UNITED STATES
SECURITIES AND EXCHANGE COMMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15d of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 18, 2003
First Consumers National Bank
First Consumers Master Trust
(Exact name of co-registrants as specified in their charter)
Illinois 333-48860 and 93-0982044
333-48860-01
(State of incorporation (Commission file (I.R.S. Employer
of First Consumers numbers) Indentification No.
Master Trust) of First Consumers
National Bank)
9300 S.W. Gemini Drive,
Beaverton, OR 97008
(Address of principal executive offices
of First Consumers National Bank) (Zip Code)
(800) 876-3262
(First Consumers National Bank telephone number, including area code)
No Change
(Former name or Former address, if changed since last report)
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Item 5. Other events
On February 18, 2003, First Consumers Credit Card Master Note Trust made
available the Monthly Noteholders' Statement for the monthly period beginning
January 1, 2003 and ending January 31, 2003, which is attached as
Exhibit 20.1 hereto.
In addition, for the reporting period ended February 28, 2003, FCNB,
as Servicer, has forecasted that the Issuer will not meet certain minimum
performance requirements related to the Issuer's securitization transactions.
If the two bankcard Series fail to meet these minimum performance
requirements, there would be an automatic Pay Out Event applicable to these
two Series, as well as to the remaining bankcard Series as a result of
cross-default provisions, in early March 2003.
The Office of the Comptroller of the Currency (the "OCC"), which
supervises FCNB, approved a disposition plan providing for the sale or
liquidation of the bankcard portfolio by April 30, 2003, as part of an
agreement with the OCC to liquidate FCNB at some point thereafter. Under the
terms of this plan, if FCNB did not receive an acceptable offer to buy the
bankcard portfolio in January 2003, it was required to implement plans to
liquidate its bankcard portfolio.
On February 14, 2003, the Company received a letter from the OCC requiring
FCNB to immediately begin the process of liquidating the bankcard portfolio
and indicating the steps it must take to do so. The OCC letter requires
FCNB to: 1) notify the trustee for each of the Company's bankcard Series that
FCNB will either amend the relevant securitization documents to replace FCNB
with a successor servicer and administrator or resign as servicer and
administrator at the earliest date permissible under the agreements,
2) cease all credit card solicitations for its bankcards, 3) cease accepting
new bankcard applications and credit lines and offering credit line increases
to any existing bankcard account, 4) notify cardholders that FCNB will no
longer honor bankcard charges on or before March 31, 2003, and 5) cease
accepting new charges on existing bankcard accounts on or before
April 1, 2003.
FCNB has complied and continues to comply with the OCC requirements
set forth in its letter of February 14, 2003 . As part of the compliance
with these requirements, FCNB issued a notice of termination of charging
privileges to its cardholders on February 28, 2003. The notice indicates
that charging privileges will be terminated for the FCNB MasterCard and
FCNB Visa cards on March 7, 2003.
Finally, on February 24, 2003 Fitch lowered its ratings on all classes
of First Consumers Master Trust series 2001-A. The downgrades include:
1) a downgrade from "AA-" to "A" on the Class A series, 2) a downgrade
from "BBB+" to "BB+" on the Class B series, and 3) a downgrade from "BBB"
to "BB+" on the Class C series.
In addition, on March 5, 2003, Standard & Poor's lowered its rating on
all classes of the First Consumers Credit Card Master Note Trust series
1999-A securities and First Consumers Credit Card Master Note Trust series
2001-A securities. The downgrades include: 1) a downgrade from "AA" to
"BBB+" on the Class A series of both the 1999-A and 2001-A securities,
2) a downgrade from "BBB" to "BB-" on the Class B 1999-A series,
3) a downgrade from "BBB+" to "BB" on the Class B 2001-A series, and
4) a downgrade from "BBB" to "BB" on the Class C 2001-A series. All
classes remain on CreditWatch for further possible downgradings by
both S&P & Fitch.
FCNB's independent auditors have informed the audit committee of
Spiegel, Inc., FCNB's parent company, of certain internal control
deficiencies related to FCNB, which constitute reportable conditions.
Specifically, the deficiencies relate to routine transactions and
accounting estimates, policies and procedures, and account balance
classifications in the financial statements. FCNB and its parent
company, Spiegel, Inc., have assigned the highest priority to the
correction of these deficiencies and are committed to addressing
them as soon as possible. FCNB believes that other controls are
in place to mitigate the risk that these deficiencies could lead to
material misstatements in FCNB's financial statements. In addition,
as disclosed herein, Spiegel, Inc. has formalized a plan to sell their
bankcard segment and FCNB will be sold or liquidated as part of the
disposition of the bankcard segment.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 20.1 Monthly Noteholders' Statement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the co-registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
FIRST CONSUMERS NATIONAL BANK
(Co-Registrant)
Dated: March 6, 2003 By: /s/ James E. Huston
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Name: James E. Huston
Title: President and Chief Executive
Officer
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EXHIBIT INDEX
Exhibit No.
20.1 Monthly Noteholder Statement
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