424B2 1 y59682b2e424b2.htm PROSPECTUS SUPPLEMENT 424B2
Table of Contents

Filed Pursuant to Rule 424(b)(2)
Registration Nos. 333-130508, 333-130508-01, 333-130508-02 and 333-130508-03
 
(American Express Logo)
Prospectus Supplement to Prospectus Dated June 4, 2008
 
American Express Credit Account Master Trust
Issuing Entity
 
American Express Receivables Financing Corporation II
American Express Receivables Financing Corporation III LLC
American Express Receivables Financing Corporation IV LLC
Depositors and Transferors
 
American Express Travel Related Services Company, Inc.
Servicer
American Express Centurion Bank
American Express Bank, FSB
Sponsors
 
SERIES 2008-5
$800,000,000 Class A Floating Rate Asset Backed Certificates
$50,000,000 Class B Floating Rate Asset Backed Certificates
 
       Consider carefully the risk factors beginning on page 7 in the prospectus.
 
     A certificate is not a deposit and neither the certificates nor the underlying accounts or receivables are insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.
 
     The certificates will represent interests in the issuing entity only and will not represent interests in or obligations of American Express Company or any of its affiliates.
 
     This prospectus supplement may be used to offer and sell the certificates only if accompanied by the prospectus.

The issuing entity will issue —
 
         
   
Class A certificates
 
Class B certificates
 
Principal amount
  $800,000,000   $50,000,000
Certificate rate
  One-Month LIBOR
plus 0.80% per year
  One-Month LIBOR
plus 2.15% per year
Interest paid
  Monthly   Monthly
First interest payment date
  July 15, 2008   July 15, 2008
Expected final payment date
  August 15, 2013   August 15, 2013
Legal final maturity
  March 15, 2016   March 15, 2016
Price to public
  $800,000,000 (100.000%)   $50,000,000 (100.000%)
Underwriting discount
  $1,800,000 (0.225%)   *
Proceeds to transferors
  $798,200,000 (99.775%)   $50,000,000 (100.000%)
 
 
The primary assets of the issuing entity are receivables generated in a portfolio of designated consumer revolving credit accounts or features and, in the future, may include other charge or credit accounts or features or products.
 
Credit Enhancement —
 
The Class B certificates are subordinated to the Class A certificates. Subordination of the Class B certificates provides credit enhancement for the Class A certificates.
 
The issuing entity is also issuing a collateral interest in the amount of $59,091,000 that is subordinated to the Class A certificates and the Class B certificates. Subordination of the collateral interest provides credit enhancement for both the Class A certificates and the Class B certificates.
 
This prospectus supplement and the accompanying prospectus relate only to the offering of the Class A certificates and the Class B certificates.
 
*The Class B certificates will be purchased directly by an affiliate of the transferors. There currently is no underwriting arrangement for the Class B certificates offered under this prospectus supplement.
 
 
Neither the SEC nor any state securities commission has approved the certificates or determined that this prospectus supplement or the prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
 
 
 
 
Underwriters of the Class A certificates
 
Deutsche Bank Securities JPMorgan
Banc of America Securities LLC
Merrill Lynch & Co.
Williams Capital Group, L.P.
 
 
June 6, 2008


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IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
 
We provide information to you about the certificates in two separate documents that progressively provide more detail: (a) the accompanying prospectus, which provides general information about each series of certificates which may be issued by the American Express Credit Account Master Trust, some of which may not apply to your series of certificates, and (b) this prospectus supplement, which describes the specific terms of your series of certificates.
 
This prospectus supplement may be used to offer and sell the Class A certificates and the Class B certificates only if accompanied by the prospectus.
 
You should rely only on the information in this prospectus supplement and the accompanying prospectus, including the information incorporated by reference. We have not authorized anyone to provide you with different information. We are not offering the certificates in any state where the offer is not permitted. We do not claim the accuracy of the information in this prospectus supplement or the accompanying prospectus as of any date other than the dates stated on their respective covers.
 
We include cross references in this prospectus supplement and the accompanying prospectus to captions in these materials where you can find additional related discussions. The Table of Contents in this prospectus supplement and in the accompanying prospectus provide the pages on which these captions are located.
 
Part of this prospectus supplement and the accompanying prospectus use defined terms. You can find these terms and their definitions under the caption “Glossary of Defined Terms” on page S-40 in this prospectus supplement and on page 75 in the accompanying prospectus.
 


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Transaction Summary
 
 
Issuing Entity: American Express Credit Account Master Trust
 
Depositors and Transferors: American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC
 
Sponsors and Originators: American Express Centurion Bank and American Express Bank, FSB
 
Servicer: American Express Travel Related Services Company, Inc.
 
Trustee: The Bank of New York
 
Series Issuance Date: June 12, 2008
 
Servicing Fee Rate: 2.00% per year
 
Clearance and Settlement: DTC/Clearstream/Euroclear
 
Primary Trust Assets: Receivables generated in a portfolio of designated American Express® credit card and Sign & Travel®/Extended Payment Option revolving credit accounts or features*
 
Group: Group II
 
Principal Sharing Series: Yes
 
Excess Allocation Series: Yes
         
   
Class A
 
Class B
 
Principal Amount:
  $800,000,000   $50,000,000
Percentage of Series:**
  88.00%   5.50%
Anticipated Ratings:***
(Moody’s/Standard & Poor’s)
  Aaa/AAA   A2/A
Credit Enhancement:
  Subordination of Class B and collateral interest   Subordination of collateral interest
Certificate Rate:
  One-month LIBOR plus 0.80% per year   One-month LIBOR plus 2.15% per year
Interest Accrual Method:
  Actual/360   Actual/360
Distribution Dates:
  Monthly (15th)   Monthly (15th)
LIBOR Determination Date:
  Two London business days before the related interest period   Two London business days before the related interest period
First Distribution Date:
  July 15, 2008   July 15, 2008
Approximate end of Revolving Period and commencement of Accumulation Period (subject to adjustment):
  August 1, 2012   August 1, 2012
Expected Final Payment Date:
  August 15, 2013   August 15, 2013
Legal Final Maturity:
  March 15, 2016   March 15, 2016
ERISA eligibility (investors are cautioned to consult with their counsel):
  Yes, subject to important considerations described under “ERISA Considerations” in this prospectus supplement and the accompanying prospectus   No, subject to important considerations described under “ERISA Considerations” in this prospectus supplement and the accompanying prospectus
Debt for United States Federal Income Tax Purposes (investors are cautioned to consult with their counsel):
  Yes, subject to important considerations described under “Tax Matters” in the accompanying prospectus   Yes, subject to important considerations described under “Tax Matters” in the accompanying prospectus
 
 
* American Express® and Sign & Travel® are federally registered servicemarks of American Express Company and its affiliates.
 
** The percentage of Series 2008-5 comprised by the collateral interest is 6.50%.
 
*** It is a condition to issuance of the Series 2008-5 certificates that at least one of these ratings be obtained.


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Summary of Series Terms
 
This summary highlights selected information about the certificates and does not contain all the information that you need to consider in making your investment decision. You should carefully read this entire document and the accompanying prospectus before you purchase any certificates.
 
Risk Factors
 
Investment in the Series 2008-5 certificates involves certain risks. You should consider carefully the risk factors beginning on page 7 of the accompanying prospectus.
 
Offered Securities
 
American Express Credit Account Master Trust is offering:
 
$800,000,000 of Class A certificates; and
 
$50,000,000 of Class B certificates.
 
In this document, references to Series 2008-5 certificates include only the Class A certificates and Class B certificates and references to Series 2008-5 include the Series 2008-5 certificates and the collateral interest.
 
Only the Class A certificates and the Class B certificates are offered by this prospectus supplement and the accompanying prospectus.
 
Beneficial interests in the Series 2008-5 certificates may be purchased in minimum denominations of $100,000 and integral multiples of $1,000.
 
The Series 2008-5 certificates are expected to be issued on June 12, 2008.
 
Distribution Dates
 
Distribution dates for the Series 2008-5 certificates will commence July 15, 2008 and, after that, will be the 15th day of each month, if the 15th is a business day and, if not, the following business day.
 
Interest
 
Interest on the Series 2008-5 certificates will be paid on each distribution date.
 
The Class A certificates will bear interest at one-month LIBOR as determined each month plus 0.80% per year.
 
The Class B certificates will bear interest at one-month LIBOR as determined each month plus 2.15% per year.
 
LIBOR for each interest period will be determined on the second business day before the beginning of that interest period. LIBOR for the initial interest period, however, will be determined two business days before the issuance date of the Series 2008-5 certificates. For calculating LIBOR only, a business day is any day that U.S. dollar deposits are transacted in the London interbank market.
 
LIBOR will be the rate appearing on Reuters Screen LIBOR01 Page (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices) as of 11:00 a.m., London time, on that date for deposits in U.S. dollars for a one-month period. If that rate does not appear on that page, the servicer will request four prime banks (selected by the servicer) in the London interbank market to provide quotations of their rates for U.S. dollar deposits for a one-month period, at approximately 11:00 a.m., London time, on that day. LIBOR will then be the average of those rates. However, if less than two rates are provided, LIBOR will be the average of the rates for loans in U.S. dollars to leading European banks for a one-month period offered by four major banks (selected by the servicer) in New York City, at approximately 11:00 a.m., New York City time, on that day.


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Interest on the Class A certificates and the Class B certificates for any distribution date will be calculated as follows:
 
                 
Principal amount at end of prior month   ×   Number of
days in interest period
  ×   Rate for
interest period
       
       
        360        
 
You may obtain the interest rate for the current period and immediately preceding period by telephoning the trustee at (212) 815-6258.
 
See “Series Provisions — Interest Payments” in this prospectus supplement for a description of how and when LIBOR will be determined and for a discussion of the determination of amounts available to pay interest.
 
No payment of interest will be made on the Class B certificates until the required payment of interest has been made on the Class A certificates. See “— Credit Enhancement” and “Series Provisions — Subordination of the Class B Certificates and the Collateral Interest” in this prospectus supplement.
 
Principal
 
Principal of the Series 2008-5 certificates is expected to be paid in full on the August 2013 distribution date, which is the expected final payment date. On approximately August 1, 2012 we are scheduled to begin accumulating collections of principal receivables for payment to you, but we may begin accumulating at a later date.
 
Although the Series 2008-5 certificates are expected to be paid on the date noted above, principal may be paid earlier or later.
 
There is no penalty for early or late payment of principal. If certain adverse events known as pay-out events occur, principal may be paid earlier than expected. If collections of the credit card receivables are less than expected or are collected more slowly than expected, then principal payments may be delayed. No principal will be paid on the Class B certificates until the Class A certificates are paid in full.
 
The final payment of principal and interest on the Series 2008-5 certificates will be made no later than the March 2016 distribution date.
 
See “Maturity Considerations” and “Series Provisions — Allocation Percentages” and “— Principal Payments” in this prospectus supplement for a discussion of the determination of amounts available to pay principal.
 
The Collateral Interest
 
At the same time the Series 2008-5 certificates are issued, the trust will issue an interest in the assets of the trust known as the collateral interest. The initial amount of the collateral interest is $59,091,000, which represents 6.50% of the initial aggregate principal amount of the Series 2008-5 certificates plus the collateral interest.
 
The holder of the collateral interest will have voting and certain other rights as if the collateral interest were a subordinated class of certificates. The collateral interest will be subordinated to the Class A certificates and the Class B certificates.
 
The collateral interest is not offered by this prospectus supplement and the accompanying prospectus.
 
Credit Enhancement
 
Subordination of the Class B certificates provides credit enhancement for the Class A certificates. Subordination of the collateral interest provides credit enhancement for both the Class A certificates and the Class B certificates. If, on any distribution date, there are insufficient funds available to make required Class A certificate payments, certain funds that would otherwise be used to make required collateral interest and Class B certificate payments will be used to make required Class A certificate payments, and the collateral invested amount and the Class B invested amount will be reduced accordingly. Similarly, if on any distribution date, there are insufficient funds available to make required Class B certificate payments, certain funds that would otherwise be used to make required collateral interest payments will be used to make required Class B certificate payments, and the collateral invested amount will be reduced accordingly. The collateral invested amount and the Class B invested amount must


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be reduced to zero before the Class A invested amount will suffer any loss of principal. The collateral invested amount must be reduced to zero before the Class B invested amount will suffer any loss of principal.
 
Credit enhancement for the Series 2008-5 certificates is for the benefit of Series 2008-5 only and you are not entitled to the benefits of any credit enhancement available to other series.
 
See “Series Provisions — Reallocation of Cash Flows,” “— Application of Collections” and “— Defaulted Receivables; Investor Charge-Offs” in this prospectus supplement for a description of the events which may lead to a reduction of the Class A invested amount, the Class B invested amount and the collateral invested amount.
 
Other Interests in the Trust
 
Other Series of Certificates
 
The trust has issued other series of certificates and expects to issue additional series. You can review a summary of each series previously issued and currently outstanding under the caption “Annex I: Other Series” included at the end of this prospectus supplement. Future series will be issued without prior notice to, or review or consent by, you or any other certificateholder.
 
The Transferor Interest
 
The interest in the trust not represented by your series or by any other series is the transferors’ interest. The transferors’ interest does not provide credit enhancement for your series or any other series.
 
The Trust Portfolio
 
The primary assets of the trust are receivables in designated consumer American Express® credit card and Sign & Travel®/Extended Payment Option revolving credit accounts or features and, in the future, may include other charge or credit accounts or features or products.* The receivables consist of principal receivables and finance charge receivables.
 
The following information is as of May 31, 2008:
 
  •   Total receivables in the trust:
$43,844,981,895
 
  •   Principal receivables in the trust:
$42,951,539,591
 
  •   Finance charge receivables in the trust:
$893,442,304
 
  •   Accounts designated to the trust:
27,673,363
 
  •   Account billing addresses: generally all 50 states plus the District of Columbia and Puerto Rico
 
See “The Trust Portfolio” in this prospectus supplement, and “Centurion’s and FSB’s Revolving Credit Businesses” and “The Accounts” in the accompanying prospectus.
 
 
*  American Express® and Sign & Travel® are federally registered servicemarks of American Express Company and its affiliates.


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Key Parties and Operating Documents
 
(CHART)
American Express Receivables Financing Corporation II does not currently transfer any receivables to the issuing entity, but may resume such transfers in the future.


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Collections by the Servicer
 
The servicer will collect payments on the receivables, will deposit (or cause to be deposited) those collections in the collection account and will keep track of those collections that are finance charge receivables and those that are principal receivables.
 
Allocations to you and your Series
 
The following discussion is a simplified description of certain allocation provisions and is qualified by the full descriptions of these provisions in this prospectus supplement and the accompanying prospectus.
 
Each month, the servicer will allocate collections of finance charge receivables, collections of principal receivables and the amount of principal receivables that are not collected and are written off as uncollectible, called the defaulted amount. Set forth below, is a brief description of how these finance charge collections, principal collections and the defaulted amount are allocated to you and your series, addressed in four steps. Allocations of finance charge collections involve each of Steps 1, 2, 3 and 4. However, allocations of principal collections and the defaulted amount involve only Steps 1, 2 and 4.
 
You are entitled to receive payments of interest and principal based upon allocations to your series. The invested amount, which is the primary basis for allocations to your series, is the sum of:
 
(a) the Class A invested amount,
 
(b) the Class B invested amount and
 
(c) the collateral invested amount.
 
The Class A invested amount, the Class B invested amount and the collateral invested amount will initially equal the outstanding principal amount of the Class A certificates, the Class B certificates and the collateral interest. The invested amount of a series or class will decline, however, as a result of principal payments and may decline if the defaulted amount is not covered by collections of finance charges allocated to your series or for other reasons. If the invested amount of your series or class declines, amounts allocated and available for payment to you will be reduced.
 
For a description of the events which may lead to these reductions, see “Series Provisions — Reallocation of Cash Flows” in this prospectus supplement.
 
Step 1: Allocations Among Series
 
Finance Charge Collections, Principal Collections and the Defaulted Amount:  Each month, the servicer will allocate finance charge collections, principal collections and the defaulted amount among:
 
  •  your series, based on the size of its invested amount at that time (which is initially $909,091,000, but may be reduced); and
 
  •  other outstanding series, based on the sizes of their respective invested amounts at that time.
 
Step 2: Allocations Within Your Series
 
Finance Charge Collections, Principal Collections and the Defaulted Amount:  Finance charge collections, principal collections and the defaulted amount that are allocated to your series in Step 1 will then be further allocated, based on varying percentages, between:
 
  •  your series, based on the size of its invested amount; and
 
  •  the holders of the transferor certificates, which will receive the remainder of these finance charge collections, principal collections and the defaulted amount.
 
Step 3: Reallocations Among Series
 
Finance Charge Collections:  Collections of finance charge receivables allocated to the Series 2008-5 certificates and the collateral interest in Step 2 will then be combined with the collections of finance charge receivables allocated to any other series in group II. Group II is a group of series which share finance charge collections pro rata, based upon the relative size of the required payments to each series in group II as compared to the total required payments of all series in group II. See “The Pooling and Servicing Agreement Generally — Reallocations Among Different Series Within a Reallocation Group” in the accompanying prospectus.


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Series 2008-5 will be the thirtieth outstanding series issued by the trust in group II. Any issuance of a new series in group II may reduce or increase the amount of finance charge collections allocated to your series.
 
Step 4: Final Allocations Among Class A, Class B and the Collateral Interest
 
Finance Charge Collections, Principal Collections and the Defaulted Amount:  The finance charge collections reallocated in Step 3, together with the principal collections and the defaulted amount allocated in Step 2, will then be further allocated, based on varying percentages, among:
 
  •  the Class A certificates, based on the Class A invested amount (which is initially $800,000,000, but may be reduced);
 
  •  the Class B certificates, based on the Class B invested amount (which is initially $50,000,000, but may be reduced); and
 
  •  the collateral interest, based on the collateral invested amount (which is initially $59,091,000, but may be reduced).
 
See “Series Provisions — Allocation Percentages” in this prospectus supplement and “The Pooling and Servicing Agreement Generally — Reallocations Among Different Series Within a Reallocation Group” in the accompanying prospectus.


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Application of Collections
 
Finance Charge Collections and Excess Spread
 
Each month, collections of finance charge receivables allocated to the Class A certificates, the Class B certificates and the collateral interest, and the excess spread that may remain, will generally be applied as follows:
 
(CHART)
 
See “Series Provisions — Application of Collections — Excess Spread; Excess Finance Charge Collections” in this prospectus supplement.


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Principal Collections
 
Each month, your series’ share of principal collections will generally be applied as follows:
 
(CHART)
 
See “Maturity Considerations,” “Series Provisions — Principal Payments” and “— Application of Collections” in this prospectus supplement.


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Fees and Expenses Payable from Collections
 
  •  Fees and expenses payable from collections of finance charge receivables
 
  •  2.0% of invested amount paid to the servicer as described below.
 
Servicing Fee
 
The servicer is entitled to receive a monthly servicing fee as compensation for its servicing activities and as reimbursement for any expenses incurred by it as servicer. For each month, the servicing fee will equal one-twelfth of the product of:
 
  •  2.00% per year; and
 
  •  the invested amount for the related monthly period.
 
The servicing fee will be allocated among the transferor interest and the certificateholders.
 
Revolving Period
 
The revolving period begins on the closing date and ends on the day before the commencement of the controlled accumulation period or, if earlier, the early amortization period. During the revolving period, no principal payments will be made to or for the benefit of the Series 2008-5 certificateholders or the holder of the collateral interest. Unless a pay-out event has occurred, the controlled accumulation period is scheduled to begin at the close of business on the last day of the July 2012 monthly period, but may be delayed as described herein.
 
Pay-Out Events
 
Certain adverse events called pay-out events might lead to the end of the revolving period or controlled accumulation period and the start of an early amortization period.
 
The pay-out events for your series are described in “Series Provisions — Pay-Out Events” in this prospectus supplement. In addition, see “Description of the Certificates — Pay-Out Events and Reinvestment Events” in the accompanying prospectus for a discussion of the consequences of an insolvency or receivership of any transferor.
 
Reallocated Investor Finance Charge Collections
 
Collections of finance charge receivables allocated to each series in group II will be combined and will be available for certain required payments to all series in group II. These amounts will be reallocated pro rata, based on the size of the required payment for each of the series in group II as compared with the total required payments for all of the series in group II.
 
See “The Pooling and Servicing Agreement Generally — Reallocations Among Different Series Within a Reallocation Group” and “Risk Factors — Issuances of additional series by the trust may adversely affect your certificates” in the accompanying prospectus.
 
Shared Principal Collections
 
Your series will be included in a group of series designated as “principal sharing series.” To the extent that collections of principal receivables allocated to your series are not needed to make payments or deposits to a trust account for the benefit of your series, these collections will be applied to cover principal payments for other principal sharing series, if any. Any reallocation for this purpose will not reduce the invested amount for your series. In addition, you may receive the benefits of collections of principal receivables and certain other amounts allocated to other principal sharing series. However, there can be no assurance that the trust will issue additional principal sharing series designated to share collections of principal receivables with your series.
 
See “The Pooling and Servicing Agreement Generally — Sharing of Principal Collections Among Principal Sharing Series” in the accompanying prospectus.


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Excess Finance Charge Collections
 
Your series will be included in a group of series designated as “excess allocation series.” To the extent that collections of finance charge receivables allocable to your series exceed the amount necessary to make required payments for your series payable from collections of finance charge receivables, such excess collections may be applied to cover shortfalls of collections of finance charge receivables allocable to other excess allocation series. In addition, you may receive the benefits of collections of finance charge receivables allocated to other excess allocation series designated to share collections of finance charge receivables with your series. However, there can be no assurance that the trust will issue additional excess allocation series designated to share collections of finance charge receivables with your series.
 
See “The Pooling and Servicing Agreement Generally — Sharing of Excess Finance Charge Collections Among Excess Allocation Series” in the accompanying prospectus.
 
Optional Repurchase
 
So long as a transferor is the servicer or an affiliate of the servicer, that transferor will have the option to repurchase your Series 2008-5 certificates when the invested amount for your series has been reduced to 5% or less of the initial invested amount for your series. See “Series Provisions — Optional Repurchase” in this prospectus supplement.
 
Series Termination
 
If on the distribution date which is two months prior to the Series 2008-5 termination date, the invested amount exceeds zero, the servicer will, within the 40-day period beginning on such date, solicit bids for the sale of interests in the principal receivables or certain principal receivables, together in each case with the related finance charge receivables, in an amount equal to the invested amount at the close of business on the last day of the monthly period preceding the Series 2008-5 termination date. The servicer will sell such receivables on the Series 2008-5 termination date to the bidder who provided the highest cash purchase offer and will deposit the proceeds of such sale in the collection account for allocation to Series 2008-5. See “Series Provisions — Series Termination” in this prospectus supplement.
 
Registration
 
The Series 2008-5 certificates will be in book-entry form and will be registered in the name of Cede & Co., as the nominee of The Depository Trust Company. Except in limited circumstances, you will not receive a definitive certificate representing your interest. See “Description of the Certificates — Definitive Certificates” in the accompanying prospectus.
 
You may elect to hold your Series 2008-5 certificates through DTC, in the United States, or Clearstream, Luxembourg or the Euroclear System in Europe. See “Description of the Certificates — Book-Entry Registration” in the accompanying prospectus.
 
Tax Status
 
Subject to important considerations described under “Tax Matters” in the accompanying prospectus, Orrick, Herrington & Sutcliffe LLP, as special tax counsel to the transferors, is of the opinion that under existing law your certificates will be characterized as debt for federal income tax purposes. By your acceptance of a certificate, you will agree to treat your certificates as debt for federal, state and local income and franchise tax purposes. See “Tax Matters” in the accompanying prospectus for additional information concerning the application of federal income tax laws.
 
ERISA Considerations
 
Subject to important considerations described under “ERISA Considerations” in this prospectus supplement and the accompanying prospectus, the Class A certificates are eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts.


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For reasons discussed under “ERISA Considerations” in this prospectus supplement and the accompanying prospectus, the Class B certificates are not eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts, other than insurance companies investing assets solely of their general accounts.
 
Certificate Ratings
 
At issuance, the Class A certificates must be rated by at least one of the following nationally recognized rating agencies:
 
         
Moody’s:
    Aaa  
Standard & Poor’s:
    AAA  
 
At issuance, the Class B certificates must be rated by at least one of the following nationally recognized rating agencies:
 
         
Moody’s:
    A2  
Standard & Poor’s:
    A  
 
A rating addresses the likelihood of the payment of interest on a certificate when due and the ultimate payment of principal of that certificate by its legal maturity date. A rating does not address the likelihood of payment of principal of a certificate on its expected final payment date. In addition, a rating does not address the possibility of an early payment or acceleration of a certificate, which could be caused by an early amortization event or an event of default. A rating is not a recommendation to buy, sell or hold certificates and may be subject to revision or withdrawal at any time by the assigning rating agency. A rating is based on each rating agency’s independent evaluation of the receivables and the availability of any credit enhancement for the certificates. A rating, or a change or withdrawal of a rating, by one rating agency will not necessarily correspond to a rating, or a change or withdrawal of a rating, from any other rating agency. You will not be notified if any of the ratings of these Series 2008-5 certificates changes.
 
See “Risk Factors — If the ratings of the certificates are lowered or withdrawn, their market value could decrease” in the accompanying prospectus.
 
Exchange Listing
 
An application will be made to list the Series 2008-5 certificates on the EuroMTF of the Luxembourg Stock Exchange. We cannot guarantee that the application for the listing will be accepted. You should consult with Deutsche Bank Luxembourg S.A., the Luxembourg listing agent, for the Series 2008-5 certificates, Boulevard Konrad Adenauer 2, Luxembourg, phone number 352-4212-2643 to determine whether or not the Series 2008-5 certificates are listed on the Luxembourg Stock Exchange.


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Introduction
 
The following provisions of this prospectus supplement contain more detailed information concerning the certificates offered hereby. The certificates will be issued by the trust pursuant to the terms of a pooling and servicing agreement dated as of May 16, 1996, as amended and restated as of January 1, 2006, as amended from time to time, among American Express Travel Related Services Company, Inc., as servicer, American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC, as transferors, and The Bank of New York, as trustee.
 
On or about June 12, 2008, the trust will issue $800,000,000 of Class A Series 2008-5 Floating Rate Asset Backed Certificates and $50,000,000 of Class B Series 2008-5 Floating Rate Asset Backed Certificates. In addition, the trust will issue a specified undivided Collateral Interest in the Trust Assets in an initial amount equal to 6.50% of the Initial Invested Amount which will be subordinated to the Series 2008-5 certificates as described herein. For purposes of this prospectus supplement, the Collateral Interest shall be deemed to be the “collateral invested amount” for all purposes under the accompanying prospectus.
 
Maturity Considerations
 
The pooling and servicing agreement and the Series 2008-5 supplement for this series provide that the Class A certificateholders will not receive payments of principal until the Expected Final Payment Date, or earlier in the event of a Pay-Out Event which results in the commencement of the Early Amortization Period. Class A certificateholders will receive payments of principal on each Special Payment Date until the Class A Invested Amount has been paid in full or the Series 2008-5 Termination Date has occurred. The Class B certificateholders will not begin to receive payments of principal until the final principal payment on the Class A certificates has been made. The holder of the Collateral Interest will not begin to receive payments of principal until the final principal payment on the Class B certificates has been made.
 
On each Distribution Date during the Controlled Accumulation Period, amounts equal to the least of:
 
(a) Available Principal Collections (see “Series Provisions — Principal Payments” in this prospectus supplement) for the related Monthly Period on deposit in the Collection Account,
 
(b) the Controlled Deposit Amount, and
 
(c) the sum of the Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount
 
will be deposited in the Principal Funding Account for Series 2008-5 held by the trustee until the Expected Final Payment Date or the first Special Payment Date. See “Series Provisions — Principal Payments” in this prospectus supplement for a discussion of the circumstances under which the commencement of the Controlled Accumulation Period may be delayed.
 
Subject to satisfaction of the Rating Agency Condition, the transferors may, at or after the time at which the Controlled Accumulation Period begins for Series 2008-5, cause the trust to issue another series (or some portion thereof, to the extent that the full principal amount of such other series is not otherwise outstanding at such time) as a paired series with respect to Series 2008-5 to be used to finance the increase in the Transferor Amount caused by the accumulation of principal in the Principal Funding Account with respect to Series 2008-5. Although no assurances can be given as to whether such other series will be issued and, if issued, the terms thereof, the outstanding principal amount of such series may vary from time to time (whether or not a Pay-Out Event occurs with respect to Series 2008-5), and the interest rate with respect to certificates of such other series may be established on its date of issuance and may be reset periodically. Further, since the terms of the Series 2008-5 certificates will vary from the terms of such other series, the Pay-Out Events or Reinvestment Events with respect to such other series will vary from the Pay-Out Events with respect to Series 2008-5 and may include Pay-Out Events or Reinvestment Events which are unrelated to the status of the transferors or the servicer or the receivables, such as Pay-Out Events or Reinvestment Events related to the continued availability and rating of certain providers of series enhancement to such other series. If a Pay-Out Event or Reinvestment Event does occur with respect to any such paired series prior to the payment in full of the Series 2008-5 certificates and the Collateral Interest, the final payment of principal to the Series 2008-5 certificateholders and the holder of the Collateral Interest may be delayed.


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Should a Pay-Out Event occur with respect to the Series 2008-5 certificates and the Collateral Interest and the Early Amortization Period begin, any amount on deposit:
 
(a) in the Principal Funding Account will be paid to the Series 2008-5 certificateholders on the first Special Payment Date, and the Series 2008-5 certificateholders and the holder of the Collateral Interest will be entitled to receive Available Principal Collections on each Distribution Date with respect to such Early Amortization Period as described herein until the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount are paid in full or until the Series 2008-5 Termination Date occurs, and
 
(b) in the Special Funding Account will be released and treated as Shared Principal Collections to the extent needed to cover principal payments due to or for the benefit of any series, including Series 2008-5 entitled to the benefits of Shared Principal Collections. See “Description of the Certificates — Pay-Out Events and Reinvestment Events” in the accompanying prospectus and “Series Provisions — Pay-Out Events” in this prospectus supplement.
 
The ability of the Series 2008-5 certificateholders and the holder of the Collateral Interest to receive payments of principal on the Expected Final Payment Date depends on the payment rates of the receivables, the amount of outstanding receivables, delinquencies, charge-offs and new borrowings on the accounts, the potential issuance by the trust of additional series and the availability of Shared Principal Collections. Monthly payment rates of the receivables may vary because, among other things, account holders may fail to make required minimum payments, may only make payments as low as the minimum required amount or may make payments as high as the entire outstanding balance. Monthly payment rates may also vary due to seasonal purchasing and payment habits of account holders and due to changes in any terms of incentive programs in which account holders participate. See the table entitled “Account Holder Monthly Payment Rates of the Trust Portfolio” under “The Trust Portfolio — Payment Rates” in this prospectus supplement. The transferors cannot predict, and no assurance can be given, as to the account holders’ monthly payment rates that will actually occur in any future period, as to the actual rate of payment of principal of the Series 2008-5 certificates and the Collateral Interest or whether the terms of any subsequently issued series might have an impact on the amount or timing of any such payment of principal. See “Risk Factors — Payment patterns of account holders may not be consistent over time and variations in these payment patterns may result in reduced payment of principal, or receipt of payment of principal earlier or later than expected” and “The Pooling and Servicing Agreement Generally — Sharing of Principal Collections Among Principal Sharing Series” in the accompanying prospectus.
 
In addition, the amount of outstanding receivables and the delinquencies, charge-offs and new borrowings on the accounts may vary from month to month due to seasonal variations, the availability of other sources of credit, legal factors, general economic conditions and spending and borrowing habits of individual account holders. There can be no assurance that collections of principal receivables with respect to the Trust Portfolio, and thus the rate at which Series 2008-5 certificateholders and the holder of the Collateral Interest could expect to receive payments of principal on the Series 2008-5 certificates and the Collateral Interest during an Early Amortization Period or the rate at which the Principal Funding Account could be funded during the Controlled Accumulation Period, will be similar to the historical experience set forth in the table entitled “Account Holder Monthly Payment Rates of the Trust Portfolio” under “The Trust Portfolio — Payment Rates” in this prospectus supplement. As described under “Series Provisions — Principal Payments” in this prospectus supplement, the transferors may shorten the Controlled Accumulation Period and, in such event, there can be no assurance that there will be sufficient time to accumulate all amounts necessary to pay the Class A Invested Amount and the Class B Invested Amount on the Expected Final Payment Date. In addition, the trust, as a master trust, has issued, and from time to time may issue, additional series, and there can be no assurance that the terms of any such series might not have an impact on the timing or amount of payments received by the Series 2008-5 certificateholders. Further, if a Pay-Out Event occurs and the Early Amortization Period begins, the average life and maturity of the Class A certificates and the Class B certificates could be significantly reduced, thereby reducing the anticipated yield on such certificates.


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Due to the reasons set forth above, there can be no assurance that deposits in the Principal Funding Account will be made on or prior to the Expected Final Payment Date in an amount equal to the sum of the Class A Invested Amount and the Class B Invested Amount or that the actual number of months elapsed from the date of issuance of the Class A certificates and Class B certificates to their respective final distribution dates will equal the expected number of months. See “Risk Factors — Payment patterns of account holders may not be consistent over time and variations in these payment patterns may result in reduced payment of principal, or receipt of payment of principal earlier or later than expected” in the accompanying prospectus.


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The Trust Portfolio
 
General
 
The primary assets of the trust are receivables generated from time to time in a portfolio of designated American Express credit cards and Sign & Travel/Extended Payment Option consumer revolving credit accounts or features and, in the future, may include other charge or credit accounts or products.
 
The accounts in the Trust Portfolio were selected from the Total Portfolio based upon the eligibility criteria specified in the purchase agreements and the pooling and servicing agreement applied with respect to the accounts as of their selection date. See “The Pooling and Servicing Agreement Generally — Conveyance of Receivables,” “— Addition of Accounts or Participation Interests” and “Risk Factors — Addition of accounts to the trust may decrease the credit quality of the assets securing the repayment of your certificates. If this occurs, your receipt of payments of principal and interest may be reduced, delayed or accelerated” in the accompanying prospectus for a discussion of those eligibility criteria. Subject only to these criteria and any applicable regulatory guidelines, the account owners have the discretion to select the accounts in the Total Portfolio for addition to the Trust Portfolio. The account owners have in the past considered, and may in the future consider, factors such as product type, tenure of an account and interest rate applicable to an account in determining the accounts to be added to the Trust Portfolio. Set forth below is certain information with respect to the Trust Portfolio. See “Centurion’s and FSB’s Revolving Credit Businesses” and “The Accounts” in the accompanying prospectus.
 
The Trust Portfolio’s yield, loss, delinquency and payment rate is comprised of segments which may, when taken individually, have yield, loss, delinquency and payment rate characteristics different from those of the overall Trust Portfolio. There can be no assurance that the yield, loss, delinquency and payment rate experience relating to the receivables in the Trust Portfolio will be comparable to the historical experience relating to the receivables in the Trust Portfolio set forth below.
 
Loss and Delinquency Experience
 
The following tables set forth the loss and delinquency experience for the Trust Portfolio for each of the periods shown. The loss and delinquency rates at any time reflect, among other factors, the quality of the Trust Portfolio, the average seasoning of the accounts, the success of the account owners’ collection efforts, the product mix of the Trust Portfolio and general economic conditions.
 
The following table sets forth the loss experience for the Trust Portfolio for each indicated period. Total gross charge-offs include charge-offs of principal receivables only, and do not include any charge-offs of finance charge and fee receivables or the amount of any reductions in principal receivables due to a rebate, refund, error, fraudulent charge or other miscellaneous adjustment described under “The Pooling and Servicing Agreement Generally — Defaulted Receivables; Rebates and Fraudulent Charges.” If finance charge and fee receivables that have been charged-off were included in total gross charge-offs, total gross charge-offs would be higher as an absolute number and as a percentage of the average principal receivables outstanding during the periods indicated. Recoveries are collections received in respect of charged-off accounts in the Trust Portfolio during the period indicated in the following table. Total recoveries for each indicated period include recoveries of principal, finance charges and certain fees for that period. Under the pooling and servicing agreement, recoveries are treated as collections of finance charge receivables. Total net charge-offs are an amount equal to total gross charge-offs minus total recoveries, each for the applicable period. Average principal receivables outstanding for each indicated period is the average of the month-end principal receivables balances for that period. We cannot provide any assurance that the loss experience for the receivables in the Trust Portfolio in the future will be similar to the historical experience set forth below. The loss rates have increased in the fourth quarter of 2007 and in the first quarter of 2008 and we anticipate that these rates may continue to increase in 2008.


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Loss Experience of the Trust Portfolio
(Dollars in Thousands)
 
                                                 
    Five Months Ended
  Year Ended December 31,
    May 31, 2008   2007   2006   2005   2004   2003
 
Average Principal Receivables Outstanding
  $ 35,472,866     $ 33,155,166     $ 27,902,997     $ 26,634,263     $ 23,851,274     $ 22,938,293  
Total Gross Charge-Offs
  $ 708,864     $ 1,245,560     $ 859,001     $ 1,245,097     $ 1,254,383     $ 1,349,547  
Total Recoveries
    94,938       240,079       242,870       238,615       220,558       209,409  
                                                 
Total Net Charge-Offs
  $ 613,926     $ 1,005,482     $ 616,132     $ 1,006,483     $ 1,033,825     $ 1,140,138  
                                                 
Total Gross Charge-Offs as a Percentage of Average Principal Receivables Outstanding
    4.80 %(1)     3.76 %     3.08 %     4.67 %     5.26 %     5.88 %
Total Recoveries as a Percentage of Average Principal Receivables Outstanding
    0.64 (1)     0.72       0.87       0.90       0.92       0.91  
                                                 
Total Net Charge-Offs as a Percentage of Average Principal Receivables Outstanding
    4.15 %(1)     3.03 %     2.21 %     3.78 %     4.33 %     4.97 %
                                                 
Number of Accounts Experiencing a Loss
    116,632       254,594       213,173       298,611       283,533       314,858  
Number of Accounts Experiencing a Recovery(2)
    282,353       710,699       702,458       706,124       605,221       579,215  
Average Net Loss per Account Experiencing a Loss(3)
  $ 5.26     $ 3.95     $ 2.89     $ 3.37     $ 3.65     $ 3.62  
 
(1) This percentage is an annualized figure.
 
(2) Calculated by totaling the number of accounts experiencing a recovery in each of the months during the indicated period. Therefore, an account that has experienced a recovery in multiple months during the indicated period will be counted more than once.
 
(3) Calculated as Net Charge-Offs divided by Number of Accounts Experiencing a Loss.
 
The following tables set forth the delinquency experience for the Trust Portfolio for each indicated period. With respect to the “Average Receivables Delinquent as a Percentage of the Trust Portfolio” table below, the average receivables delinquent is the average of the month-end delinquent amounts, while the average receivables outstanding is the average of month-end receivables balances, each for the applicable period. With respect to the “Average Number of Delinquent Accounts as a Percentage of the Trust Portfolio” table below, the average number of delinquent accounts is the average of the month-end delinquent accounts, while the average number of outstanding accounts is the average of total month-end accounts, each for the applicable period. We cannot provide any assurance that the delinquency experience for the receivables in the Trust Portfolio in the future will be similar to the historical experience set forth below. The delinquency rates have increased in the fourth quarter of 2007 and in the first quarter of 2008 and we anticipate that these rates may continue to increase in 2008.


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Average Receivables Delinquent as a Percentage of the Trust Portfolio
(Dollars in Thousands)
 
                                                                                                 
    Five Months Ended
  Year Ended December 31,
    May 31, 2008   2007   2006   2005   2004   2003
        Percentage of
      Percentage of
      Percentage of
      Percentage of
      Percentage of
      Percentage of
        Average
      Average
      Average
      Average
      Average
      Average
    Dollar
  Receivables
  Dollar
  Receivables
  Dollar
  Receivables
  Dollar
  Receivables
  Dollar
  Receivables
  Dollar
  Receivables
    Amount   Outstanding   Amount   Outstanding   Amount   Outstanding   Amount   Outstanding   Amount   Outstanding   Amount   Outstanding
 
Average Receivables
Outstanding     
  $ 36,246,781       100.00 %   $ 33,928,691       100.00 %   $ 28,641,328       100.00 %   $ 27,372,969       100.00 %   $ 24,535,933       100.00 %   $ 23,626,444       100.00 %
Average Receivables
Delinquent:
                                                                                               
31 to 60 Days
  $ 338,546       0.93 %   $ 311,402       0.92 %   $ 270,392       0.94 %   $ 266,803       0.97 %   $ 249,948       1.02 %   $ 264,267       1.12 %
61 to 90 Days
    238,068       0.66       186,507       0.55       150,542       0.53       145,012       0.53       146,078       0.60       160,501       0.68  
91 to 120 Days
    199,596       0.55       149,611       0.44       116,468       0.41       106,301       0.39       110,499       0.45       121,476       0.51  
121 to 150 Days
    174,975       0.48       127,699       0.38       94,370       0.33       84,073       0.31       90,311       0.37       98,063       0.42  
151 Days or More
    132,011       0.36       73,958       0.22       40,963       0.14       33,994       0.12       33,577       0.14       32,500       0.14  
                                                                                                 
Total
  $ 1,083,194       2.99 %   $ 849,178       2.50 %   $ 672,735       2.35 %   $ 636,183       2.32 %   $ 630,413       2.57 %   $ 676,806       2.86 %
                                                                                                 
 
Average Number of Delinquent Accounts as a Percentage of the Trust Portfolio
 
                                                                                                 
    Five Months Ended
    Year Ended December 31,  
    May 31, 2008     2007     2006     2005     2004     2003  
          Percentage of
          Percentage of
          Percentage of
          Percentage of
          Percentage of
          Percentage of
 
    Number of
    Total Number
    Number of
    Total Number
    Number of
    Total Number
    Number of
    Total Number
    Number of
    Total Number
    Number of
    Total Number
 
    Accounts     of Accounts     Accounts     of Accounts     Accounts     of Accounts     Accounts     of Accounts     Accounts     of Accounts     Accounts     of Accounts  
 
Average Number of Accounts
Outstanding     
    22,553,709       100.00 %     23,287,669       100.00 %     20,828,126       100.00 %     20,331,741       100.00 %     18,980,407       100.00 %     18,163,387       100.00 %
Average Number of Accounts
Delinquent:
                                                                                               
31 to 60 Days
    48,603       0.22 %     61,159       0.26 %     68,552       0.33 %     74,713       0.37 %     68,802       0.36 %     72,839       0.40 %
61 to 90 Days
    28,098       0.12       29,980       0.13       33,471       0.16       35,893       0.18       34,187       0.18       36,624       0.20  
91 to 120 Days
    22,124       0.10       22,163       0.10       24,142       0.12       24,650       0.12       24,279       0.13       25,427       0.14  
121 to 150 Days
    18,285       0.08       17,875       0.08       18,803       0.09       18,802       0.09       19,275       0.10       19,924       0.11  
151 Days or More
    13,389       0.06       10,929       0.05       10,084       0.05       9,273       0.05       8,635       0.05       8,003       0.04  
                                                                                                 
Total
    130,499       0.58 %     142,106       0.61 %     155,051       0.74 %     163,331       0.80 %     155,177       0.82 %     162,817       0.90 %
                                                                                                 
 
Revenue Experience
 
The following table sets forth the revenue experience for the Trust Portfolio from total finance charge and fee collections for each indicated period. Total finance charge and fee collections set forth in the table below include periodic finance charges, cash advance fees, annual membership fees, other fees, discount option yield (for periods prior to March 26, 2004), Issuer Rate Fees (for periods on and after March 26, 2004) and recoveries on charged- off accounts. Under the pooling and servicing agreement, recoveries on charged-off accounts are treated as collections of finance charge receivables. Until March 26, 2004, the transferors transferred receivables to the trust at a discount of 2.0%. As of the close of business on March 26, 2004, the transferors reduced the discount percentage to 0.0% and, since that time, the transferors have transferred to the trust all Issuer Rate Fees allocable to the receivables arising in accounts comprising the Trust Portfolio. See “The Pooling and Servicing Agreement Generally — Discount Option” and “Centurion’s and FSB’s Revolving Credit Businesses — Issuer Rate Fees” in the accompanying prospectus. There can be no assurance that the revenues for the Trust Portfolio in the future will be similar to the historical experience of the Trust Portfolio set forth below.
 
Revenue experience from total finance charge and fee collections results from dividing total finance charges and fee collections by the average principal receivables outstanding. The average principal receivables outstanding for each indicated period is the average of the month-end principal receivables balances for that period.


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Revenue Experience of the Trust Portfolio
(Dollars in Thousands)
 
                                                 
    Five Months Ended
    Year Ended December 31,  
    May 31, 2008     2007     2006     2005     2004     2003  
 
Average Principal Receivables Outstanding
  $ 35,472,866     $ 33,155,166     $ 27,902,997     $ 26,634,263     $ 23,851,274     $ 22,938,293  
Total Finance Charge and Fee Collections
  $ 3,024,602     $ 7,434,173     $ 6,323,880     $ 5,558,921     $ 4,502,332     $ 4,347,605  
Total Finance Charge and Fee Collections as a Percentage of Average Principal Receivables Outstanding
    20.46 %(1)     22.42 %     22.66 %     20.87 %     18.88 %     18.95 %
 
(1) This percentage is an annualized figure.
 
The historical revenue figures for the Trust Portfolio shown in the table above include interest on purchases and cash advances and fees collected from holders of the accounts during the applicable month. Revenues from finance charges and fees collected will be affected by numerous factors, including the periodic finance charges on the receivables, the amount of fees paid by account holders, the percentage of account holders who pay off their balances in full each month and do not incur periodic finance charges on purchases and change in the level of delinquencies on the receivables. Revenues related to finance charges and fees also depend on the types of charges and fees assessed by the account owners on the accounts in the Trust Portfolio. Accordingly, revenues will be affected by future changes in the types of charges and fees assessed on the accounts and other factors. See “Certain Legal Aspects of the Receivables — Consumer Protection Laws” in the accompanying prospectus. None of the servicer, any account owner or any of their respective affiliates has any basis to predict how future changes in the use of the accounts by account holders or in the terms of accounts may affect the revenue for the Trust Portfolio.
 
Principal Payment Rates
 
The following table sets forth the highest and lowest account holder monthly principal payment rates for the Trust Portfolio during any month in the period shown and the average account holder monthly principal payment rates for all months during each period shown, calculated as the percentage equivalent of a fraction. The monthly principal payment rates are calculated as the amount of principal payments from account holders (excluding recoveries on charged-off receivables) as posted to the accounts during the applicable month divided by the aggregate amount of principal receivables outstanding as of the beginning of the applicable month. In addition, as of the four months ended April 30, 2008, and with regard to the prior month’s statements only, 10.82% of the accounts in the Trust Portfolio made the minimum payment under the terms of the related account agreement, and 50.06% of the accounts in the Trust Portfolio had account holders that paid their full balance under the terms of the related account agreement. See “Centurion’s and FSB’s Revolving Credit Businesses — Billing and Payments” in the accompanying prospectus for a description of how minimum payments are calculated.
 
Account Holder Monthly Principal Payment Rates of the Trust Portfolio
 
                                                         
    Five Months Ended
    Year Ended December 31,        
    May 31, 2008     2007     2006     2005     2004     2003        
 
Lowest Month
    22.40 %     23.40 %     24.60 %     24.37 %     21.87 %     18.65 %        
Highest Month
    26.07 %     26.92 %     26.83 %     26.03 %     25.01 %     23.13 %        
Monthly Average
    24.22 %     25.02 %     25.59 %     25.47 %     23.58 %     20.22 %        


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The Receivables
 
As of May 31, 2008, the receivables in the accounts included in the Trust Portfolio totaled $43,844,981,895 comprised of $42,951,539,591 of principal receivables and $893,442,304 of finance charge receivables.
 
The following tables, together with the paragraph under “— Composition by Geographic Distribution,” summarize the Trust Portfolio by various criteria as of May 31, 2008. Because the future composition of the Trust Portfolio may change over time, these tables are not necessarily indicative of the composition of the Trust Portfolio at any time subsequent to May 31, 2008.
 
Composition By Account Balance
Trust Portfolio
 
                                 
          Percentage
          Percentage
 
          of Total
          of Total
 
    Number of
    Number of
    Receivables
    Receivables
 
Account Balance Range
  Accounts     Accounts     Outstanding     Outstanding  
 
Credit Balance
    304,072       1.1 %   $ (42,102,693 )     (0.1 )%
Zero Balance
    16,437,748       59.4       0       0  
$0.01 to $1,000
    4,575,177       16.5       1,674,706,787       3.8  
$1,000.01 to $5,000
    3,864,798       14.0       9,586,106,659       21.9  
$5,000.01 to $10,000
    1,305,243       4.7       9,257,751,998       21.1  
$10,000.01 or More
    1,186,325       4.3       23,368,519,144       53.3  
                                 
Total
    27,673,363       100.0 %   $ 43,844,981,895       100.0 %
                                 
 
The average account balance as of May 31, 2008 was $1,584 for all accounts and $3,902 for all accounts other than accounts with a zero balance as of that date.
 
Composition By Credit Limit
Trust Portfolio
 
                                 
          Percentage
          Percentage
 
          of Total
          of Total
 
    Number of
    Number of
    Receivables
    Receivables
 
Credit Limit Range
  Accounts     Accounts     Outstanding     Outstanding  
 
Less than $1,000.99(1)
    4,016,266       14.5 %   $ 99,315,598       0.2 %
$1,001 to $5,000.99
    3,613,585       13.1       2,238,622,622       5.1  
$5,001 to $10,000.99
    4,148,816       15.0       4,297,541,962       9.8  
$10,001 to $15,000.99
    3,037,313       11.0       5,024,014,227       11.5  
$15,001 to $20,000.99
    2,219,063       8.0       5,759,775,732       13.1  
$20,001 to $25,000.99
    1,280,693       4.6       4,505,998,731       10.3  
$25,001 or More(2)
    1,146,654       4.1       10,260,296,036       23.4  
                                 
Total (Credit Card)
    19,462,390       70.3 %   $ 32,185,564,908       73.4 %
No Pre-Set Spending Limit
(Sign & Travel Accounts)
    8,210,973       29.7       11,659,416,987       26.6  
                                 
Grand Total
    27,673,363       100.0 %   $ 43,844,981,895       100.0 %
                                 
 
 
(1) As of May 2008, accounts which have been cancelled, and with respect to which credit privileges have been revoked, are included in the “Less than $1,000.99” credit limit range. Prior to May 2008, a cancelled account was included in the credit limit range applicable to such account prior to its cancellation.
 
(2) The maximum credit limit generally is $100,000.


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Composition by Period of Delinquency
Trust Portfolio
 
                                 
          Percentage
          Percentage
 
          of Total
          of Total
 
Period of Delinquency
  Number of
    Number of
    Receivables
    Receivables
 
(Days Contractually Delinquent)
  Accounts     Accounts     Outstanding     Outstanding  
 
Current to 30 days
    27,510,328       99.4 %   $ 42,532,027,989       97.0 %
31 to 60 Days
    58,007       0.2       383,863,534       0.9  
61 to 90 Days
    36,054       0.1       296,960,133       0.7  
91 Days to 120 Days
    27,456       0.1       240,783,408       0.5  
121 Days to 150 Days
    22,658       0.1       207,250,705       0.5  
151 Days or More
    18,860       0.1       184,096,126       0.4  
                                 
Total
    27,673,363       100.0 %   $ 43,844,981,895       100.0 %
                                 
 
Composition by Account Age
Trust Portfolio
 
                                 
          Percentage
          Percentage
 
          of Total
          of Total
 
    Number of
    Number of
    Receivables
    Receivables
 
Account Age
  Accounts     Accounts     Outstanding     Outstanding  
 
Not More than 11 Months
    295,760       1.1 %   $ 462,621,023       1.1 %
12 Months to 17 Months
    1,373,792       5.0       2,264,524,134       5.2  
18 Months to 23 Months
    1,368,530       4.9       2,291,361,736       5.2  
24 Months to 35 Months
    3,302,258       11.9       5,101,601,029       11.6  
36 Months to 47 Months
    2,910,703       10.5       4,780,452,090       10.9  
48 Months to 59 Months
    2,808,784       10.1       4,665,915,449       10.6  
60 Months to 71 Months
    2,086,814       7.5       3,793,449,537       8.7  
72 Months or More
    13,526,722       48.9       20,485,056,898       46.7  
                                 
Total
    27,673,363       100.0 %   $ 43,844,981,895       100.0 %
                                 
 
Composition by Geographic Distribution
Trust Portfolio
 
As of May 31, 2008, approximately 17.08%, 9.81%, 8.73%, 6.85% and 5.19% of the receivables related to account holders having billing addresses in California, New York, Florida, Texas and New Jersey, respectively. Not more than 5% of the receivables related to account holders have billing addresses in any other single state.
 
Composition by Standardized Credit Score
Trust Portfolio
 
The following table sets forth the composition of the Trust Portfolio as of May 31, 2008 by FICO®* score ranges. To the extent available, FICO scores are obtained at origination and monthly thereafter. A FICO score is a measurement determined by Fair Isaac Corporation using information collected by the major credit bureaus to assess consumer credit risk. FICO risk scores rank-order consumers according to the likelihood that their credit obligations will be paid in accordance with the terms of their accounts. Although Fair Isaac Corporation discloses only limited information about the variables it uses to assess credit risk, those variables likely include, but are not limited to, debt level, credit history, payment patterns (including delinquency experience), and level of utilization of available credit. FICO scores of an individual may change over time, depending on the conduct of the individual,
 
 
* FICO® is a federally registered servicemark of Fair, Isaac & Company.


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including the individual’s usage of his or her available credit and changes in credit score technology used by Fair Isaac Corporation.
 
FICO scores are based on independent, third-party information, the accuracy of which we cannot verify. The account owners do not use standardized credit scores, such as a FICO score, alone to determine the amount of charges that should be approved on a credit card account. Rather, a FICO score is only one of many factors used by Centurion and FSB, as account owners, to assess an individual’s credit and default risk. In connection with their underwriting and authorization decisions, the account owners use proprietary scoring models, which they generally have found to be more accurate predictors of credit and default risk than any single standardized credit score such as FICO. The use of proprietary models also enables an account owner to extend credit to an account holder with a lower FICO score without changing the account owner’s risk tolerance than would be the case if the account owner relied solely on FICO. See “Centurion’s and FSB’s Revolving Credit Business — Underwriting and Authorization Procedures” in the accompanying prospectus. The FICO scores presented below should not be used alone as a method of forecasting whether account holders will make payments in accordance with the terms of their accounts. References to “Receivables Outstanding” in the following table include both finance charge receivables and principal receivables. Because the future composition of the Trust Portfolio may change over time, this table is not necessarily indicative of the composition of the Trust Portfolio at any specific time in the future.
 
Composition by Standardized Credit Score(1)
Trust Portfolio
 
                 
          Percentage of Total
 
    Receivables
    Receivables
 
FICO Score Range
  Outstanding     Outstanding  
 
Less than 560
  $ 1,653,886,564       3.8 %
560 - 659
    6,004,067,839       13.7  
660 - 699
    7,521,760,265       17.2  
700 - 759
    15,717,928,592       35.8  
760 and above
    12,833,973,724       29.3  
Refreshed FICO Unavailable
    113,364,910       0.3  
                 
Total
  $ 43,844,981,895       100.0 %
                 
 
 
(1) Standardized Credit Score defined as the FICO score in the most recent Monthly Period.
 
Static Pool Information
 
Static pool information regarding the performance of the receivables in the Total Portfolio is provided in Annex II to this prospectus supplement, which forms an integral part of this prospectus supplement. All static pool information regarding the performance of those receivables in Annex II for periods prior to January 1, 2006 will not form a part of this prospectus supplement, the accompanying prospectus or the registration statement relating to the certificates.


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Series Provisions
 
The Series 2008-5 certificates and the Collateral Interest will be issued pursuant to the pooling and servicing agreement and the Series 2008-5 supplement specifying the principal terms of the certificates, the forms of which have been filed as exhibits to the registration statement of which the prospectus and this prospectus supplement are a part. The following summary describes certain terms applicable to the Series 2008-5 certificates and the Collateral Interest. Reference should be made to the prospectus for additional information concerning the Series 2008-5 certificates, the Collateral Interest and the pooling and servicing agreement. See “The Pooling and Servicing Agreement Generally” in the accompanying prospectus.
 
Interest Payments
 
Interest on the Class A certificates and the Class B certificates will accrue from the closing date on the outstanding principal balances of the Class A certificates and the Class B certificates at the Class A certificate rate and Class B certificate rate, respectively. Interest will be distributed on each Distribution Date, beginning July 15, 2008 to the Series 2008-5 certificateholders in whose names the Series 2008-5 certificates were registered on the relevant Record Date. Interest for any Distribution Date will accrue from and including the preceding Distribution Date (or, in the case of the first Distribution Date, from and including the closing date) to but excluding such Distribution Date.
 
On each Distribution Date, interest due to the Class A certificateholders will be equal to the product of:
 
(i) the actual number of days in the related Interest Period divided by 360,
 
(ii) the Class A certificate rate for that Interest Period, and
 
(iii) the outstanding principal balance of the Class A certificates as of the preceding Record Date (or, in the case of the first Distribution Date, as of the closing date).
 
For the first Distribution Date, however, interest on the Class A certificates will equal the interest accrued on the initial principal amount of the Class A certificates at the Class A certificate rate for the initial Interest Period.
 
Interest due on the Class A certificates but not paid on any Distribution Date will be payable on the next succeeding Distribution Date together with additional interest on such amount at the Class A certificate rate plus 2% per year. Such additional interest shall accrue on the same basis as interest on the Class A certificates, and shall accrue from the Distribution Date such overdue interest became due, to but excluding the Distribution Date on which such additional interest is paid.
 
The Class A certificates will bear interest from and including the closing date to but excluding July 15, 2008, and during each Interest Period thereafter, at the rate 0.80% per year above LIBOR prevailing on the related LIBOR Determination Date with respect to each such period.
 
On each Distribution Date, Class A Outstanding Monthly Interest due but not paid to the Class A certificateholders and any Class A Additional Interest will be paid, to the extent funds are available, to the Class A certificateholders. Payments to the Class A certificateholders in respect of interest on the Class A certificates on any Distribution Date will be funded from Class A Available Funds for the related Monthly Period. To the extent Class A Available Funds allocated to the holders of the Class A certificates for such Monthly Period are insufficient to pay such interest, Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 and Reallocated Principal Collections allocable first to the Collateral Invested Amount and then the Class B Invested Amount will be used to make such payments.
 
On each Distribution Date, interest due to the Class B certificateholders will be equal to the product of:
 
(i) the actual number of days in the related Interest Period divided by 360,
 
(ii) the Class B certificate rate for that Interest Period, and
 
(iii) the outstanding principal balance of the Class B certificates as of the preceding Record Date (or, in the case of the first Distribution Date, as of the closing date).


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For the first Distribution Date, however, interest on the Class B certificates will equal the interest accrued on the initial principal amount of the Class B certificates at the Class B certificate rate for the initial Interest Period.
 
Interest due on the Class B certificates but not paid on any Distribution Date will be payable on the next succeeding Distribution Date together with additional interest on such amount at the Class B certificate rate plus 2% per year. Such additional interest shall accrue on the same basis as interest on the Class B certificates, and shall accrue from the Distribution Date such overdue interest became due, to but excluding the Distribution Date on which such additional interest is paid.
 
The Class B certificates will bear interest from and including the closing date to but excluding July 15, 2008, and during each Interest Period thereafter, at the rate of 2.15% per year above LIBOR prevailing on the related LIBOR Determination Date with respect to each such period.
 
On each Distribution Date, Class B Outstanding Monthly Interest due but not paid to the Class B certificateholders and any Class B Additional Interest will be paid, to the extent funds are available, to the Class B certificateholders. Payments to the Class B certificateholders in respect of interest on the Class B certificates on any Distribution Date will be funded from Class B Available Funds for the related Monthly Period. To the extent Class B Available Funds allocated to the holders of the Class B certificates for such Monthly Period are insufficient to pay such interest, Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 and Reallocated Principal Collections allocable to the Collateral Invested Amount and not required to pay the Class A Required Amount or reimburse Class A Investor Charge-Offs will be used to make such payments.
 
Interest will accrue on the Collateral Interest at the Collateral Minimum Interest Rate from the closing date. Interest will be distributed on each Distribution Date, beginning July 15, 2008, to the holder of the Collateral Interest in an amount equal to the product of:
 
(i) the actual number of days in the related Interest Period divided by 360,
 
(ii) the Collateral Minimum Interest Rate for that Interest Period, and
 
(iii) the Collateral Initial Invested Amount minus the aggregate amount of principal payments made to the holder of the Collateral Interest on all prior Distribution Dates (or, in the case of the first Distribution Date, as of the closing date).
 
For the first Distribution Date, however, interest on the Collateral Interest will accrue on the Collateral Initial Invested Amount at the Collateral Minimum Interest Rate for the initial Interest Period. The Collateral Interest will also provide for additional interest as provided herein and in the Series 2008-5 supplement.
 
The Class A certificate rate, the Class B certificate rate and the Collateral Minimum Interest Rate applicable to the then current and immediately preceding interest periods may be obtained by telephoning the trustee at its corporate trust office at (212) 815-6258.
 
Principal Payments
 
The Revolving Period begins on the closing date and ends on the day before the commencement of the Controlled Accumulation Period or, if earlier, the Early Amortization Period. During the Revolving Period, no principal payments will be made to or for the benefit of the Series 2008-5 certificateholders or the holder of the Collateral Interest. Unless a Pay-Out Event has occurred, the Controlled Accumulation Period is scheduled to begin at the close of business on the last day of the July 2012 Monthly Period, but may be delayed as described herein, and ends on the earliest to occur of:
 
(a) the commencement of an Early Amortization Period,
 
(b) the payment in full of the Invested Amount and
 
(c) the Expected Final Payment Date.
 
During the Controlled Accumulation Period (on or prior to the Expected Final Payment Date), principal will be deposited in the Principal Funding Account as described below and on the Expected Final Payment Date will be


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distributed to Class A certificateholders up to the Class A Invested Amount and then to Class B certificateholders up to the Class B Invested Amount.
 
On each Distribution Date with respect to the Controlled Accumulation Period, the trustee will deposit in the Principal Funding Account an amount equal to the least of:
 
(a) Available Principal Collections on deposit in the Collection Account with respect to such Distribution Date,
 
(b) the Controlled Deposit Amount for such Distribution Date and
 
(c) the sum of the Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount,
 
until the amount on deposit in the Principal Funding Account equals the sum of the Class A Invested Amount and the Class B Invested Amount. Amounts on deposit in the Principal Funding Account will be paid to the Class A certificateholders and, if the amount on deposit in the Principal Funding Account exceeds the Class A Invested Amount, to the Class B certificateholders on the Expected Final Payment Date. No principal payments will be made in respect of the Collateral Invested Amount until the final principal payment has been made to the Class A certificateholders and the Class B certificateholders.
 
The Controlled Accumulation Period is scheduled to begin at the close of business on the last day of the July 2012 Monthly Period. However, the date on which the Controlled Accumulation Period actually begins may be delayed if — after making a calculation prescribed by the pooling and servicing agreement — the servicer determines, in effect, that enough Shared Principal Collections are expected to be available for your series from principal sharing series that will be in their revolving periods during the Controlled Accumulation Period to delay the start of the Controlled Accumulation Period, without affecting the payment in full of the certificates of your series by the Expected Final Payment Date. This calculation will take into account the then-current principal payment rate on the accounts and the principal amount of principal sharing series that are entitled to share principal with Series 2008-5.
 
If the beginning of your series’ Controlled Accumulation Period is delayed and then a Pay-Out Event or Reinvestment Event occurs with respect to any outstanding principal sharing series, your series’ Controlled Accumulation Period will start on (i) the first day of the Monthly Period immediately succeeding the date on which the Pay-Out Event or Reinvestment Event occurred or, if sooner, (ii) the date on which the Controlled Accumulation Period is then scheduled to start.
 
If a Pay-Out Event with respect to Series 2008-5 occurs during the Controlled Accumulation Period, the Early Amortization Period will commence and any amount on deposit in the Principal Funding Account will be paid first to the Class A certificateholders on the first Special Payment Date and then, after the Class A Invested Amount is paid in full, to the Class B certificateholders.
 
If, on the Expected Final Payment Date, monies on deposit in the Principal Funding Account are insufficient to pay the Class A Invested Amount and the Class B Invested Amount or if there are insufficient collections of principal receivables to pay the Collateral Invested Amount, a Pay-Out Event will occur and the Early Amortization Period will commence.
 
On each Distribution Date with respect to the Early Amortization Period until the Class A Invested Amount has been paid in full or the Series 2008-5 Termination Date occurs, the holders of the Class A certificates will be entitled to receive Available Principal Collections in an amount up to the Class A Invested Amount. After payment in full of the Class A Invested Amount, the holders of the Class B certificates will be entitled to receive, on each Distribution Date, Available Principal Collections until the earlier of the date the Class B Invested Amount is paid in full and the Series 2008-5 Termination Date. After payment in full of the Class B Invested Amount, the holder of the Collateral Interest will be entitled to receive, on each Distribution Date, Available Principal Collections until the earlier of the date the Collateral Invested Amount is paid in full and the Series 2008-5 Termination Date.


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Subordination of the Class B Certificates and the Collateral Interest
 
The Class B certificates and the Collateral Interest will be subordinated to the extent necessary to fund certain payments with respect to the Class A certificates. In addition, the Collateral Interest will be subordinated to the extent necessary to fund certain payments with respect to the Class B certificates. Certain principal payments otherwise allocable to the Class B certificateholders may be reallocated to the Class A certificateholders and the Class B Invested Amount may be reduced.
 
Similarly, certain principal payments otherwise allocable to the Collateral Interest may be reallocated to the Class A certificateholders and the Class B certificateholders and the Collateral Invested Amount may be reduced. If the Collateral Invested Amount is reduced to zero, holders of the Class B certificates will bear directly the credit and other risks associated with their interest in the trust. To the extent the Class B Invested Amount is reduced, the percentage of collections of finance charge receivables allocated to the Class B certificateholders in subsequent Monthly Periods will be reduced. Moreover, to the extent the amount of such reduction in the Class B Invested Amount is not reimbursed, the amount of principal distributable to the Class B certificateholders will be reduced. If the Class B Invested Amount is reduced to zero, the Class A certificateholders will bear directly the credit and other risks associated with their undivided interest in the trust. In the event of a reduction in the Class A Invested Amount, the Class B Invested Amount or the Collateral Invested Amount, the amount of principal and interest available to fund payments with respect to the Class A certificates and the Class B certificates will be decreased. See “— Allocation Percentages,” “— Reallocation of Cash Flows” and “— Application of Collections — Excess Spread; Excess Finance Charge Collections” below.
 
Allocation Percentages
 
Pursuant to the pooling and servicing agreement, the servicer will allocate among Series 2008-5 and all other series outstanding all collections of finance charge receivables and principal receivables and the Defaulted Amount with respect to such Monthly Period as described under “The Pooling and Servicing Agreement Generally — Allocations” in the accompanying prospectus and, with respect to Series 2008-5 specifically, as described below.
 
Pursuant to the pooling and servicing agreement, during each Monthly Period, the servicer will allocate to Series 2008-5 its Series Allocable Finance Charge Collections, Series Allocable Principal Collections and Series Allocable Defaulted Amount.
 
The Series Allocable Finance Charge Collections and the Series Allocable Defaulted Amount for Series 2008-5 with respect to any Monthly Period will be allocated to the Series 2008-5 certificates and the Collateral Interest based on the Floating Allocation Percentage and the remainder of such Series Allocable Finance Charge Collections and Series Allocable Defaulted Amount will be allocated to the interest of the holders of the transferor certificates.
 
Investor Finance Charge Collections (which for any Monthly Period is equal to the product of the Floating Allocation Percentage and the Series Allocable Finance Charge Collections) will be reallocated among all series, including Series 2008-5, in the second group of series known as Group II as set forth in “The Pooling and Servicing Agreement Generally — Reallocations Among Different Series Within a Reallocation Group” in the accompanying prospectus. Reallocated Investor Finance Charge Collections allocated to Series 2008-5 and the Investor Default Amount will be further allocated among the Class A certificateholders, the Class B certificateholders and the holder of the Collateral Interest in accordance with the Class A Floating Percentage, the Class B Floating Percentage and the Collateral Floating Percentage, respectively.
 
Series Allocable Principal Collections for Series 2008-5 will be allocated to the Series 2008-5 certificates and the Collateral Interest based on the Principal Allocation Percentage and the remainder of such Series Allocable Principal Collections will be allocated to the holders of the transferor certificates. Such principal collections so allocated to the Series 2008-5 certificates and the Collateral Interest will be further allocated to the Class A certificateholders, the Class B certificateholders and the holder of the Collateral Interest based on the Class A Principal Percentage, the Class B Principal Percentage and the Collateral Principal Percentage, respectively.


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Principal Funding Account
 
The servicer will establish and maintain in the name of the trustee, on behalf of the trust, the Principal Funding Account as an Eligible Deposit Account held for the benefit of the Series 2008-5 certificateholders. During the Controlled Accumulation Period, the servicer will transfer collections in respect of principal receivables allocated to Series 2008-5, Shared Principal Collections allocated to Series 2008-5 and other amounts described herein to be treated in the same manner as collections of principal receivables from the Collection Account to the Principal Funding Account as described below under “— Application of Collections.”
 
Unless a Pay-Out Event has occurred and the Early Amortization Period has begun with respect to Series 2008-5, all amounts on deposit in the Principal Funding Account on any Distribution Date (after giving effect to any deposits to, or withdrawals from, the Principal Funding Account to be made on such Distribution Date) will be invested through the following Distribution Date by the trustee at the direction of the servicer in Eligible Investments. On each Distribution Date with respect to the Controlled Accumulation Period, the interest and other investment income (net of investment expenses and losses) earned on such investments will be withdrawn from the Principal Funding Account and will be treated as a portion of Class A Available Funds. If such investments with respect to any such Distribution Date yield less than the Covered Amount, such shortfall will be funded from Class A Available Funds (including a withdrawal from the Reserve Account, if necessary, as described below under “— Reserve Account”) and from Class B Available Funds. The Available Reserve Account Amount at any time will be limited and there can be no assurance that sufficient funds will be available to fund any such shortfall.
 
Reserve Account
 
The servicer will establish and maintain in the name of the trustee, on behalf of the trust, an Eligible Deposit Account for the benefit of the Class A certificateholders, the Class B certificateholders and the holder of the Collateral Interest. The Reserve Account is established to assist with the subsequent distribution of interest on the Class A certificates as provided in this prospectus supplement during the Controlled Accumulation Period. On each Distribution Date from and after the funding of the Reserve Account begins, but prior to the termination of the Reserve Account, the trustee, acting pursuant to the servicer’s instructions, will apply Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 (in the order of priority described below under “— Application of Collections — Payment of Interest, Fees and Other Items”) to increase the amount on deposit in the Reserve Account (to the extent such amount is less than the Required Reserve Account Amount). In addition, on each such Distribution Date, the transferors will have the option, but will not be required, to make a deposit in the Reserve Account to the extent that the amount on deposit in the Reserve Account, after giving effect to any Excess Spread and Excess Finance Charge Collections allocated and available to be deposited in the Reserve Account on such Distribution Date, is less than the Required Reserve Account Amount.
 
On each Distribution Date, after giving effect to any deposit to be made to, and any withdrawal to be made from, the Reserve Account on such Distribution Date, the trustee will withdraw from the Reserve Account an amount equal to the excess, if any, of the amount on deposit in the Reserve Account over the Required Reserve Account Amount and shall distribute such excess to the holder of the Collateral Interest.
 
If the Reserve Account has not terminated as described below, all amounts remaining on deposit in the Reserve Account on any Distribution Date (after giving effect to any deposits to, or withdrawals from, the Reserve Account to be made on such Distribution Date) will be invested to mature on or before the following Distribution Date by the trustee at the direction of the servicer in Eligible Investments. The interest and other investment income (net of investment expenses and losses) earned on such investments will be retained in the Reserve Account (to the extent the amount on deposit therein is less than the Required Reserve Account Amount) or deposited in the Collection Account and treated as collections of finance charge receivables allocable to Series 2008-5.
 
On or before each Distribution Date with respect to the Controlled Accumulation Period (on or prior to the Expected Final Payment date) and on the first Special Payment Date (if such Special Payment Date occurs on or prior to the Expected Final Payment Date), a withdrawal will be made from the Reserve Account, and the amount of


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such withdrawal will be deposited in the Collection Account and included in Class A Available Funds in an amount equal to the lesser of:
 
(a) the Available Reserve Account Amount for such Distribution Date or Special Payment Date, and
 
(b) the amount, if any, by which the Covered Amount for such Distribution Date or Special Payment Date exceeds the investment earnings (net of losses and investment expenses), if any, in the Principal Funding Account for the related Distribution Date;
 
provided that the amount of such withdrawal will be reduced to the extent that funds otherwise would be available to be deposited in the Reserve Account on such Distribution Date or Special Payment Date. On each Distribution Date, the amount available to be withdrawn from the Reserve Account will equal the Available Reserve Account Amount.
 
The Reserve Account will be terminated following the earliest to occur of:
 
(a) the termination of the trust pursuant to the pooling and servicing agreement,
 
(b) the date on which the Invested Amount is paid in full, and
 
(c) if the Controlled Accumulation Period has not commenced, the occurrence of a Pay-Out Event with respect to Series 2008-5 or, if the Controlled Accumulation Period has commenced, the earlier of the first Special Payment Date and the Expected Final Payment Date.
 
Upon the termination of the Reserve Account, all amounts on deposit therein (after giving effect to any withdrawal from the Reserve Account on such date as described above) will be distributed to the holder of the Collateral Interest. Any amounts withdrawn from the Reserve Account and distributed to the holder of the Collateral Interest as described above will not be available for distribution to the Class A certificateholders and the Class B certificateholders.
 
Reallocation of Cash Flows
 
Class A Required Amount
 
On each Determination Date, the servicer will calculate the Class A Required Amount. If the Class A Required Amount is greater than zero, the following reallocations will occur:
 
  •  Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 and available for such purpose will be used to fund the Class A Required Amount for the related Distribution Date;
 
  •  if such Excess Spread and Excess Finance Charge Collections are insufficient to fund the Class A Required Amount, Reallocated Principal Collections allocable first to the Collateral Interest and then to the Class B certificates will be used to fund the remaining Class A Required Amount; and
 
  •  if Reallocated Principal Collections for the related Monthly Period, together with Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5, are insufficient to fund the Class A Required Amount for such related Monthly Period, then the Collateral Invested Amount will be reduced by the amount of such excess (but not by more than the Class A Investor Default Amount for such related Distribution Date).
 
In the event that such reduction would cause the Collateral Invested Amount to be a negative number, the Collateral Invested Amount will be reduced to zero, and the Class B Invested Amount will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero (but not by more than the excess of the Class A Investor Default Amount, if any, for such Distribution Date over the amount of such reduction, if any, of the Collateral Invested Amount for such Distribution Date).
 
In the event that such reduction would cause the Class B Invested Amount to be a negative number, the Class B Invested Amount will be reduced to zero and the Class A Invested Amount will be reduced by the amount by which the Class B Invested Amount would have been reduced below zero (but not by more than the excess, if any, of the Class A Investor Default Amount for such Distribution Date over the amount of the reductions, if any, of the Collateral Invested Amount and the Class B Invested Amount with respect to such Distribution Date as described above). Any such reduction in the Class A Invested Amount may have the effect of slowing or reducing the return of


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principal and interest to the Class A certificateholders. In such case, the Class A certificateholders will bear directly the credit and other risks associated with their undivided interest in the trust. See “— Defaulted Receivables; Investor Charge-Offs” below.
 
Reductions of the Class A Invested Amount and Class B Invested Amount will thereafter be reimbursed and the Class A Invested Amount and Class B Invested Amount increased on each Distribution Date by the amount, if any, of Excess Spread and Excess Finance Charge Collections allocable to Series 2008-5 and available to reimburse such reductions. See “Application of Collections — Excess Spread; Excess Finance Charge Collections” below.  When such reductions of the Class A Invested Amount and Class B Invested Amount have been fully reimbursed, reductions of the Collateral Invested Amount will be reimbursed and the Collateral Invested Amount increased in a similar manner.
 
Class B Required Amount
 
On each Determination Date, the servicer will calculate the Class B Required Amount. If the Class B Required Amount is greater than zero, the following reallocations will occur:
 
  •  Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 and not required to pay the Class A Required Amount or reimburse Class A Investor Charge-Offs will be used to fund the Class B Required Amount for the related Distribution Date;
 
  •  if such Excess Spread and Excess Finance Charge Collections are insufficient to fund the Class B Required Amount, Reallocated Principal Collections allocable to the Collateral Interest and not required to pay the Class A Required Amount will then be used to fund the remaining Class B Required Amount; and
 
  •  if such Reallocated Principal Collections allocable to the Collateral Interest for the related Monthly Period are insufficient to fund the remaining Class B Required Amount, then the Collateral Invested Amount will be reduced by the amount of such insufficiency (but not by more than the Class B Investor Default Amount for such related Distribution Date).
 
In the event that such reduction would cause the Collateral Invested Amount to be a negative number, the Collateral Invested Amount will be reduced to zero, and the Class B Invested Amount will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero (but not by more than the excess of the Class B Investor Default Amount for such Distribution Date over the amount of such reduction of the Collateral Invested Amount). Any such reduction in the Class B Invested Amount may have the effect of slowing or reducing the return of principal and interest to the Class B certificateholders. In that case, the Class B certificateholders will bear directly the credit and other risks associated with their undivided interests in the trust. See “— Defaulted Receivables; Investor Charge-Offs” below.
 
Application of Collections
 
Payment of Interest, Fees and Other Items.
 
On each Distribution Date, the trustee, acting pursuant to the servicer’s instructions, will apply the Class A Available Funds, Class B Available Funds and Collateral Available Funds on deposit in the Collection Account in the following priority:
 
(A) an amount equal to the Class A Available Funds will be distributed in the following priority:
 
(i) an amount equal to Class A Monthly Interest for such Distribution Date, plus the amount of any Class A Outstanding Monthly Interest, plus the amount of any Class A Additional Interest for such Distribution Date and any Class A Additional Interest previously due but not distributed to the Class A certificateholders on a prior Distribution Date, will be distributed to the Class A certificateholders;
 
(ii) if TRS or an affiliate of TRS is no longer the servicer, an amount equal to the Class A Servicing Fee for such Distribution Date, plus the amount of any Class A Servicing Fee previously due but not distributed to the servicer on a prior Distribution Date, will be distributed to the servicer;


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(iii) an amount equal to the Class A Investor Default Amount for such Distribution Date will be treated as a portion of Available Principal Collections for such Distribution Date; and
 
(iv) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under “— Excess Spread; Excess Finance Charge Collections” below.
 
(B) an amount equal to the Class B Available Funds will be distributed in the following priority:
 
(i) an amount equal to Class B Monthly Interest for such Distribution Date, plus the amount of any Class B Outstanding Monthly Interest, plus the amount of any Class B Additional Interest for such Distribution Date and any Class B Additional Interest previously due but not distributed to the Class B certificateholders on a prior Distribution Date, will be distributed to the Class B certificateholders;
 
(ii) if TRS or an affiliate of TRS is no longer the servicer, an amount equal to the Class B Servicing Fee for such Distribution Date, plus the amount of any Class B Servicing Fee previously due but not distributed to the servicer on a prior Distribution Date, will be distributed to the servicer; and
 
(iii) the balance, if any, shall constitute Excess Spread and shall be allocated and distributed as described under “— Excess Spread; Excess Finance Charge Collections” below.
 
(C) an amount equal to the Collateral Available Funds will be distributed in the following priority:
 
(i) if TRS or an affiliate of TRS is no longer the servicer, an amount equal to the Collateral Interest Servicing Fee for such Distribution Date, plus the amount of any Collateral Interest Servicing Fee previously due but not distributed to the servicer on a prior Distribution Date, will be paid to the servicer; and
 
(ii) the balance, if any, will constitute a portion of Excess Spread and will be allocated and distributed as described under “— Excess Spread; Excess Finance Charge Collections” below.
 
Excess Spread; Excess Finance Charge Collections.
 
On each Distribution Date, the trustee, acting pursuant to the servicer’s instructions, will apply Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 for the related Monthly Period to make the following distributions in the following priority:
 
(a) an amount equal to the Class A Required Amount, if any, for such Distribution Date will be used to fund the Class A Required Amount, and if the Class A Required Amount for such Distribution Date exceeds the amount of Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5, such Excess Spread and Excess Finance Charge Collections will be applied:
 
  •  first, to pay shortfalls in the payment of amounts described in clause (A)(i) under “— Payment of Interest, Fees and Other Items” in this prospectus supplement,
 
  •  second, to pay shortfalls in the payment of amounts described in clause (A)(ii) under “— Payment of Interest, Fees and Other Items” in this prospectus supplement, and
 
  •  third, to pay shortfalls in the payment of amounts described in clause (A)(iii) under “— Payment of Interest, Fees and Other Items” in this prospectus supplement;
 
(b) an amount equal to the aggregate amount of Class A Investor Charge-Offs that have not been previously reimbursed will be treated as a portion of Available Principal Collections for such Distribution Date as described under “— Payments of Principal” in this prospectus supplement;
 
(c) an amount equal to the interest accrued with respect to the aggregate outstanding principal balance of the Class B certificates not otherwise distributed to the Class B certificateholders on such Distribution Date will accrue at the Class B certificate rate and be paid to Class B certificateholders, except that any such interest previously due but not paid will accrue at the Class B certificate rate plus 2% per year;
 
(d) an amount equal to the Class B Required Amount, if any, for such Distribution Date will be (I) used to fund the Class B Required Amount and applied first, to pay shortfalls in the payment of amounts described in


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clause (B)(i) under “— Payment of Interest, Fees and Other Items” in this prospectus supplement, and second, to pay shortfalls in the payment of amounts described in clause (B)(ii) under “— Payment of Interest, Fees and Other Items” in this prospectus supplement and then (II) treated up to the Class B Investor Default Amount, as a portion of Available Principal Collections for such Distribution Date;
 
(e) an amount equal to the aggregate amount by which the Class B Invested Amount has been reduced pursuant to clauses (iii), (iv) and (v) of the definition of Class B Invested Amount (but not in excess of the aggregate amount of such reductions that have not been previously reimbursed) will be treated as a portion of Available Principal Collections for such Distribution Date;
 
(f) an amount equal to Collateral Minimum Monthly Interest for such Distribution Date, plus the amount of any Collateral Minimum Monthly Interest previously due but not distributed to the holder of the Collateral Interest on a prior Distribution Date and any Collateral Additional Interest will be distributed to the holder of the Collateral Interest;
 
(g) an amount equal to the Monthly Servicing Fee due but not paid to the servicer on such Distribution Date or a prior Distribution Date shall be paid to the servicer;
 
(h) an amount equal to the Collateral Default Amount shall be treated as a portion of Available Principal Collections for such Distribution Date;
 
(i) an amount equal to the aggregate amount by which the Collateral Invested Amount has been reduced pursuant to clauses (iii), (iv) and (v) of the definition of Collateral Invested Amount (but not in excess of the aggregate amount of such reductions that have not been previously reimbursed) shall be treated as a portion of Available Principal Collections for such Distribution Date;
 
(j) on each Distribution Date from and after the date on which the Reserve Account is funded, but prior to the date on which the Reserve Account terminates as described under “— Reserve Account” above, an amount up to the excess, if any, of the Required Reserve Account Amount over the Available Reserve Account Amount shall be deposited into the Reserve Account; and
 
(k) the balance, if any, will be distributed to the holder of the Collateral Interest.
 
Payments of Principal.
 
On each Distribution Date, the trustee, acting pursuant to the servicer’s instructions, will distribute Available Principal Collections (see “— Principal Payments” above) on deposit in the Collection Account in the following priority:
 
(i) on each Distribution Date with respect to the Revolving Period, all such Available Principal Collections will be treated as Shared Principal Collections and applied as described under “The Pooling and Servicing Agreement Generally — Sharing of Principal Collections Among Principal Sharing Series” in the accompanying prospectus;
 
(ii) on each Distribution Date with respect to the Controlled Accumulation Period, all such Available Principal Collections will be distributed or deposited in the following priority:
 
(A) an amount equal to the lesser of (x) the Controlled Deposit Amount and (y) the sum of the Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount will be deposited in the Principal Funding Account;
 
(B) for each Distribution Date beginning on the Distribution Date on which the Class B Invested Amount is paid in full, an amount up to the Collateral Invested Amount will be paid to the holder of the Collateral Interest; and
 
(C) for each Distribution Date, the balance, if any, of Available Principal Collections not applied pursuant to paragraphs (A) and (B) (as applicable) above will be treated as Shared Principal Collections and applied as described under “The Pooling and Servicing Agreement Generally — Sharing of Principal Collections Among Principal Sharing Series” in the accompanying prospectus; and


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(iii) on each Distribution Date with respect to the Early Amortization Period, all such Available Principal Collections will be distributed as follows:
 
(A) an amount up to the Class A Adjusted Invested Amount will be distributed to the Class A certificateholders;
 
(B) for each Distribution Date beginning on the Distribution Date on which the Class A Invested Amount is paid in full, an amount up to the Class B Adjusted Invested Amount will be distributed to the Class B certificateholders;
 
(C) for each Distribution Date beginning on the Distribution Date on which the Class B Invested Amount is paid in full, an amount up to the Collateral Invested Amount will be distributed to the holder of the Collateral Interest; and
 
(D) for each Distribution Date, the balance, if any, of Available Principal Collections not applied pursuant to paragraphs (A), (B) and (C) (as applicable) above will be treated as Shared Principal Collections and applied as described under “The Pooling and Servicing Agreement Generally — Sharing of Principal Collections Among Principal Sharing Series” in the accompanying prospectus.
 
Defaulted Receivables; Investor Charge-Offs
 
On each Determination Date, the servicer will calculate the Investor Default Amount for the related Distribution Date. An amount equal to the Class A Investor Default Amount for each Distribution Date will be paid from Class A Available Funds, Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 and from Reallocated Principal Collections, if applicable, and applied as described above in “— Application of Collections — Payment of Interest, Fees and Other Items.” An amount equal to the Class B Investor Default Amount for each Distribution Date will be paid from Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 and from Reallocated Principal Collections allocable to the Collateral Invested Amount, if applicable, and applied as described above in “— Application of Collections — Excess Spread; Excess Finance Charge Collections.”
 
Class A Investor Charge-Offs
 
On each Distribution Date, if the Class A Required Amount for such Distribution Date exceeds the sum of (i) Excess Spread and Excess Finance Charge Collections allocable to Series 2008-5 and (ii) Reallocated Principal Collections, the Collateral Invested Amount will be reduced by the amount of such excess, but not by more than the Class A Investor Default Amount for such Distribution Date.
 
In the event that such reduction would cause the Collateral Invested Amount to be a negative number, the Collateral Invested Amount will be reduced to zero, and the Class B Invested Amount will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero, but not by more than the excess, if any, of the Class A Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Collateral Invested Amount for such Distribution Date.
 
In the event that such reduction would cause the Class B Invested Amount to be a negative number, the Class B Invested Amount will be reduced to zero, and the Class A Invested Amount will be reduced by the amount by which the Class B Invested Amount would have been reduced below zero, but not by more than the excess, if any, of the Class A Investor Default Amount for such Distribution Date over the amount of the reductions, if any, of the Collateral Invested Amount and of the Class B Invested Amount with respect to such Distribution Date as described above. A reduction in the Class A Invested Amount as described in the preceding sentence is a “Class A Investor Charge-Off.” Such Class A Investor Charge-Offs will reduce the amounts allocable and available for payment and may have the effect of slowing or reducing the return of principal to your series. If the Class A Invested Amount has been reduced by the amount of any Class A Investor Charge-Offs, it will thereafter be increased on any Distribution Date (but not by an amount in excess of the aggregate Class A Investor Charge-Offs) by the amount of Excess Spread and Excess Finance Charge Collections allocable to Series 2008-5 available for such purpose as described above under “— Application of Collections — Excess Spread; Excess Finance Charge Collections.”


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Reductions in Class B Invested Amount and Collateral Invested Amount
 
On each Distribution Date, if the Class B Required Amount for such Distribution Date exceeds the sum of (i) Excess Spread and Excess Finance Charge Collections allocable to Series 2008-5 and not required to pay the Class A Required Amount or reimburse Class A Investor Charge-Offs, and (ii) Reallocated Principal Collections allocable to the Collateral Interest and not required to pay the Class A Required Amount, then the Collateral Invested Amount will be reduced by the amount of such excess, but not by more than the Class B Investor Default Amount for such Distribution Date.
 
In the event that such reduction would cause the Collateral Invested Amount to be a negative number, the Collateral Invested Amount will be reduced to zero, and the Class B Invested Amount will be reduced by the amount by which the Collateral Invested Amount would have been reduced below zero, but not by more than the excess, if any, of the Class B Investor Default Amount for such Distribution Date over the amount of such reduction, if any, of the Collateral Invested Amount for such Distribution Date. A reduction in the Class B Invested Amount as described in the preceding sentence is a “Class B Investor Charge-Off.”
 
The Class B Invested Amount will also be reduced by the amount of Reallocated Principal Collections in excess of the Collateral Invested Amount and the amount of any portion of the Class B Invested Amount allocated to the Class A certificates to avoid a reduction in the Class A Invested Amount. Any reductions in the Class B Invested Amount will reduce the amounts allocable and available for payment and may have the effect of slowing or reducing the return of principal to your series. The Class B Invested Amount will thereafter be increased on any Distribution Date (but not by an amount in excess of the amount of such reductions in the Class B Invested Amount) by the amount of Excess Spread and Excess Finance Charge Collections allocable to Series 2008-5 available for such purpose as described above under “— Application of Collections — Excess Spread; Excess Finance Charge Collections.”
 
On each Distribution Date, if the Collateral Default Amount for such Distribution Date exceeds the amount of Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 which is allocated and available to fund such amount as described above under “— Application of Collections — Excess Spread; Excess Finance Charge Collections,” the Collateral Invested Amount will be reduced by the amount of such excess but not by more than the lesser of the Collateral Default Amount and the Collateral Invested Amount for such Distribution Date. A reduction in the Collateral Invested Amount as described in the preceding sentence is a “Collateral Charge-Off.”
 
The Collateral Interest will also be reduced by the amount of Reallocated Principal Collections and the amount of any portion of the Collateral Invested Amount allocated to the Class A certificates to avoid a reduction in the Class A Invested Amount or to the Class B certificates to avoid a reduction in the Class B Invested Amount. Any reductions in the Collateral Invested Amount will reduce the amounts allocable and available for payment and may have the effect of slowing or reducing the amount of payments to your series. The Collateral Invested Amount will thereafter be increased on any Distribution Date (but not by an amount in excess of the amount of such reductions in the Collateral Invested Amount) by the amount of Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 allocated and available for that purpose as described above under “— Application of Collections — Excess Spread; Excess Finance Charge Collections.”
 
Paired Series
 
Series 2008-5 may be paired with one or more other series (each called a “paired series”) at or after the commencement of the Controlled Accumulation Period if the Rating Agency Condition is satisfied. As funds are accumulated in the Principal Funding Account, the invested amount in the trust of such paired series will increase by up to a corresponding amount. Upon payment in full of the Series 2008-5 certificates, assuming that there have been no unreimbursed charge-offs with respect to any related paired series, the aggregate invested amount of such related paired series will have been increased by an amount up to an aggregate amount equal to the Invested Amount paid to or deposited for the benefit of the Series 2008-5 certificateholders after the Series 2008-5 certificates were paired with the paired series. The issuance of a paired series will be subject to the conditions described under “The Pooling and Servicing Agreement Generally — New Issuances” in the prospectus. There can be no assurance, however, that the terms of any paired series might not have an impact on the timing or amount of payments received by the Series 2008-5 certificateholders. See “Risk Factors — Issuances of additional series by the trust may adversely affect your certificates” and “The Pooling and Servicing Agreement Generally — Paired Series” in the accompanying prospectus.


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Pay-Out Events
 
The Pay-Out Events with respect to the Series 2008-5 certificates and the Collateral Interest will include each of the following:
 
(a) the occurrence of an insolvency event (as such term is defined in the prospectus) with respect to any transferor or other holder of the Original Transferor Certificate;
 
(b) the trust become an “investment company” within the meaning of the Investment Company Act of 1940, as amended;
 
(c) a failure on the part of any transferor:
 
(i) to make any payment or deposit required under the pooling and servicing agreement or the Series 2008-5 supplement within five Business Days after the day such payment or deposit is required to be made; or
 
(ii) to observe or perform any other covenant or agreement of such transferor set forth in the pooling and servicing agreement or the Series 2008-5 supplement, which failure has a material adverse effect on the Series 2008-5 certificateholders or the holder of the Collateral Interest and which continues unremedied for a period of 60 days after written notice;
 
(d) any representation or warranty made by any transferor in the pooling and servicing agreement or the Series 2008-5 supplement or any information required to be given by any transferor to the trustee to identify the accounts proves to have been incorrect in any material respect when made or delivered and continues to be incorrect in any material respect for a period of 60 days after written notice and as a result of which the interests of the Series 2008-5 certificateholders and the holder of the Collateral Interest are materially and adversely affected; provided, however, that a Pay-Out Event shall not be deemed to occur thereunder if a transferor has repurchased the related receivables or all such receivables, if applicable, during such period (or such longer period as the trustee may specify not to exceed an additional 60 days) in accordance with the provisions of the pooling and servicing agreement;
 
(e) a failure by a transferor to convey receivables in additional accounts or participation interests to the trust within five Business Days after the day on which it is required to convey such receivables or participation interests pursuant to the pooling and servicing agreement or the Series 2008-5 supplement;
 
(f) the occurrence of any Servicer Default which would have an adverse effect;
 
(g) a reduction of the average Series Adjusted Portfolio Yield for any three consecutive Monthly Periods to a rate less than the average of the Base Rates for such three Monthly Periods;
 
(h) the failure to pay in full the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount on the Expected Final Payment Date;
 
(i) any transferor is unable for any reason to transfer receivables to the trust in accordance with the pooling and servicing agreement or the Series 2008-5 supplement;
 
(j) the occurrence of an insolvency event as defined in the related purchase agreement relating to any account owner; and
 
(k) any account owner is unable for any reason to transfer receivables to the related transferor in accordance with the related purchase agreement.
 
In the case of any event described above in subparagraph (c), (d) or (f), after the applicable grace period, if any, set forth in such subparagraphs, either the trustee or the holders of Series 2008-5 certificates and the Collateral Interest evidencing more than 50% of the aggregate unpaid principal amount of Series 2008-5 certificates and the Collateral Interest by notice then given in writing to the transferors and the servicer (and to the trustee if given by the Series 2008-5 certificateholders and the holder of the Collateral Interest) may declare that a Pay-Out Event has occurred with respect to Series 2008-5 as of the date of such notice, and, in the case of any event described in subparagraph (b), (e), (g) or (h), a Pay-Out Event shall occur with respect to Series 2008-5 without any notice or other action on the part of the trustee immediately upon the occurrence of such event.


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In the case of any event described in subparagraph (a), (i), (j) or (k), a Pay-Out Event shall occur with respect to Series 2008-5 without any notice or other action on the part of the trustee, the Series 2008-5 certificateholders or the holder of the Collateral Interest immediately upon the occurrence of such event (or, in the case of clause (y) below, immediately following the expiration of the 60-day grace period), but only to the extent that:
 
(x) as of the date of such event, the average of the Monthly Receivables Percentage for the immediately preceding three Monthly Periods is equal to or greater than 10%, or
 
(y) as of the date of such event, the average of the Monthly Receivables Percentage for the immediately preceding three Monthly Periods is less than 10%, and within 60 days following the occurrence of the related insolvency event or inability to transfer receivables, the aggregate amount of principal receivables outstanding in the trust does not at least equal the Required Minimum Principal Balance (without giving effect to principal receivables attributable to the transferor or the account owner with respect to which the insolvency event or the inability to transfer receivables has occurred).
 
If the proceeds of any sale of the receivables following the occurrence of an insolvency event with respect to a transferor, as described in the accompanying prospectus under “Description of the Certificates — Pay-Out Events and Reinvestment Events,” allocated to the Class A Invested Amount and the proceeds of any collections on the receivables in the Collection Account are not sufficient to pay in full the remaining amount due on the Class A certificates, the Class A certificateholders will suffer a corresponding loss and no such proceeds will be available to the Class B certificateholders or the holder of the Collateral Interest. See “Certain Legal Aspects of the Receivables — Certain Matters Relating to Bankruptcy, Conservatorship and Receivership” in the accompanying prospectus for a discussion of the impact of recent federal legislation on the trustee’s ability to liquidate the receivables.
 
Servicing Compensation and Payment of Expenses
 
The share of the Servicing Fee allocable to Series 2008-5 for any Distribution Date, called the Monthly Servicing Fee, will be equal to one-twelfth of the product of:
 
(a) the Servicing Fee Rate, and
 
(b) the Servicing Base Amount.
 
The share of the Monthly Servicing Fee allocable to the Class A certificateholders for any Distribution Date, called the Class A Servicing Fee, shall be equal to one-twelfth of the product of:
 
(a) the Class A Floating Percentage,
 
(b) the Servicing Fee Rate, and
 
(c) the Servicing Base Amount.
 
The share of the Monthly Servicing Fee allocable to the Class B certificateholders for any Distribution Date, called the Class B Servicing Fee, shall be equal to one-twelfth of the product of:
 
(a) the Class B Floating Percentage,
 
(b) the Servicing Fee Rate, and
 
(c) the Servicing Base Amount.
 
The share of the Monthly Servicing Fee allocable to the holder of the Collateral Interest for any Distribution Date, called the Collateral Interest Servicing Fee, shall be equal to one-twelfth of the product of:
 
(a) the Collateral Floating Percentage,
 
(b) the Servicing Fee Rate, and
 
(c) the Servicing Base Amount.


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The remainder of the Servicing Fee shall be paid by the holders of the transferor certificates or the certificateholders of other series (as provided in the related supplements). In no event will the trust, the trustee, the Series 2008-5 certificateholders or the holder of the Collateral Interest be liable for the share of the Servicing Fee to be paid by the holders of the transferor certificates or the certificateholders of any other series.
 
Optional Repurchase
 
So long as a transferor is the servicer or an affiliate of the servicer, on any Distribution Date occurring on or after the date that the sum of the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount is reduced to an amount equal to 5% of the initial outstanding aggregate principal amount of the Class A certificates, the Class B certificates and the Collateral Interest or less, that transferor will have the option to repurchase the Class A certificateholders’ interest, the Class B certificateholders’ interest and the Collateral Interest. The purchase price will be equal to the sum of the Adjusted Invested Amount and accrued and unpaid interest on the Class A certificates, the Class B certificates and the Collateral Interest (and accrued and unpaid interest with respect to interest amounts that were due but not paid on such Distribution Date or any prior Distribution Date) through (a) if the day on which such repurchase occurs is a Distribution Date, the day preceding such Distribution Date or (b) if the day on which such repurchase occurs is not a Distribution Date, the day preceding the Distribution Date next following such day. Such proceeds will be allocated first to pay amounts due to the Class A certificateholders, then, to pay amounts due to the Class B certificateholders and finally, to pay amounts due to the holder of the Collateral Interest. Following any such repurchase, the Receivables will be assigned to the transferors and the Class A certificateholders, the Class B certificateholders and the holder of the Collateral Interest will have no further rights with respect thereto. In the event that the transferors fail for any reason to deposit the aggregate purchase price for such receivables, the trust will continue to hold the receivables and payments will continue to be made to the Class A certificateholders, Class B certificateholders and the holder of the Collateral Interest as described herein.
 
Series Termination
 
If on the Distribution Date which is two months prior to the Series 2008-5 Termination Date, the Invested Amount (after giving effect to all changes therein on such date) exceeds zero, the servicer will, within the 40-day period beginning on such date, solicit bids for the sale of interests in the principal receivables or certain principal receivables, together in each case with the related finance charge receivables, in an amount equal to the Invested Amount at the close of business on the last day of the Monthly Period preceding the Series 2008-5 Termination Date (after giving effect to all distributions required to be made on the Series 2008-5 Termination Date other than from the proceeds of the sale). No transferor, any affiliate thereof, any agent thereof or any other party consolidated with such transferor for purposes of United States generally accepted accounting principles will be entitled to participate in such bidding process or to purchase the receivables; provided, however, that, to the extent the holder of the Collateral Interest is not a transferor, an affiliate thereof, an agent thereof or any other party consolidated with a transferor for purposes of United States generally accepted accounting principles, the holder of the Collateral Interest may participate in such bidding process. Upon the expiration of such 40-day period, the trustee will determine (a) which bid is the highest cash purchase offer and (b) the amount which otherwise would be available in the Collection Account on the Series 2008-5 Termination Date for distribution to the Series 2008-5 certificateholders and the holder of the Collateral Interest. The servicer will sell such receivables on the Series 2008-5 Termination Date to the bidder who provided the highest cash purchase offer and will deposit the proceeds of such sale in the Collection Account for allocation (together with the amount which otherwise would be available in the Collection Account on the Series 2008-5 Termination Date for distribution to the Series 2008-5 certificateholders and the holder of the Collateral Interest) to Series 2008-5.
 
Reports
 
No later than the second Business Day prior to each Distribution Date, the servicer will forward to the trustee, the paying agent, the transferors, each Rating Agency and the holder of the Collateral Interest, a monthly report


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prepared by the servicer setting forth certain information with respect to the trust, the Class A certificates, the Class B certificates and the Collateral Interest, including:
 
(a) the aggregate amount of principal receivables and finance charge receivables in the trust as of the end of such Monthly Period;
 
(b) the Class A Invested Amount, the Class B Invested Amount and the Collateral Invested Amount at the close of business on the last day of the preceding Monthly Period;
 
(c) the Series Allocation Percentage, the Floating Allocation Percentage, the Class A Floating Percentage, the Class B Floating Percentage and the Collateral Floating Percentage and the Principal Allocation Percentage, the Class A Principal Percentage, the Class B Principal Percentage and the Collateral Principal Percentage;
 
(d) the amount of collections of principal receivables and finance charge receivables processed during the related Monthly Period and the portion thereof allocated to the interest of the holders of the Series 2008-5 certificates and the holder of the Collateral Interest;
 
(e) the aggregate outstanding balance of accounts that were 31, 61 and 91 days or more delinquent as of the end of such Monthly Period;
 
(f) the Class A Investor Default Amount, the Class B Investor Default Amount and the Collateral Default Amount and the Defaulted Amount with respect to the related Distribution Date;
 
(g) the aggregate amount, if any, of Class A Investor Charge-Offs, Class B Investor Charge-Offs, any reductions in the Class B Invested Amount pursuant to clauses (iii), (iv) and (v) of the definition of Class B Invested Amount, and the amounts by which the Collateral Invested Amount has been reduced pursuant to clauses (iii), (iv) and (v) of the definition of Collateral Invested Amount and any Class A Investor Charge-Offs, Class B Investor Charge-Offs or Collateral Charge-Offs reimbursed on the related Monthly Period, for such Monthly Period;
 
(h) the Monthly Servicing Fee, Class A Servicing Fee, Class B Servicing Fee and Collateral Interest Servicing Fee for such Monthly Period;
 
(i) the Series Adjusted Portfolio Yield for such Monthly Period;
 
(j) the Base Rate for such Monthly Period;
 
(k) Reallocated Principal Collections; and
 
(1) Shared Principal Collections.
 
ERISA Considerations
 
Class A Certificates
 
Subject to the considerations described below and in the accompanying prospectus, the Class A certificates may be purchased by, on behalf of, or with “plan assets” of any Plan. Any Plan fiduciary that proposes to cause a Plan to acquire any of the Class A certificates should consult with its counsel with respect to the potential consequences of the Plan’s acquisition and ownership of such Class A certificates under ERISA and the Internal Revenue Code. See “ERISA Considerations” in the accompanying prospectus.
 
Class B Certificates
 
The Class B certificates may not be acquired or held by, on behalf of, or with “plan assets” of any Plan other than insurance companies investing solely assets of their general accounts. By its acceptance of a Class B certificate, each Class B certificateholder will be deemed to have represented and warranted that either (i) it is not and will not be, and is not acquiring the Class B certificates with “plan assets” of, a Plan or (ii) it is an insurance company, it acquired and will hold the Class B certificates solely with assets of its general account, and such acquisition and


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holding satisfies the conditions applicable under Sections I and III of Department of Labor Prohibited Transaction Class Exemption 95-60.
 
The Department of Labor Authorization
 
The Department of Labor has authorized the trust to rely upon the exemptive relief from certain of the prohibited transaction provisions of ERISA and Section 4975 of the Internal Revenue Code available under PTCE 96-62 relating to (i) the initial purchase, the holding and the subsequent resale by Plans of senior certificates representing an undivided interest in a credit card trust with respect to which Centurion, RFC II or any of their affiliates is the sponsor; and (ii) the servicing, operation and management of such trust; provided that the general conditions and certain other conditions set forth in such authorization are satisfied. The authorization will apply to the acquisition, holding and resale of the Class A certificates by, on behalf of or with “plan assets” of a Plan; provided that the conditions described in “ERISA Considerations” in the accompanying prospectus are satisfied.
 
The transferors believe that the authorization will apply to the acquisition and holding of the Class A certificates by Plans and that all conditions of the authorization, other than those that are within the control of the investors, will be met.
 
Consultation With Counsel
 
In light of the foregoing fiduciaries or other persons contemplating purchasing the Class A certificates on behalf of or with “plan assets” of any Plan should consult their own counsel regarding whether the trust’s assets represented by the Class A certificates would be considered “plan assets,” the consequences that would apply if the trust’s assets were considered “plan assets,” and the availability of exemptive relief from the prohibited transaction rules.
 
Finally, Plan fiduciaries and other Plan investors should consider the fiduciary standards under ERISA or other applicable law in the context of the Plan’s particular circumstances before authorizing an investment of a portion of the Plan’s assets in the Class A certificates. Accordingly, among other factors, Plan fiduciaries and other Plan investors should consider whether the investment (i) satisfies the diversification requirement of ERISA or other applicable law, (ii) is in accordance with the Plan’s governing instruments, and (iii) is prudent in light of the “Risk Factors” and other factors discussed in the accompanying prospectus.


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Underwriting
 
Subject to the terms and conditions set forth in the underwriting agreement among the transferors, American Express Centurion Bank, American Express Bank, FSB and the underwriters of the Class A certificates named below, the transferors have agreed to cause the trust to sell to the underwriters, and the underwriters have agreed to purchase, the principal amount of the Class A certificates set forth opposite their names:
 
         
    Aggregate Principal Amount
Underwriters of the Class A Certificates
  of Class A Certificates
 
Deutsche Bank Securities Inc. 
  $ 197,500,000  
J.P. Morgan Securities Inc. 
    197,500,000  
Banc of America Securities LLC
    197,500,000  
Merrill Lynch, Pierce, Fenner & Smith Incorporated
    197,500,000  
Williams Capital Group, L.P. 
    10,000,000  
         
Total
  $ 800,000,000  
         
 
TRS, an affiliate of the transferors, will purchase directly all of the Class B certificates upon initial issuance and, at a subsequent date, may sell all or a portion of those certificates in one or more negotiated transactions, or otherwise, at varying prices to be determined at the time of sale. In connection with any such sale, TRS may be deemed to be an underwriter of the Class B certificates under the Securities Act of 1933 and any discounts or commissions received by it and any profit realized by it on the sale or resale of the Class B certificates may be deemed to be underwriting discounts and commissions. However, there currently is no underwriting arrangement with respect to the Class B certificates.
 
The underwriting agreement provides that the obligation of the Class A underwriters to pay for and accept delivery of the Class A certificates is subject to the approval of certain legal matters by their counsel and to certain other conditions. All of the Series 2008-5 certificates offered hereby will be issued if any are issued. Offering expenses are estimated to be $600,000.
 
The Class A underwriters propose initially to offer the Class A certificates to the public at the price set forth on the cover page hereof and to certain dealers at such price less concessions not in excess of 0.1350% of the principal amount of the Class A certificates. The Class A underwriters may allow, and such dealers may reallow, concessions not in excess of 0.1125% of the principal amount of the Class A certificates to certain brokers and dealers. After the initial public offering, the public offering price and other selling terms may be changed by the Class A underwriters.
 
Each underwriter of these Series 2008-5 certificates has agreed that:
 
  •  it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000, or the FSMA, with respect to anything done by it in relation to the Series 2008-5 certificates in, from or otherwise involving the United Kingdom; and
 
  •  it has only and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Series 2008-5 certificates in circumstances in which Section 21(1) of the FSMA does not apply to the trust.
 
The underwriters may engage in over-allotment transactions, stabilizing transactions, syndicate covering transactions and penalty bids with respect to the Series 2008-5 certificates in accordance with Regulation M under the Securities Exchange Act of 1934, as amended. Over-allotment transactions involve syndicate sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit bids to purchase the Series 2008-5 certificates so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of the Series 2008-5 certificates in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the Series 2008-5 certificates originally sold by such syndicate member are purchased in a syndicate covering transaction. Such over-allotment transactions, stabilizing transactions, syndicate-covering transactions and penalty bids may cause the prices of the Series 2008-5 certificates to be higher than they would be in the absence of such transactions. Neither the transferors nor any of the underwriters represent that the underwriters will engage in any such transactions or that such transactions, once commenced, will not be discontinued without notice at any time.


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In the ordinary course of their respective businesses, the underwriters and their respective affiliates have engaged and may in the future engage in investment banking or commercial banking transactions with the transferors, TRS, Centurion, FSB or any of their affiliates.
 
Centurion, on behalf of itself and RFC III, FSB, on behalf of itself and RFC IV, and RFC II will indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or contribute to payments the underwriters may be required to make in respect thereof.


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Glossary of Defined Terms
 
“Adjusted Invested Amount” for any date of determination means the sum of the Class A Adjusted Invested Amount and the Class B Adjusted Invested Amount and the Collateral Invested Amount as of such date.
 
“Available Principal Collections” means, with respect to any Monthly Period, an amount equal to the sum of:
 
(i) the Principal Allocation Percentage of the Series Allocation Percentage of all collections of principal receivables received during such Monthly Period (minus certain Reallocated Principal Collections used to fund the Class A Required Amount and the Class B Required Amount),
 
(ii) any Shared Principal Collections with respect to other principal sharing series that are allocated to Series 2008-5 and
 
(iii) certain other amounts which pursuant to the Series 2008-5 supplement are to be treated as Available Principal Collections with respect to the related Distribution Date.
 
“Available Reserve Account Amount” means, on each Distribution Date, the amount available to be withdrawn from the Reserve Account equal to the lesser of the amount on deposit in the Reserve Account (before giving effect to any deposit to be made to the Reserve Account on such Distribution Date) and the Required Reserve Account Amount for such Distribution Date.
 
“Base Rate” means, for any Monthly Period, the annualized percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
  •  the numerator of which is equal to the sum of the Class A Monthly Interest, the Class B Monthly Interest (calculated as if the Class B Invested Amount equals the outstanding principal balance of the Class B certificates), the Collateral Minimum Monthly Interest and the Monthly Servicing Fee for the Series 2008-5 certificates and for the Collateral Interest for the related Distribution Date, and
 
  •  the denominator of which is the Invested Amount as of the last day of the preceding Monthly Period.
 
“Business Day” means, for purposes of this prospectus supplement and the accompanying prospectus (unless otherwise indicated), any day other than (a) a Saturday or Sunday, or (b) any other day on which banking institutions in New York, New York or any other state in which the principal executive offices of Centurion, FSB, any other account owner or the trustee are located, are authorized or are obligated by law or executive order to be closed.
 
“Class A Additional Interest” means an amount paid on each Distribution Date, if applicable, equal to the product of:
 
(i) the actual number of days in the related Interest Period divided by 360,
 
(ii) the Class A certificate rate for that Interest Period plus 2.0% per year, and
 
(iii) the amount payable on interest amounts that were due but not distributed to the Class A certificateholders on a prior Distribution Date.
 
“Class A Adjusted Invested Amount” for any date of determination means an amount equal to the Class A Invested Amount minus the funds on deposit in the Principal Funding Account (up to the Class A Invested Amount) on such date.
 
“Class A Available Funds” means, with respect to any Monthly Period, an amount equal to the sum of:
 
(i) the Class A Floating Percentage of Reallocated Investor Finance Charge Collections allocated to the Series 2008-5 certificates and the Collateral Interest with respect to such Monthly Period (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables allocable to Series 2008-5 in accordance with the pooling and servicing agreement and the Series 2008-5 supplement),
 
(ii) if such Monthly Period relates to a Distribution Date with respect to the Controlled Accumulation Period, the Class A Floating Percentage of net investment earnings, if any, in the Principal Funding Account for such Distribution Date, and


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(iii) amounts, if any, to be withdrawn from the Reserve Account that must be included in Class A Available Funds pursuant to the Series 2008-5 supplement with respect to the related Distribution Date.
 
“Class A Floating Percentage” means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
  •  the numerator of which is equal to the Class A Adjusted Invested Amount as of the close of business on the last day of the preceding Monthly Period (or, with respect to the first Monthly Period, the Class A Initial Invested Amount), and
 
  •  the denominator of which is equal to the Adjusted Invested Amount as of the close of business on such day (or, with respect to the first Monthly Period, the Initial Invested Amount).
 
“Class A Initial Invested Amount” means $800,000,000.
 
“Class A Invested Amount” for any date of determination means an amount equal to:
 
(i) the Class A Initial Invested Amount, minus
 
(ii) the amount of principal payments made to the Class A certificateholders on or prior to such date, minus
 
(iii) the excess, if any, of the aggregate amount of Class A Investor Charge-Offs for all prior Distribution Dates over the aggregate amount of any reimbursements of Class A Investor Charge-Offs for all Distribution Dates prior to such date;
 
provided, however, that the Class A Invested Amount may not be reduced below zero.
 
“Class A Investor Charge-Off” has the meaning described in “Series Provisions — Defaulted Receivables; Investor Charge-Offs — Class A Investor Charge-Offs” in this prospectus supplement.
 
“Class A Investor Default Amount” means, for any Distribution Date, the portion of the Investor Default Amount allocated to the Class A certificates in an amount equal to the product of the Class A Floating Percentage applicable during the related Monthly Period and the Investor Default Amount for such Distribution Date.
 
“Class A Monthly Interest” means, for any Distribution Date, an amount equal to the product of:
 
(i) the actual number of days in the related Interest Period divided by 360,
 
(ii) the Class A certificate rate in effect for that Interest Period, and
 
(iii) the outstanding principal amount of the Class A certificates as of the preceding Record Date;
 
provided, however, that for the first Distribution Date, Class A Monthly Interest shall be equal to the interest accrued on the initial principal amount of the Class A certificates at the Class A certificate rate for the initial Interest Period.
 
“Class A Outstanding Monthly Interest” means, for any Distribution Date, the amount of Class A Monthly Interest previously due but not paid to Class A certificateholders on a prior Distribution Date.
 
“Class A Principal Percentage” means, with respect to any Monthly Period:
 
  •  during the Revolving Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
(i) the numerator of which is the Class A Invested Amount as of the last day of the immediately preceding Monthly Period (or, with respect to the first Monthly Period, the Class A Initial Invested Amount), and
 
(ii) the denominator of which is the Invested Amount as of such day (or, with respect to the first Monthly Period, the Initial Invested Amount), and
 
  •  during the Controlled Accumulation Period or the Early Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
(i) the numerator of which is the Class A Invested Amount as of the end of the Revolving Period, and


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(ii) the denominator of which is the Invested Amount as of such day.
 
“Class A Required Amount” means, for any Determination Date, the amount equal to:
 
(i) Class A Monthly Interest for the related Distribution Date, plus
 
(ii) any Class A Outstanding Monthly Interest, plus
 
(iii) any Class A Additional Interest, plus
 
(iv) if TRS or an affiliate is no longer the servicer, the Class A Servicing Fee for the related Distribution Date and any unpaid Class A Servicing Fee, plus
 
(v) the Class A Investor Default Amount, if any, for the related Distribution Date, minus
 
(vi) Class A Available Funds for the related Monthly Period.
 
“Class A Servicing Fee” has the meaning described in “Series Provisions — Servicing Compensation and Payment of Expenses” in this prospectus supplement.
 
“Class B Additional Interest” means an amount paid on each Distribution Date, if applicable, equal to the product of:
 
(i) the actual number of days in the related Interest Period divided by 360,
 
(ii) the Class B certificate rate for that Interest Period plus 2.0% per year, and
 
(iii) the amount payable on interest amounts that were due but not distributed to the Class B certificateholders on a prior Distribution Date.
 
“Class B Adjusted Invested Amount” for any date of determination means an amount equal to the Class B Invested Amount minus the funds on deposit in the Principal Funding Account (up to the Class B Invested Amount) on such date.
 
“Class B Available Funds” means, with respect to any Monthly Period, an amount equal to the sum of:
 
(i) the Class B Floating Percentage of Reallocated Investor Finance Charge Collections allocated to the Series 2008-5 certificates and the Collateral Interest with respect to such Monthly Period (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables allocable to Series 2008-5 in accordance with the pooling and servicing agreement and the Series 2008-5 supplement), and
 
(ii) if such Monthly Period relates to a Distribution Date with respect to the Controlled Accumulation Period, the Class B Floating Percentage of net investment earnings, if any, in the Principal Funding Account for such Distribution Date.
 
“Class B Floating Percentage” means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
  •  the numerator of which is equal to the Class B Adjusted Invested Amount as of the close of business on the last day of the preceding Monthly Period (or, with respect to the first Monthly Period, the Class B Initial Invested Amount), and
 
  •  the denominator of which is equal to the Adjusted Invested Amount as of the close of business on such day (or, with respect to the first Monthly Period, the Initial Invested Amount).
 
“Class B Initial Invested Amount” means $50,000,000.
 
“Class B Invested Amount” for any date of determination means an amount equal to:
 
(i) the Class B Initial Invested Amount, minus
 
(ii) the amount of principal payments made to Class B certificateholders on or prior to such date, minus
 
(iii) the aggregate amount of Class B Investor Charge-Offs for all prior Distribution Dates, minus


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(iv) the aggregate amount of Reallocated Principal Collections for all prior Distribution Dates which have been used to fund the Class A Required Amount with respect to such Distribution Dates (excluding any Reallocated Principal Collections that have resulted in a reduction of the Collateral Invested Amount), minus
 
(v) an amount equal to the amount by which the Class B Invested Amount has been reduced to cover the Class A Investor Default Amount on all prior Distribution Dates as described under “Series Provisions — Defaulted Receivables; Investor Charge-Offs” in this prospectus supplement, plus
 
(vi) the aggregate amount of Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 and applied on all prior Distribution Dates for the purpose of reimbursing amounts deducted as described in clauses (iii), (iv) and (v) above;
 
provided, however, that the Class B Invested Amount may not be reduced below zero.
 
“Class B Investor Charge-Off” has the meaning described in “Series Provisions — Defaulted Receivables; Investor Charge-Offs — Reductions in Class B Invested Amount and Collateral Invested Amount” in this prospectus supplement.
 
“Class B Investor Default Amount” means, for any Distribution Date, the portion of the Investor Default Amount allocated to the Class B certificates in an amount equal to the product of the Class B Floating Percentage applicable during the related Monthly Period and the Investor Default Amount for such Distribution Date.
 
“Class B Monthly Interest” means, for any Distribution Date, an amount equal to the product of:
 
(i) the actual number of days in the related Interest Period divided by 360,
 
(ii) the Class B certificate rate in effect for that Interest Period, and
 
(iii) the Class B Invested Amount as of the preceding Record Date;
 
provided, however, that for the first Distribution Date, Class B Monthly Interest shall be equal to the interest accrued on the initial principal amount of the Class B certificates at the Class B certificate rate for the initial Interest Period.
 
“Class B Outstanding Monthly Interest” means, for any Distribution Date, the amount of Class B Monthly Interest previously due but not paid to Class B certificateholders on a prior Distribution Date.
 
“Class B Principal Percentage” means, with respect to any Monthly Period:
 
  •  during the Revolving Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
(i) the numerator of which is the Class B Invested Amount as of the last day of the immediately preceding Monthly Period (or, with respect to the first Monthly Period, the Class B Initial Invested Amount), and
 
(ii) the denominator of which is the Invested Amount as of such day (or, with respect to the first Monthly Period, the Initial Invested Amount), and
 
  •  during the Controlled Accumulation Period or the Early Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
(i) the numerator of which is the Class B Invested Amount as of the end of the Revolving Period, and
 
(ii) the denominator of which is the Invested Amount as of such day.
 
“Class B Required Amount” means, for any Determination Date, the amount equal to:
 
(i) Class B Monthly Interest for the related Distribution Date, plus
 
(ii) any Class B Outstanding Monthly Interest, plus
 
(iii) any Class B Additional Interest, plus
 
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(v) the Class B Investor Default Amount, if any, for the related Distribution Date, minus
 
(vi) Class B Available Funds for the related Monthly Period.
 
“Class B Servicing Fee” has the meaning described in “Series Provisions — Servicing Compensation and Payment of Expenses” in this prospectus supplement.
 
“Collateral Additional Interest” means, for any Distribution Date, additional interest on Collateral Minimum Monthly Interest due but not paid to the holder of the Collateral Interest on a prior Distribution Date at a rate equal to the Collateral Minimum Interest Rate.
 
“Collateral Available Funds” means, for any Monthly Period, an amount equal to the Collateral Floating Percentage of Reallocated Investor Finance Charge Collections (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables allocable to Series 2008-5 in accordance with the pooling and servicing agreement and the Series 2008-5 supplement).
 
“Collateral Charge-Off” has the meaning described in “Series Provisions — Defaulted Receivables; Investor Charge-Offs — Reductions in Class B Invested Amount and Collateral Invested Amount” in this prospectus supplement.
 
“Collateral Default Amount” means, with respect to any Distribution Date, the product of the Investor Default Amount for such Distribution Date and the Collateral Floating Percentage.
 
“Collateral Floating Percentage” means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
  •  the numerator of which is equal to the Collateral Invested Amount as of the close of business on the last day of the preceding Monthly Period (or, with respect to the first Monthly Period, the Collateral Initial Invested Amount), and
 
  •  the denominator of which is equal to the Adjusted Invested Amount as of the close of business on such day (or, with respect to the first Monthly Period, the Initial Invested Amount).
 
“Collateral Initial Invested Amount” means an amount equal to 6.50% of the Initial Invested Amount.
 
“Collateral Interest” means an uncertificated interest in the trust assets that is subordinated to, and serves as credit enhancement for, the Series 2008-5 certificates.
 
“Collateral Interest Servicing Fee” has the meaning described in “Series Provisions — Servicing Compensation and Payment of Expenses” in this prospectus supplement.
 
“Collateral Invested Amount” for any date of determination means an amount equal to:
 
(i) the Collateral Initial Invested Amount, minus
 
(ii) the amount of principal payments made to the holder of the Collateral Interest on or prior to such date, minus
 
(iii) the aggregate amount of Collateral Charge-Offs for all prior Distribution Dates, minus
 
(iv) the aggregate amount of Reallocated Principal Collections for all prior Distribution Dates, minus
 
(v) an amount equal to the amount by which the Collateral Invested Amount has been reduced to cover the Class A Investor Default Amount and the Class B Investor Default Amount on all prior Distribution Dates as described under “Series Provisions — Defaulted Receivables; Investor Charge-Offs” in this prospectus supplement, plus
 
(vi) the aggregate amount of Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 and applied on all prior Distribution Dates for the purpose of reimbursing amounts deducted as described in clauses (iii), (iv) and (v) above;
 
provided, however, that the Collateral Invested Amount may not be reduced below zero.


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“Collateral Minimum Interest Rate” means an annual rate specified in the agreement among RFC II, RFC III, RFC IV, TRS and the holder of the Collateral Interest relating to the transfer of the Collateral Interest from RFC II, RFC III and RFC IV to the holder of the Collateral Interest, which rate will not exceed LIBOR for one-month United States dollar deposits, determined as of the related LIBOR Determination Date, plus 3.80%.
 
“Collateral Minimum Monthly Interest” means, for any Distribution Date, an amount equal to the product of:
 
(i) the actual number of days in the related Interest Period divided by 360,
 
(ii) the Collateral Minimum Interest Rate in effect for that Interest Period, and
 
(iii) the Collateral Initial Invested Amount minus the aggregate amount of principal payments made to the holder of the Collateral Interest on all prior Distribution Dates.
 
“Collateral Principal Percentage” means, with respect to any Monthly Period:
 
  •  during the Revolving Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
(i) the numerator of which is the Collateral Invested Amount as of the last day of the immediately preceding Monthly Period (or, with respect to the first Monthly Period, the Collateral Initial Invested Amount), and
 
(ii) the denominator of which is the Invested Amount as of such day (or, with respect to the first Monthly Period, the Initial Invested Amount), and
 
  •  during the Controlled Accumulation Period or the Early Amortization Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
(i) the numerator of which is the Collateral Invested Amount as of the end of the Revolving Period, and
 
(ii) the denominator of which is the Invested Amount as of such day.
 
“Controlled Accumulation Amount” means $70,833,333.34; provided, however, that, if the start of the Controlled Accumulation Period is delayed and, therefore, the length of the Controlled Accumulation Period is shortened as described under “Series Provisions — Principal Payments” in this prospectus supplement, the Controlled Accumulation Amount may be different for each Distribution Date for the Controlled Accumulation Period and will be determined by the servicer in accordance with the Series 2008-5 supplement based on the principal payment rates for the accounts and on the invested amounts of other principal sharing series that are scheduled to be in their revolving periods and able to create Shared Principal Collections during the Controlled Accumulation Period.
 
“Controlled Deposit Amount” means, for any Distribution Date relating to the Controlled Accumulation Period, an amount equal to the sum of the Controlled Accumulation Amount for such Distribution Date and any Deficit Controlled Accumulation Amount for the immediately preceding Distribution Date.
 
“Covered Amount” means, for any Distribution Date with respect to the Controlled Accumulation Period or the first Special Payment Date, if such Special Payment Date occurs prior to the payment in full of the Class A Invested Amount, an amount equal to the sum of:
 
(i) the product of:
 
(a) the actual number of days in the related Interest Period divided by 360,
 
(b) the Class A certificate rate in effect for that Interest Period, and
 
(c) the aggregate amount on deposit in the Principal Funding Account, if any, as of the preceding Distribution Date that is allocable to the principal of the Class A certificates, plus
 
(ii) the product of:
 
(a) the actual number of days in the related Interest Period divided by 360,


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(b) the Class B certificate rate in effect for that Interest Period, and
 
(c) the aggregate amount on deposit in the Principal Funding Account, if any, as of the preceding Distribution Date that is allocable to the principal of the Class B certificates.
 
“Deficit Controlled Accumulation Amount” means:
 
(a) on the first Distribution Date for the Controlled Accumulation Period, the excess, if any, of the Controlled Accumulation Amount for such Distribution Date over the amount deposited in the Principal Funding Account on such Distribution Date, and
 
(b) on each subsequent Distribution Date for the Controlled Accumulation Period, the excess, if any, of the Controlled Deposit Amount for such subsequent Distribution Date over the amount deposited in the Principal Funding Account on such subsequent Distribution Date.
 
“Excess Spread” means, for any Distribution Date, an amount equal to the sum of the amounts described in clause (A)(iv), clause (B)(iii) and clause (C)(ii) in “Series Provisions — Application of Collections — Payment of Interest, Fees and Other Items” in this prospectus supplement.
 
“Expected Final Payment Date” means the August 2013 Distribution Date.
 
“Floating Allocation Percentage” means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
  •  the numerator of which is the Adjusted Invested Amount as of the last day of the preceding Monthly Period (or, with respect to the first Monthly Period, the Initial Invested Amount), and
 
  •  the denominator of which is the product of:
 
(i) the sum of the total amount of the principal receivables in the trust as of such day (or, with respect to the first Monthly Period, the total amount of principal receivables in the trust on the closing date) and the principal amount on deposit in the Special Funding Account, and
 
(ii) the Series Allocation Percentage for such Monthly Period.
 
However, the amount calculated above pursuant to clause (i) of the denominator shall be increased by the aggregate amount of principal receivables in Additional Accounts added to the trust during such Monthly Period and decreased by the aggregate amount of principal receivables in Additional Accounts removed from the trust during such Monthly Period, as though such receivables had been added to or removed from, as the case may be, the trust as of the first day of such Monthly Period.
 
“Initial Invested Amount” means $909,091,000.
 
“Interest Period” means, for any Distribution Date, a period from and including the preceding Distribution Date to but excluding such Distribution Date; provided, however, that the initial Interest Period will be the period from and including the closing date to but excluding the July 2008 Distribution Date.
 
“Invested Amount” for any date of determination means an amount equal to the sum of the Class A Invested Amount as of such date, the Class B Invested Amount as of such date and the Collateral Invested Amount as of such date.
 
“Investor Default Amount” means, for any Distribution Date, the product of (i) the Floating Allocation Percentage for the related Monthly Period and (ii) the Series Allocable Defaulted Amount for such Monthly Period.
 
“LIBOR” means, as of any LIBOR Determination Date, the rate for deposits in United States dollars for a one-month period which appears on Reuters Screen LIBOR01 Page (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices) as of 11:00 a.m., London time, on such date. If such rate does not appear on that page, the rate for that LIBOR Determination Date will be determined on the basis of the rates at which deposits in United States dollars are offered by four reference banks in the London interbank market for a one-month period (commencing on the first day of the relevant Interest Period). The servicer will request the principal London office of each of the reference banks to provide a quotation of its rate. If at least two quotations are


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provided, the rate for that LIBOR Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, the rate for that LIBOR Determination Date will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the servicer, at approximately 11:00 a.m., New York City time, on that day for loans in United States dollars to leading European banks for a one-month period (commencing on the first day of the relevant Interest Period). If the banks selected by the servicer are not quoting rates as provided in the immediately preceding sentence, LIBOR for such Interest Period will be LIBOR for the immediately preceding Interest Period.
 
“LIBOR Determination Date” means, for each of the Class A certificate rate, the Class B certificate rate and the Collateral Minimum Interest Rate, (i) for the initial Interest Period, the second London business day prior to the closing date and (ii) for each Interest Period following the initial Interest Period, the second London business day prior to the first day of such Interest Period. For purposes of the LIBOR Determination Date, a London business day is any day on which dealings in deposits in United States dollars are transacted in the London interbank market.
 
“Monthly Receivables Percentage” means, for any day, the percentage equivalent of a fraction:
 
  •  the numerator of which is an amount equal to the sum of the aggregate amount of principal receivables outstanding in the trust attributable to the transferor or the account owner with respect to which an insolvency event has occurred or to the transferor that is unable to transfer receivables to the trust, and
 
  •  the denominator of which is an amount equal to the sum of the aggregate amount of principal receivables outstanding in the trust,
 
in each case as of the last day of the immediately preceding Monthly Period.
 
“Monthly Servicing Fee” has the meaning described in “Series Provisions — Servicing Compensation and Payment of Expenses” in this prospectus supplement.
 
“Principal Allocation Percentage” means, with respect to any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction:
 
  •  the numerator of which is:
 
(i) during the Revolving Period, the Series Adjusted Invested Amount for Series 2008-5 as of the last day of the immediately preceding Monthly Period (or, with respect to the first Monthly Period, the Initial Invested Amount), and
 
(ii) during the Controlled Accumulation Period or the Early Amortization Period, the Series Adjusted Invested Amount for Series 2008-5 as of the last day of the Revolving Period, and
 
  •  the denominator of which is the product of:
 
(i) the sum of the total amount of principal receivables in the trust as of the last day of the immediately preceding Monthly Period and the principal amount on deposit in the Special Funding Account as of such last day (or, with respect to the first Monthly Period, as of the closing date), and
 
(ii) the Series Allocation Percentage for Series 2008-5 as of the last day of the immediately preceding Monthly Period.
 
However, the amount calculated above pursuant to clause (i) of the denominator shall be increased by the aggregate amount of principal receivables in Additional Accounts added to the trust during such Monthly Period and decreased by the aggregate amount of principal receivables in Additional Accounts removed from the trust during such Monthly Period, as though such receivables had been added to or removed from, as the case may be, the trust as of the first day of such Monthly Period.
 
Because the Series 2008-5 certificates are subject to being paired with a future series, if a Pay-Out Event or a Reinvestment Event occurs with respect to a paired series during the Controlled Accumulation Period for Series 2008-5, the transferors may, by written notice to the trustee and the servicer, designate a different numerator for the foregoing fraction, provided that such numerator is not less than the Adjusted Invested Amount as of the last day of the Revolving Period for such paired series and the transferors shall have received written notice from each


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Rating Agency that such designation will satisfy the Rating Agency Condition and shall have delivered copies of each such written notice to the servicer and the trustee. In addition, each transferor shall have delivered to the trustee a certificate of an authorized officer to the effect that, based on the facts known to such officer at the time, in the reasonable belief of such transferor, such designation will not cause a Pay-Out Event or an event that, after the giving of notice or lapse of time, would constitute a Pay-Out Event, to occur with respect to Series 2008-5.
 
“Principal Funding Account” means the account established as described under “Series Provisions — Principal Funding Account” in this prospectus supplement.
 
“Reallocated Principal Collections” means, for any Distribution Date, the collections of principal receivables allocable first to the Collateral Interest and then, in the case of the Class A Required Amount, to the Class B certificates that are used to fund the excess, if any, of the Class A Required Amount and the Class B Required Amount remaining after Excess Spread and Excess Finance Charge Collections allocated to Series 2008-5 and available for such purpose have been used to fund the Class A Required Amount and the Class B Required Amount.
 
“Record Date” means, for any Distribution Date, the last day of the calendar month immediately preceding that Distribution Date.
 
“Required Reserve Account Amount” for any Distribution Date on or after the Reserve Account must be funded will be equal to:
 
(i) 0.50% of the Class A Invested Amount as of the preceding Distribution Date (after giving effect to all changes therein on such date), or
 
(ii) such other amount designated by the transferors, provided that the holder of the Collateral Interest shall have consented to such designation and such designation satisfies the Rating Agency Condition.
 
“Series 2008-5” means the series of Class A certificates, Class B certificates and Collateral Interest, the terms of which are described in this prospectus supplement and the accompanying prospectus.
 
“Series 2008-5 Termination Date” means the March 2016 Distribution Date.
 
“Series Adjusted Invested Amount” means, with respect to Series 2008-5, for any Monthly Period, the Initial Invested Amount for Series 2008-5, less the excess, if any, of all reductions in the Invested Amount (other than any reductions occasioned by payments of principal to the Series 2008-5 certificateholders or to the holder of the Collateral Interest) as of the last day of the preceding Monthly Period over the aggregate amount of any reimbursement of such reductions as of such last day.
 
“Series Adjusted Portfolio Yield” means, for any Monthly Period, the annualized percentage equivalent of a fraction:
 
  •  the numerator of which is equal to:
 
(i) Reallocated Investor Finance Charge Collections (including any investment earnings and certain other amounts that are to be treated as collections of finance charge receivables allocable to Series 2008-5 in accordance with the pooling and servicing agreement) for such Monthly Period, plus
 
(ii) the amount of investment earnings, if any, in the Principal Funding Account for the related Distribution Date, plus
 
(iii) any Excess Finance Charge Collections that are allocated to Series 2008-5, plus
 
(iv) the amount of funds withdrawn from the Reserve Account and which are required to be deposited into the Collection Account and included as Class A Available Funds for the Distribution Date for such Monthly Period, minus
 
(v) the Investor Default Amount for the Distribution Date for such Monthly Period, and
 
  •  the denominator of which is the Invested Amount as of the last day of the preceding Monthly Period.
 
“Series Allocable Finance Charge Collections,” “Series Allocable Principal Collections” and “Series Allocable Defaulted Amount” mean, with respect to Series 2008-5, for any Monthly Period, the product


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of (i) the Series Allocation Percentage for Series 2008-5 and (ii) the amount of collections of finance charge receivables deposited in the Collection Account, the amount of collections of principal receivables deposited in the Collection Account and the amount of all Defaulted Amounts with respect to such Monthly Period, respectively.
 
“Series Allocation Percentage” means, with respect to Series 2008-5, for any Monthly Period, the percentage equivalent (which percentage shall never exceed 100%) of a fraction, the numerator of which is the Series Adjusted Invested Amount for Series 2008-5 as of the last day of the immediately preceding Monthly Period and the denominator of which is the Trust Adjusted Invested Amount.
 
“Series Required Transferor Amount” for any date of determination means 7.0% of the Invested Amount.
 
“Servicing Base Amount” means, for any Distribution Date, (i) the Adjusted Invested Amount as of the last day of the Monthly Period preceding such Distribution Date, minus (ii) the product of the amount, if any, on deposit in the Special Funding Account as of the last day of the Monthly Period preceding such Distribution Date and the Series Allocation Percentage with respect to such Monthly Period.
 
“Servicing Fee Rate” means 2.0% per year.
 
“Trust Portfolio” means certain accounts selected from the Total Portfolio and designated for the trust based on the eligibility criteria specified in the purchase agreements and the pooling and servicing agreement.


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Annex I
 
Other Series
 
The information provided in this Annex I is an integral part of the prospectus supplement.
 
The table below sets forth the principal characteristics of all other series issued by the trust and currently outstanding.
 
Series 2002-5
 
     
Initial Invested Amount   $600,000,000
Class A Initial Invested Amount   $495,000,000
Class A Certificate Rate   One-Month LIBOR plus 0.17% per year
Class B Initial Invested Amount   $48,000,000
Class B Certificate Rate   One-Month LIBOR plus 0.45% per year
Controlled Accumulation Amount (subject to adjustment)   $45,250,000
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)   July 1, 2008
Annual Servicing Fee Percentage   2.0% per year
Collateral Initial Invested Amount   $57,000,000
Enhancement for the Class A and Class B Certificates   Collateral Invested Amount
Other enhancement for the Class A Certificates   Subordination of the Class B Certificates
Expected Final Payment Date   July 2009 Distribution Date
Series Issuance Date   July 17, 2002
Principal Sharing Series   Yes
Excess Allocation Series   Yes
Group   Group II
 
Series 2004-1
 
     
Initial Invested Amount
  $800,000,000
Class A Initial Invested Amount
  $668,000,000
Class A Certificate Rate
  One-Month LIBOR plus 0.08% per year
Class B Initial Invested Amount
  $60,000,000
Class B Certificate Rate
  One-Month LIBOR plus 0.25% per year
Controlled Accumulation Amount (subject to adjustment)
  $60,666,666.67
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  February 1, 2008
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $72,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  February 2009 Distribution Date
Series Issuance Date
  March 1, 2004
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Series 2004-2
 
     
Initial Invested Amount
  $400,000,000
Class A Initial Invested Amount
  $334,000,000
Class A Certificate Rate
  One-Month LIBOR plus 0.17% per year
Class B Initial Invested Amount
  $30,000,000
Class B Certificate Rate
  One-Month LIBOR plus 0.37% per year
Controlled Accumulation Amount (subject to adjustment)
  $30,333,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  May 1, 2013
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $36,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  May 2014 Distribution Date
Series Issuance Date
  June 2, 2004
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2004-3
 
     
Initial Invested Amount
  $600,000,000
Class A Initial Invested Amount
  $522,000,000
Class A Certificate Rate
  4.35% per year
Class B Initial Invested Amount
  $30,000,000
Class B Certificate Rate
  4.55% per year
Controlled Accumulation Amount (subject to adjustment)
  $46,000,000
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  May 1, 2008
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $48,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  May 2009 Distribution Date
Series Issuance Date
  June 2, 2004
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group I


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Series 2004-4
 
     
Initial Invested Amount
  $1,100,000,000
Class A Initial Invested Amount
  $918,500,000
Class A Certificate Rate
  One-Month LIBOR plus 0.09% per year
Class B Initial Invested Amount
  $82,500,000
Class B Certificate Rate
  One-Month LIBOR plus 0.28% per year
Controlled Accumulation Amount (subject to adjustment)
  $83,416,666.67
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  August 1, 2008
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $99,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  August 2009 Distribution Date
Series Issuance Date
  August 17, 2004
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2004-5
 
     
Initial Invested Amount
  $1,000,000,000
Class A Initial Invested Amount
  $835,000,000
Class A Certificate Rate
  One-Month LIBOR plus 0.09% per year
Class B Initial Invested Amount
  $75,000,000
Class B Certificate Rate
  One-Month LIBOR plus 0.25% per year
Controlled Accumulation Amount (subject to adjustment)
  $75,833,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  September 1, 2008
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $90,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  September 2009 Distribution Date
Series Issuance Date
  September 23, 2004
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Series 2005-1
 
     
Initial Invested Amount
  $600,000,000
Class A Initial Invested Amount
  $501,000,000
Class A Certificate Rate
  One-Month LIBOR plus 0.03% per year
Class B Initial Invested Amount
  $45,000,000
Class B Certificate Rate
  One-Month LIBOR plus 0.12% per year
Controlled Accumulation Amount (subject to adjustment)
  $45,500,000
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  March 1, 2009
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $54,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  March 2010 Distribution Date
Series Issuance Date
  March 24, 2005
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2005-2
 
     
Initial Invested Amount
  $600,000,000
Class A Initial Invested Amount
  $501,000,000
Class A Certificate Rate
  One-Month LIBOR plus 0.10% per year
Class B Initial Invested Amount
  $45,000,000
Class B Certificate Rate
  One-Month LIBOR plus 0.28% per year
Controlled Accumulation Amount (subject to adjustment)   $45,500,000
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  March 1, 2014
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $54,000,000
Enhancement for the Class A and Class B Certificates   Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  March 2015 Distribution Date
Series Issuance Date
  March 24, 2005
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Table of Contents

Series 2005-3
 
     
Initial Invested Amount
  $700,000,000
Class A Initial Invested Amount
  $584,500,000
Class A Certificate Rate
  One-Month LIBOR plus 0.00% per year
Class B Initial Invested Amount
  $52,500,000
Class B Certificate Rate
  One-Month LIBOR plus 0.14% per year
Controlled Accumulation Amount (subject to adjustment)
  $53,083,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  June 1, 2007
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $63,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  June 2008 Distribution Date
Series Issuance Date
  June 17, 2005
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2005-4
 
     
Initial Invested Amount
  $500,000,000
Class A Initial Invested Amount
  $417,500,000
Class A Certificate Rate
  One-Month LIBOR plus 0.07% per year
Class B Initial Invested Amount
  $37,500,000
Class B Certificate Rate
  One-Month LIBOR plus 0.25% per year
Controlled Accumulation Amount (subject to adjustment)
  $37,916,666.67
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  June 1, 2011
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $45,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  June 2012 Distribution Date
Series Issuance Date
  June 17, 2005
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Table of Contents

Series 2005-5
 
     
Initial Invested Amount
  $1,100,000,000
Class A Initial Invested Amount
  $918,500,000
Class A Certificate Rate
  One-Month LIBOR plus 0.04% per year
Class B Initial Invested Amount
  $82,500,000
Class B Certificate Rate
  One-Month LIBOR plus 0.18% per year
Controlled Accumulation Amount (subject to adjustment)
  $83,416,666.67
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  July 1, 2009
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $99,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  July 2010 Distribution Date
Series Issuance Date
  July 21, 2005
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2005-6
 
     
Initial Invested Amount
  $700,000,000
Class A Initial Invested Amount
  $584,500,000
Class A Certificate Rate
  One-Month LIBOR plus 0.00% per year
Class B Initial Invested Amount
  $52,500,000
Class B Certificate Rate
  One-Month LIBOR plus 0.14% per year
Controlled Accumulation Amount (subject to adjustment)
  $53,083,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  August 1, 2007
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $63,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  August 2008 Distribution Date
Series Issuance Date
  August 18, 2005
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Table of Contents

Series 2005-7
 
     
Initial Invested Amount
  $700,000,000
Class A Initial Invested Amount
  $584,500,000
Class A Certificate Rate
  One-Month LIBOR plus 0.07% per year
Class B Initial Invested Amount
  $52,500,000
Class B Certificate Rate
  One-Month LIBOR plus 0.27% per year
Controlled Accumulation Amount (subject to adjustment)
  $53,083,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  August 1, 2011
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $63,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  August 2012 Distribution Date
Series Issuance Date
  August 18, 2005
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2005-8
 
     
Initial Invested Amount
  $500,000,000
Class A Initial Invested Amount
  $417,500,000
Class A Certificate Rate
  One-Month LIBOR plus 0.03% per year
Class B Initial Invested Amount
  $37,500,000
Class B Certificate Rate
  One-Month LIBOR plus 0.17% per year
Controlled Accumulation Amount (subject to adjustment)
  $37,916,666.67
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  November 1, 2009
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $45,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  November 2010 Distribution Date
Series Issuance Date
  November 22, 2005
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Table of Contents

Series 2006-A
 
     
Initial Invested Amount
  $700,000,000
Class A Initial Invested Amount
  $584,500,000
Class A Certificate Rate
  Floating Rate
Class B Initial Invested Amount
  $52,500,000
Class B Certificate Rate
  Floating Rate
Controlled Accumulation Amount (subject to adjustment)
  $53,083,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  January 1, 2008
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $63,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  January 2009 Distribution Date
Series Issuance Date
  February 15, 2006
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2006-B
 
     
Initial Invested Amount
  $700,000,000
Class A Initial Invested Amount
  $584,500,000
Class A Certificate Rate
  Floating Rate
Class B Initial Invested Amount
  $52,500,000
Class B Certificate Rate
  Floating Rate
Controlled Accumulation Amount (subject to adjustment)
  $53,083,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  January 1, 2010
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $63,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  January 2011 Distribution Date
Series Issuance Date
  February 15, 2006
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Table of Contents

Series 2006-1
 
     
Initial Invested Amount
  $1,000,000,000
Class A Initial Invested Amount
  $835,000,000
Class A Certificate Rate
  One-Month LIBOR plus 0.03% per year
Class B Initial Invested Amount
  $75,000,000
Class B Certificate Rate
  One-Month LIBOR plus 0.14% per year
Controlled Accumulation Amount (subject to adjustment)
  $75,833,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  May 1, 2010
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $90,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  May 2011 Distribution Date
Series Issuance Date
  June 14, 2006
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2006-2
 
     
Initial Invested Amount
  $500,000,000
Class A Initial Invested Amount
  $437,500,000
Class A Certificate Rate
  5.35% per year
Class B Initial Invested Amount
  $27,500,000
Class B Certificate Rate
  5.55% per year
Controlled Accumulation Amount (subject to adjustment)
  $38,750,000
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  June 1, 2010
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $35,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  June 2011 Distribution Date
Series Issuance Date
  June 14, 2006
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group I


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Table of Contents

Series 2006-3
 
     
Initial Invested Amount
  $600,000,000
Class A Initial Invested Amount
  $501,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.02% per year
Class B Initial Invested Amount
  $45,000,000
Class B Certificate Rate
  One-month LIBOR plus 0.12% per year
Controlled Accumulation Amount (subject to adjustment)
  $45,500,000
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  August 1, 2010
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $54,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  August 2011 Distribution Date
Series Issuance Date
  August 15, 2006
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2007-1
 
     
Initial Invested Amount
  $500,000,000
Class A Initial Invested Amount
  $440,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.02% per year
Class B Initial Invested Amount
  $27,500,000
Class B Certificate Rate
  One-month LIBOR plus 0.11% per year
Controlled Accumulation Amount (subject to adjustment)
  $38,958,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  February 1, 2011
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $32,500,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  February 2012 Distribution Date
Series Issuance Date
  February 14, 2007
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Table of Contents

Series 2007-2
 
     
Initial Invested Amount
  $500,000,000
Class A Initial Invested Amount
  $440,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.05% per year
Class B Initial Invested Amount
  $27,500,000
Class B Certificate Rate
  One-month LIBOR plus 0.18% per year
Controlled Accumulation Amount (subject to adjustment)
  $38,958,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  February 1, 2013
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $32,500,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  February 2014 Distribution Date
Series Issuance Date
  February 14, 2007
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2007-3
 
     
Initial Invested Amount
  $600,000,000
Class A Initial Invested Amount
  $528,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.00% per year
Class B Initial Invested Amount
  $33,000,000
Class B Certificate Rate
  One-month LIBOR plus 0.09% per year
Controlled Accumulation Amount (subject to adjustment)
  $46,750,000
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  March 1, 2009
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $39,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  March 2010 Distribution Date
Series Issuance Date
  March 21, 2007
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Table of Contents

Series 2007-4
 
     
Initial Invested Amount
  $800,000,000
Class A Initial Invested Amount
  $704,000,000
Class A Certificate Rate
  One-month LIBOR minus 0.01% per year
Class B Initial Invested Amount
  $44,000,000
Class B Certificate Rate
  One-month LIBOR plus 0.09% per year
Controlled Accumulation Amount (subject to adjustment)
  $62,333,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  May 1, 2009
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $52,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  May 2010 Distribution Date
Series Issuance Date
  May 17, 2007
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2007-5
 
     
Initial Invested Amount
  $500,000,000
Class A Initial Invested Amount
  $440,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.03% per year
Class B Initial Invested Amount
  $27,500,000
Class B Certificate Rate
  One-month LIBOR plus 0.15% per year
Controlled Accumulation Amount (subject to adjustment)
  $38,958,333.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  May 1, 2011
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $32,500,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  May 2012 Distribution Date
Series Issuance Date
  May 17, 2007
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Table of Contents

Series 2007-6
 
     
Initial Invested Amount
  $1,000,000,000
Class A Initial Invested Amount
  $880,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.00% per year
Class B Initial Invested Amount
  $55,000,000
Class B Certificate Rate
  One-month LIBOR plus 0.10% per year
Controlled Accumulation Amount (subject to adjustment)
  $77,916,666.67
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  June 1, 2009
Annual Servicing Fee Percentage
  2.0%per year
Collateral Initial Invested Amount
  $65,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  June 2010 Distribution Date
Series Issuance Date
  July 24, 2007
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2007-7
 
     
Initial Invested Amount
  $900,000,000
Class A Initial Invested Amount
  $792,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.04% per year
Class B Initial Invested Amount
  $49,500,000
Class B Certificate Rate
  One-month LIBOR plus 0.17% per year
Controlled Accumulation Amount (subject to adjustment)
  $70,125,000
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  July 1, 2011
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $58,500,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  .July 2012 Distribution Date
Series Issuance Date
  July 24, 2007
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


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Table of Contents

Series 2007-8
 
     
Initial Invested Amount
  $1,200,000,000
Class A Initial Invested Amount
  $1,056,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.30% per year
Class B Initial Invested Amount
  $66,000,000
Class B Certificate Rate
  One-month LIBOR plus 0.70% per year
Controlled Accumulation Amount (subject to adjustment)
  $93,500,000
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  October 1, 2011
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $78,000,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  October 2012 Distribution Date
Series Issuance Date
  October 15, 2007
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2008-1
 
     
Initial Invested Amount
  $2,875,000,000
Class A Initial Invested Amount
  $2,530,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.45% per year
Class B Initial Invested Amount
  $158,125,000
Class B Certificate Rate
  One-month LIBOR plus 1.35% per year
Controlled Accumulation Amount (subject to adjustment)
  $224,010,416.67
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  January 1, 2010
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $186,875,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  January 2011 Distribution Date
Series Issuance Date
  January 24, 2008
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


A-I-14


Table of Contents

Series 2008-2
 
     
Initial Invested Amount
  $1,363,638,000
Class A Initial Invested Amount
  $1,200,000,000
Class A Certificate Rate
  One-month LIBOR plus 1.26% per year
Class B Initial Invested Amount
  $75,001,000
Class B Certificate Rate
  One-month LIBOR plus 3.75% per year
Controlled Accumulation Amount (subject to adjustment)
  $106,250,083.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  February 1, 2017
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $88,637,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  February 2018 Distribution Date
Series Issuance Date
  February 22, 2008
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II
 
Series 2008-3
 
     
Initial Invested Amount
  $1,704,547,000
Class A Initial Invested Amount
  $1,500,000,000
Class A Certificate Rate
  One-month LIBOR plus 0.95% per year
Class B Initial Invested Amount
  $93,751,000
Class B Certificate Rate
  One-month LIBOR plus 3.50% per year
Controlled Accumulation Amount (subject to adjustment)
  $132,812,583.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  January 1, 2009
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $110,796,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  January 2010 Distribution Date
Series Issuance Date
  April 17, 2008
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


A-I-15


Table of Contents

Series 2008-4
 
     
Initial Invested Amount
  $607,956,000
Class A Initial Invested Amount
  $535,000,000
Class A Certificate Rate
  One-month LIBOR plus 1.40% per year
Class B Initial Invested Amount
  $33,438,000
Class B Certificate Rate
  One-month LIBOR plus 4.25% per year
Controlled Accumulation Amount (subject to adjustment)
  $47,369,833.34
Approximate Commencement of Controlled Accumulation Period (subject to adjustment)
  April 1, 2013
Annual Servicing Fee Percentage
  2.0% per year
Collateral Initial Invested Amount
  $39,518,000
Enhancement for the Class A and Class B Certificates
  Collateral Invested Amount
Other enhancement for the Class A Certificates
  Subordination of the Class B Certificates
Expected Final Payment Date
  April 2014 Distribution Date
Series Issuance Date
  April 17, 2008
Principal Sharing Series
  Yes
Excess Allocation Series
  Yes
Group
  Group II


A-I-16


Table of Contents

 
 
Static Pool Information
 
The information in this Annex II forms an integral part of the prospectus supplement.
 
The following tables present charge-off, delinquency, payment rate and revenue experience of the Total Portfolio. The Total Portfolio is comprised of American Express credit cards and Sign & Travel/Extended Payment Option consumer revolving credit accounts or features owned by Centurion and FSB. Data is presented in separate increments based on the year of origination of the accounts, each an “Origination Segment.” Data is presented for accounts that were originated in 2001 or thereafter. Data for origination years prior to 2001 is not presented, since such data is not available and could not be obtained without unreasonable effort or expense. As of March 31, 2008, the accounts reflected in the following tables had receivables outstanding that were approximately 69.71% of the total receivables outstanding in the Total Portfolio at such date.
 
As used in the tables, the date of origination is generally either the date the account became effective or was first used. The account aging shows activity through the indicated age of the account (e.g., 0-12 months, 13-24 months), which is referred to in this Annex II as the “performance period.” In the following tables, highlighted data is based on a full 12 months of activity for all accounts in the applicable Origination Segment and, therefore, will not change in future disclosures. The data that is not highlighted will change in future disclosures and, in some cases, will reflect activity in an account for less than 12 full months, depending on when the account is originated and when the data for that disclosure is generated.
 
For years prior to January 1, 2006, activity in a particular account for a particular month reflects activity that occurred within such account’s monthly billing cycle, resulting in different end dates during a month for which activity is presented, since there are generally multiple monthly billing cycles within a month. For periods after January 1, 2006, activity in all accounts reflects activity in the relevant Monthly Period. As a result of this change, for accounts whose monthly billing cycle end date was prior to December 25, 2005, data will not be presented for those days subsequent to such account’s monthly billing cycle end date and prior to December 25, 2005 which is the first date in the January 2006 Monthly Period.
 
Because the Trust Portfolio is only a portion of the Total Portfolio, the actual performance of the receivables in the Trust Portfolio may be different from the performance reflected in the tables below. There can be no assurance that the performance of receivables in the future will be similar to the historical experience set forth below.


A-II-1


Table of Contents

Gross Charge-Off Rate of the Total Portfolio
 
As of Date: March 31, 2008
 
                                                 
    0-12
  13-24
  25-36
  37-48
  49-60
  >=61
Origination Year
  Months   Months   Months   Months   Months   Months
 
                                                 
2008 Origination
    0.04%                                          
2007 Origination
    1.18%       6.42%                                  
2006 Origination
    1.98%       6.38%       8.22%                          
2005 Origination
    2.03%       6.04%       7.10%       7.08%                  
2004 Origination
    1.24%       4.66%       5.45%       5.50%       5.93%          
2003 Origination
    1.54%       4.02%       4.42%       4.48%       5.17%       5.43%  
2002 Origination
    2.11%       4.81%       4.85%       4.11%       4.01%       4.69%  
2001 Origination
    2.39%       5.59%       6.11%       5.49%       4.83%       4.44%  
 
 
 
 
 
(Line Graph)
 
 
 
 
 
Total gross charge-offs for any Origination Segment include charge-offs of principal, finance charges and certain fees, but do not include the amount of any reductions in principal receivables due to a rebate, refund, error, fraudulent charge or other miscellaneous adjustment described under “The Pooling and Servicing Agreement Generally — Defaulted Receivables; Rebates and Fraudulent Charges” in the accompanying prospectus. The gross charge-off rate, which is an annualized percentage, results from dividing total gross charge-offs by the average month-end receivables for each month in the applicable performance period, which is referred to in this Annex II as the “average receivables outstanding.”
 
Historical data for total gross charge-offs as reported with respect to the Trust Portfolio (i) unlike the calculation of total gross charge-offs above, does not include charge-offs of finance charges or fee receivables and (ii) is calculated using the average principal receivables outstanding instead of the average receivables outstanding. As a result, there are limitations to any comparison of the historical data presented in this prospectus supplement and the static pool data presented in the table above.


A-II-2


Table of Contents

Net Charge-Off Rate of the Total Portfolio
 
As of Date: March 31, 2008
 
                                                 
    0-12
  13-24
  25-36
  37-48
  49-60
  >=61
Origination Year
  Months   Months   Months   Months   Months   Months
 
2008 Origination
    0.04%                                          
2007 Origination
    1.17%       6.32%                                  
2006 Origination
    1.94%       6.17%       7.79%                          
2005 Origination
    1.99%       5.75%       6.60%       6.53%                  
2004 Origination
    1.21%       4.46%       5.04%       4.98%       5.36%          
2003 Origination
    1.50%       3.83%       4.03%       3.90%       4.56%       4.79%  
2002 Origination
    2.07%       4.59%       4.40%       3.55%       3.37%       4.09%  
2001 Origination
    2.36%       5.38%       5.68%       4.86%       4.10%       3.65%  
 
 
 
(Line Graph)
 
 
 
Total net charge-offs for any Origination Segment are an amount equal to total gross charge-offs minus total recoveries. The net charge-off rate, which is an annualized percentage, results from dividing total net charge-offs by the average receivables outstanding.
 
Historical data for total net charge-offs as reported with respect to the Trust Portfolio in this prospectus supplement is calculated using the average principal receivables outstanding instead of the average receivables outstanding. As a result, there are limitations to any comparison of the historical data presented in this prospectus supplement and the static pool data presented in the tables above.


A-II-3


Table of Contents

30 Days+ Delinquency Rate of the Total Portfolio
 
As of Date: March 31, 2008
 
                                                 
    0-12
  13-24
  25-36
  37-48
  49-60
  >=61
Origination Year
  Months   Months   Months   Months   Months   Months
 
2008 Origination
    0.01%                                          
2007 Origination
    1.07%       3.25%                                  
2006 Origination
    1.44%       3.38%       4.25%                          
2005 Origination
    1.45%       3.03%       3.74%       3.73%                  
2004 Origination
    0.92%       2.08%       2.59%       2.94%       3.33%          
2003 Origination
    1.10%       2.09%       2.35%       2.47%       2.83%       3.19%  
2002 Origination
    1.52%       2.48%       2.52%       2.29%       2.30%       2.61%  
2001 Origination
    1.62%       2.75%       2.96%       2.76%       2.52%       2.49%  
 
 
 
(Line Graph)
 
 
 
The 30 Days+ Delinquency Rate (i.e., accounts 31 days or more delinquent) is the result of dividing the average of the month-end delinquent amounts for each month in the applicable performance period by the average receivables outstanding.
 
For periods prior to January 1, 2006, the delinquency status of an account (i.e., whether it is delinquent and if so the age of the receivables in the account) and the amounts delinquent, if any, related to such account are based on the status of such account and payments made as of the end of such account’s monthly billing cycle occurring in the relevant Monthly Period. For periods after January 1, 2006, the delinquency status of an account and the amounts delinquent, if any, related to such account will reflect the status of such account and activity in the account at the end of the relevant Monthly Period.


A-II-4


Table of Contents

 
Account Holder Monthly Payment Rate of the Total Portfolio
 
As of Date: March 31, 2008
 
                                                 
    0-12
  13-24
  25-36
  37-48
  49-60
  >=61
Origination Year
  Months   Months   Months   Months   Months   Months
 
2008 Origination
    32.10%                                          
2007 Origination
    23.03%       26.11%                                  
2006 Origination
    26.29%       26.72%       27.59%                          
2005 Origination
    27.78%       27.35%       25.61%       28.34%                  
2004 Origination
    27.58%       29.89%       28.46%       27.42%       26.50%          
2003 Origination
    33.56%       32.96%       29.75%       28.42%       27.89%       28.34%  
2002 Origination
    36.96%       31.81%       30.86%       30.59%       30.30%       29.25%  
2001 Origination
    31.61%       30.06%       29.37%       30.90%       30.29%       28.79%  
 
 
 
(Line Graph)
 
 
 
The monthly payment rate results from dividing total collections received (excluding recoveries on charged-off receivables) during each month by that month’s opening total receivables balance.
 
Historical data for the monthly principal payment rate as reported with respect to the Trust Portfolio (i) unlike the calculation of monthly payment rate above includes collections of principal receivables only and (ii) is calculated using that month’s opening principal receivables balance. As a result, there are limitations to any comparison of the historical data presented in this prospectus supplement and the static pool data presented in the table above.


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Table of Contents

Revenue Experience of the Total Portfolio
 
As of Date: March 31, 2008
 
                                                 
    0-12
  13-24
  25-36
  37-48
  49-60
  >=61
Origination Year
  Months   Months   Months   Months   Months   Months
 
2008 Origination
    15.10%                                          
2007 Origination
    13.29%       18.89%                                  
2006 Origination
    14.97%       21.45%       22.00%                          
2005 Origination
    15.70%       22.21%       22.39%       22.31%                  
2004 Origination
    13.39%       20.30%       21.91%       21.41%       21.03%          
2003 Origination
    15.62%       19.89%       21.39%       21.96%       21.65%       22.18%  
2002 Origination
    18.80%       19.55%       20.23%       21.96%       22.91%       22.22%  
2001 Origination
    18.86%       19.96%       18.72%       19.83%       21.68%       21.96%  
 
 
 
(Line Graph)
 
 
 
The percentages set forth above, which are annualized percentages, result from dividing total finance charges and fees billed by the average receivables outstanding. Total finance charges and fees billed include periodic finance charges, cash advance fees, annual membership fees, other fees and Issuer Rate Fees.
 
Historical data for revenue experience as reported with respect to the Trust Portfolio (i) unlike the calculation of total finance charges and fees billed above which is based on the related amounts posted to accounts, is calculated based on the related amounts collected on the accounts including recoveries, (ii) is calculated using discount option yield for periods prior to March 26, 2004 and using Issuer Rate Fees for periods after the close of business on March 26, 2004 and (iii) is calculated using the average principal receivables outstanding instead of the average receivables outstanding. As a result, there are limitations to any comparison of the historical data presented in this prospectus supplement and the static pool data presented in the table above.


A-II-6


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(AMERICAN EXPRESS LOGO)  
Prospectus            

American Express Credit Account Master Trust            
Issuing Entity            
American Express Receivables Financing Corporation II
American Express Receivables Financing Corporation III LLC
American Express Receivables Financing Corporation IV LLC
Depositors and Transferors
 
American Express Travel Related Services Company, Inc.
Servicer
 
American Express Centurion Bank
American Express Bank, FSB
Sponsors
 
Asset Backed Certificates
 
       Consider carefully the risk factors beginning on page 7 in this prospectus.
 
       A certificate is not a deposit and neither the certificates nor the underlying accounts or receivables are insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.
 
       The certificates will represent interests in the issuing entity only and will not represent interests in or obligations of American Express Company or any of its affiliates.
 
       This prospectus may be used to offer and sell any series of certificates only if accompanied by the prospectus supplement for that series.
 
The issuing entity —
 
  •  may periodically issue asset backed certificates in one or more series with one or more classes; and
 
  •  will own —
 
  •  receivables in a portfolio of consumer charge or revolving credit accounts;
 
  •  payments due on those receivables; and
 
  •  other property described in this prospectus and in the accompanying prospectus supplement.
 
The certificates —
 
  •  will represent interests in the issuing entity and will be paid only from the trust assets;
 
  •  offered with this prospectus will be rated in one of the four highest rating categories by at least one nationally recognized rating organization;
 
  •  may have one or more forms of enhancement; and
 
  •  will be issued as part of a designated series which may include one or more classes of certificates and enhancement.
 
The certificateholders —
 
  •  will receive interest and principal payments from a varying percentage of credit card account collections.
 
 
Neither the SEC nor any state securities commission has approved the certificates or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
 
June 4, 2008


Table of Contents

Important Notice About Information Presented in This
Prospectus and the Accompanying Prospectus Supplement
 
We provide information to you about the certificates in two separate documents that progressively provide more detail: (a) this prospectus, which provides general information about each series of certificates which may be issued by the American Express Credit Account Master Trust, some of which may not apply to your series of certificates, and (b) the accompanying prospectus supplement, which describes the specific terms of your series of certificates, including:
 
  •  the timing of interest and principal payments;
 
  •  information about the receivables;
 
  •  information about credit enhancement, if any, for each class;
 
  •  the ratings for each class; and
 
  •  the method for selling the certificates.
 
You should rely only on the information provided in this prospectus and the accompanying prospectus supplement, including the information incorporated by reference. We have not authorized anyone to provide you with different information. We are not offering the certificates in any state where the offer is not permitted. We do not claim the accuracy of the information in this prospectus or the accompanying prospectus supplement as of any date other than the dates stated on their respective covers.
 
We include cross-references in this prospectus and in the accompanying prospectus supplement to captions in these materials where you can find additional, related discussions. The following table of contents and the table of contents included in the accompanying prospectus supplement provide the pages on which these captions are located.
 
Parts of this prospectus contain defined terms. You can find a listing of the pages where defined terms in this prospectus are defined under the caption “Glossary of Defined Terms” beginning on page 75 in this prospectus.
 
 


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TABLE OF CONTENTS
 
         
    Page
 
Prospectus Summary
    1  
Risk Factors
    7  
Use of Proceeds
    16  
The Issuing Entity
    16  
Centurion’s and FSB’s Revolving Credit Businesses
    17  
General
    17  
Underwriting and Authorization Procedures
    18  
Billing and Payments
    19  
Collection Efforts
    20  
Issuer Rate Fees
    20  
RFC II, RFC III, RFC IV, Centurion, FSB and TRS
    21  
RFC II
    21  
RFC III
    22  
RFC IV
    22  
Centurion
    23  
FSB
    23  
TRS
    23  
Merger or Consolidation of a Transferor or the Servicer
    24  
Assumption of a Transferor’s Obligations
    24  
The Accounts
    25  
Description of the Certificates
    26  
General
    26  
Book-Entry Registration
    26  
Definitive Certificates
    30  
Interest
    30  
Principal
    31  
Pay-Out Events and Reinvestment Events
    32  
Servicing Compensation and Payment of Expenses
    34  
The Pooling and Servicing Agreement Generally
    34  
Conveyance of Receivables
    34  
Representations and Warranties
    34  
The Transferor Certificates; Additional Transferors
    36  
Additions of Accounts or Participation Interests
    37  
Removal of Accounts
    38  
Discount Option
    38  
Premium Option
    39  
Indemnification
    40  
Collection and Other Servicing Procedures
    40  
Outsourcing of Servicing
    41  
New Issuances
    42  
Collection Account
    43  
Deposits in Collection Account
    43  
Allocations
    45  

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Table of Contents

         
    Page
 
Groups of Series
    45  
Reallocations Among Different Series Within a Reallocation Group
    45  
Sharing of Excess Finance Charge Collections Among Excess Allocation Series
    48  
Sharing of Principal Collections Among Principal Sharing Series
    48  
Paired Series
    49  
Special Funding Account
    49  
Funding Period
    49  
Defaulted Receivables; Rebates and Fraudulent Charges
    50  
Credit Enhancement and Other Support
    50  
Servicer Covenants
    53  
Certain Matters Regarding the Servicer
    54  
Servicer Default
    54  
Evidence as to Compliance
    55  
Amendments
    55  
Defeasance
    57  
List of Certificateholders
    57  
The Trustee
    58  
Description of the Purchase Agreements
    59  
Sale of Receivables
    59  
Representations and Warranties
    60  
Repurchase Obligations
    61  
Reassignment of Other Receivables
    61  
Amendments
    61  
Termination
    62  
Certain Legal Aspects of the Receivables
    62  
Certain Regulatory Matters
    62  
Consumer Protection Laws
    62  
Recent Litigation
    63  
Tax Matters
    64  
Federal Income Tax Consequences — General
    64  
Treatment of the Certificates as Debt
    64  
Description of Opinions
    65  
Treatment of the Trust
    65  
Taxation of U.S. Certificate Owners
    67  
Foreign Certificate Owners
    68  
Backup Withholding and Information Reporting
    69  
State and Local Taxation
    69  
ERISA Considerations
    69  
Plan of Distribution
    72  
Legal Matters
    73  
Reports to Certificateholders
    74  
Where You Can Find More Information
    74  
Glossary of Defined Terms
    75  


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Prospectus Summary
 
This summary does not contain all of the information you may need to make an informed investment decision. You should read the entire prospectus and any supplement to this prospectus before you purchase any certificates. The accompanying supplement to this prospectus may supplement disclosure in this prospectus.
 
Risk Factors
 
Investment in the certificates involves risks. You should consider carefully the risk factors beginning on page 7 in this prospectus.
 
The Issuing Entity
 
American Express Credit Account Master Trust is the issuing entity of the certificates. It was formed in 1996 pursuant to a pooling and servicing agreement. This agreement, as it has been amended and restated as of January 1, 2006 and as may be further amended from time to time, is among American Express Travel Related Services Company, Inc., as servicer, American Express Receivables Financing Corporation II, American Express Receivables Financing Corporation III LLC and American Express Receivables Financing Corporation IV LLC, as transferors, and The Bank of New York, as trustee.
 
We refer to the American Express Credit Account Master Trust as the “trust” or the “issuing entity.”
 
The trust is a master trust under which multiple series of certificates may be issued. The trust issues each series pursuant to a supplement to the pooling and servicing agreement. The terms of a series are set forth in the series supplement.
 
Some classes or series may not be offered by this prospectus. They may be offered, for example, in a private placement offering.
 
Account Owners and Sponsors
 
The receivables owned by the trust will arise in designated credit or charge accounts owned by American Express Centurion Bank, American Express Bank, FSB or any of their affiliates.
 
Centurion
 
American Express Centurion Bank, a Utah industrial bank, owns credit card and other credit or charge accounts from which receivables are transferred to American Express Receivables Financing Corporation III LLC. American Express Receivables Financing Corporation III LLC may then, subject to certain conditions, add those receivables to the trust. See “The Pooling and Servicing Agreement Generally — Additions of Accounts or Participation Interests” and “Description of the Purchase Agreements.”
 
We refer to American Express Centurion Bank as “Centurion.”
 
FSB
 
American Express Bank, FSB, a federal savings bank, owns credit card and other credit or charge accounts from which receivables are transferred to American Express Receivables Financing Corporation IV LLC. American Express Receivables Financing Corporation IV LLC may then, subject to certain conditions, add those receivables to the trust. See “The Pooling and Servicing Agreement Generally — Additions of Accounts or Participation Interests” and “Description of the Purchase Agreements.”
 
We refer to American Express Bank, FSB as “FSB” and, together with Centurion, the “account owners.”
 
Depositors and Transferors
 
American Express Receivables Financing Corporation III LLC is a limited liability company formed under the laws of the State of Delaware on March 11, 2004. It is a wholly-owned subsidiary of Centurion. RFC III purchases from Centurion receivables arising in credit card and other credit or charge accounts owned by Centurion. RFC III


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may then, subject to certain conditions, add those receivables to the trust. See “Description of the Purchase Agreements” in this prospectus. American Express Receivables Financing Corporation III LLC structures the issuing entity’s transactions. Its address is 4315 South 2700 West, Room 1300, 02-01-04, Salt Lake City, Utah 84184 and its phone number is (801) 945-2030.
 
American Express Receivables Financing Corporation IV LLC is a limited liability company formed under the laws of the State of Delaware on March 11, 2004. It is a wholly-owned subsidiary of FSB. RFC IV purchases from FSB receivables arising in credit card and other credit or charge accounts owned by FSB. RFC IV may then, subject to certain conditions, add those receivables to the trust. See “Description of the Purchase Agreements” in this prospectus. American Express Receivables Financing Corporation IV LLC structures the issuing entity’s transactions. Its address is 4315 South 2700 West, Room 1300, 02-01-58, Salt Lake City, Utah 84184 and its phone number is (801) 945-2068.
 
American Express Receivables Financing Corporation II, or RFC II, is a Delaware corporation incorporated under the laws of the State of Delaware on August 7, 1995 and is a wholly-owned subsidiary of American Express Travel Related Services Company, Inc. Currently, RFC II does not transfer any receivables to the trust, but may resume such transfers in the future.
 
We refer to American Express Receivables Financing Corporation II as “RFC II,” a “depositor” or a “transferor.” We refer to American Express Receivables Financing Corporation III LLC as “RFC III,” a “depositor” or a “transferor.” We refer to American Express Receivables Financing Corporation IV LLC as “RFC IV,” a “depositor” or a “transferor.” RFC II, RFC III and RFC IV collectively are referred to as the “transferors.”
 
Servicer
 
American Express Travel Related Services Company, Inc. is the servicer of the trust. As servicer, it is responsible for servicing, managing and making collections on the receivables in the trust. See “Transaction Parties — Servicer” and “The Pooling and Servicing Agreement Generally — Collection and Other Servicing Procedures” in this prospectus. American Express Travel Related Services Company, Inc. has outsourced certain functions to affiliated and unaffiliated third parties, but it remains responsible for the overall servicing process. For information about certain affiliated and unaffiliated third party vendors that provide these services, including Amex Card Services Company, Centurion and FSB, see “The Pooling and Servicing Agreement Generally — Collection and Other Servicing Procedures” in this prospectus.
 
In limited cases, the servicer may resign or be removed, and either the trustee or a third party may be appointed as the new servicer. See “The Pooling and Servicing Agreement Generally — Servicer Default” in this prospectus.
 
The servicer receives a servicing fee from the trust, and each series is obligated to pay a portion of that fee. See the related prospectus supplement for a description of the monthly servicing fee allocated to each series of certificates.
 
We refer to American Express Travel Related Services Company, Inc. as “TRS” or the “servicer.”
 
Trustee
 
The Bank of New York, a New York banking corporation, is the trustee of the trust and each series of certificates issued by the trust. Its address is 101 Barclay Street, Floor 4 West, New York, New York 10286, Attention: Asset-Backed Securities Unit. Its telephone number is (212) 815-6258.
 
Under the terms of the pooling and servicing agreement, the role of the trustee is limited. See “The Pooling and Servicing Agreement Generally — The Trustee” in this prospectus.


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Trust Assets
 
The transferors have designated to the trust selected consumer American Express®* credit card and Sign & Travel®*/Extended Payment Option revolving credit accounts or features, and have sold to the trust the receivables in such accounts or features.
 
Certificateholders will not be notified of any changes to the composition of the assets in the trust due to additions or removals of receivables. However, monthly reports containing certain information relating to the certificates and the collateral securing the certificates will be filed with the Securities and Exchange Commission. These reports will not be sent to certificateholders. See “Where You Can Find More Information” in this prospectus for information as to how these reports may be accessed.
 
Subject only to the eligibility criteria established in the purchase agreements and the pooling and servicing agreement, the account owners have the discretion to select the accounts to be designated to the trust. All receivables in the accounts when designated to the trust were transferred to the trust and all new receivables generated in those accounts have been and will be transferred automatically to the trust.
 
The receivables transferred to the trust are the trust’s primary assets. The total amount of receivables in the trust fluctuates daily as new receivables are generated and payments are received on existing receivables.
 
The trust’s assets also include or may include:
 
  •  funds collected on the receivables;
 
  •  monies and investments in the trust’s bank accounts;
 
  •  the right to receive certain issuer rate fees attributed to the receivables;
 
  •  recoveries (net of collection expenses) and proceeds of credit insurance policies relating to the receivables; and
 
  •  credit enhancement that varies from one series to another and, within a series, may vary from one class to another.
 
Additional assets may be transferred to the trust as described under “The Pooling and Servicing Agreement Generally — Additions of Accounts or Participation Interests” in this prospectus. The transferors may add additional receivables or participation interests to the trust at any time without limitation, provided that the receivables are eligible receivables, the transferors reasonably believe that the addition will not result in an adverse effect, and the rating agencies confirm the ratings on the outstanding certificates. Under certain limited circumstances, the transferors may be obligated to add additional receivables or participation interests to the trust if required to maintain the required minimum principal balance.
 
The transferors may also remove receivables that previously were transferred to the trust as described in “The Pooling and Servicing Agreement Generally — Removal of Accounts” in this prospectus, provided that
 
  •  the transferors reasonably believe that the removal will not result in an adverse effect,
 
  •  the rating agencies confirm the ratings on the outstanding certificates,
 
  •  the receivables subject to removal are selected randomly, and
 
  •  only one removal occurs each month.
 
If a transferor breaches certain representations and warranties relating to the eligibility of receivables included in the trust, however, that transferor may be required to remove immediately those receivables from the trust. Finally, on the date when any receivable in an account is charged off as uncollectible, the trust automatically transfers those receivables back to the applicable transferor.
 
 
*  American Express® and Sign & Travel® are federally registered servicemarks of American Express Company and its affiliates.


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Table of Contents

 
The Certificates
 
The trust has issued, and in the future expects to issue, asset backed certificates, each evidencing an undivided interest in the trust. The certificates are issued in series. A series may contain one or more classes.
 
The terms of any future series or class will not be subject to your prior review or consent. We cannot assure you that the terms of any future series might not have an impact on the timing or amount of payments received by a certificateholder.
 
The Transferor Interest
 
The interest in the trust not represented by your series or by any other series is the transferors’ interest, which is held by the transferors. The transferors’ interest may be held either in certificated form represented by the transferor certificates or in uncertificated form. Any reference in this prospectus to the transferor certificates means the transferors’ interest as held in either certificated or uncertificated form. The transferors’ interest does not provide credit enhancement for your series or any other series.
 
Collections by the Servicer
 
The servicer receives collections on the receivables, deposits (or causes to be deposited) those collections in the collection account and keeps track of those collections for finance charge receivables and principal receivables. The servicer then allocates those collections as summarized below.
 
Allocation of Trust Assets
 
The trust assets are allocated among the series of certificates outstanding and the transferors’ interest. The servicer allocates
 
  •  collections of finance charge receivables and principal receivables and
 
  •  principal receivables in accounts written off as uncollectible, to each series based on varying percentages.
 
The accompanying prospectus supplement describes the allocation percentages applicable to your series.
 
Certificateholders are only entitled to amounts allocated to their series equal to the interest and principal payments on their certificates.
 
See “The Pooling and Servicing Agreement Generally — Allocations” in this prospectus.
 
Interest Payments on the Certificates
 
Each certificate entitles the holder to receive payments of interest as described in the accompanying prospectus supplement. If a series of certificates consists of more than one class, each class may differ in, among other things, priority of payments, payment dates, interest rates, method for computing interest and rights to series enhancement.
 
Each class of certificates may have fixed, floating or any other type of interest rate. Generally, interest will be paid monthly, quarterly, semi- annually or on other scheduled dates over the life of the certificates.
 
See “Description of the Certificates — Interest” in this prospectus.
 
Principal Payments on the Certificates
 
Each certificate entitles the holder to receive payments of principal as described in the accompanying prospectus supplement. If a series of certificates consists of more than one class, each class may differ in, among other things, the amounts allocated for principal payments, priority of payments, payment dates, maturity, and rights to series enhancement.
 
See “Description of the Certificates — Principal” in this prospectus.


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Table of Contents

 
Revolving Period
 
Each series of certificates will begin with a period, known as the revolving period, during which the trust will not pay or accumulate principal for payment to the certificateholders. During the revolving period, the trust will pay available principal to the holders of the transferor certificates or to certificateholders of other series.
 
The revolving period for a series begins on the series cut-off date described in the accompanying prospectus supplement, and ends at the start of either an amortization period or an accumulation period.
 
Following the revolving period, each class of certificates will have one or a combination of the following periods in which:
 
  •  principal is accumulated in specified amounts per month and paid on a scheduled date;
 
  •  principal is paid in fixed amounts at scheduled intervals;
 
  •  principal is accumulated in varying amounts each month based on the amount of principal receivables collected following certain adverse events and paid on a scheduled date; and
 
  •  principal is paid in varying amounts each month based on the amount of principal receivables collected following certain adverse events.
 
Principal Accumulation and Amortization Periods
 
The time at which principal payments will begin and the period over which principal payments will be made will vary from one series to another and within a series from one class to another. The principal payment provisions for each series and class will be included in the accompanying prospectus supplement.
 
Early Accumulation and Amortization Periods
 
If a pay-out event has occurred with respect to a series, either an early accumulation period or an early amortization period will begin. In that case, the trust will either deposit available principal in a trust account for payment on the expected final payment date or pay all available principal to the certificateholders of that series on each distribution date. If the series has more than one class, each class may have a different priority for these payments. A pay-out event may affect more than one series.
 
For a detailed discussion of the pay-out events, see “Description of the Certificates — Pay-Out Events and Reinvestment Events” in this prospectus and “Series Provisions — Pay-Out Events” in the accompanying prospectus supplement.
 
Reallocated Investor Finance Charge Collections
 
The certificates of a series may be included in a group, called a “reallocation group,” that reallocates collections of receivables and other amounts or obligations among the series in that group. Collections of finance charge receivables which would otherwise be allocated to each series in the reallocation group will instead be combined and will be available for certain required payments to all series in that group. Any issuance of a new series in a reallocation group may reduce or increase the amount of finance charge collections allocated to any other series of certificates in that group.
 
For a more detailed discussion, see “The Pooling and Servicing Agreement Generally — Reallocations Among Different Series Within a Reallocation Group” and “Risk Factors — Issuances of additional series by the trust may adversely affect your certificates” in this prospectus.
 
Shared Excess Finance Charge Collections
 
Any series may be included in a group called an excess allocation group. If specified in the accompanying prospectus supplement, to the extent that collections of finance charge receivables allocated to a series are not needed for that series, those collections may be applied to cover certain shortfalls of other series in the same excess allocation group.


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Table of Contents

 
See “The Pooling and Servicing Agreement Generally — Sharing of Excess Finance Charge Collections Among Excess Allocation Series” in this prospectus.
 
Shared Principal Collections
 
If specified in the accompanying prospectus supplement, to the extent that collections of principal receivables allocated to any series are not needed for that series, those collections may be applied to cover principal payments for other series in the same principal sharing group.
 
See “The Pooling and Servicing Agreement Generally — Sharing of Principal Collections Among Principal Sharing Series” in this prospectus.
 
Credit Enhancement
 
Each class of a series may be entitled to credit enhancement. Credit enhancement for the certificates of any class may take the form of one or more of the following:
 
  •  subordination
 
  •  insurance policy
 
  •  letter of credit
 
  •  spread account
 
  •  derivative agreement agreement
 
  •  supplemental credit enhancement or liquidity agreement
 
  •  collateral interest
 
  •  cash collateral guaranty or account
 
  •  surety bond
 
  •  maturity liquidity arrangement
 
The type, characteristics and amount of any credit enhancement will be:
 
  •  based on several factors, including the characteristics of the receivables and accounts at the time a series of certificates is issued; and
 
  •  established based on the requirements of the rating agencies.
 
See “The Pooling and Servicing Agreement Generally — Credit Enhancement” and “Risk Factors” in this prospectus.
 
Tax Status
 
For information concerning the application of the United States federal income tax laws, including whether the certificates will be characterized as debt for federal income tax purposes. See “Tax Matters” in this prospectus.
 
Certificate Ratings
 
Any certificate offered by this prospectus and the accompanying prospectus supplement will be rated in one of the four highest rating categories by at least one nationally recognized rating organization.
 
A rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn at any time by the assigning agency. Each rating should be evaluated independently of any other rating. See “Risk Factors — If the ratings of the certificates are lowered or withdrawn, their market value could decrease” in this prospectus.


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Risk Factors
 
You should consider the following factors before you decide whether or not to purchase the certificates.
 
There is no public market for the certificates. As a result, you may be unable to sell your certificates or the price of the certificates may suffer.
 
The underwriters may assist in resales of the certificates but they are not required to do so. A secondary market for any certificates may not develop. If a secondary market does develop, it might not continue or it might not be sufficiently liquid to allow you to resell any of your certificates.
 
In addition, some certificates have a more limited trading market and experience more price volatility. There may be a limited number of buyers when you decide to sell those certificates. This may affect the price you receive for the certificates or your ability to sell the certificates.
 
Moreover, recent and continuing events in financial markets, including increased illiquidity, de-valuation of various assets in secondary markets and the lowering of ratings on certain asset-backed securities, may reduce the market price or adversely affect the liquidity of your certificates.
 
You should not purchase certificates unless you understand and know you can bear these investment risks.
 
Some interests could have priority over the trustee’s interest in the receivables, which could cause delayed or reduced payments to you.
 
Representations and warranties are made that the trustee has a perfected interest in the receivables. If any of these representations and warranties were found not to be true, however, payments to you could be delayed or reduced.
 
In addition, the transaction documents permit certain tax liens to have priority over the trustee’s perfected interest in the receivables. If any of these tax liens were to arise, you could suffer a loss on your investment.
 
Furthermore, if a conservator or receiver for either bank or a bankruptcy trustee for TRS were to argue that any of its administrative expenses relate to the receivables or the transaction documents, those expenses could be paid from collections on the receivables before the trustee receives any payments, which could result in losses on your investment.
 
The trustee may not have a perfected interest in collections commingled by the servicer or any subservicer with its own funds, which could cause delayed or reduced payments to you.
 
The servicer is obligated to deposit collections into the collection account no later than the second business day after the date of processing for those collections. In the event that certain conditions are met, however, the servicer is permitted to hold all collections received during a monthly period and to make only a single deposit of those collections on the following distribution date. See “The Pooling and Servicing Agreement Generally — Deposits in Collection Account.”
 
All collections that the servicer is permitted to hold are commingled with its other funds or the funds of a subservicer and used for its own benefit. The trustee may not have a perfected interest in these amounts, and thus payments to you could be delayed or reduced if the servicer or any subservicer were to become bankrupt.
 
The conservatorship, receivership, bankruptcy, or insolvency of Centurion, FSB, TRS, a transferor, the trust, or any of their affiliates could result in accelerated, delayed, or reduced payments to you.
 
Centurion is a Utah industrial bank and FSB is a federal savings bank, and the deposits of each bank are insured by the Federal Deposit Insurance Corporation (FDIC). If certain events occur relating to either bank’s financial condition or the propriety of its actions, the FDIC may be appointed as conservator or receiver for that bank.
 
Prior to April 16, 2004, Centurion treated its transfer of the receivables to the trustee as a sale for accounting purposes. From and after April 16, 2004, Centurion treats its transfer of the receivables to RFC III as a sale and FSB treats its transfer of receivables to RFC IV as a sale. Arguments may be made, however, that any of these transfers constitutes only the grant of a security interest under applicable law.


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Nevertheless, the FDIC has issued a regulation surrendering certain rights to reclaim, recover, or recharacterize a financial institution’s transfer of financial assets such as the receivables if
 
  •  the transfer involved a securitization of the financial assets and meets specified conditions for treatment as a sale under relevant accounting principles;
 
  •  the financial institution received adequate consideration for the transfer;
 
  •  the parties intended that the transfer constitute a sale for accounting purposes; and
 
  •  the financial assets were not transferred fraudulently, in contemplation of the financial institution’s insolvency, or with the intent to hinder, delay, or defraud the financial institution or its creditors.
 
Currently, each bank’s transfer of the receivables is intended to satisfy all of these conditions.
 
If a condition required under the FDIC’s regulation were found not to have been met, however, the FDIC as conservator or receiver for Centurion or FSB could seek to reclaim, recover, or recharacterize the transfer of the receivables by Centurion or FSB. If the FDIC were successful, the Federal Deposit Insurance Act, as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, would limit any damages to ”actual direct compensatory damages” determined as of the date that the FDIC was appointed as conservator or receiver for Centurion or FSB. The FDIC may not be subject to an express time limit in deciding whether to take these actions, and a delay by the FDIC in making a decision could result in losses on your investment. If the FDIC were successful in any of these actions, moreover, you may not be entitled under applicable law to the full amount of your damages.
 
Even if the FDIC did not reclaim, recover, or recharacterize the transfer of the receivables by Centurion or FSB, payments to you could be delayed or reduced if either bank entered conservatorship or receivership.
 
For instance, the FDIC may argue that a statutory injunction automatically prevents the trustee and the certificateholders from exercising their rights, remedies, and interests for up to 90 days. The FDIC also may be able to obtain a stay of any action to enforce the transaction documents or the certificates. The FDIC also may require that its claims process be followed before payments on the receivables are released. The delay caused by any of these actions could result in losses to you.
 
The FDIC, moreover, may have the power to choose whether or not the terms of the transaction documents will continue to apply. Thus, regardless of what the transaction documents provide, the FDIC could
 
  •  prevent or limit the commencement of an early amortization period or a rapid accumulation period, or instead do the opposite and require those to commence;
 
  •  prevent or limit the early liquidation of the receivables and the termination of the trust, or instead do the opposite and require those to occur; or
 
  •  prevent or limit the continued transfer of receivables, or instead do the opposite and require those to continue.
 
If any of these events were to occur, payments to you could be delayed or reduced. You also may suffer a loss if the FDIC were to argue that any term of the transaction documents violates applicable regulatory requirements.
 
RFC III is a wholly-owned subsidiary of Centurion. RFC IV is a wholly-owned subsidiary of FSB. Certain banking laws and regulations may apply not only to Centurion and FSB but to their subsidiaries as well. If RFC III or RFC IV were found to have violated any of these laws or regulations, you could suffer a loss on your investment.
 
Arguments also may be made that the FDIC’s rights and powers extend to RFC III, RFC IV, and the trust and that, as a consequence, the FDIC could repudiate or otherwise directly affect the rights of certificateholders under the transaction documents. If the FDIC were to take this position, losses to you could result.
 
In addition, no assurance can be given that the FDIC would not attempt to exercise control over the receivables or the other assets of RFC III, RFC IV, or the trust on an interim or a permanent basis. If this were to occur, payments to you could be delayed or reduced.


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RFC II, RFC III, RFC IV, and the trust have been established so as to minimize the risk that any of them would become insolvent or enter bankruptcy. Nevertheless, each of them may be eligible to file for bankruptcy, and no assurance can be given that the risk of insolvency or bankruptcy has been eliminated. If RFC II, RFC III, RFC IV, or the trust were to become insolvent or were to enter bankruptcy, you could suffer a loss on your investment. Risks also exist that, if RFC II, RFC III, RFC IV, or the trust were to enter bankruptcy, any of the others and their assets (including the receivables) would be treated as part of the bankruptcy estate.
 
If TRS or any of its affiliates were to become a debtor in a bankruptcy case, the court could exercise control over the receivables or the other assets of RFC II, RFC III, RFC IV, or the trust on an interim or a permanent basis. If this were to occur, payments to you could be delayed or reduced. The court, moreover, may have the power to choose whether or not the terms of the transaction documents will continue to apply. Thus, regardless of what the transaction documents provide, the court could
 
  •  authorize TRS to stop servicing the receivables or to stop providing administrative services for RFC II, RFC III or RFC IV;
 
  •  prevent the appointment of a successor servicer for the trust or the appointment of a successor administrator for RFC II, RFC III or RFC IV;
 
  •  alter the terms on which TRS continues to service the receivables or to provide administrative services for RFC II, RFC III or RFC IV, including the amount of fees paid to TRS;
 
  •  order that RFC II, RFC III, and RFC IV and its assets (including the receivables) be substantively consolidated with the bankruptcy estate of TRS or any of its affiliates;
 
  •  order that the receivables are necessary for TRS or any of its affiliates to reorganize;
 
  •  impose a temporary or preliminary stay with respect to the receivables (or collections thereon) or exercise remedies under the transaction documents in order to afford itself time to ascertain the facts and apprise itself of the law;
 
  •  prevent or limit the commencement of an early amortization period or a rapid accumulation period, or instead do the opposite and require those to commence;
 
  •  prevent or limit the early liquidation of the receivables and the termination of the trust, or instead do the opposite and require those to occur; or
 
  •  prevent or limit the continued transfer of receivables, or instead do the opposite and require those to continue.
 
If any of these events were to occur, payments to you could be delayed or reduced. You also may suffer a loss if the FDIC were to argue that any term of the transaction documents violates applicable regulatory requirements.
 
Regardless of any decision made by the FDIC or ruling made by a court, moreover, the mere fact that the Centurion, FSB, TRS, RFC II, RFC III, RFC IV, the trust, or any of their affiliates has become insolvent or entered conservatorship, receivership, or bankruptcy could have an adverse effect on the value of the receivables and on the liquidity and value of the certificates.
 
Prior to April 16, 2004, Centurion transferred receivables to Credco, which in turn transferred receivables to RFC II, which then transferred receivables to the trustee. The agreements that effected these transfers remain in place and RFC II may, in the future, again transfer receivables to the trustee pursuant to the pooling and servicing agreement. If this were to occur, risks similar to those described above would exist, and payments to you could be delayed or reduced for similar reasons.
 
Regulatory action could result in losses.
 
Centurion is regulated and supervised by the Utah Department of Financial Institutions and the FDIC. FSB is regulated and supervised by the Office of Thrift Supervision. These regulatory authorities, and possibly others, have broad powers of enforcement with respect to the banks and their affiliates.


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If any of these regulatory authorities were to conclude that an obligation under the transaction documents were an unsafe or unsound practice or violated any law, regulation, written condition, or agreement applicable to a bank or its affiliates, that authority may have the power to order that bank or the related affiliate to rescind the transaction document, to refuse to perform the obligation, to amend the terms of the obligation, or to take any other action determined by that authority to be appropriate. In addition, that bank or the related affiliate probably would not be liable to you for contractual damages for complying with such an order, and you would be unlikely to have any recourse against the regulatory authority. Therefore, if such an order were issued, payments to you could be delayed or reduced.
 
In one case of which the banks are aware, the regulatory authority ordered the financial institution to immediately resign as servicer and to cease performing its duties as servicer within approximately 120 days, to immediately withhold and segregate funds from collections for payment of its servicing fee (notwithstanding the priority of payments in the securitization documents and the perfected security interest of the relevant trust in those funds), and to increase its servicing fee percentage above that which was specified in the securitization documents.
 
Changes to consumer protection laws may impede collection efforts or reduce collections, which may result in acceleration of or reduction in payment on your certificates.
 
Credit card receivables that do not comply with consumer protection laws may not be valid or enforceable under their terms against the obligors of those credit card receivables.
 
Federal and state consumer protection laws regulate the creation and enforcement of consumer loans, including credit card receivables. The United States Congress and the states could further regulate the credit card and consumer credit industry in ways that make it more difficult for the servicer or the account owners to collect payments on the receivables or that reduce the finance charges and other fees that Centurion, FSB or their affiliates can charge on revolving credit card account balances, resulting in reduced collections. For example, the Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Association have proposed rules that would limit the ability of credit card issuers to increase credit card interest rates on existing balances and the allocation of payments in respect of existing balances with different interest rates. If Centurion, FSB or their affiliates were required to reduce their finance charges and other fees, resulting in a corresponding decrease in the effective yield of revolving credit card accounts, whether due to these regulations or other changes in consumer protection laws, a pay out event could occur and could result in an acceleration of payment or reduced payment on your certificates. See “Description of the Certificates — Pay-Out Events and Reinvestment Events” and “Certain Legal Aspects of the Receivables — Consumer Protection Laws.”
 
Each of the transferors, Centurion and FSB makes representations and warranties about its compliance with legal requirements. Each of the transferors also makes certain representations and warranties in the pooling and servicing agreement about the validity and enforceability of the accounts and the receivables. However, the trustee will not make any examination of the receivables or the records about the receivables for the purpose of establishing the presence or absence of defects, compliance with such representations and warranties, or for any other purpose. If any such representation or warranty is breached, the only remedy is that the transferors or the servicer, as the case may be, must accept reassignment of receivables affected by the breach.
 
Proposed changes to accounting standards could have an impact on the trust, the transferors, the account owners, or TRS.
 
Under current accounting standards — specifically, Statement of Financial Accounting Standards No. 140 (FAS 140) — a portion of the receivables is not consolidated on the balance sheet of TRS, the account owners, the transferors or any of their affiliates. One consequence of this accounting treatment is that none of TRS, the account owners, the transferors or any of their affiliates is required to include this portion of the receivables as an asset when calculating its minimum regulatory capital ratios or allowances for loan losses.
 
Recently the Financial Accounting Standards Board (FASB) has been considering substantial revisions to FAS 140 and FASB Interpretation No. 46(R) that, if adopted, could result in this portion of the receivables being consolidated on the balance sheet of TRS, the account owners, the transferors or any of their affiliates. It is not clear, however, whether amendments ultimately will be adopted by the FASB, what form they will take and how they will be implemented if adopted, how regulatory authorities will respond, or how the trust, the transferors, the account


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owners or TRS may be affected. Still, no assurance can be given that these amendments would not have an impact on the trust, the transferors, the account owners or TRS — including on the level of receivables held in the trust, the servicing of those receivables, or the amount of certificates issued in the future.
 
Changes to federal or state bankruptcy or debtor laws may impede collection efforts or alter timing and amount of collections, which may result in acceleration or reduction in payment of your certificates.
 
If an account holder sought protection under federal or state bankruptcy or debtor relief laws, a court could reduce or discharge completely the account holder’s obligations to repay amounts due on its revolving credit card account. As a result, the related credit card receivables arising in that credit card account would be written off as uncollectible. You could suffer a loss if no funds were available from credit enhancement or other sources and collections of finance charge receivables allocated to the certificates to cover the applicable defaulted amount. See “The Pooling and Servicing Agreement Generally — Defaulted Receivables; Rebates and Fraudulent Charges” in this prospectus.
 
Payment patterns of account holders may not be consistent over time and variations in these payment patterns may result in reduced payment of principal, or receipt of payment of principal earlier or later than expected.
 
The receivables may be paid at any time. We cannot assure you that the creation of additional receivables in the accounts will occur or that any particular pattern of account holder payments will occur. The timing of the payment of principal on your certificates may be different than expected if the principal payment pattern of the receivables is different than expected or if certain adverse events happen to an account owner, a transferor or the trust. A significant decline in the amount of receivables generated could result in the occurrence of a pay-out event for one or more series. If a pay-out event occurs for your series, you could receive payment of principal sooner than expected. Centurion’s and FSB’s ability to compete in the current industry environment will affect its ability to generate new receivables and might also affect payment patterns on the receivables.
 
In addition to other factors discussed elsewhere in this “Risk Factors” section, changes in finance charges can alter the monthly payment rates of accountholders. A significant decrease in monthly payment rates could slow the return or accumulation of principal during an amortization or an accumulation period.
 
One development which affects the level of finance charge collections is the increased convenience use of credit cards. Convenience use means that the customers pay their account balances in full on or prior to the due date. The customer, therefore, avoids all finance charges on his account. This decreases the effective yield on the accounts and could cause an early payment of your certificates.
 
The account owners may not be able to generate new receivables, or the transferors may not be able to designate new accounts to the trust when required by the pooling and servicing agreement. This could result in an acceleration of or reduction on payments on your certificates.
 
The trust’s ability to make payments on the certificates will be impaired if sufficient new receivables are not generated by Centurion or FSB, as applicable. We do not guarantee that new receivables will be created, that any receivables will be added to the trust or that receivables will be repaid at a particular time or with a particular pattern.
 
The pooling and servicing agreement requires that the balance of principal receivables in the trust not fall below a specified level. If the level of principal receivables does fall below the required level, an early payment of your certificates could occur. To maintain the level of principal receivables in the trust, the transferors periodically add receivables through the designation of additional accounts for inclusion in the trust. There is no guarantee that the transferors will have enough receivables to add to the trust. If the transferors are not able to add additional accounts when required, an early payment of your certificates will occur.
 
See “Maturity Considerations” in the accompanying prospectus supplement.


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Social, economic and geographic factors can affect credit card payments and may cause a delay in or default on payments.
 
Changes in credit card use, payment patterns and the rate of defaults by cardholders may result from a variety of social, economic and geographic factors. Social factors include changes in consumer confidence levels and attitudes towards incurring debt, the public’s perception of the use of credit cards and changing attitudes about incurring debt and the stigma of personal bankruptcy. Economic factors include the rates of inflation, the unemployment rates and the relative interest rates offered for various types of loans. Moreover, adverse changes in economic conditions in states where cardholders are located, terrorist acts against the United States or other nations, the commencement of hostilities between the United States and a foreign nation or nations or natural disasters could have a direct impact on the timing and amount of payments on your certificates.
 
We cannot predict how any of these or other factors will affect repayment patterns or card use and, consequently, the timing and amount of payments on your series. Any reductions in the amount or timing of interest or principal payments will reduce the amount available for distribution on the certificates.
 
Competition in the credit card industry may result in a decline in Centurion’s or FSB’s ability to generate new receivables. This may result in the payment of principal earlier or later than the expected final payment date, or in reduced amounts.
 
The credit card industry is highly competitive. The American Express-branded proprietary credit card programs operated by American Express and its affiliates encounter substantial and intense competition. As a card issuer, American Express competes in the United States with financial institutions (such as Citibank, Bank of America, JPMorgan Chase and Capital One Financial) that are members of the VISA®* and/or MasterCard®* associations and that issue general purpose credit cards, primarily under revolving credit plans, on one or both of those systems, and the Morgan Stanley affiliate that issues the Discover Card on the Discover Business Services network. Limited competition also exists from businesses that issue their own cards or otherwise extend credit to their customers, such as retailers and airline associations, although these cards are not generally substitutes for general purpose cards because of their limited acceptance.
 
As a result of continuing consolidations among banking and financial services companies and credit card portfolio acquisitions by major card issuers, there are now a smaller number of significant issuers, and the largest issuers have continued to grow using their greater resources, economies of scale and brand recognition to compete.
 
Competing card issuers offer a variety of products and services to attract cardholders, including premium cards with enhanced services or lines of credit, airline frequent flyer program mileage credits, cash rebates and other reward or rebate programs, “teaser” promotional interest rates for both credit card acquisition and balance transfers, and co-branded arrangements with partners that offer benefits to cardholders.
 
Most financial institutions that offer demand deposit accounts also issue debit cards to permit depositors to access their funds. Use of debit cards for point-of-sale purchases has grown as most financial institutions have replaced ATM cards with general purpose debit cards bearing either the VISA or MasterCard logo. As a result, the volume of transactions made with debit cards in the United States has continued to increase significantly and, in the United States, has grown more rapidly than credit and charge card transactions.
 
The principal competitive factors that affect the card-issuing business are:
 
  •  the features and the quality of the services, including rewards programs, provided to cardmembers;
 
  •  the number, spending characteristics and credit performance of cardmembers;
 
  •  the quantity and quality of the establishments that accept a card;
 
  •  the cost of cards to cardmembers;
 
  •  the pricing, payment and other card account terms and conditions;
 
 
* VISA® and MasterCard® are federally registered trademarks of VISA U.S.A., Inc. and MasterCard International Incorporated, respectively.


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  •  the number and quality of other payment instruments available to cardmembers;
 
  •  the nature and quality of expense management data capture and reporting capability;
 
  •  the success of targeted marketing and promotional campaigns;
 
  •  reputation and brand recognition;
 
  •  the ability of issuers to implement operational and cost efficiencies; and
 
  •  the quality of customer service.
 
American Express-branded cards are issued on the American Express network. As a network, TRS competes with other charge and credit card networks, including, among others, VISA, MasterCard, Diners Club® (which, in the United States, has been folded into the network operated by MasterCard), Discover®, a business unit of Morgan Stanley (primarily in the United States), and JCB Co., Ltd. (primarily in Asia).
 
The competitive nature of the credit card industry may result in a reduced amounts of finance charge receivables collected and available to pay interest on the certificates. This competition also may affect Centurion’s and FSB’s ability to originate new accounts and generate new receivables. Such events could cause a pay-out event to occur and an early payment of your certificates.
 
See “Description of the Certificates — Pay-Out Events and Reinvestment Events” in this prospectus.
 
Changes in co-branding arrangements may affect the performance of the trust’s receivables and cardholder usage, and, consequently, the timing and amount of payments on your series.
 
Centurion and FSB enter into co-branding arrangements with certain unaffiliated retail and services companies. Under these arrangements, participating cardholders earn “points” or other benefits, such as frequent flyer miles, hotel loyalty points and cash back, that may be redeemed with the co-branding partner. These arrangements are entered into for a fixed period, generally ranging from five to ten years, and will terminate in accordance with their terms unless extended or renewed at the option of the parties. Currently, the two largest co-branding arrangements are with Delta Air Lines and Costco Wholesale.
 
If one or more of Centurion’s or FSB’s significant co-branding arrangements were to experience reduced volume or termination for any reason, including a general decline in the business of any of its co-branding partners, it could affect the performance of the trust’s receivables, including repayment patterns, and cardholder usage of the co-branded accounts. Centurion and FSB cannot predict what effect, if any, changes in a significant co-branding arrangement would have on the performance of the trust’s receivables or cardholder usage and, consequently, the timing and amount of payments on your series. Any reductions in the amount or timing of interest or principal payments on these receivables will reduce the amount available for distribution on the certificates of your series.
 
Centurion and FSB may change the terms of the credit card accounts in a way that reduces or slows collections. These changes may result in reduced, accelerated or delayed payments to you.
 
As owners of the accounts, Centurion and FSB retain the right to change various credit card account terms (including finance charges and other fees it charges and the required minimum monthly payment). A pay-out event could occur if Centurion or FSB, as applicable, reduced the finance charges and other fees it charges, and a corresponding decrease in finance charges resulted. In addition, changes in the credit card account terms may alter payment patterns. If payment rates decrease significantly at a time when you are scheduled to receive principal, you might receive principal more slowly than expected.
 
Neither Centurion nor FSB will reduce the interest rate it charges on the receivables or other fees if that action would result in a payout event, unless it is required by law to do so or it determines that such reduction is necessary to maintain its credit card business on a competitive basis, based on its good faith assessment of its business competition.
 
Neither Centurion nor FSB has restrictions on its ability to change the terms of the credit card accounts except as described above or in the accompanying prospectus supplement. Changes in relevant law, changes in the


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marketplace or prudent business practices could cause Centurion or FSB, as applicable, to change credit card account terms.
 
Credit card rates may decline without a corresponding change in the amounts needed to pay the certificates, which could result in a delay or reduction in payments of your certificates.
 
Some accounts may have finance charges set at variable rate based on a designated index (for example, the prime rate). A series or class of certificates may bear interest either at a fixed rate or at a floating rate based on a different index. If the rate charged on the accounts declines, collections of finance charge receivables may be reduced without a corresponding reduction in the amounts payable as interest on the certificates and other amounts paid from collections of finance charge receivables. This could result in delayed or reduced principal and interest payments to you.
 
If the ratings of the certificates are lowered or withdrawn, their market value could decrease.
 
The initial rating of a certificate addresses the likelihood of the payment of interest on that certificate when due and the ultimate payment of principal of that certificate by its legal maturity date. The ratings do not address the likelihood of the payment of principal of a certificate on its expected final payment date. In addition, the ratings do not address the likelihood of early payment or acceleration of a certificate, which could be caused by a pay-out event.
 
The ratings of the certificates are not a recommendation to buy, hold or sell the certificates. The ratings of the certificates may be lowered or withdrawn entirely at any time by the applicable rating agency without notice from Centurion, FSB, TRS or the transferors to certificateholders of such change in rating. The market value of the certificates could decrease if the ratings are lowered or withdrawn.
 
Issuances of additional series by the trust may adversely affect your certificates.
 
The trust is a master trust that has issued other series of certificates and is expected to issue additional series from time to time. All such certificates are payable from the receivables in the trust. The trust may issue additional series with terms that are different from your series without notice to you and without your prior review or consent. Before the trust can issue a new series, each rating agency that has rated an outstanding series must confirm in writing that the issuance of the new series will not result in a reduction or withdrawal of its earlier rating. Nevertheless, the terms of a new series could affect the timing and amounts of payments on any other outstanding series.
 
The owners of the certificates of any new series will have voting rights that will reduce the percentage interest represented by your series. Such voting rights may relate to the ability to approve waivers and give consents. The actions which may be affected include directing the appointment of a successor servicer following a servicer default, amending the pooling and servicing agreement and directing a reassignment of the entire portfolio of accounts.
 
See “The Pooling and Servicing Agreement Generally — Groups of Series” in this prospectus.
 
Addition of accounts to the trust may decrease the credit quality of the assets securing the repayment of your certificates. If this occurs, your receipt of payments of principal and interest may be reduced, delayed or accelerated.
 
The assets of the trust change every day. The transferors may choose, or may be required, to add receivables to the trust. The accounts from which these receivables arise may have different terms and conditions from the accounts already designated to the trust. For example, the new accounts may have high