SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Rule 14a-12
STANDARD CREDIT CARD TRUST 1990-3
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(Name of Registrant as Specified In Its Charter)
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CITIBANK (SOUTH DAKOTA), N.A.
CITIBANK (NEVADA), NATIONAL ASSOCIATION
SOLICITATION STATEMENT
Statement Soliciting Consents of Investor Certificateholders with respect to a
proposed Amendment of the Pooling and Servicing Agreement governing the Credit
Card Participation Certificates issued by:
STANDARD CREDIT CARD TRUST 1990-3
Class A Certificates (Cusip No. 853333 AE2*)
Class B Certificates (Cusip No. 853333 AF9*)
This solicitation statement is furnished by Citibank (South Dakota),
N.A., a national banking association ("Citibank (South Dakota)"), and Citibank
(Nevada), National Association, a national banking association ("Citibank
(Nevada)" and together with Citibank (South Dakota), the "Banks"), as
originators of Standard Credit Card Trust 1990-3 (the "Trust"), to holders of
the Credit Card Participation Certificates issued by such Trust (collectively,
the "Investor Certificates") which represent undivided interests in such Trust.
This solicitation statement is being sent in connection with the Banks'
solicitation (the "Solicitation") of consents from the registered holders of the
Investor Certificates (the "Investor Certificateholders") as at the close of
business on October 29, 1996 (the "Record Date") to the execution and delivery
of a proposed Amendment (the "Amendment") to the Pooling and Servicing Agreement
(the "Agreement") among Citibank (South Dakota) , as seller and servicer (in its
capacity as servicer, the "Servicer"), Citibank (Nevada), as seller, and Yasuda
Bank and Trust Company (U.S.A.), as trustee (the "Trustee"). The date on which
this solicitation statement is first being sent to Investor Certificateholders
is October 30, 1996.
Approval of the Amendment requires the consent (the "Consent") of
Investor Certificateholders evidencing not less than 66-2/3% of the aggregate
unpaid principal amount of the Investor Certificates issued and outstanding with
respect to the Trust (the "Certificateholders' Interest") and the consent of The
Fuji Bank, Limited, New York Branch, the issuer of the letter of credit with
respect to the Trust (the "Credit Enhancer"). The Amendment will be executed and
delivered if Consents are obtained from the required number of Investor
Certificateholders on or before the Solicitation Expiration Date and if the
Credit Enhancer consents to such Amendment. There can be no assurance that the
Credit Enhancer will consent to the Amendment. Notwithstanding that Consents are
obtained from the required number of Investor Certificateholders, in the event
that the Credit Enhancer does not consent to the Amendment, the Amendment cannot
be executed and delivered. Furthermore, the Amendment will become effective only
upon receipt by the Trustee of letters from Standard &
_________________________________
* This CUSIP number has been assigned by Standard & Poor's Rating Services and
is included solely for the convenience of the holders of the Investor
Certificates. Neither the Banks nor the Trustee shall be responsible for the
selection or use of this CUSIP number, nor is any representation made as to its
correctness on the Investor Certificates or as indicated herein or in any of the
accompanying documents.
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Poor's Ratings Group, Moody's Investors Service, Inc. and Duff & Phelps Credit
Rating Co. (the "Rating Agencies"), confirming that adoption of such Amendment
will not result in a reduction or withdrawal of their respective ratings of the
Investor Certificates.
The term "Solicitation Expiration Date" means the earlier of (a) 5:00
p.m. New York City time on December 18, 1996 or (b) 5:00 p.m. New York City time
on the date on which Consents are obtained from the required number of Investor
Certificateholders or, if extended by the Banks, such subsequent time and date
specified by the Banks. The Banks reserve the right to extend the period during
which Consents will be received from the Investor Certificateholders (the
"Solicitation Period") at any time by making a public announcement of such
extension not later than 10:00 a.m. New York City time on the business day
following any previously announced Solicitation Expiration Date. The Banks may
extend the Solicitation Period any number of times for periods of up to 30 days
each.
Only a registered holder of an Investor Certificate (or such holder's
authorized legal representative) on the Record Date may execute a Consent, and
such Consent will be binding on all subsequent transferees of such Investor
Certificate. Any beneficial owner of an Investor Certificate who is not a
registered owner of such Investor Certificate must arrange with a person who, as
of the Record Date, was the registered holder or such registered holder's
assignee to execute and deliver a Consent on its behalf. Any Investor
Certificateholder who gives its Consent to the Amendment on the accompanying
form may not revoke such Consent. Any Investor Certificateholder who opposes or
abstains on the accompanying form may revoke such opposition or abstention and
give its Consent to the Amendment (by delivering to D.F. King & Co., Inc. such
Consent on the accompanying form) at any time prior to the Solicitation
Expiration Date. If a properly executed Consent is returned with no instructions
given with respect to the Amendment, the Consent will be deemed to be in favor
of the Amendment.
Investor Certificateholders will have no rights of appraisal or similar
dissenters' rights in the event that the Amendment is adopted.
Purpose and Consequences of the Amendment
General
The proposed Amendment provides for: (1) a reduction in the amount of
the Servicing Fee (as defined below) to which the Servicer is entitled under the
Agreement; (2) a requirement that a fixed portion of the newly reduced Servicing
Fee must be paid from Interchange (as defined below); and (3) a reduction of the
Base Rate (as defined below) applicable under the Agreement by 1.40%, from
12.85% to 11.45%. These actions are intended to reduce the likelihood of an
Early Amortization Event (as defined below) being triggered by a decline in the
Portfolio Yield (as defined below) at a time when the cash flows on the
receivables held by the Trust are expected to be sufficient, in the absence of
the occurrence of an Early Amortization Event, to support the ultimate payment
of principal of and full and timely payment of interest on such Investor
Certificates to the degree consistent with the ratings of such Investor
Certificates. An "Early Amortization Event" refers to the occurrence of any of
several events which have the effect described in the next sentence, the
relevant occurrence being the reduction of the Portfolio Yield (averaged over
any three consecutive Due Periods) to a rate below the Base Rate. Upon the
occurrence of an Early Amortization Event, monthly distributions of both
principal and interest would commence on the first distribution date following
the occurrence of such event (although distributions of principal
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on the Class B Certificates would not commence until the principal amount of the
Class A Certificates has been repaid in full). "Portfolio Yield" is defined in
the Agreement as the annualized percentage equivalent of a fraction, the
numerator of which is the amount of collections of finance charge receivables
during the immediately preceding Due Period calculated on a cash basis, after
subtracting therefrom the excess, if any, of the amount of principal receivables
which were charged off as uncollectible in such Due Period over the aggregate
amount of recoveries on charged-off principal receivables for such Due Period,
and the denominator of which is the total amount of principal receivables in the
Trust as of the last day of the immediately preceding Due Period. "Due Period"
is defined in the Agreement as a monthly period beginning at the close of
business on the fourth-to-last business day of a month and ending at the close
of business on the fourth-to-last business day of the following month. "Base
Rate" is defined in the Agreement as a per annum rate which is equal to (x) the
higher of the Class A Certificate Rate and the Class B Certificate Rate plus (y)
3.0% . The Base Rate is currently equal to 12.85%.
Advantages of the Amendment
The Amendment will reduce the likelihood of an Early Amortization Event
occurring, thereby decreasing the likelihood that principal will be repaid to
Investor Certificateholders with respect to the Investor Certificates earlier
than their respective expected final payment dates; therefore, Investor
Certificateholders are less likely to need to invest "premature" distributions
of principal, the rate of return on which may be more or less than that of the
Investor Certificates. As Investor Certificateholders expect, in the absence of
an Early Amortization Event, interest will continue to accrue and be paid to
Investor Certificateholders on the Investor Certificates at their current fixed
rates until maturity on their respective expected final payment dates. Further,
the proposed Amendment has been reviewed by the Rating Agencies, all of which
have agreed that adoption of the Amendment will not adversely affect their
respective ratings of either the Class A Certificates or the Class B
Certificates. Thus, Investor Certificateholders would continue to hold Investor
Certificates with the same ratings as those currently assigned, but with a
reduced likelihood of early distributions of principal.
Disadvantages of the Amendment
Although the Class A Certificates and the Class B Certificates will
maintain their respective ratings after the adoption of the Amendment and the
reduction in the Base Rate, in the event that the Portfolio Yield subsequently
declines, an Early Amortization Event will occur later than it would have
occurred without the adoption of the Amendment and the levels of Portfolio Yield
at such time would be lower than if such Early Amortization Event occurred as a
result of a decline in Portfolio Yield prior to the effectiveness of the
Amendment. Investor Certificateholders could incur a loss as a result of the
proposed reduction in the Base Rate if the performance of the Trust's assets
were worse than is assumed by the Rating Agencies when they confirm their
respective ratings of the Investor Certificates, resulting in losses greater
than the available credit enhancement where such situation could have been
avoided had the higher, current Base Rate triggered an Early Amortization Event
early enough that such losses would not have been greater than the available
credit enhancement.
The disadvantage of adoption of the Amendment to the Banks is the lower
Servicing Fee that they would receive, although the Banks expect such reduction
to be offset by an increase in the excess spread remaining in the Trust. Unlike
the Servicing Fee, however, the excess spread to which the Banks would be
entitled is not subject to credit enhancement, so the likelihood of receipt of
such excess spread would be less certain.
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Certain Provisions of the Agreement
The Agreement provides that an Early Amortization Event will occur if
the Portfolio Yield (averaged over three consecutive monthly Due Periods) is
reduced to a rate below the Base Rate. Monthly distributions of principal and
interest to Class A Certificateholders would begin on the first Distribution
Date following the Due Period in which such Early Amortization Event occurred.
Class B Certificateholders would not receive payments of principal until the
principal amount of the Class A Certificates were repaid in full.
The occurrence of an Early Amortization Event under the Agreement would
result in the early repayment of principal to the Investor Certificateholders.
No principal is scheduled to be paid to Class A Investor Certificateholders and
Class B Investor Certificateholders until May 12, 1997 and July 10, 1997,
respectively.
Following the occurrence of an Early Amortization Event, principal
payments would be made on the Class A Certificates on each Distribution Date
until the principal amount thereof has been paid in full before any principal
payments would be made with respect to the Class B Certificates. In the case of
such payments, there would be no limitation on the amount of principal that
could be distributed on any single Distribution Date.
The purpose of accelerating payment of principal to Investor
Certificateholders upon the occurrence of an Early Amortization Event is to help
ensure that Investor Certificateholders receive a full return of their
investment before the conditions giving rise to such event impair the cash flows
generated by the receivables held by the Trust to the extent that available
credit enhancement would actually be depleted prior to such Investor
Certificateholders receiving such full return of their investment.
Under the terms of the Agreement, Citibank (South Dakota) covenants
that it will not reduce the Portfolio Yield to less than the Base Rate unless
such reduction is otherwise required by law or is deemed necessary by Citibank
(South Dakota) to maintain its credit card business on a competitive basis,
based on a good faith assessment by Citibank (South Dakota) of the nature of the
competition in the credit card business. The purpose of this covenant is to
protect Investor Certificateholders from Citibank (South Dakota) taking actions
that would decrease the cash flow on such receivables to a rate that is less
than that required to enable the Trust to continue to make scheduled payments of
interest and cover losses attributable to charged-off principal receivables
allocable to Investor Certificateholders or to a rate that would trigger
amortization of the Investor Certificates as described above.
Under the terms of the Agreement, the Servicer is responsible for
servicing, managing and making collections on the receivables. The Servicer is
entitled to a fee for these services on each Distribution Date, payable monthly
in arrears (the "Servicing Fee") in an amount equal to one-twelfth of the
product of 2.30% and the amount of principal receivables as of the last day of
the second preceding Due Period. Each Class of Investor Certificates is
obligated to contribute its pro rata share of the Servicing Fee based on such
Class's Invested Amount. Such Servicing Fee is paid from the collection account
(unless such amount had been netted by the Servicer against its deposits of
collections in respect of finance charge receivables to the collection account).
Citibank (South Dakota) receives certain fees from VISA U.S.A., Inc.
("VISA") and MasterCard International Incorporated ("MasterCard") as partial
compensation for taking credit risk, absorbing fraud losses and funding credit
card receivables for a limited period prior to initial billing ("Interchange").
Interchange allocable to the Trust is calculated based on the volume of goods
and services charged on credit card accounts
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the receivables from which have been transferred to the Trust. The amount of
Interchange generated by a transaction ranges from 1.00% to 1.85% of the
transaction amount, although VISA and MasterCard may each from time to time
change the amount of Interchange reimbursed to banks that issue their credit
cards. Currently, all Interchange allocable to the Trust is deposited into the
collection account as collections of finance charge receivables.
Distributions from the collection account in respect of finance charge
receivables are made by the Servicer in payment of interest and delinquent
amounts on the Investor Certificates prior to payment of the Servicing Fee. If,
on any Distribution Date, inadequate funds are available in the collection
account to make full payment of the Servicing Fee after distributions with
greater priority have been made, such Servicing Fee shall be considered to have
been fully paid regardless of the amount actually paid to the Servicer on such
Distribution Date.
Portfolio Yield and Early Amortization Event Risk
As discussed above, the Portfolio Yield is based on the amount of
collections of finance charge receivables received by the Trust less the amount
of principal receivables which have been charged-off as uncollectible and not
reimbursed to the Trust. The level of finance charge collections and losses due
to charged-off receivables depends on payment patterns of cardholders which are
the result of a variety of economic, legal and social factors. The Banks are
unable to determine and have no basis to predict whether or to what extent
changes in applicable laws or other economic or social factors will affect card
use or repayment patterns. Economic factors include the rate of inflation,
unemployment levels and relative interest rates. As shown in Exhibit I, the
amount of charged-off principal receivables, consistent with the industry's
overall experience, has increased in recent months, although the number of
delinquent accounts has not increased during this period, due largely to an
increase in the incidence of voluntary filings of personal bankruptcy by
cardholders who, prior to such filings, were not delinquent in making payments
on their accounts. The amount of charged-off receivables may continue to
increase in the future if such economic conditions worsen and may continue to
increase for several months even after such conditions begin to improve. An
increase in the level of delinquencies or increased convenience use (where
cardholders pay their balances early and avoid charges) could also result in a
decrease in the Portfolio Yield. Also, the credit card industry is increasingly
competitive, with new credit card issuers continually seeking to expand in or
enter the market and additional non-cash payment methods, including pre-paid
cash cards and other technology-based cash substitutes, being introduced which
may also compete with credit cards. If cardholders choose to utilize competing
sources of credit and/or methods of payment, fewer credit card receivables may
be generated and certain cardholder purchase and payment patterns may be
affected. Citibank (South Dakota) reviews market conditions regularly to
maintain the competitiveness of its credit card products and, accordingly,
reserves the right (subject to the limitations discussed below) to change the
terms of its credit card accounts, including applicable fees and finance
charges. In response to market conditions, Citibank (South Dakota) recently
introduced certain account repricing initiatives, such as lower finance charges,
which may decrease the Portfolio Yield but which, in themselves, are not
expected to cause an Early Amortization Event. A decrease in the periodic
finance charge would decrease the effective yield on such accounts and could, if
the Portfolio Yield (averaged over any three consecutive Due Periods) were less
than the Base Rate, result in the occurrence of an Early Amortization Event.
Additional factors that individually may affect the Portfolio Yield and
therefore contribute to the occurrence of an Early Amortization Event include an
increase in charge-offs or expenses and a reduction in the gross yield on the
Trust's assets.
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The Base Rate and the level of credit enhancement initially analyzed by
the Rating Agencies were determined to provide for the ultimate return of
principal of and the full and timely payment of interest on the Investor
Certificates at risk levels commensurate with the ratings assigned by such
Rating Agencies to such Investor Certificates. The Rating Agencies' analyses
with respect to credit card receivables have evolved since the issuance of the
Investor Certificates, such that the Rating Agencies have advised the Banks that
they will confirm that the adoption of the Amendment will not result in a
reduction in their respective ratings of the Investor Certificates nor will any
increase in credit enhancement be required in connection with such confirmation.
In 1991, the Banks solicited and received the consent of holders of the investor
certificates issued by five trusts to reduce the extent of base rate protection
applicable to each such trust by 2.30%, from 4.50% to 2.20%. Since such
reduction, cash flow has remained sufficient with respect to each such trust
such that no Early Amortization Event has occurred and either interest and
principal with respect to the related investor certificates were paid in full or
interest is being paid currently. No representation can be made, however, that,
in the event that the Amendment is adopted, the results with respect to those
trusts will be indicative of the future performance of the Trust.
The current Base Rate is equal to the higher of the Class A Certificate
Rate or the Class B Certificate Rate plus 3.0%. The proposed Amendment would
require that Interchange constitute the only source for payment of a portion of
the Servicing Fee. The Servicing Fee would be reduced to be equal to the product
of 1.87% and the principal receivables as of the last day of the second
preceding Due Period. Only the portion of the Servicing Fee that is not required
to be paid from Interchange could be paid from amounts generally available in
the collection account in respect of finance charge receivables. The Servicer
has consented to the reduction of the Servicing Fee and to bear the risk that
Interchange may not be sufficient to pay the portion of the Servicing Fee
required to be paid from Interchange, which portion is equal to 0.50% of the
principal receivables as of the last day of the second preceding Due Period.
Servicing Fee and Interchange
The Servicing Fee, which is paid to the Servicer monthly in arrears, is
paid out of collections in respect of finance charge receivables deposited in
the collection account after payment of current interest and defaulted amounts
in respect of the Investor Certificates. Currently, all Interchange is deposited
as collections in respect of finance charge receivables. Even if, as the
Amendment provides, a portion of the Servicing Fee were required to be paid from
Interchange, all amounts on deposit in the collection account in respect of
finance charge receivables, including amounts designated as Servicer
Interchange, would continue to be available for payment to Investor
Certificateholders prior to any payment being made therefrom to the Servicer in
respect of the Servicing Fee.
Purpose of the Amendment
The Banks recently reviewed the amount of Base Rate protection provided
with respect to the Trust and the minimum Portfolio Yield required to enable the
Trust to continue to make scheduled payments to Investor Certificateholders. The
Banks also discussed the proposed reduction in the Base Rate and the use of
Servicer Interchange to pay Servicing Fees with the Rating Agencies.
Notwithstanding the factors discussed above under "Portfolio Yield and Early
Amortization Event Risk," the Banks concluded that the Rating Agencies' analyses
of the Base Rate and required level of credit enhancement had changed, creating
the possibility that the Portfolio Yield (averaged over any three consecutive
Due Periods) could fall below the Base Rate, causing an Early
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Amortization Event to occur at a time when the cash flows on the receivables
held by the Trust were sufficient, in the absence of the occurrence of an Early
Amortization Event, to support the ultimate payment of principal of and full and
timely payment of interest on such Investor Certificates, to the degree
consistent with the ratings of such Investor Certificates.
The Rating Agencies have agreed that adoption of the proposed Amendment
will not result in a reduction of their respective ratings of the Class A
Certificates, which are currently rated "AAA" and "Aaa", or the Class B
Certificates, which are currently rated "A".
In light of these factors, the Banks' have proposed an Amendment that
would reduce the Base Rate by 1.40%.
As discussed above, the effect of the Amendment will be to reduce the
likelihood that an Early Amortization Event would arise from a reduction in the
Portfolio Yield on the receivables assigned to the Trust and, therefore, reduce
the possibility of early repayment of principal to Investor Certificateholders
of the affected Trust due to such reduction. The Banks believe that, absent
adoption of the Amendment, such an Early Amortization Event and acceleration of
repayment of principal on the Investor Certificates could occur (because of
requirements of the Agreement which prevailed when the Investor Certificates
were initially issued) at a time when cash flows on the receivables assigned to
the Trust would still be sufficient, to the degree consistent with the ratings
of such Investor Certificates, to support the ultimate payment of principal of
and full and timely payment of interest on such Investor Certificates. Investor
Certificateholders could incur a loss as a result of the proposed reduction in
the Base Rate if the performance of the Trust's assets were worse than is
assumed by the Rating Agencies when they confirm their respective ratings of the
Investor Certificates, resulting in losses greater than the available credit
enhancement where such situation could have been avoided had the higher, current
Base Rate triggered an Early Amortization Event early enough that such losses
would not have been greater than the available credit enhancement.
A reduction in the Base Rate under the Amendment would also permit
Citibank (South Dakota) to decrease the cash flow on the receivables assigned to
the Trust to a level below that which is currently permitted by taking certain
actions to modify the terms of the revolving credit card accounts under which
such receivables arise. Citibank (South Dakota) reviews market conditions
regularly to maintain the competitiveness of its credit card products and,
accordingly, reserves the right (subject to the limitations discussed below) to
change the terms of its credit card accounts, including decreasing the periodic
finance charge assessed on balances in such accounts or other fees applicable to
the accounts (such as annual membership fees and late payment fees), altering
the minimum required monthly payment or changing various other terms of the
accounts. In response to market conditions, Citibank (South Dakota) recently
introduced certain account repricing initiatives which may decrease the
Portfolio Yield but which, in themselves, are not expected to cause an Early
Amortization Event. Such initiatives could help Citibank (South Dakota) to
increase or maintain its market share of the credit card business.
Terms of the Amendment
The definition of the term "Base Rate" in the Agreement currently
states that the Base Rate for such Trust is equal to (a) the higher of the Class
A Certificate Rate and the Class B Certificate Rate plus (b) 3.0% per annum.
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The Amendment will replace "3.0%" in such definition with "1.60%".
The Agreement currently provides for the payment of the Servicing Fee
from collections of finance charge receivables on a monthly basis in an amount
equal to one-twelfth of the product of 2.30% and the amount of principal
receivables as of the last day of the second preceding Due Period.
The Amendment will replace "2.30%" in the appropriate provision of such
Agreement with "1.87%".
The Amendment will provide further that a portion of such Servicing Fee
equal to 0.50% of the principal receivables as of the last day of the second
preceding Due Period may be paid only from Interchange, and if Interchange is
not sufficient to pay such portion of the Servicing Fee, such portion will not
be paid.
Rating Agency Confirmation and Credit Enhancer's Approval
The effectiveness of the Amendment, by its terms, will be subject to
the receipt by the Trustee of letters from the Rating Agencies confirming that
such Amendment will not result in a reduction or withdrawal of their ratings of
the Investor Certificates. In addition, the approval of the Amendment requires
the consent of the Credit Enhancer. There can be no assurance that the Credit
Enhancer will agree to consent to the Amendment.
Financial Information
Attached hereto as Exhibit I is a chart which sets forth the following
information with respect to the Trust, which experience does not differ
materially from that of the industry in general, for each month in the year
ended December 31, 1995 and each month in the nine-month period ended September
25, 1996, each expressed as a percentage of the principal amount of the Investor
Certificates: (a) the total yield (which is equal to the amount of collections
of finance charge receivables during the preceding Due Period); (b) principal
net credit losses (which is equal to the amount of charged-off principal
receivables net of recoveries of charged-off principal receivables); and (c) the
amount of available credit support. Exhibit I also sets forth the following for
the same periods, in each case expressed as a percentage of the sum of principal
receivables and finance charge receivables outstanding: (d) the aggregate
outstanding balance of accounts delinquent by 35 to 64 days; and (e) the
aggregate outstanding balance of accounts delinquent by 65 to 184 days. Attached
hereto as Exhibit II is a chart which sets forth the monthly base rate
protection, monthly Portfolio Yield and level of excess cash (which for any
particular period is equal to (i) the Portfolio Yield for such period less (ii)
the Certificate Rate and such period's pro rata portion of applicable servicing
fees) for each month in the year ended December 31, 1995 and each month in the
nine-month period ended September 25, 1996, as well as the three-month average
of such base rate protection (which is equal to the difference between the
monthly Portfolio Yield and the Base Rate), Portfolio Yield and level of excess
cash for the same periods.
As Exhibit I indicates, although delinquencies have remained relatively
stable during the past twelve months, charge-offs have risen and total yield,
accordingly, has declined. Exhibit II reflects a decrease in base rate
protection and portfolio yield, which resulted largely from the increase in
charge-offs. See "Portfolio Yield and Early Amortization Event Risk".
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Federal Income Tax Considerations
Based on advice of tax counsel, the Banks believe that, under recently
adopted Treasury Regulations, the adoption of the Amendment would not be a
"significant modification" to the Investor Certificates. As a result, a holder
of Investor Certificates would not recognize gain or loss as a result of the
Amendment, and future tax consequences to holders would be the same as if the
Amendment had not been adopted.
However, no IRS ruling is being obtained that the adoption of the
Amendment is not a "significant modification." As a result, no assurance can be
given that the IRS would not disagree with this position, although such
disagreement is not believed likely. Moreover, the Amendment might have other
tax consequences to particular holders of Investor Certificates in light of
their own circumstances. As a result, the above discussion is intended for
general information only, and holders of Investor Certificates should consult
their own tax advisors in determining the federal, state, local and other tax
consequences of the Amendment.
Consents
Authorization of the Amendment requires the consent of holders of
Investor Certificates representing not less than 66 2/3% of the
Certificateholders' Interest, excluding from such calculation Investor
Certificates owned by the Banks or any of their affiliates, as well as the
consent of the Credit Enhancer. No Investor Certificates are presently owned by
the Banks or, to their knowledge, by any director or officer of the Banks.
Investor Certificates may be owned by affiliates of the Banks or directors or
officers of such affiliates. The Certificateholders's Interest is calculated
based on the Invested Amount, which is generally defined under the Agreement as
an amount equal to the aggregate initial principal amount of the Investor
Certificates less (a) the amount of principal payments previously made to
Investor Certificateholders and (b) the excess, if any, of losses allocated to
the Investor Certificates over any such losses previously reimbursed.
Of the aggregate Certificateholders' Interest of $562,000,000
outstanding as of October 29, 1996, Certificateholders' Interest of $374,666,667
is necessary to approve the Amendment.
All of the Investor Certificates are held in the name of Cede & Co.,
whose address is 55 Water Street, New York, New York 10041. Cede & Co. is the
nominee name of The Depository Trust Company, which is a securities depositary
engaged in, among other things, the business of effecting computerized
book-entry transfers of securities deposited with its participants, which are
financial institutions such as brokerage firms and banks.
To the best of the knowledge of the Banks, no beneficial owner of any
Investor Certificate owns more than 5% of the securities permitted to vote with
respect to the Amendment.
Procedure for Consent
Investor Certificateholders who are registered holders on the Record
Date should complete, sign and date the accompanying Consent in accordance with
the instructions set forth therein and deliver, by mail, by hand or by telecopy,
the Consent to D.F. King & Co., Inc. A postage-paid envelope is enclosed for
that purpose. Only a registered holder of such Investor Certificates (or such
holder's authorized legal representative) on the Record Date may execute a
Consent. Any beneficial owner of Investor Certificates who is not the registered
holder of such Investor Certificates on the Record Date must arrange with the
registered holder to execute and deliver a
9
Consent on its behalf.
If a Consent relates to fewer than all the Investor Certificates
registered in the name of the Investor Certificateholder providing such Consent,
such Investor Certificateholder must indicate on the Consent the aggregate
dollar amount of the Certificateholders' Interest of the Investor Certificates
to which the Consent relates. Otherwise the Consent will be deemed to relate to
all Investor Certificates registered in the name of such holder at the close of
business on the Record Date.
The manner of obtaining Consents and of evidencing the authorization of
the execution thereof by Investor Certificateholders shall be determined by the
Trustee and shall be subject to such reasonable
Revocation of Consents
Any Investor Certificateholder who gives its Consent to an Amendment
may not revoke such Consent. Any Investor Certificateholder who opposes or
abstains with respect to an Amendment on the accompanying form may revoke such
opposition or abstention and give its Consent to the Amendment (by delivering to
D.F. King & Co., Inc. such Consent on the accompanying form) at any time prior
to the Solicitation Expiration Date. IF A PROPERLY EXECUTED CONSENT IS RETURNED
WITH NO INSTRUCTIONS GIVEN WITH RESPECT TO THE AMENDMENT, THE CONSENT WILL BE
DEEMED TO BE IN FAVOR OF SUCH AMENDMENT.
Effective Date of Amendment
The Banks and the Trustee will execute the Amendment as soon as
practicable after the Solicitation Expiration Date if the requisite number of
Consents to such Amendment and the consent of the Credit Enhancer are obtained.
The Amendment will be deemed to become effective as of the end of the Due Period
immediately preceding the Due Period in which the Amendment is executed, subject
to receipt of confirmation from the Rating Agencies that such Amendment will not
result in a reduction or withdrawal of their current rating of the Investor
Certificates. After the Amendment becomes effective, it will bind all Investor
Certificateholders regardless of whether they consented to the adoption of the
Amendment.
Other Matters
Directors, officers and employees of the Banks may engage in further
solicitation of Consents by wire, mail or telephone or in person, without
compensation therefor other than reimbursement of expenses.
The Banks have retained D.F. King & Co., Inc. to assist with the
Solicitation for a fee not expected to exceed $7,500 exclusive of expenses.
All costs of the Solicitation will be borne by the Banks. The Banks
will pay brokerage houses and other custodians, nominees and fiduciaries the
reasonable out-of-pocket expenses incurred by them in forwarding copies of this
solicitation statement and the Consent and any related documents to the
beneficial owners of the Investor Certificates held of record by such persons
and in forwarding Consents to their customers.
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Consents should be sent to:
D.F. King & Co., Inc.
77 Water Street, 20th Floor
New York, New York 10005
Attention: Thomas Long
Telecopy Number: (212) 809-8839
If you wish to obtain additional copies of the solicitation materials,
please telephone Thomas Long of D.F. King & Co., Inc. at (212) 425-1685. If you
have any questions regarding the solicitation materials, please telephone Hugh
F. Van Deventer, at (718) 248-5163, or Lisa Capuano, at (718) 248-5827, of
Citicorp Credit Services, Inc.
The mailing addresses of the principal executive offices of the Banks
are:
Citibank (South Dakota), N.A.
701 East 60th Street, North
Sioux Falls, South Dakota 57117
Citibank (Nevada), National Association
8725 West Sahara Avenue
Las Vegas, Nevada 89163
These addresses are set forth in order to comply with rules of the
Securities and Exchange Commission governing the Solicitation. Consents should
be delivered, mailed or telecopied only to D.F. King & Co., Inc. at the above
address. Under no circumstances should Consents be mailed to the Banks.
PLEASE INDICATE YOUR CONSENT BY EXECUTING THE ENCLOSED CONSENT FORM AND
RETURNING IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE OR BY TELECOPY. YOUR
FAILURE TO ACT WILL HAVE THE SAME EFFECT AS IF YOU HAD VOTED AGAINST THE
AMENDMENT.
11
EXHIBIT I
STANDARD CREDIT CARD TRUST 1990-3
NET AVAILABLE
TOTAL PRINCIPAL CREDIT DELINQUENT DELINQUENT
YIELD LOSSES SUPPORT 35-64 DAYS 65-184 DAYS
_____ ______ _______ __________ ___________
SEP-96 19.09% 5.03% 8.53% 2.13% 3.16%
AUG-96 18.48% 4.53% 7.72% 2.09% 3.00%
JUL-96 18.92% 5.44% 7.04% 1.96% 2.85%
JUN-96 19.85% 5.48% 6.48% 2.01% 2.83%
MAY-96 18.77% 4.22% 6.00% 1.96% 2.87%
APR-96 19.68% 5.60% 6.00% 1.87% 2.93%
MAR-96 19.70% 4.82% 6.00% 1.99% 2.98%
FEB-96 19.22% 3.80% 6.00% 2.06% 3.03%
JAN-96 18.94% 4.54% 6.00% 2.21% 2.97%
DEC-95 19.62% 4.55% 6.00% 2.26% 2.90%
NOV-95 18.83% 3.91% 6.00% 2.02% 2.87%
OCT-95 19.40% 3.90% 6.00% 2.12% 2.78%
SEP-95 18.89% 3.96% 6.00% 2.10% 2.77%
AUG-95 19.00% 4.03% 6.00% 1.98% 2.65%
JUL-95 18.83% 3.98% 6.00% 1.88% 2.70%
JUN-95 18.55% 3.61% 6.00% 1.95% 2.72%
MAY-95 19.09% 4.01% 6.00% 1.82% 2.76%
APR-95 19.09% 4.35% 6.00% 1.85% 2.87%
MAR-95 19.53% 3.73% 6.00% 1.98% 3.12%
FEB-95 19.32% 4.08% 6.00% 2.14% 3.13%
JAN-95 18.63% 4.00% 6.00% 2.32% 3.12%
NOTE: Each of the foregoing terms is defined in the accompanying Solicitation
Statement.
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EXHIBIT II
STANDARD CREDIT CARD TRUST 1990-3
3 MONTH AVG 3 MONTH AVG
BASE RATE PORTFOLIO EXCESS BASE RATE PORTFOLIO 3 MONTH AVG
PROTECTION YIELD CASH PROTECTION YIELD EXCESS CASH
__________ _____ ____ __________ _____ ___________
SEP-96 1.21% 14.06% 2.22% 1.16% 14.01% 2.17%
AUG-96 1.10% 13.95% 2.11% 1.08% 13.93% 2.09%
JUL-96 0.63% 13.48% 1.64% 1.28% 14.13% 2.29%
JUN-96 1.52% 14.37% 2.53% 1.48% 14.33% 2.49%
MAY-96 1.70% 14.55% 2.71% 1.65% 14.50% 2.66%
APR-96 1.23% 14.08% 2.24% 1.94% 14.79% 2.95%
MAR-96 2.03% 14.88% 3.04% 2.05% 14.90% 3.06%
FEB-96 2.57% 15.42% 3.58% 2.11% 14.96% 3.12%
JAN-96 1.55% 14.40% 2.56% 1.95% 14.80% 2.96%
DEC-95 2.22% 15.07% 3.23% 2.31% 15.16% 3.32%
NOV-95 2.07% 14.92% 3.08% 2.27% 15.12% 3.28%
OCT-95 2.65% 15.50% 3.66% 2.28% 15.13% 3.29%
SEP-95 2.08% 14.93% 3.09% 2.07% 14.92% 3.08%
AUG-95 2.12% 14.97% 3.13% 2.07% 14.92% 3.08%
JUL-95 2.00% 14.85% 3.01% 2.11% 14.96% 3.12%
JUN-95 2.09% 14.94% 3.10% 2.07% 14.92% 3.08%
MAY-95 2.23% 15.08% 3.24% 2.36% 15.21% 3.37%
APR-95 1.89% 14.74% 2.90% 2.41% 15.26% 3.42%
MAR-95 2.95% 15.80% 3.96% 2.37% 15.22% 3.38%
FEB-95 2.39% 15.24% 3.40% 6.82% 15.39% 2.06%
JAN-95 1.78% 14.63% 2.79% 11.06% 15.34% 0.93%
NOTE: Each of the foregoing terms is defined in the accompanying Solicitation
Statement.
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ANNEX A
STANDARD CREDIT CARD TRUST 1990-3
CONSENT
SOLICITED ON BEHALF OF CITIBANK (SOUTH DAKOTA), N.A. AND
CITIBANK (NEVADA), NATIONAL ASSOCIATION,
UNDER THE POOLING AND SERVICING AGREEMENT
The undersigned holder of Credit Card Participation Certificates
(the "Certificates") issued by Standard Credit Card Trust 1990-3 hereby
__ Consents to __ Opposes __ Abstains from voting on
the execution and delivery of the amendment to the Pooling and Servicing
Agreement under which the Certificates were issued, as set forth in the
Solicitation Statement, dated October 30, 1996 (the "Solicitation Statement"),
by Citibank (South Dakota), N.A. and Citibank (Nevada), National Association
(collectively, the "Banks") to the holders of the Certificates, which amendment
has been proposed by the Banks.
If you indicate an amount in the following space, this Consent shall be
effective with respect to only the principal amount of Certificates indicated.
$________________
If you leave the preceding space blank, this Consent shall be effective with
respect to all Certificates of which you are the beneficial owner.
(Please sign and date below)
IF THIS CONSENT IS SIGNED BUT NOT MARKED ABOVE, IT WILL BE DEEMED TO BE IN FAVOR
OF THE AMENDMENT.
Signature________________________ Date:___________
Signature ________________________
(if held jointly)
Please date and sign as your name appears hereon and return in the enclosed
envelope or by telecopy as provided in the Solicitation Statement. If acting as
executor, administrator, trustee or guardian, you should so indicate when
signing. If the signer is a corporation, please sign the corporate name by duly
authorized officer. If Certificates are held in the name of more than one
person, each Certificateholder should sign the Consent.
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EXHIBIT INDEX
EXHIBIT NO. EXHIBIT PAGE
1 Letter to Certificateholders 16
15
EXHIBIT 1
October 30, 1996
To the Holders of the Credit Card Participation
Certificates of Standard Credit Card Trust 1990-3
This letter is being mailed to you on behalf of Citibank (South
Dakota), N.A., and Citibank (Nevada), National Association (collectively, the
"Banks"), as originators of the above-named Trust (the "Trust"). The purpose of
this letter and the accompanying materials is to obtain your consent to the
execution of an amendment (the "Amendment") to the Pooling and Servicing
Agreement (the "Agreement") pursuant to which Credit Card Participation
Certificates (collectively, the "Investor Certificates") were issued by the
Trust. The Amendment would, among other things, reduce the applicable Base Rate,
as such term is defined in the related Agreement, by 1.40% per annum. The
Amendment and the reasons why the Banks seek your approval to adoption of the
Amendment are discussed in the accompanying Solicitation Statement.
Only a registered holder of an Investor Certificate of the Trust (or
such holder's authorized legal representative) at the close of business on
October 29, 1996, the record date, may execute a consent, and such consent will
be binding on all subsequent transferees of such Investor Certificate. Any
beneficial owner of Investor Certificates that is not the registered holder of
such Investor Certificate on the record date must arrange with the registered
holder to execute and deliver a consent on its behalf.
Regardless of the size of your holdings, your consent is important
because in order to implement an Amendment consents from the holders of Investor
Certificates of the Trust representing not less than 66 2/3% of the undivided
interest in the Trust must be received. Failure to complete and return a consent
form will have the effect of a negative vote.
Any Investor Certificateholder who gives its consent to the Amendment
may not revoke its consent.
A Solicitation Statement, a Consent Form and a return, postage-paid
envelope are enclosed. If you wish to obtain additional copies of the
accompanying materials, please telephone Thomas Long of D.F. King & Co., Inc. at
(212) 425-1685. If you have any questions regarding the accompanying materials,
please telephone Hugh F. Van Deventer, at (718) 248-5163, or Lisa Capuano, at
(718) 248-5827, of Citicorp Credit Services, Inc.
We urge you to complete, sign, date and return the enclosed consent
form as soon as possible.
Very truly yours,
Vice President
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