FWP 1 c16665f3fwp.htm FREE WRITING PROSPECTUS fwp
 

Issuer Free Writing Prospectus
Filed Pursuant to Rule 433
Registration Nos. 333-141703,
333-141703-01 and 333-141703-02
PRICING TERM SHEET DATED JULY 20, 2007
DISCOVER® CARD EXECUTION NOTE TRUST
DiscoverSeries Notes, Class B(2007-1)
$200,000,000 Principal Amount of Notes
 
         
Issuing Entity of Notes:
  Discover Card Execution Note Trust    
Issuing Entity of Collateral Certificate:
  Discover Card Master Trust I    
Class:
  Class B (2007-1)    
Principal Amount
  $200,000,000    
Interest Rate
  One-month LIBOR plus 0.24%    
Required Ratings
        
(Moody’s / S&P / Fitch)
  A2 / A / A    
Expected Maturity Date
  July 15, 2014    
Weighted Average Life
  6.97 years    
Legal Final Maturity Date
  January 17, 2017    
Pricing Date
  July 20, 2007    
Settlement Date
  July 26, 2007    
Underwriters
  Morgan Stanley & Co. Incorporated   $153,800,000
 
  Banc of America Securities LLC   $15,400,000
 
  Barclays Capital Inc.   $15,400,000
 
  J.P. Morgan Securities Inc.   $15,400,000
Underwriting Discounts and Commissions
  0.325%    
Underwriting Concessions
  0.195%    
Underwriting Reallowance
  0.0975%    
Price to Public
  100%    
Proceeds to Discover Card Execution Note Trust
  $199,350,000    
Estimate of Expenses
  $475,000    
Minimum Principal Receivables Balance 1, 2
  $29,109,213,978.49    
Principal Receivables in Master Trust in Excess of Minimum Principal Receivables Balance 2
  $7,338,489,011.70    
Percentage of the Excess of Principal Receivables over Minimum Principal Receivables Balance to Total Amount of Principal Receivables in Master Trust 2
  20.13%    
 
1   An amount equal to the series minimum principal receivables balances for each master trust series, including each subseries, then outstanding, and including the collateral certificate after giving effect to the issuance of such collateral certificate and the Class B(2007-1) and Class C(2007-1) notes.
 
2   As of July 20, 2007, after giving effect to the issuance of the Class B(2007-1) and Class C(2007-1) notes.
Discover Bank and Discover Card Master Trust I have filed a registration statement, as amended, (including a prospectus) (Registration Nos. 333-141703 and 333-141703-01) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement, including the preliminary prospectus for these Class B(2007-1) Notes filed pursuant to Rule 424(b) on July 19, 2007, and other documents Discover Bank and Discover Card Master Trust I filed with the SEC for complete information about Discover Bank, the master trust, the note issuance trust, and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, Discover Bank, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling toll-free 1-866-718-1649.

 

 

IMPORTANT NOTICE REGARDING THE CONDITIONS
FOR THIS OFFERING OF ASSET-BACKED SECURITIES
The asset-backed securities referred to in these materials are being offered when, as and if issued. In particular, you are advised that asset-backed securities, and the asset pools backing them, are subject to modification or revision (including, among other things, the possibility that one or more classes of securities may be split, combined or eliminated), at any time prior to issuance or availability of a final prospectus. As a result, you may commit to purchase securities that have characteristics that may change, and you are advised that all or a portion of the securities may not be issued that have the characteristics described in these materials. Our obligation to sell securities to you is conditioned on the securities and the underlying transaction having the characteristics described in these materials. If we determine that condition is not satisfied in any material respect, we will notify you, and neither the issuing entity nor the underwriter will have any obligation to you to deliver all or any portion of the securities which you have committed to purchase, and there will be no liability between us as a consequence of the non-delivery.
IMPORTANT INFORMATION AND IRS CIRCULAR 230 NOTICE
This material has been prepared for information purposes to support the promotion or marketing of the transaction or matters addressed herein. This is not a research report and was not prepared by Morgan Stanley or any other underwriter. This material was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Each taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. Past performance is not necessarily a guide to future performance. Please see additional important information and qualifications at the end of this material.
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Any legends, disclaimers or other notices that may appear at the bottom of this e-mail or at the bottom of the e-mail communication to which this material may have been attached are not applicable to these materials and should be disregarded. Such legends, disclaimers or other notices have been automatically generated as a result of these materials having been sent via Bloomberg or another email system.
This material was not produced by Morgan Stanley or any other underwriter. Unless otherwise indicated, these views (if any) are the author’s and may differ from those of the Morgan Stanley fixed income or equity research department or others in the firm or from the views of any other underwriter.
The information contained in this material is subject to change, completion or amendment from time to time, and the information in this material supersedes information in any other communication relating to the securities referred to in this material.
This material is not a solicitation to participate in any trading strategy, and is not an offer to sell any security or instrument or a solicitation of an offer to buy or sell any security or instrument in any jurisdiction where the offer, solicitation or sale is not permitted.
Unless otherwise set forth in this material, any securities referred to in this material may not have been registered under the U.S. Securities Act of 1933, as amended, and, if not, may not be offered or sold absent an exemption therefrom. Recipients are required to comply with any legal or contractual restrictions on their purchase, holding, sale, exercise of rights or performance of obligations under any securities/instruments transaction.
The securities/instruments discussed in this material may not be suitable for all investors. This material has been prepared and issued by Discover Bank for intended distribution to market professionals and institutional investor clients. Other recipients should seek independent investment advice prior to making any investment decision based on this material. This material does not provide individually tailored investment advice or offer tax, regulatory, accounting or legal advice. Prior to entering into any proposed transaction, recipients should determine, in consultation with their own investment, legal, tax, regulatory and accounting advisors, the economic risks and merits, as well as the legal, tax, regulatory and accounting characteristics and

 

 

consequences, of the transaction. You should consider this material as only a single factor in making an investment decision.
The value of and income from investments may vary because of changes in interest rates, foreign exchange rates, default rates, prepayment rates, securities/instruments prices, market indexes, operational or financial conditions of companies or other factors. There may be time limitations on the exercise of options or other rights in securities/instruments transactions. Past performance is not necessarily a guide to future performance. Estimates of future performance are based on assumptions that may not be realized. Actual events may differ from those assumed and changes to any assumptions may have a material impact on any projections or estimates. Other events not taken into account may occur and may significantly affect the projections or estimates. Certain assumptions may have been made for modeling purposes only to simplify the presentation and/or calculation of any projections or estimates, and Discover Bank does not represent that any such assumptions will reflect actual future events. Accordingly, there can be no assurance that estimated returns or projections will be realized or that actual returns or performance results will not materially differ from those estimated herein. Some of the information contained in this document may be aggregated data of transactions in securities or other financial instruments executed by Discover Bank that has been compiled so as not to identify the underlying transactions of any particular customer.
Notwithstanding anything herein to the contrary, Morgan Stanley and each recipient hereof agree that they (and their employees, representatives, and other agents) may disclose to any and all persons, without limitation of any kind from the commencement of discussions, the U.S. federal and state income tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to the tax treatment and tax structure. For this purpose, “tax structure” is limited to facts relevant to the U.S. federal and state income tax treatment of the transaction and does not include information relating to the identity of the parties, their affiliates, agents or advisors.
In the UK, this communication is directed in the UK to those persons who are market counterparties or intermediate customers (as defined in the UK Financial Services Authority’s rules). In Japan, this communication is directed to the sophisticated institutional investors as defined under the Foreign Broker Dealer Law of Japan and the ordinances thereunder. The trademarks and service marks contained herein are the property of their respective owners.