SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Securities Exchange Act of 1934
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[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12
CHASE CREDIT CARD OWNER TRUST 1999-3 (Issuer)
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION (Depositor)
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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2
May 19, 2003
To the Holders of the
Class A 6.66% Asset Backed Notes, Series 1999-3,
Class B 6.95% Asset Backed Notes, Series 1999-3 and
Class C Floating Rate Asset Backed Notes, Series 1999-3 of
Chase Credit Card Owner Trust 1999-3
This letter is being mailed to you on behalf of Chase Manhattan Bank
USA, National Association, as depositor of the above-named trust. The purpose
of this letter and the accompanying materials is to obtain your consent to the
execution of an amendment to the Series 1999-3 Supplement dated as of
September 29, 1999 to the Pooling and Servicing Agreement pursuant to which
the series certificate, which secures your notes, was issued by the master
trust. The amendment would change the portfolio performance trigger for the
purpose of determining whether a base rate pay out event has occurred. The
adoption of this amendment would decrease the likelihood that a base rate pay
out event will occur. The amendment and the reasons why Chase USA seeks your
approval to adopt the amendment are discussed in the accompanying Solicitation
Statement.
Only a registered holder of the notes of the trust (or such holder's
authorized legal representative) at the close of business on April 15, 2003,
the record date, may execute a consent, and such consent will be binding on
all subsequent transferees of such notes. If you hold your notes through a
broker, dealer, bank or other nominee, you must contact that entity directly
in order to give appropriate instructions for consenting to the amendment. A
letter of instruction is included in the enclosed solicitation materials which
you may use for this purpose.
Regardless of the size of your holdings, your consent is important
because in order to implement the amendment consents from the holders of the
notes representing more than 50% of the outstanding principal amount of the
notes must be received. Accordingly, failure to complete and return a consent
will have the effect of a negative vote.
Any noteholder that gives its consent to the amendment may not
revoke its consent.
A Solicitation Statement, a Consent Form, a letter of instruction
and a return, postage-paid envelope are enclosed. If you wish to obtain
additional copies of the accompanying materials, please contact the
solicitation agent, Mellon Investor Services LLC, at (888) 468-9726.
We urge you to complete, sign, date and return the enclosed Consent
Form as soon as possible.
Very truly yours,
/s/ Keith Schuck
-----------------------------
Keith Schuck
Senior Vice President
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
SOLICITATION STATEMENT
Statement soliciting consents of noteholders with respect to a proposed
amendment of the Series 1999-3 Supplement to the Pooling and Servicing
Agreement governing the series certificate which secures the Notes issued by:
CHASE CREDIT CARD OWNER TRUST 1999-3
Class A 6.66% Asset Backed Notes, Series 1999-3 (Cusip No. 16151RAA1)
Class B 6.95% Asset Backed Notes, Series 1999-3 (Cusip No. 16151RAB9)
Class C Floating Rate Asset Backed Notes, Series 1999-3 (Cusip No. 16151RAC7)
This solicitation statement is furnished by Chase Manhattan Bank
USA, National Association, to holders of the Class A 6.66% Asset Backed Notes,
Series 1999-3, the Class B 6.95% Asset Backed Notes, Series 1999-3 and the
Class C Floating Rate Asset Backed Notes, Series 1999-3 (the Class A notes,
the Class B notes and the Class C notes collectively, the "Notes") issued by
Chase Credit Card Owner Trust 1999-3. The owner trust holds the series
certificate which represents an undivided interest in certain assets of the
Chase Credit Card Master Trust. The master trust exists pursuant to the Third
Amended and Restated Pooling and Servicing Agreement, dated as of November 15,
1999 (the "Agreement") among Chase USA, as transferor on and after June 1,
1996, JPMorgan Chase Bank (formerly known as Chemical Bank and The Chase
Manhattan Bank), as transferor prior to June 1, 1996, and as servicer, and The
Bank of New York, as trustee. The series certificate was issued pursuant to
the Series 1999-3 Supplement dated as of September 29, 1999 (the "Series
Supplement") to the Agreement. This solicitation statement is being sent in
connection with Chase USA's solicitation of consents from the registered
holders of the Notes to the execution and delivery of a proposed amendment to
the Series Supplement. The record date for determining the noteholders
eligible to consent to the amendment is the close of business on April 15,
2003. The date on which this solicitation statement is first being sent to
noteholders is May 20, 2003. Capitalized terms that are not defined within the
text of this solicitation statement are defined in the glossary of terms
attached as Annex A.
The Notes are secured by the series certificate and the proceeds of
the series certificate that may be held from time to time by the owner trust.
In order for the owner trust as holder of the series certificate to consent to
the amendment, it is required to obtain the consent of the noteholders holding
more than 50% of the outstanding principal amount of the Notes. The amendment
will be executed and delivered if consents are obtained from the required
number of noteholders on or before the Solicitation Expiration Date (as
defined below). Furthermore, the amendment will be executed and delivered only
if The Bank of New York, as indenture trustee for the Notes under the
indenture pursuant to which the Notes were issued and the trustee receives
letters from Standard & Poor's Ratings Group, Moody's Investors Service, Inc.
and Fitch Ratings (collectively, the "Rating Agencies"), confirming that
adoption of the amendment will not result in a reduction or withdrawal of
their respective ratings of the Notes or the series certificate, respectively.
2
The term "Solicitation Expiration Date" means the earlier of (a)
5:00 p.m. New York City time on June 4, 2003 and (b) 5:00 p.m. New York City
time on the date on which consents are obtained from the required number of
noteholders or, if extended by Chase USA, such subsequent time and date
specified by Chase USA. Chase USA reserves the right to extend the period
during which consents will be received from the noteholders 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. Chase USA may extend the solicitation period any
number of times.
Only a registered holder of a Note (or such holder's authorized
legal representative) on the record date may execute a consent. Giving a
consent will not affect the right of a noteholder to transfer a Note, and such
consent will be binding on all subsequent transferees of such Note. As of the
date of this solicitation statement, all of the Notes are registered in the
name of a nominee of The Depository Trust Company ("DTC"). Chase USA
anticipates that DTC, as nominee holder of the Notes, will execute an omnibus
proxy that will authorize its participants to execute consents with respect to
the Notes owned by such DTC participants as specified on the DTC position
listing as of the record date. Beneficial owners of Notes who hold their Notes
through a broker, dealer, bank or other nominee must contact that entity in
order to give their consent with respect to the amendment. A letter of
instruction is included in the solicitation materials provided with this
solicitation statement which may be used by a beneficial owner to give such
instructions to the applicable broker, dealer, bank or other nominee.
Any noteholder that executes a consent to the amendment on the
accompanying form may not revoke such consent. Any noteholder that opposes or
abstains on the accompanying form may revoke such opposition or abstention and
give its consent to the amendment (by executing and delivering such consent as
instructed 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.
Noteholders will have no rights of appraisal or similar dissenters'
rights in the event that the amendment is adopted.
General
As the prime rate has decreased since the issuance of the series
certificate, the Portfolio Yield (as defined below) for the series certificate
has decreased while components of the Base Rate have remained constant due to
the fixed rate coupon for the Class A notes and the Class B notes. Portfolio
Yield has decreased because one of the main components of Portfolio Yield is
collections of finance charge receivables which are based upon the prime rate.
As a result, the likelihood of the occurrence of a Base Rate Pay Out Event (as
defined below) has increased because the difference between the Portfolio
Yield and the Base Rate has narrowed as compared to when the Class A notes and
the Class B notes were originally issued.
The proposed amendment adds a new defined term "Portfolio
Supplemented Yield" which replaces the term "Portfolio Yield" solely for the
purpose of determining whether a Base Rate Pay Out Event has occurred. If
specified conditions are met, the Portfolio Supplemented
3
Yield will be equal to the Portfolio Yield plus a specific amount of shared
excess finance charge collections otherwise available to the series
certificate. Shared excess finance charge collections are generally the amount
by which finance charge collections on the receivables in the master trust
allocable to the investor interests of all series exceed the aggregate amount
of allocable servicing fees, defaulted receivables (net of recoveries) and
interest on the outstanding series of certificates available from all
outstanding series of certificates issued by the master trust.
A "Base Rate Pay Out Event" currently occurs if Portfolio Yield
(averaged over any three consecutive monthly periods) is less than the Base
Rate (averaged over any three consecutive monthly periods). The "Base Rate"
means, with respect to any monthly period, the annualized percentage
equivalent of a fraction, the numerator of which is the sum of (a) the monthly
interest distributable on the Notes and any shortfall for previous monthly
interest requirements and (b) the proportionate share of the servicing fee
allocable to the series certificate with respect to such monthly period and
the denominator of which is the Investor Interest as of the close of business
on the last day of such monthly period. "Portfolio Yield" means the annualized
percentage equivalent of a fraction, the numerator of which is the sum of (a)
the amount of finance charge receivables collected for the monthly period, (b)
investment earnings on funds in the Principal Funding Account for the monthly
period and (c) the amounts withdrawn from the Accumulation Period Reserve
Account in accordance with the Series Supplement and deposited into the
Finance Charge Account for the monthly period, calculated on a cash basis,
after subtracting from that amount, the amount of receivables which were
charged off as uncollectible in such monthly period, and the denominator of
which is the Investor Interest as of the last day of such monthly period.
Shared excess finance charge collections are currently available to
cover shortfalls in amounts allocable to make payments of interest on the
series certificate and to meet the other obligations of the master trust with
respect to each of the other series of certificates that it has issued.
However, shared excess finance charge collections are not currently included
in the defined term "Portfolio Yield" and thus are not taken into account in
the current determination of whether a Base Rate Pay Out Event has occurred.
The amendment adds a new defined term "Portfolio Supplemented Yield".
Portfolio Supplemented Yield adds a portion of shared excess finance charge
collections (if specified conditions are met) to the amount of Portfolio Yield
(up to the maximum amount specified below) and uses Portfolio Supplemented
Yield in the determination of whether a Base Rate Pay Out Event has occurred.
Although sufficient shared excess finance charge collections are
currently available to the series certificate, sufficient shared excess
finance charge collections may not always be available in the future,
particularly if the master trust experiences higher levels of charged-off
receivables or if the prime rate were to continue to decline. If shared excess
finance charge collections are not available to the series certificate, then
no amount of shared excess finance charge collections will be included in the
Portfolio Supplemented Yield and the calculation of the Base Rate Pay Out
Event will be determined in the same manner as it is determined before this
amendment takes effect.
This amendment will not have the effect of increasing the amount of
finance charge collections allocable or distributable to the Notes. In
addition, the inclusion of any amounts of shared excess finance charge
collections in the calculation of whether a Base Rate Pay Out Event
4
has occurred does not change in any way (either positively or negatively) the
amount of collateral or cash flow available to pay principal or interest on
the Notes nor will the amendment affect the interest rate, payment date
(either final or expected), collateral or rating of the Notes.
The purpose of the amendment is to reduce the likelihood of the
occurrence of a Base Rate Pay Out Event. If a Base Rate Pay Out Event were to
occur, a rapid amortization of the series certificate would commence and the
master trust would begin making payments of principal to the indenture trustee
who holds the series certificate for the benefit of the noteholders. As a
result, monthly distributions of principal on the Notes would commence on the
first distribution date following the occurrence of the Base Rate Pay Out
Event (although distributions of principal on the Class C notes would not
commence until the principal amount of the Class A notes and Class B notes has
been repaid in full and the distributions of principal on the Class B notes
would not commence until the principal amount of the Class A notes has been
repaid in full).
The effect of this amendment on noteholders will be to reduce the
likelihood that a decline in Portfolio Yield will cause a Base Rate Pay Out
Event to occur, thereby decreasing the likelihood that principal will be
repaid to investor noteholders prior to the scheduled maturity date, which is
September 15, 2003 for the Class A notes and October 15, 2004 for the Class B
and Class C notes.
A form of the amendment is attached to this solicitation statement
as Annex E.
Advantages of the Amendment
The amendment will reduce the likelihood of a Base Rate Pay Out
Event occurring, thereby decreasing the likelihood that principal will be
repaid to noteholders earlier than the respective scheduled payment dates of
such Notes. As a result, noteholders are less likely to need to reinvest early
distributions of principal. For the holders of the Class A notes and the Class
B notes, principal will be reinvested at prevailing interest rates that are
currently significantly lower than the rates applicable to the Class A and
Class B notes. Because the Class C notes bear interest at a floating rate
there may be no benefit to the holders of the Class C notes in reducing the
likelihood of a Base Rate Pay Out Event and thus no advantages to them. In the
absence of a pay out event, interest will continue to accrue and be paid to
noteholders on the Notes at their current respective fixed or floating rates
until their respective final payment dates. Further, the proposed amendment
has been reviewed by the Rating Agencies, all of which have indicated that
adoption of the amendment will not adversely affect their respective ratings
of the Notes or the series certificate. Thus, noteholders would continue to
hold the Notes with the same ratings as those currently assigned, but with a
reduced likelihood of early distributions of principal.
Disadvantages of the Amendment
Although the Notes will maintain their respective ratings after the
adoption of the amendment, the effect of the amendment will be to delay the
commencement of a Base Rate Pay Out Event that occurs as a result of a decline
in Portfolio Yield. Portfolio Yield is calculated (as described below) based
upon two principal components--finance charge collections and charged-
5
off receivables. If the amendment is adopted, a decline in finance charge
collections or an increase in charged-off receivables that would otherwise
have resulted in a Base Rate Pay Out Event will not result in such a Base Rate
Pay Out Event and, as a consequence, noteholders could incur a loss if the
performance of the master trust's assets were worse than is assumed by the
Rating Agencies when they confirm their respective ratings of the Notes,
resulting in losses greater than the available credit enhancement where such
situation could have been avoided if the Base Rate Pay Out Event had occurred
earlier and before the deterioration in the master trust's assets.
Furthermore, because the Class C notes are subordinated to the Class A notes
and Class B notes, and the Class B notes are subordinated to the Class A
notes, the Class B notes have a greater risk of loss than the Class A notes
and the Class C notes have a greater risk of loss than the Class B notes. In
order to mitigate this risk, the amendment provides that certain conditions
must be met in order to use the revised formula for calculating whether a Base
Rate Pay Out Event has occurred and limits the amount of shared excess finance
charge collections that can be included in Portfolio Supplemented Yield in any
one monthly period.
Certain Provisions of the Agreement
If a Base Rate Pay Out Event occurs, monthly distributions of
principal to holders of the Class A notes would begin on the first
distribution date following the monthly period in which such Base Rate Pay Out
Event occurred, even though the scheduled principal payment date of the Class
A notes is not until September 15, 2004. Holders of the Class B notes and
Class C notes would begin receiving monthly distributions of principal, in the
case of the Class B notes, on the first distribution date after the Class A
notes are repaid in full and, in the case of the Class C notes, on the first
distribution date after the Class B notes are paid in full, even though the
scheduled principal payment date of the Class B notes and Class C notes is not
until October 15, 2004. 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 noteholders upon
the occurrence of a Base Rate Pay Out Event is to enhance the likelihood that
noteholders will 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 master trust to the extent that available credit
enhancement would actually be depleted prior to such noteholders receiving
such full return of their investment.
Under the terms of the Agreement, Chase USA 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 Chase USA to
maintain its credit card business on a competitive basis, based on a good
faith assessment by Chase USA of the nature of the competition in the credit
card business. The purpose of this covenant is to protect noteholders from
Chase USA taking actions that would decrease the cash flow on such receivables
to a rate that is less than that required to enable the master trust to
continue to make scheduled payments of interest and cover losses attributable
to charged-off principal receivables allocable to the series certificate or to
a rate that would trigger amortization of the series certificate as described
above. The amendment does not in any way affect this covenant because the
defined term "Portfolio Yield" will not be affected by the amendment. The
amendment will only affect the calculation for determining whether the Base
Rate Pay Out Event has occurred.
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Portfolio Yield
Portfolio Yield is based on the amount of collections of finance
charge receivables received by the master trust less the amount of receivables
that has been charged-off as uncollectible. The amount of finance charge
collections and losses due to charged-off receivables depends on payment
patterns of cardholders which result from a variety of economic, legal and
social factors. Chase USA is unable to determine and has 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. Chase USA believes that the reduction in gross portfolio yield for the
master trust that has created the increased risk of a Base Rate Pay Out Event
is primarily attributable to a decrease in periodic finance charges as a
result of multiple reductions in the prime rate that have occurred since the
issuance of the Notes. A majority of the credit card accounts held by the
master trust have periodic finance charges that are calculated on a floating
rate based upon the prime rate. The prime rate has decreased 4.25% from
January 1, 2000 to March 31, 2003. When the prime rate decreases periodic
finance charges also decrease resulting in lower gross portfolio yield. As
shown in the chart below, the net default rates and the payment rates for the
master trust have been relatively stable in recent months, while the gross
portfolio yield for the master trust has declined during the last twelve
months. The amount of gross portfolio yield will decrease in the future if the
prime rate continues to decline.
The chart below shows the gross portfolio yield, payment rate and
net charge-off rate for the master trust portfolio for each month from January
2001 to December 2002.
- --------------------------------------------------------------------------------
CHASE CREDIT CARD MASTER TRUST
Gross Net
Portfolio Payment Default
Yield Rate Rate
Jan-01 18.76% 15.70% 5.52%
Feb-01 17.06% 13.47% 5.94%
Mar-01 19.47% 15.44% 6.22%
Apr-01 18.43% 15.24% 6.36%
May-01 18.15% 15.47% 6.60%
Jun-01 16.74% 14.74% 6.67%
Jul-01 18.37% 15.80% 6.28%
Aug-01 18.42% 16.20% 5.59%
Sep-01 15.62% 13.73% 5.80%
Oct-01 18.69% 16.55% 5.48%
Nov-01 16.72% 14.96% 5.11%
Dec-01 16.83% 15.18% 5.27%
Jan-02 16.32% 16.11% 5.87%
Feb-02 14.64% 13.83% 5.46%
Mar-02 16.42% 15.75% 5.92%
Apr-02 14.80% 15.52% 5.31%
May-02 14.81% 16.19% 4.75%
Jun-02 13.97% 14.69% 4.94%
Jul-02 16.01% 16.78% 4.72%
Aug-02 15.04% 16.03% 4.84%
Sep-02 14.72% 15.58% 4.68%
Oct-02 15.25% 15.97% 5.18%
Nov-02 14.27% 14.38% 5.02%
Dec-02 15.65% 16.18% 6.07%
- --------------------------------------------------------------------------------
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"Gross portfolio yield" for any month means the total amount of
collected finance charges and interchange fees allocated to the master trust
for the month, expressed as a percentage of total outstanding principal
receivables at the beginning of the month.
The "payment rate" for any month is the total amount collected on
receivables during the month, including recoveries on previously charged-off
receivables, expressed as a percentage of total outstanding receivables at the
beginning of the month.
The "net default rate" for any month is the amount of charged-off
receivables recorded in the month, net of any recoveries from earlier
charge-offs on receivables in the master trust portfolio, expressed as a
percentage of total outstanding principal receivables at the beginning of the
month.
The amount of finance charge collections and charged-off receivables
is also influenced by the amount of delinquencies and the level of convenience
use (where cardholders pay their balances early and avoid charges), both of
which can decrease the Portfolio Yield. If more cardholders do not pay their
account in a timely manner, delinquencies will increase possibly indicating
that in the future, the receivables for the cardholders with delinquent
accounts may be uncollectible resulting in a larger amount of receivables
being charged-off. If cardholders increase their level of convenience use then
less finance charge receivables will be generated by the master trust and
finance charge collections will decrease.
In addition, competition may affect Portfolio Yield. As the credit
card industry is increasingly competitive, new credit card issuers continually
seek to expand in or enter the market and additional non-cash payment methods,
including pre-paid cash cards and other technology-based cash substitutes, are
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 resulting in fewer finance charge
receivables and finance charge collections. To retain cardholders, Chase USA
reviews market conditions regularly to maintain the competitiveness of its
credit card products and, accordingly, reserves the right (subject to the
limitations discussed above) to change the terms of its credit card accounts,
including applicable fees and finance charges. Any decreases in applicable fee
rates and finance charge rates that Chase USA makes can also decrease finance
charge collections.
As discussed in the preceding paragraphs, any decrease in the level
of finance charge collections or increase in the level of receivables
charged-off as uncollectible has the effect of decreasing Portfolio Yield. Any
decrease in Portfolio Yield increases the risk of the occurrence of a Base
Rate Pay Out Event.
Purpose of the Amendment
Declines in the gross portfolio yield for the master trust have
resulted in a decreased Portfolio Yield on the series certificate. The
Portfolio Yield was 9.28% for the Monthly Period ending March 31, 2003. If the
three-month consecutive average of the Portfolio Yield, which was 9.14% as of
March 31, 2003, falls below the three-month consecutive average of the Base
Rate, which is 8.32% as of March 31, 2003, then a Base Rate Pay Out Event will
occur resulting in early payment of principal of the Notes.
8
Despite the reduction in gross yield available to the master trust,
sufficient shared excess finance charge collections are currently available to
make payments of interest on the Notes and to meet the other obligations of
the master trust with respect to each of the series of certificates that it
has issued. Approximately 91% of the outstanding amount of the series of
certificates issued as part of Group I bear a floating interest rate that is
based upon one-month LIBOR. One-month LIBOR has decreased 4.51% from the
January 1, 2000 monthly period to the March 31, 2003 monthly period. As
one-month LIBOR has decreased, the interest payments on the floating rate
certificates have also decreased, thereby reducing the overall obligations of
the master trust. However, because the Class A notes and Class B notes are
fixed rate notes, there has not been a corresponding decrease in the interest
payments or the Base Rate for the Notes. The floating rate certificates thus
generate shared excess finance charge collections that are available to Series
1999-3 and other fixed rate series. The amount of gross portfolio yield and
shared excess finance charge collections that the master trust has generated
over the past twelve months can be found in the table on Annex B.
Concurrently with this solicitation, Chase USA is soliciting
substantially similar consents from the holders of Series 1996-2 and Series
1996-3 investor certificates, both of which are fixed rate series. These other
fixed rate series are entitled to shared excess finance charge collections on
a pro rata basis with Series 1999-3. The continuing requirements of the other
fixed rate series may reduce the amount of shared finance charge collections
available to Series 1999-3 and may reduce the Average Trust Excess Spread
Percentage and thus may increase the likelihood of a Base Rate Pay Out Event.
Approval of this amendment is not conditioned on approval of the respective
amendments by the holders of the other series.
In light of these factors, Chase USA proposes the amendment that
would have the effect of reducing the likelihood that a Base Rate Pay Out
Event would arise from a reduction in the Portfolio Yield and, therefore,
reducing the possibility of early repayment of principal to noteholders due to
such reduction. Chase USA believes that, absent adoption of the amendment, a
Base Rate Pay Out Event and acceleration of repayment of principal on the
Notes could occur at a time when cash flows on the receivables assigned to the
master trust would still be sufficient to the degree consistent with the
ratings of such Notes as originally assigned by the relevant Rating Agencies,
to support the ultimate payment of principal of, and full and timely payment
of interest on, such Notes. Noteholders could incur a loss as a result of the
proposed amendment if the performance of the master trust's assets were worse
than is assumed by the Rating Agencies when they confirm their respective
ratings of the Notes, resulting in losses greater than the available credit
enhancement where such situation could have been avoided had the lower,
current Portfolio Yield triggered a Base Rate Pay Out Event early enough that
such losses would not have been greater than the available credit enhancement.
Although sufficient shared excess finance charge collections are
currently available to the series certificate, sufficient shared excess
finance charge collections may not always be available in the future,
particularly if the master trust experiences higher levels of charged-off
receivables or if the prime rate were to continue to decline. If shared excess
finance charge collections are not available to the series certificate, then
no amount of shared excess finance charge collections will be included in the
Portfolio Supplemented Yield and the calculation of the Base Rate Pay Out
Event will be determined in the same manner as it is determined before this
amendment takes effect.
9
Terms of the Amendment
The amendment adds a new defined term "Portfolio Supplemented Yield"
which replaces the term "Portfolio Yield" solely for the purpose of
determining whether a Base Rate Pay Out Event has occurred. If specified
conditions are met, the Portfolio Supplemented Yield will be equal to the
Portfolio Yield plus a specific amount of shared excess finance charge
collections otherwise available to the series certificate. The amount of
shared excess finance charge collections included in the calculation of the
Base Rate Pay Out Event varies with the Average Excess Spread Percentage.
"Average Excess Spread Percentage" means the amount (expressed as an
annualized percentage) by which the average Portfolio Yield for three
consecutive monthly periods exceeds the average Base Rate. Assuming sufficient
shared excess finance charge collections exist, the amendment would have the
effect of adding in any one monthly period approximately (a) 0% to the
Portfolio Yield if the Average Excess Spread Percentage is greater than 1.50%,
(b) 0.50% to the Portfolio Yield if the Average Excess Spread Percentage is
greater than 1% and less than or equal to 1.50%, (c) 1.00% to the Portfolio
Yield if the Average Excess Spread Percentage is greater than 0.50% and less
than or equal to 1.00% and (d) 1.50% to the Portfolio Yield if the Average
Excess Spread Percentage is less than or equal to 0.50%. However, if (i) the
Average Trust Excess Spread Percentage is less than or equal to 3.5%
indicating that the Base Rates for the series of certificates issued by the
master trust has increased or Portfolio Yield has decreased to a level where
insufficient shared excess finance charge collections exist, (ii) unreimbursed
Investor Interest Charge-offs exist indicating that the amount of receivables
of the master trust that have been charged off has increased to a level where
the series certificate and the Notes are experiencing a loss or (iii) if a
servicer default has occurred and is continuing, then no amount of shared
excess finance charge collections are included in Portfolio Supplemented
Yield. Under such circumstances, the occurrence of a Base Rate Pay Out Event
will be determined as if the amendment had not been adopted.
In the event that the amount required to be included in Portfolio
Supplemented Yield is greater than the amount of shared excess finance charge
collections available to the series certificate, then only the amount of
shared excess finance charge collections available will be included in
Portfolio Supplemented Yield.
Rating Agency Confirmation
The Rating Agencies have indicated that adoption of the proposed
amendment will not result in a reduction of their respective ratings of the
Notes or the series certificate. The Class A notes are currently rated "AAA"
by Standard & Poor's Ratings Group and Fitch Ratings and "Aaa" by Moody's
Investors Service, Inc. The Class B notes are currently rated "A" by Standard
& Poor's Ratings Group and Fitch Ratings and "A2" by Moody's Investors
Service, Inc. The Class C notes are currently rated "BBB" by Standard & Poor's
Ratings Group and Fitch Ratings and "Baa2" by Moody's Investors Service, Inc.
The series certificate is currently rated "BBB" by Fitch Ratings.
The effectiveness of the amendment will be subject to the receipt by
the indenture trustee and the trustee of letters from the Rating Agencies
confirming that such amendment will not result in a reduction or withdrawal of
their current ratings of the Notes or series certificate, respectively.
10
Financial Information
Attached hereto as Annex C are two tables setting forth the
delinquency and loss experience with respect to the master trust for the three
months ended March 31, 2003 and for the years ended December 31, 2000, 2001
and 2002. "Number of days delinquent" means the number of days after the first
billing date following the original billing date in which the minimum payment
was not received; for example, 30 days delinquent means that the minimum
payment was not received within 60 days of the original billing date.
Delinquencies are calculated as a percentage of outstanding receivables as of
the end of the indicated month. "Average principal receivables outstanding" is
the average of the beginning of the month balance of the master trust's
principal receivables outstanding during the indicated period. "Gross
charge-offs" shown include only the principal portion of charged-off
receivables. Also excluded from gross charge-offs is the amount of any
reductions in average principal receivables outstanding due to fraud, returned
goods or customer disputes.
Attached hereto as Annex D is a chart which sets forth with respect
to the series certificate the monthly Portfolio Yield, Base Rate and excess
spread percentage (which is the amount by which Portfolio Yield exceeds the
Base Rate), as well as the Average Excess Spread Percentage and Average Trust
Excess Spread Percentage each calculated by using the particular month shown
and the two months preceding it.
As Annexes B and C indicate, delinquencies and charge-offs have
remained relatively stable while gross portfolio yield has declined. Annex B
also illustrates the amount of shared excess finance charge collections that
are currently available in the master trust.
Federal Income Tax Considerations
Chase USA believes that under applicable current Treasury
Regulations the adoption of the amendment would not be a "significant
modification" to the terms of the Notes. As a result, noteholders would not
recognize gain or loss as a result of the amendment, and future tax
consequences to noteholders would be the same as if the amendment had not been
adopted.
However, no ruling is being requested from the Internal Revenue
Service (the "IRS") regarding the tax consequences of the amendment. As a
result, no assurance can be given that the IRS or a court would not disagree
with this position. Moreover, the amendment might have other tax consequences
to particular noteholders in light of their own circumstances. As a result,
the above discussion is intended for general information only, and noteholders
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 noteholders
representing more than 50% of the outstanding principal amount of the Notes
(excluding from such calculation the Notes, if any, that are owned by the
owner trust, Chase USA or any of its affiliates). In addition, payments on the
Notes that are deposited with the indenture trustee or any paying agent in
trust for the noteholders are not considered outstanding.
11
As of the record date, the outstanding aggregate principal amount of
the Notes is $965,910,000. Accordingly, consents from the noteholders
representing more than $482,955,000 of the outstanding principal amount of the
Notes are necessary to approve the amendment.
All of the Notes are registered in the name of Cede & Co., whose
address is 55 Water Street, New York, New York 10041. Cede & Co. is the
nominee name of DTC 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.
Procedure for Consent
Noteholders 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 the solicitation agent, Mellon Investor Services LLC, as
follows:
Mellon Investor Services LLC
44 Wall Street, 7th Floor
New York, New York 10005
Attention: Adrian Rocco
Telecopy Number: (917) 320-6312 or (917) 320-6320
If you wish to obtain additional copies of the solicitation materials, please
telephone (888) 468-9726. If you have any questions regarding the solicitation
materials, please telephone Patricia Garvey of Chase USA at (302) 552-6317.
Only a registered holder of Notes (or such holder's authorized legal
representative) on the record date may execute a consent. Any beneficial owner
of Notes who holds the Notes through a broker, dealer, bank or other nominee
must contact that entity in order to give its consent with respect to the
amendment. A letter of instruction is contained in the solicitation materials
provided along with this solicitation statement which may be used by a
beneficial owner to give such instructions to the applicable broker, dealer,
bank or other nominee.
If a consent relates to fewer than all of the Notes registered in
the name of the noteholder providing such consent, such noteholder must
indicate on the consent the aggregate principal dollar amount of the
noteholder's interest of the Notes to which the consent relates. Otherwise the
consent will be deemed to relate to all of the Notes registered in the name of
such holder at the close of business on the record date.
All questions as to the validity, form, eligibility (including time
of receipt) and the acceptance of consents will be resolved by the trustee, in
its sole discretion, whose determination shall be binding. The trustee
reserves the absolute right to reject all consents that are not in proper form
or the acceptance of which could, in the opinion of its counsel, be unlawful.
The trustee also reserves the right to waive any irregularities or conditions
of delivery as to particular consents. Unless waived, any irregularities in
connection with the deliveries must be cured within such time as the trustee
determines. None of the trustee, the solicitation agent, Chase USA or any
other person will be under any duty to give notification of any such
irregularities or
12
waiver. Deliveries of such consents will not be deemed to have been properly
made until such irregularities have been cured or waived. The interpretation
of the trustee of the terms and conditions of this solicitation shall be
binding.
Revocation of Consents
Any noteholder who gives its consent to the amendment may not revoke
such consent. Any noteholder who opposes or abstains with respect to the
amendment on the accompanying form may revoke such opposition or abstention
and give its consent to the amendment (by delivering such consent on the
accompanying form in accordance with the procedures described above) 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.
Effective Date of Amendment
Chase USA and the trustee intend to execute the amendment as soon as
practicable after the Solicitation Expiration Date if the requisite number of
consents is obtained. The amendment will be deemed to become effective, if
executed on or prior to the Determination Date in a monthly period, as of the
first day of the preceding monthly period and otherwise as of the first day of
the monthly 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 respective current ratings of the Notes or
series certificate. After the amendment becomes effective, it will bind all
noteholders whether or not they consented to the adoption of the amendment.
Other Matters
Directors, officers and employees of Chase USA may engage in further
solicitation of consents by wire, mail or telephone or in person, without
compensation therefor other than reimbursement of expenses.
Chase USA has retained the solicitation agent to assist with the
solicitation for a fee not expected to exceed $17,000 exclusive of expenses.
All costs of the solicitation will be borne by Chase USA. Chase USA
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 Notes held of record by such persons and in
forwarding consents to their customers.
The mailing addresses of the principal executive offices of Chase
USA are:
White Clay Center Building 200
Route 273
Newark, Delaware 19711
13
These addresses are set forth in order to comply with rules of the
Securities and Exchange Commission (the "SEC") governing the solicitation.
Consents should be delivered, mailed or telecopied only to the Solicitation
Agent at the address as set forth above under the caption "Procedures for
Consent". Under no circumstances should consents be mailed to Chase USA.
Incorporation of Other Documents By Reference
The SEC allows the master trust to "incorporate by reference"
information that it files with the SEC, which means that the master trust can
disclose important information to the noteholders by referring them to those
documents. The information incorporated by reference is an important part of
this solicitation statement. The master trust incorporates by reference the
documents listed below under Item 13(b) of Schedule 14A of Regulation 14A
under the Securities Exchange Act of 1934, as amended. Such information was
filed in accordance with the letters dated January 16, 1991 and March 14,
1991, submitted to the Office of the Chief Counsel of the SEC on behalf of the
originators of the master trust:
The owner trust's Annual Report on Form 10-K for the fiscal year
ended December 31, 2002 filed on March 31, 2003.
The master trust's Current Reports on Form 8-K filed since January
1, 2000 that contain the Monthly Certificateholder's Statement for
the Notes.
In addition, all documents that the master trust files pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, subsequent to the date of this solicitation statement and prior to
the Solicitation Expiration Date shall be deemed to be incorporated by
reference into this solicitation statement and to be a part hereof from the
date of filing such documents.
Noteholders may request a copy of these filings at no cost, by
writing or telephoning Chase USA at the following address:
Comptroller of Chase Manhattan Bank USA, National Association
500 Stanton Christiana Road
Floor 1
Newark, Delaware 19713
(302) 552-6310
Chase USA will respond to such request by first class mail or other equally
prompt means within one business day of receipt of such request.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this solicitation statement to the extent that a statement
contained in this solicitation statement, or in any other subsequently filed
document which is also incorporated herein by reference, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this solicitation statement except as so
modified or superseded.
14
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.
15
ANNEX A
GLOSSARY OF TERMS FOR SOLICITATION STATEMENT
"Accumulation Period Reserve Account" means an eligible deposit
account held for the benefit of the series certificateholder in which deposits
and withdrawals are made in accordance with the Series Supplement.
"Agreement" means the Third Amended and Restated Pooling and
Servicing Agreement, dated as of November 15, 1999 among Chase USA, as
transferor on and after June 1, 1996, JPMorgan Chase Bank (formerly known as
Chemical Bank and The Chase Manhattan Bank), as transferor prior to June 1,
1996, and as servicer, and The Bank of New York, as trustee.
"Average Excess Spread Percentage" means the amount (expressed as an
annualized percentage) by which the average Portfolio Yield for three
consecutive monthly periods exceeds the average Base Rate.
"Average Trust Excess Spread Percentage" means the average amount
for three consecutive monthly periods (expressed as an annualized percentage)
by which the Portfolio Yield exceeds the weighted average of the Base Rates
for all series of certificates issued by the Master Trust included in Group
One.
"Base Rate" means, with respect to any monthly period, the
annualized percentage equivalent of a fraction, the numerator of which is the
sum of (a) the monthly interest distributable on the Notes and any shortfall
for previous monthly interest requirements and (b) the proportionate share of
the servicing fee allocable to the series certificate with respect to such
monthly period and the denominator of which is the Investor Interest as of the
close of business on the last day of such monthly period.
"Base Rate Pay Out Event" means a pay out event that occurs if
Portfolio Yield (averaged over any three consecutive monthly periods) is less
than the Base Rate (averaged over any three consecutive monthly periods).
"DTC" means The Depository Trust Company.
"Finance Charge Account" means a bank account held for the benefit
of the noteholders in which the servicer will deposit collections of finance
charge receivables allocated to the noteholders.
"Group One" means the group of series under the master trust to
which the series certificate belongs.
"Investor Certificates" means the Class A certificates, Class B
certificates and the related collateral interest.
"Investor Interest" means an amount equal to the sum of (a) the
initial principal amount of the series certificate minus (b) the aggregate
amount of principal payments made to the owner trust as holder of the series
certificate, minus (c) the series certificateholder's proportionate share of
receivables that were charged off as uncollectible and not reimbursed and
minus (d) any other reallocated amounts pursuant to the Agreement.
"Investor Interest Charge-offs" mean reductions in the Investor
Interest due to receivables that were charged off as uncollectible.
"Portfolio Yield" means the annualized percentage equivalent of a
fraction, the numerator of which is the sum of (a) the amount of finance
charge receivables collected for the monthly period, (b) investment earnings
on funds in the Principal Funding Account for the monthly period and (c) the
amounts withdrawn from the Accumulation Period Reserve Account in accordance
with the Series Supplement and deposited into the Finance Charge Account for
the monthly period, calculated on a cash basis, after subtracting from that
amount, the amount of receivables which were charged off as uncollectible in
such monthly period, and the denominator of which is the Investor Interest as
of the last day of such monthly period.
"Portfolio Supplemented Yield" means Portfolio Yield plus a
specified amount of shared excess finance charge collections if the following
conditions are met: (a) the Average Trust Excess Spread Percentage is greater
than 3.5%, (b) no unreimbursed Investor Interest Charge-offs exist and (c) no
servicer default has occurred.
"Principal Funding Account" means an eligible deposit account held
for the benefit of the series certificateholder in which collections of
principal receivables are accumulated.
"Rating Agencies" means Standard & Poor's Ratings Group, Moody's
Investors Service, Inc. and Fitch Ratings.
"Series Supplement" means the Series 1999-3 Supplement dated as of
September 29, 1999 to the Agreement.
"Solicitation Expiration Date" means the earlier of (a) 5:00 p.m.
New York City time on June 4, 2003 and (b) 5:00 p.m. New York City time on the
date on which consents are obtained from the required number of investor
noteholders or, if extended by Chase USA, such subsequent time and date
specified by Chase USA.
2
ANNEX B
CHASE CREDIT CARD MASTER TRUST
Gross Portfolio Yield Shared Excess Finance Charge Collections
---------------------- ----------------------------------------
(Annualized) (dollars in millions)
Mar-03 15.06% 132.5
Feb-03 14.72% 108.0
Jan-03 14.22% 108.8
Dec-02 15.64% 134.5
Nov-02 14.27% 104.3
Oct-02 15.25% 119.0
Sep-02 14.72% 120.4
Aug-02 15.04% 119.6
Jul-02 16.01% 139.0
Jun-02 13.97% 84.1
May-02 14.81% 100.4
Apr-02 14.80% 85.6
Mar-02 16.42% 89.9
Feb-02 14.64% 51.9
Jan-02 16.32% 61.8
ANNEX C
Delinquency Experience
Master Trust Portfolio
(dollar amounts in millions)
As of March 31, Year Ended December 31,
--------------------------- ------------------------------------------------------------------------------------
2003 2002 2001 2000
--------------------------- --------------------------- --------------------------- --------------------------
Percentage Percentage Percentage Percentage
Number of Days Delinquent of Total Delinquent of Total Delinquent of Total Delinquent of Total
Delinquent Amount Receivables Amount Receivables Amount Receivables Amount Receivables
- ----------------- ------------ ------------- ------------ ------------- ------------ ------------- ------------ -------------
30 to 59 Days.... $ 452 1.38% $ 460 1.40% $ 367 1.45% $ 306 1.39%
60 to 89 Days.... 324 0.99% 350 1.07% 282 1.11% 242 1.10%
90 Days or More.. 683 2.08% 663 2.02% 542 2.14% 477 2.17%
------ ---- ------ ---- ------ ---- ------ ----
TOTAL......... $1,459 4.44% $1,473 4.49% $1,191 4.70% $1,025 4.66%
====== ==== ====== ==== ====== ==== ====== ====
Loss Experience
Master Trust Portfolio
(dollar amounts in millions)
Three Months
Ended
March 31, Year Ended December 31,
----------------- -------------------------------------------------------
2003 2002 2001 2000
----------------- ----------------- ----------------- -----------------
Average Principal Receivables
Outstanding......................... $ 32,268 $ 29,200 $ 21,504 $ 20,486
Gross Charge-Offs..................... 496 1,637 1,346 1,161
Recoveries............................ 50 117 82 69
Net Charge-Offs....................... 446 1,520 1,263 1,093
Net Charge-Offs as a Percentage of
Average Receivables Outstanding..... 5.52%* 5.21% 5.87% 5.33%
- ----------------
* annualized figure
ANNEX D
CHASE CREDIT CARD OWNER TRUST 1999-3
AVERAGE AVERAGE
EXCESS EXCESS TRUST EXCESS
SPREAD SPREAD SPREAD
PORTFOLIO YIELD BASE RATE PERCENTAGE PERCENTAGE PERCENTAGE
- --------- ----------------- ----------- ------------ ------------ --------------
MAR-03 9.28% 8.31% 0.97% 0.82% 5.17%
FEB-03 9.43% 8.33% 1.10% 0.91% 5.22%
JAN-03 8.70% 8.32% 0.38% 0.85% 5.11%
DEC-02 9.56% 8.32% 1.24% 1.31% 5.41%
NOV-02 9.26% 8.32% 0.94% 1.46% 5.42%
OCT-02 10.07% 8.33% 1.74% 1.76% 5.60%
SEP-02 10.04% 8.35% 1.69% 2.17% 5.96%
AUG-02 10.20% 8.34% 1.86% 1.84% 5.58%
JUL-02 11.29% 8.33% 2.96% 1.79% 5.47%
JUN-02 9.03% 8.34% 0.69% 1.19% 4.85%
MAY-02 10.06% 8.34% 1.72% 1.68% 5.29%
APRIL-02 9.49% 8.33% 1.16% 1.38% 4.97%
MAR-02 10.49% 8.34% 2.15% 1.69% 5.28%
FEB-02 9.18% 8.35% 0.83% 2.04% 5.62%
JAN-02 10.45% 8.35% 2.10% 2.85% 6.35%
NOTE: Each of the foregoing terms is defined in the accompanying solicitation
statement.
ANNEX E
- --------------------------------------------------------------------------------
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
Transferor on and after June 1, 1996,
JPMORGAN CHASE BANK
(formerly The Chase Manhattan Bank),
Transferor prior to June 1, 1996 and Servicer
and
THE BANK OF NEW YORK,
Trustee
on behalf of the Certificateholders
of Chase Credit Card Master Trust
(formerly Chemical Master Credit Card Trust I)
----------------------------------------
AMENDMENT
Dated as of May ___, 2003
to
SERIES 1999-3 SUPPLEMENT
Dated as of September 29, 1999
TO
THIRD AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of November 15, 1999
--------------------------------------------
- --------------------------------------------------------------------------------
AMENDMENT NO. 1, dated as of May ___, 2003 (this "Amendment"), to
the Series 1999-3 Supplement, dated as of September 29, 1999 (the
"Supplement") to the Third Amended and Restated Pooling and Servicing
Agreement, dated as of November 15, 1999 (as amended by the First Amendment,
dated as of March 31, 2001, and by the Second Amendment, dated as of March 1,
2002, and as supplemented, the "Pooling and Servicing Agreement") by and among
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION ("Chase USA"), as Transferor on
and after June 1, 1996, JPMORGAN CHASE BANK (formerly The Chase Manhattan
Bank), as Transferor prior to June 1, 1996, and as Servicer, and THE BANK OF
NEW YORK, as Trustee.
WHEREAS, Section 13.1(c) of the Pooling and Servicing Agreement
provides that the Servicer, the Transferor and the Trustee, with the consent
of Certificateholders evidencing undivided interests aggregating more than 50%
of the Investor Interest of each and every Series adversely affected, may
amend the Pooling and Servicing Agreement or any supplement from time to time
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Pooling and Servicing Agreement or
any supplement or of modifying in any manner the rights of the
Certificateholders of any Series;
WHEREAS, the Servicer, the Transferor and the Trustee desire to
amend the Supplement as set forth below;
WHEREAS, the Trustee has received the consent of at least a majority
of the Certificateholders of the Series 1999-3 Certificates issued and
outstanding under the Pooling and Servicing Agreement as supplemented by the
Supplement; and
WHEREAS, all other conditions precedent to the execution of this
Amendment have been complied with;
NOW, THEREFORE, the Servicer, the Transferor and the Trustee are
executing and delivering this Amendment in order to amend the Supplement in
the manner set forth below.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
SECTION 1. Amendment to Section 2.
(a) Section 2 of the Supplement is hereby amended by adding the
following defined terms in appropriate alphabetical order:
"'Average Excess Spread Percentage' shall mean, on any
Determination Date, the average (expressed as a per annum rate)
of the Excess Spread Percentages for the three consecutive
Monthly Periods preceding such date."
"'Average Trust Excess Spread Percentage' shall mean, on
any Distribution Date, the average (expressed as a per annum
rate) of the Trust
2
Excess Spread Percentages for the three consecutive
Distribution Dates ending on such date."
"'Excess Spread Percentage' shall mean, with respect to any
Monthly Period, the amount, if any, by which (i) the Portfolio
Yield exceeds (ii) the Base Rate."
"'Portfolio Supplemented Yield' shall mean, with respect to
any Monthly Period, the annualized percentage equivalent of a
fraction, the numerator of which is an amount equal to the sum
of (a) the amount of Collections of Finance Charge Receivables
deposited into the Finance Charge Account and allocable to the
Investor Certificates for such Monthly Period, (b) the
Principal Funding Investment Proceeds deposited into the
Finance Charge Account on the Transfer Date related to such
Monthly Period, (c) the amount of the Accumulation Period
Reserve Draw Amount (up to the Available Accumulation Period
Reserve Account Amount) on the related Transfer Date plus any
amounts of interest and earnings described in subsections
4.14(b), (c) and (d) each deposited into the Finance Charge
Account on the Transfer Date relating to such Monthly Period,
and (d) for any Monthly Period (1) for which the Average Trust
Excess Spread Percentage as of the related Distribution Date
was greater than 3.5%, (2) for which (after giving effect to
all allocations made on such Distribution Date) there were no
unreimbursed Investor Charge-Offs pursuant to Section 4.10 and
(3) for which no Servicer Default has occurred and is
continuing, Required Shared Excess Finance Charge Collections
up to the amount of the Shared Excess Finance Charge
Collections available to Series 1999-3 pursuant to Section 4.9
on the Transfer Date relating to such Monthly Period, such sum
to be calculated on a cash basis after subtracting the Investor
Default Amount for such Monthly Period, and the denominator of
which is the Investor Interest as of the close of business on
the last day of such Monthly Period."
"'Required Shared Excess Finance Charge Collections' shall
mean, on any Transfer Date, the amount determined as set forth
below on such Transfer Date:
3
================================================================================
Average Excess Spread Percentage The Required Shared Excess
on such Transfer Date is: Finance Charge Collections is:
- ------------------------------------------------
Greater Than: And Less Than Or Equal To:
- -------------------- --------------------------- -------------------------------
1.50% -- -0-
- -------------------- --------------------------- -------------------------------
1.00% 1.50% $402,463
- -------------------- --------------------------- -------------------------------
0.50% 1.00% $804,925
- -------------------- --------------------------- -------------------------------
-- 0.50% $1,207,388
==================== =========================== ===============================
"'Trust Excess Spread Percentage' shall mean, with respect
to any Monthly Period, the amount, if any, by which the (i)
Portfolio Yield exceeds the (ii) weighted average of the
Base Rates for all Series in Group 1."
SECTION 2. Amendments to Section 9. Section 9(c) of the Supplement
shall be amended by deleting the reference to "Portfolio Yield" and inserting
in lieu thereof the following: "Portfolio Supplemented Yield".
SECTION 3. No Waiver. The execution and delivery of this Amendment
shall not constitute a waiver of a past default under the Supplement or the
Pooling and Servicing Agreement or impair any right consequent thereon.
SECTION 4. Pooling and Servicing Agreement in Full Force and Effect
as Amended. Except as specifically amended or waived hereby, all of the terms
and conditions of the Pooling and Servicing Agreement and the Supplement shall
remain in full force and effect. All references to the Pooling and Servicing
Agreement and the Supplement in any other document or instrument shall be
deemed to mean such Pooling and Servicing Agreement and the Supplement as
amended by this Amendment. This Amendment shall not constitute a novation of
the Pooling and Servicing Agreement or the Supplement, but shall constitute an
amendment thereof. The parties hereto agree to be bound by the terms and
obligations of the Pooling and Servicing Agreement and the Supplement, as
amended by this Amendment, as though the terms and obligations of the Pooling
and Servicing Agreement and the Supplement were set forth herein.
SECTION 5. Counterparts. This Amendment may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute
one and the same instrument.
4
SECTION 6. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND DUTIES
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 7. Effective Date. This Amendment shall become effective as
of the first day of _____, 2003.
IN WITNESS WHEREOF, the Servicer, the Transferor and the Trustee
have caused this Amendment to be duly executed by their respective officers,
thereunto duly authorized, as of the day and year first above written.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION
Transferor on and after June 1, 1996
By:________________________________
Name:
Title:
JPMORGAN CHASE BANK (formerly the
Chase Manhattan Bank), Transferor
prior to June 1, 1996 and Servicer
By:________________________________
Name:
Title:
THE BANK OF NEW YORK,
Trustee
By:________________________________
Name:
Title:
CHASE CREDIT CARD OWNER TRUST 1999-3
CLASS A 6.66% ASSET BACKED NOTES, SERIES 1999-3 CONSENT
SOLICITED ON BEHALF OF
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
UNDER THE POOLING AND SERVICING AGREEMENT
The undersigned holder of the Class A 6.66% Asset Backed Notes,
Series 1999-3 issued by Chase Credit Card Owner Trust 1999-3 hereby
[_] Consents to [_] Opposes [_] Abstains from voting on
the execution and delivery of the amendment to the Series 1999-3 Supplement
dated as of September 29, 1999 to the Pooling and Servicing Agreement under
which the series certificate was issued, as set forth in the solicitation
statement, dated May 19, 2003, by Chase Manhattan Bank, USA, National
Association ("Chase USA") to the holders of the notes, which amendment has
been proposed by Chase USA.
If you indicate an amount in the following space, this consent shall
be effective with respect to only the principal amount of notes indicated.
$________________
If you leave the preceding space blank, this consent shall be
effective with respect to all notes of which you are the registered holder.
(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 notes are held in the name of more than one
person, each noteholder should sign the consent.
CHASE CREDIT CARD OWNER TRUST 1999-3
CLASS B 6.95% ASSET BACKED NOTES, SERIES 1999-3 CONSENT
SOLICITED ON BEHALF OF
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
UNDER THE POOLING AND SERVICING AGREEMENT
The undersigned holder of the Class B 6.95% Asset Backed Notes,
Series 1999-3 issued by Chase Credit Card Owner Trust 1999-3 hereby
[_] Consents to [_] Opposes [_] Abstains from voting on
the execution and delivery of the amendment to the Series 1999-3 Supplement
dated as of September 29, 1999 to the Pooling and Servicing Agreement under
which the series certificate was issued, as set forth in the solicitation
statement, dated May 19, 2003, by Chase Manhattan Bank, USA, National
Association ("Chase USA") to the holders of the notes, which amendment has
been proposed by Chase USA.
If you indicate an amount in the following space, this consent shall
be effective with respect to only the principal amount of notes indicated.
$________________
If you leave the preceding space blank, this consent shall be
effective with respect to all notes of which you are the registered holder.
(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 notes are held in the name of more than one
person, each noteholder should sign the consent.
CHASE CREDIT CARD OWNER TRUST 1999-3
CLASS C FLOATING RATE ASSET BACKED NOTES, SERIES 1999-3 CONSENT
SOLICITED ON BEHALF OF
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
UNDER THE POOLING AND SERVICING AGREEMENT
The undersigned holder of the Class C Floating Rate Asset Backed
Notes, Series 1999-3 issued by Chase Credit Card Owner Trust 1999-3 hereby
[_] Consents to [_] Opposes [_] Abstains from voting on
the execution and delivery of the amendment to the Series 1999-3 Supplement
dated as of September 29, 1999 to the Pooling and Servicing Agreement under
which the series certificate was issued, as set forth in the solicitation
statement, dated May 19, 2003, by Chase Manhattan Bank, USA, National
Association ("Chase USA") to the holders of the notes, which amendment has
been proposed by Chase USA.
If you indicate an amount in the following space, this consent shall
be effective with respect to only the principal amount of notes indicated.
$________________
If you leave the preceding space blank, this consent shall be
effective with respect to all notes of which you are the registered holder.
(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 notes are held in the name of more than one
person, each noteholder should sign the consent.
CHASE CREDIT CARD MASTER TRUST (ISSUER)
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION (DEPOSITOR)
Solicitation of Consents with respect to
Class A 6.66% Asset Backed Notes, Series 1999-3 (CUSIP No. 16151RAA1)
Class B 6.95% Asset Backed Notes, Series 1999-3 (CUSIP No. 16151RAB9)
Class C Floating Rate Asset Backed Notes Series 1999-3 (CUSIP No. 16151RAC7)
Pursuant to the Solicitation Statement dated May 19, 2003
- --------------------------------------------------------------------------------
THE CONSENT SOLICITATION COMMENCES ON May 19, 2003 AND WILL EXPIRE AT 5:00
P.M. NEW YORK CITY TIME ON THE EARLIER OF JUNE 4, 2003 AND THE DATE ON WHICH
THE REQUIRED NUMBER OF CONSENTS ARE OBTAINED UNLESS EXTENDED (THE
"SOLICITATION EXPIRATION DATE"). ANY NOTEHOLDER THAT CONSENTS TO THE AMENDMENT
ON THE ACCOMPANYING FORM MAY NOT REVOKE SUCH CONSENT. ANY NOTEHOLDER WHO
OPPOSES OR ABSTAINS ON THE ACCOMPANYING FORM MAY REVOKE SUCH OPPOSITION OR
ABSTENTION UNDER THE CIRCUMSTANCES DESCRIBED IN THE SOLICITATION STATEMENT (AS
DEFINED).
- --------------------------------------------------------------------------------
May 19, 2003
To Our Clients,
Enclosed for your consideration are the Solicitation Statement dated
May 19, 2003 (the "Solicitation Statement") and the related Consent Form in
connection with the solicitation by Chase Manhattan Bank USA, National
Association ("Chase USA") of consents from holders of Class A 6.66% Asset
Backed Notes, Series 1999-3, Class B 6.95% Asset Backed Notes, Series 1999-3
and Class C Floating Rate Asset Backed Notes, Series 1999-3 of the Chase
Credit Card Owner Trust 1999-3 to the proposed amendment to the Series 1999-3
Supplement dated as of September 29, 1999 to the Pooling and Servicing
Agreement pursuant to which the series certificate that secures your notes was
issued.
We are the holder of the notes held for your account. Consent to the
proposed amendment may be given only by us as the holder and pursuant to your
instructions. The Consent Form is furnished to you for your information only
and cannot be used by you to consent to the proposed amendment in respect of
notes held by us for your account.
We request instructions as to whether you wish to consent to the
proposed amendment upon the terms and subject to the conditions set forth in
the Solicitation Statement and the related Consent Form. We urge you to read
the Solicitation Statement and the related Consent Form carefully before
instructing us to deliver or withhold consents. Your instructions to us should
be
forwarded as promptly as possible in order to permit us to deliver consents
on your behalf in accordance with the provisions of the Solicitation
Statement.
The consent solicitation will expire on the Solicitation Expiration
Date. If the requisite consents are received and accepted and the proposed
amendment is executed and becomes effective upon the satisfaction of the
conditions described in the enclosed Solicitation Statement, the proposed
amendment will be binding on all holders.
If you wish to have us consent to the proposed amendment, please so
instruct us by completing, executing and returning to us the instruction form
that follows prior to the Solicitation Expiration Date.
THE CONSENT SOLICITATION WILL NOT BE MADE TO, NOR WILL CONSENTS BE
ACCEPTED BY OR ON BEHALF OF, BENEFICIAL OWNERS OF INTERESTS IN NOTES IN ANY
JURISDICTION IN WHICH THE MAKING OF THE CONSENT SOLICITATION OR ACCEPTANCE
THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.
2
Instructions from beneficial owner regarding delivery of
consents relating to Proposed Amendment with respect to
the Series 1999-3 Supplement to the Pooling
and Servicing Agreement governing the
Class A 6.66% Asset Backed Notes, Series 1999-3 (Cusip No. 163151RAA1)
Class B 6.95% Asset Backed Notes, Series 1999-3 (Cusip No. 16151RAB9)
Class C Floating Rate Notes, Series 1999-3 (Cusip No. 16151RAC7)
The undersigned acknowledge(s) receipt of your letter, the
Solicitation Statement and the related Consent Form, in connection with the
consent solicitation by Chase Manhattan Bank USA, National Association.
The undersigned, as the beneficial owner of the principal amount of
notes listed below with respect to which you are the holder, hereby authorizes
and directs you to execute and deliver the Consent Form to evidence the
consent to the proposed amendment by the undersigned. You are further
authorized and directed to take all such other or further action as may be
necessary to carry out and effectuate the purpose and intent of these
instructions.
[ ] Please deliver my consent to the proposed amendment with
respect to the principal amount of notes held by you for
my account or benefit.
[ ] Please do not deliver my consent to the proposed amendment for
the principal amount of notes held by you for my account
or benefit.
[ ] Please abstain from voting on the proposed amendment for the
principal amount of notes held by you for my account or
benefit.
If you indicate an amount in the following space, your instructions
indicated above shall be effective with respect to only the principal amount
of notes indicated (must be in integral multiples of $1,000).
$________________
If you leave the preceding space blank, your instructions indicated
above shall be effective with respect to the entire principal amount of notes
which we hold for your account or benefit.
(Please sign and date below)
IF THIS CONSENT IS SIGNED BUT NOT MARKED ABOVE, IT WILL BE DEEMED TO BE IN
FAVOR OF THE PROPOSED AMENDMENT.
Date:_________________________, 2003
_________________________________
Signature(s)
_________________________________
_________________________________
Please print name(s) here