Mail Stop 3561
March 15, 2006
Via Fax and U.S. Mail
Michael F. Rickert
Vice President, Chief Accounting Officer, Treasurer and Assistant
Secretary
Discover Bank
12 Read`s Way
New Castle, Delaware 19720
Re: Discover Card Master Trust I
Registration Statement on Form S-3
Filed February 16, 2006
File No. 333-131898
Dear Mr. Rickert,
We have limited our review of your filing for compliance
with
Regulation AB. Please note that our limited review covers only
those
issues addressed in the comments below. Please also note that our
comments to either the base prospectus and/or the supplement
should
be applied universally, if applicable.
Where indicated, we think you should revise your document in
response to these comments. If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so that we can better understand your
disclosure. After reviewing this information, we may raise
additional comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects and welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
Registration Statement on Form S-3
General
1. Please confirm that the depositor or any issuing entity
previously
established, directly or indirectly, by the depositor or any
affiliate of the depositor has been current and timely with
Exchange
Act reporting during the last twelve months with respect to asset-
backed securities involving the same asset class. Please refer to
General Instruction I.A.4. of Form S-3. Also, please provide us
with
the CIK codes for any affiliate of the depositor that has offered
a
class of asset-backed securities involving the same asset class as
this offering.
2. Please confirm that all material terms to be included in the
finalized agreements will also be disclosed in the final Rule
424(b)
prospectus, or that finalized agreements will be filed
simultaneously
with or prior to the final prospectus. Refer to Item 1100(f) of
Regulation AB.
3. Please also confirm that you will file unqualified legal and
tax
opinions at the time of each takedown.
4. Please note that a takedown off of a shelf that involves
assets,
structural features, credit enhancement or other features that
were
not described in the base prospectus will usually require either a
new registration statement, if to include additional assets, or a
post-effective amendment. Refer to Rule 409 of the Securities
Act,
which requires that the registration statement be complete at the
time of effectiveness, except for information that is not known or
reasonably available. Please confirm for us that the base
prospectus
includes all assets, credit enhancements or other structural
features
reasonably contemplated to be included in an actual takedown.
5. Please specifically incorporate the annexes into the filing.
6. Please revise to clarify that you will include all information
that may be required by Item 1119 in a separate section in the
prospectus, even if you include some of it in other parts of the
prospectus.
7. Please confirm that the asset pool will not contain any non-
performing assets as of the measurement date. Refer to Item
1101(c)(2)(iii) and 1101(g) of Regulation AB.
Prospectus Supplement
Cover Page
8. Please specifically state that the certificates are the
obligations of the issuing entity.
9. Please expand your credit enhancement disclosure to provide
bracketed language identifying the possible use of interest rate
swap
agreements that you disclose in the summary. Refer to Item
1102(h)
of Regulation AB.
Cash Collateral Account - Class B Credit Enhancement
10. Please tell us and disclose which entity or who is responsible
for paying back the loans made by the special purpose entity, and
with what funds, and what the timing is for repayment of any money
funded in the cash collateral account by Discover Receivables
Financing Corporation.
Revolving Period, page S-13
11. If applicable, please disclose any limitations on the ability
to
add pool assets. See Item 1111(g)(6) of Regulation AB.
12. Please disclose the underwriting criteria for the assets that
may
be added to the pool during the revolving period. See Item
1111(g)(7) of Regulation AB.
Collection Efforts and Charged-Off Accounts, page S-28
13. Please confirm that delinquent assets will comprise less than
20%
of the asset pool. Refer to Item 1101(c)(2)(iv) of Regulation AB.
Maximum Class B Credit Enhancement Amount, page S-51
14. Please revise your statement on page S-52 regarding the master
servicer`s ability to replace this credit enhancement with "any
type
of credit enhancement, including without limitation..." to include
a
discrete list of the replacement credit enhancement options
available
to the master servicer. We view your current statement as an
impermissible catch-all.
Derivative Instruments, page S-52
15. Please add bracketed language in the prospectus supplement to
clarify that you will provide the financial information as
outlined
in Item 1114(b)(1) and (2) of Regulation AB if the aggregate
significant percentage is 10% or more.
16. In addition, please include a bracketed placeholder if the
significant percentage of a derivative is 10% or more. Refer to
Item
1115(a)(4).
Annex A - Cash Flows, page S-80
17. Please include a table itemizing all fees and expenses to be
paid
or payable out of the cash flows from the pool assets. Refer to
Item
1113(c) of Regulation AB. Also, please advise us why you have
included the cash flow information in the Annex. Consider placing
the table and accompanying description pursuant to Item 1113(c) in
the supplement.
Base Prospectus
Addition of Accounts, page 18
18. Please confirm that you will comply with Item 1110 of
Regulation
AB and provide the appropriate information regarding originators,
other than Discover Bank, if they are responsible for a
significant
percentage of additional accounts.
The Trust, page 19
19. Please tell us what you mean by "interest in other credit card
receivables pools" in the fourth to last bullet point. For
example,
will the trust`s assets include receivables from a pool outside of
the master trust structure? Please clarify.
Issuance of Additional Series and Additional Certificates, page 28
20. With reference to the second paragraph on page 29, please
confirm
that additional issuances contemplated at a later date will be
registered at this time, or conducted in a transaction exempt from
the federal securities laws.
Credit Enhancement, page 32
21. Please revise your statement that the credit enhancement for a
series may include "any other form of credit enhancement described
in
the related prospectus supplement" because the base prospectus is
required to contain a complete and specific list of all forms of
credit enhancement that may reasonably be contemplated to be used
in
a proposed takedown.
Derivative Instruments, page 36
22. Please revise here and throughout to clarify that swap
agreements
will be limited to interest rate or currency swaps, or advise us
how
the anticipated swaps would meet the definition of asset backed
security. Refer to Section III.A.2.a. of the Regulation AB
Adopting
Release (Release No. 33-8518; 34-50905) and Item 1115 of
Regulation
AB.
Evidence as to Compliance, page 46
23. Please include a more detailed description of the contents of
the
report on an assessment of compliance with servicing criteria, and
of
the attestation report from the public accountants, in accordance
with Item 1118 of Regulation AB, and consistent with any updates
you
make to the pooling and servicing agreement.
Index to Exhibits
24. Please tell us whether Exhibit 4.3, to be filed by amendment,
will incorporate changes made to comply with Regulation AB. If
so,
please provide us with a marked copy of that amendment so that we
may
review the changes made to comply with the new requirements in
Exchange Act Rule 15d-18. For example, it appears from the
language
of Section 3.08(a) of Exhibit 4.1 that you will need to make some
revisions.
* * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision. Since the company and its
management are in possession of all the facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequately
of
the disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rule 461 regarding requesting
acceleration of a registration statement. Please allow adequate
time
after the filing of any amendment for further review before
submitting a request for acceleration. Please provide this
request
at least two business days in advance of the requested effective
date.
If you have any questions regarding these comments, you may
contact Susan Min at (202) 551-3727. If you need further
assistance,
you may contact me at (202) 551-3XXX.
Sincerely,
Sara Dunton
Senior Attorney
cc: Via Facsimile (312) 993-9767
Ms. Kathy Birkeland, Esq.
Latham & Watkins LLP
Telephone: (312) 876-7700
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Mr. Michael F. Rickert
Discover Card Master Trust I
March 15, 2006
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