Item 2.03. Creation of a Direct Financial Obligation of a Registrant or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On August 7, 2014
, Discover Bank
(the "Bank"), a wholly-owned subsidiary of
Discover Financial Services
(the "Company"), issued and sold $750,000,000
aggregate principal amount of its 3.200% Notes due 2021 (the "Notes"). The Notes
were issued pursuant to a Fiscal and Paying Agency Agreement, dated August 7,
(the "FPAA"), between the Bank, as issuer of the Notes, and U.S. Bank
, as fiscal and paying agent. The Notes were issued pursuant
to an exemption from registration provided by Section 3(a)(2) of the Securities
Act of 1933, as amended.
The Notes are direct, unconditional and unsecured general obligations of the
Bank and rank pari passu among themselves and all other unsecured and
unsubordinated indebtedness of the Bank, except deposit liabilities and other
obligations that are entitled to any priorities or preferences. The Notes are
solely the obligations of the Bank and are neither obligations of, nor
guaranteed by, the Company (which is the sole shareholder of the Bank) or any of
the Bank's other affiliates.
The Notes mature on August 9, 2021
. The Notes are subject to redemption at the
option of the Bank, at any time after July 9, 2021
, in whole or in part on no
less than 30 nor more than 60 days' prior notice delivered to the holders. The
Notes will bear interest semi-annually at the rate of 3.200% per annum from
August 7, 2014
until the principal of the Notes has been paid in full or a sum
sufficient to pay the principal of the Notes has been made available for
payment. Interest on the Notes will be payable semi-annually in arrears on
and August 9
of each year, commencing February 9, 2015
, and on the
date of maturity (each, an "Interest Payment Date"). Payments will include
interest accrued to (but excluding) the relevant Interest Payment Date. Interest
on the Notes will be calculated on the basis of a 360 day year of twelve 30-day
A copy of the FPAA, which includes the form of Note as an exhibit thereto, is
filed with this Company's Current Report on Form 8-K as Exhibit 4.1 and is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description
4.1 Fiscal and Paying Agency Agreement, dated August 7, 2014, between
Discover Bank, as issuer, and U.S. Bank National Association, as
fiscal and paying agent.