UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K405
(Mark one)
[X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended............December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from.........to..........
Commission file numbers ....333-48860 and 333-48860-01
First Consumers National Bank
First Consumers Master Trust
(Exact name of co-registrants as specified in charter)
Illinois 93-0982044
(State of incorporation) (I.R.S. Employer Identification No.
of First Consumers National Bank)
9300 S.W. Gemini Drive
Beaverton, OR 97008
(Address of principal executive offices) (Zip Code)
First Consumers National Bank telephone number,
including area code: (800) 876-3262
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
First Consumers Credit Card Master Note Trust
Class A Series 2001-A Floating Rate Asset Backed Notes
Class B Series 2001-A Floating Rate Asset Backed Notes
Class C Series 2001-A Floating Rate Asset Backed Notes
(Title of each class of securities covered by this Form)
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 of 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 X No
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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 the 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. [ X ]
The common equity of the registrant is not publicly traded and is
entirely held by affiliates. The aggregate principal value of the Notes
held by non-affiiates of the registrant as of December 31, 2001
was $561 million.
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PART I
ITEM 1. BUSINESS.
The First Consumers Credit Card Master Note Trust (the "Issuer") is a common
law trust created under the laws of the State of Illinois. The First Consumers
Credit Card Master Note Trust is operated under a Trust Agreement (the
"Trust Agreement"), dated as of March 1, 2001, between First Consumers
National Bank (the "Seller") and Bankers Trust Company (subsequently changed
to Deutche Bank Trust Company Americas), as the Owner Trustee. The Issuer's
activities are limited to acquiring, owning and managing trust assets and the
proceeds of those assets; issuing and making payments on the notes; and
engaging in related activities. On March 6, 2001, $462,000,000, $63,000,000
and $36,000,000 Class A,B and C Floating Rate Asset-Backed Notes, respectively,
(the "Notes") were issued by the Issuer under an indenture supplement to an
indenture, each between the Issuer and The Bank of New York, as indenture
trustee.
The Notes are secured by a beneficial interest in a pool of receivables
(the "Receivables") that arise under MasterCard and Visa credit card
accounts owned by First Consumers National Bank ("FCNB"), a national
banking association engaged in credit card operations and a wholly-owned
subsidiary of Spiegel, Inc. ("Spiegel"). FCNB currently designates all
eligible accounts in its portfolio of bank card credit card accounts and
transfers the receivables in those accounts to First Consumers Credit
Corporation under a receivables purchase agreement. First Consumers Credit
Corporation, in turn, transfers the receivables to First Consumers Master
Trust, an Illinois common trust operated under a pooling and servicing
agreement, amended and restated in December 2001, among First Consumers
National Bank, as seller and servicer, and the Bank of New York as
trustee (the "Trustee").
First Consumers Master Trust has issued a collateral certificate to FCNB that
represents a beneficial interest in the Receivables. FCNB transferred the
collateral certificate to the Issuer under a transfer and servicing agreement
among FCNB, as seller and servicer, and the Issuer.
The Notes were registered under a Registration Statement (file nos. 333-48860
and 333-48860-01) on Form S-3 declared effective on March 1, 2001.
Significant Events
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In the fourth quarter of 2001, Spiegel formalized a plan to sell FCNB, the
Company's special purpose bank, and Financial Services Acceptance Corporation
(FSAC). Spiegel anticipates the completion of a sale of FCNB and FSAC
by April 2003. To the extent that Spiegel is unable to sell FCNB and FSAC,
FCNB and FSAC will be liquidated as part of the liquidation of FCNB in its
entirety, as required under an agreement with the Office of the Comptroller
of the Currency ("OCC").
On May 15, 2002, FCNB entered into an agreement with the OCC, the primary
federal regulator of FCNB. The agreement calls for FCNB to comply with
certain requirements. The agreement, among other things, (i) contains
restrictions on transactions between FCNB and its affiliates and requires
FCNB to complete a review of all existing agreements with affiliated companies,
and to make necessary and appropriate changes; (ii) requires FCNB to obtain an
aggregate of $198 million in guarantees, which guarantees have been
provided through Spiegel's majority shareholder; (iii) restricts FCNB's
ability to accept, renew or rollover deposits; (iv) places restrictions
on FCNB's ability to issue new credit cards and make credit line increases;
(v) requires FCNB within 30 days of the agreement to file with the OCC a
disposition plan to either sell, merge or liquidate the bank; (vi) requires
FCNB to maintain sufficient assets to meet daily liquidity requirements;
(vii) requires FCNB to complete a comprehensive risk management assessment;
(viii) establishes minimum capital levels for FCNB; and (ix) provides for
increased oversight by and reporting to the OCC; and (x) provides for the
maintenance of certain asset growth restrictions.
In October 2002, FCNB submitted a revised disposition plan to the OCC.
The disposition plan provides for the sale or liquidation of the FCNB
bankcard portfolio by April 30, 2003. To the extent that Spiegel is
unable to sell the FCNB bankcard portfolio, the portfolio will be liquidated
as part of the liquidation of FCNB in its entirety. On November 27, 2002,
the OCC approved the disposition plan.
In May 2002, the applicable credit rating agencies downgraded their ratings
of the Series 2001-A Class A and Class B Notes issued by the Issuer. The
credit ratings of the Class A Notes were downgraded by Standard & Poor's
from AAA to AA, by Moody's from Aaa to Aa1, and by Fitch from AAA to AA-.
The credit ratings of the Class B Notes were downgraded by Standard & Poor's
from A to BBB+, by Moody's from A2 to Baa2, and by Fitch from A to BBB+.
Furthermore, on August 16, 2002, Moody's further downgraded the credit
rating of the Class A Notes from Aa1 to Aa2 and the credit rating of the
Class B Notes from Baa2 to Baa3.
In addition, FCNB, as Servicer, has forecasted that, in the next several
months, the Issuer will not meet certain minimum performance requirements
related to the Issuer's securitization transactions. If FCNB cannot
achieve the minimum performance requirements, a "Pay Out Event" will
occur.
ITEM 2. PROPERTIES.
Not applicable.
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ITEM 3. LEGAL PROCEEDINGS.
On May 15, 2002, FCNB entered into an agreement with the OCC, the primary
federal regulator of FCNB. The agreement calls for FCNB to comply with
certain requirements. The agreement, among other things, (i) contains
restrictions on transactions between FCNB and its affiliates and requires
FCNB to complete a review of all existing agreements with affiliated companies,
and to make necessary and appropriate changes; (ii) requires FCNB to obtain an
aggregate of $198 million in guarantees, which guarantees have been
provided through Spiegel's majority shareholder; (iii) restricts FCNB's
ability to accept, renew or rollover deposits; (iv) places restrictions
on FCNB's ability to issue new credit cards and make credit line increases;
(v) requires FCNB within 30 days of the agreement to file with the OCC a
disposition plan to either sell, merge or liquidate the bank; (vi) requires
FCNB to maintain sufficient assets to meet daily liquidity requirements;
(vii) requires FCNB to complete a comprehensive risk management assessment;
(viii) establishes minimum capital levels for FCNB; and (ix) provides for
increased oversight by and reporting to the OCC; and (x) provides for the
maintenance of certain asset growth restrictions.
In October 2002, FCNB submitted a revised disposition plan to the OCC.
The disposition plan provides for the sale or liquidation of the FCNB
bankcard portfolio by April 30, 2003. To the extent that Spiegel is
unable to sell the FCNB bankcard portfolio, the portfolio will be liquidated
as part of the liquidation of FCNB in its entirety. On November 27, 2002,
the OCC approved the disposition plan.
Other than the matter discussed above, the co-registrants are not aware of
any material pending legal proceedings, involving the Registrants, the
Trustee, the Seller or the Servicer with respect to the Notes or the
Registrants property.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No vote or consent of the holder of the Notes was solicited for any purpose
during the year ended December 31, 2001.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
To the best of the registrants' knowledge, there is no
established public trading market for the Notes. As of
March 5, 2002, there were two Noteholders of record of the
Class A, B and C Series 2001-A who each may be holding Notes
for the accounts of others.
ITEM 6. SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Not applicable.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Not applicable. The Issuer does not have directors and
executive officers.
ITEM 11. EXECUTIVE COMPENSATION.
Not applicable. The Issuer does not have any employees.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
As of March 5, 2002, there was one Noteholder of record holding
100% of both the Class A and B Series 2001-A and one Noteholder
of record holding 100% of the Class C Series 2001-A, both of
which may be holding the Notes for the accounts of others. The
following are the names and addresses of the entities which hold of
record 100% of the outstanding principal amounts of the Class A,B
and C Notes:
Class A and B Series 2001-A Noteholder:
CEDE & CO
55 Water Street
New York, NY 10041
Class C Series 2001-A Noteholder:
Gemini Securitization Corp. (formerly Twin Towers Corp)
1290 6th Ave, 6th FL.
New York, NY 10019
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None, except the information concerning the servicing fees paid
to the Servicer by the Trust as contained in Exhibit 99, which is
incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K.
a. The following documents are filed as part of this Report:
(3.) Exhibits
Exhibit
Number Description of Exhibit
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4.1 Receivables Purchase Agreement, dated as of
December 31, 2001, by and between First
Consumers Credit Corporation as Buyer, and
First Consumers National Bank, as RPA Seller. (1)
4.2 Pooling and Servicing Agreement, dated as of
September 30, 1992, amended and restated February
1, 1999, and amended and restated a second time
as of December 31, 2001, by and between First
Consumers Credit Corporation, as Seller, First
Consumers National Bank, as Servicer, and the
Bank of New York, as Successor Trustee on behalf
of the Certificateholders of First Consumers
Master Note Trust. (1)
4.3 Transfer and Servicing Agreement, dated as of
March 1, 2001, amended and restated as of December
31, 2001, by and between First Consumers Credit
Corporation, as Seller, First Consumers National
Bank, as Servicer, and First Consumers Credit Card
Master Note Trust, as Issuer. (1)
4.4 Collateral Series Supplement to Amended and
Restated Pooling and Servicing Agreement, dated as
of March 1, 2001, by and between First Consumers
National Bank, as Seller and Servicer, and the
Bank of New York, as Trustee on behalf of the
Collateral Certificateholder. (1)
4.5 Series 1999-A Supplement to Amended and Restated
Pooling and Servicing Agreement, dated as of
February 1, 1999, by and between First Consumers
National Bank, as Seller and Servicer, and Harris
Trust and Savings Bank, as Trustee on behalf of
the Series 1999-A Certificateholders. (1)
4.6 Master Indenture, dated as of March 1, 2001,
amended and restated as of December 31, 2001,
by and between First Consumers Credit Card Master
Note Trust, as Issuer, and The Bank of New York,
as Indenture Trustee. (1)
4.7 Series 2001-A Indenture Supplement, dated as of
March 1, 2001, by and between First Consumers
Credit Card Master Note Trust, as Issuer, and
The Bank of New York, as Indenture Trustee. (1)
4.8 Series 2001-VFN Indenture Supplement, dated as
of October 17, 2001, by and between First
Consumers Credit Card Master Note Trust, as
Issuer, and The Bank of New York, as Indenture
Trustee. (1)
10.1 Consent Order dated as of May 15, 2002, between
First Consumers National Bank and the Office of
the Comptroller of the Currency. (1)
99 Annual Noteholder Statement for the period ended
December 31, 2001.
99.3 Independent Accountants review of Agreed-Upon Procedures
(1) Filed as an Exhibit to the Spiegel, Inc. 2001 Form 10-K
and hereby incorporated by reference herein.
b. The Registrants filed the following current reports on Form 8-K
for the fourth quarter of 2001:
Date of Report: December 17, 2001
Items Covered: Noteholders' Statement for the monthly period
beginning November 1, 2001 and ending November
30, 2001.
Date of Report: November 15, 2001
Items Covered: Noteholders' Statement for the monthly period
beginning October 1, 2001 and ending October
31, 2001.
Date of Report: October 15, 2001
Items Covered: Noteholders' Statement for the monthly period
beginning September 1, 2001 and ending September
30, 2001.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the co-registrants have duly
caused this Annual Report on Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized, on
February 7, 2003.
First Consumers National Bank
(Co-Registrant)
By: /s/ James E. Huston
-----------------------------
Name: James E. Huston
Title: President and Chief Executive Officer
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Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the co-registrants, and in the capacities indicated
on February 7, 2003.
Signature Title
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/s/ Jim Huston
- ----------------------- President and Director
Jim Huston (Principal Executive, Financial and
Accounting Officer)
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CERTIFICATIONS
CERTIFICATION FOR ASSET-BACKED ISSUERS PURSUANT TO EXCHANGE ACT RULES
13a-14 AND 15d-14
I, Jim Huston, hereby certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution or servicing reports filed in respect
of periods included in the year covered by this annual report, of
the Issuer.
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light
of circumstances under which such statements were made, not misleading as
of the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution information required to be
provided to the trustee by the servicer under the pooling and servicing
agreement is included in these reports;
4. I am responsible for reviewing the activities performed by the servicer
under the pooling and servicing agreement and based upon the review required
under the pooling and servicing agreement, and except as disclosed in the
report, the servicer has fulfilled its obligations under the servicing
agreement; and
5. I have disclosed to the registrant's certified public accountants all
significant deficiencies relating to the servicer's compliance with the
minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers
or similar standard as set forth in the pooling and servicing agreement.
Date: February 7, 2003
By:/s/ James E. Huston
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Name: James E. Huston
Title: President and
Chief Executive Officer
First Consumers National Bank
(Co-registrant)