |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 121.5 |
| August 2, 2001 through |
| USD-LIBOR-BBA |
| 4.920 | % | $ | (3,379 | ) | |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 468.0 |
| November 7, 2002 through |
| USD-LIBOR-BBA |
| 3.520 | % | $ | (8,051 | ) | |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 51.0 |
| November 7, 2002 through |
| USD-LIBOR-BBA |
| 3.520 | % | $ | (877 | ) | |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 81.0 |
| November 7, 2002 through |
| USD-LIBOR-BBA |
| 3.560 | % | $ | (1,428 | ) | |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 100.0 |
| June 19, 2003 through |
| USD-LIBOR-BBA |
| 1.27% - 4.07 | %* | $ | 3,052 |
| |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 40.0 |
| June 19, 2003 through |
| USD-LIBOR-BBA |
| 0.70% - 4.70 | %* | $ | 1,374 |
| |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 368.0 |
| August 14, 2003 through |
| USD-LIBOR-BBA |
| 2.80% - 4.12 | %* | $ | (1,821 | ) | |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 51.0 |
| August 14, 2003 through |
| USD-LIBOR-BBA |
| 2.40% - 4.50 | %* | $ | (175 | ) | |||
|
|
|
|
|
|
|
|
|
| |||||
$ | 41.0 |
| August 14, 2003 through |
| USD-LIBOR-BBA |
| 1.82% - 5.20 | %* | $ | (66 | ) | |||
* See previous table.
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There is nothing to report with regard to this item.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is nothing to report with regard to this item.
II-8
ITEM 11. EXECUTIVE COMPENSATION
There is nothing to report with regard to this item.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is nothing to report with regard to this item.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is nothing to report with regard to this item.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
No response required pursuant to Instruction to Item 14.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
a) Listed below are the documents filed as part of this report:
(1) The following exhibits are filed as part of this Annual Report.
31.1 |
| Rule 13a-14(a)/15d-14(a) Certifications |
31.2 |
| Rule 13a-14(a)/15d-14(a) Certifications |
32.1 |
| Rule 13a-14(b)/15d-14(b) Certifications |
32.2 |
| Rule 13a-14(b)/15d-14(b) Certifications |
99.1 |
| Annual Servicer’s Certificate |
b) Reports on Form 8-K:
The following current reports on Form 8-K were filed for the fourth quarter of 2003:
Monthly Report |
| Date of Report |
|
|
|
October 2003 |
| November 17, 2003 |
November 2003 |
| December 15, 2003 |
December 2003 |
| January 15, 2004 |
c) Omitted
d) Omitted
II-9
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Bank, on behalf of the Trust, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| By: | World Financial Network Credit Card |
|
| Master Note Trust |
|
| World Financial Network National |
|
| Bank, as Servicer |
|
|
|
Date: March 30, 2004 | By: | Daniel T. Groomes |
|
| President |
|
|
|
|
|
|
| By: | WFN Credit Company, LLC, as |
|
| Transferor |
|
|
|
Date: March 30, 2004 | By: | Daniel T. Groomes |
|
| President |
II-10