Item 1:
Business.
Item 1A:
Item 1A:
Risk Factors.
Item 2:
Properties.
Item 3:
Legal Proceedings.
Item 4:
Submission of Matters to a Vote of Security Holders.
Item 1B.
Item 1B. Unresolved Staff Comments.
Not Applicable.
Substitute information provided in accordance with General Instruction J to Form 10-K:
Item 1112(b) of Regulation AB. Significant Obligors of Pool Assets (Financial Information).
The primary asset of the issuing entity is the collateral certificate, Series 2001-D, representing an undivided interest in BA Master Credit Card Trust II, whose assets include the receivables arising in a portfolio of unsecured consumer revolving credit card accounts. BA Master Credit Card Trust II, therefore, may be considered a significant obligor in relation to BA Credit Card Trust. Pursuant to Instruction 3.b. to Item 1112(b) of Regulation AB, the information required by Instruction J to Form 10-K in respect of BA Master Credit Card Trust II has been disclosed in this report on Form 10-K in lieu of the information otherwise contemplated by Item 1112(b).
The pool assets held by BA Master Credit Card Trust II do not include any significant obligors.
Item 1114(b)(2) of Regulation AB: Credit Enhancement and Other Support, Except for Certain Derivatives Instruments (Financial Information).
Based on the standards set forth in Item 1114(b)(2) of Regulation AB, no information is required in response to this Item.
Item 1115(b) of Regulation AB: Certain Derivatives Instruments (Financial Information).
Based on the standards set forth in Item 1115(b) of Regulation AB, no information is required in response to this Item.
Item 1117 of Regulation AB: Legal Proceedings.
Industry Developments
FIA Card Services, National Association (“FIA”) issues credit cards on MasterCard’s and Visa’s networks. MasterCard and Visa are facing significant litigation and increased competition. In 2003, MasterCard and Visa settled a suit by Wal-Mart and other merchants who claimed that MasterCard and Visa unlawfully tied acceptance of debit cards to acceptance of credit cards. Under the settlement MasterCard and Visa are required to, among other things, allow merchants to accept MasterCard or Visa branded credit cards without accepting their debit cards (and vice versa), reduce the prices charged to
merchants for off-line signature debit transactions for a period of time, and pay over ten years amounts totaling $3.05 billion into a settlement fund. MasterCard and Visa are also parties to suits in various state courts mirroring the allegations brought by Wal-Mart and the other merchants.
In October 2004, the United States Supreme Court let stand a federal court decision in a suit brought by the U.S. Department of Justice, in which MasterCard and Visa rules prohibiting banks that issue cards on MasterCard and Visa networks from issuing cards on other networks (the “association rules”) were found to have violated federal antitrust laws. This decision effectively permits banks that issue cards on Visa’s or MasterCard’s networks, such as FIA and Bank of America Corporation’s other banking subsidiaries, to issue cards on competitor networks. Discover and American Express have initiated separate civil lawsuits against MasterCard and Visa claiming substantial damages stemming from the association rules. MasterCard and Visa are also parties to suits alleging that MasterCard’s and Visa’s currency conversion practices are unlawful.
The costs associated with these and other matters could cause MasterCard and Visa to invest less in their networks and marketing efforts and could adversely affect the interchange paid to their member banks, including FIA.
Litigation
In June, August, September and November 2005, certain retail merchants filed numerous purported class action lawsuits in federal courts, alleging that MasterCard and Visa and their member banks, including FIA and Bank of America, National Association (USA), conspired to charge retailers excessive interchange in violation of federal antitrust laws. In October 2005, certain of the lawsuits were consolidated in In Re: Payment Card Fee and Merchant Discount Antitrust Litigation, in the U.S. District Court for the Eastern District of New York. The plaintiffs seek unspecified treble damages, injunctive relief, attorney fees and costs.
On April 24, 2006, plaintiffs filed a first consolidated and amended putative class action complaint re-alleging the claims in the original complaint and alleging, among other additional claims, that defendants violated federal and California antitrust laws by combining to impose certain fees and to adopt rules and practices of Visa and MasterCard that are alleged to constitute restraints of trade.
Plaintiffs filed a supplemental complaint alleging as additional claims (i) federal antitrust claims arising out of MasterCard’s initial public offering and (ii) a fraudulent conveyance claim under New York Debtor and Creditor Law. Plaintiffs seek unspecified treble damages and injunctive relief.
PART II
The following Items have been omitted in accordance with General Instruction J to Form 10-K:
Item 5:
Item 5:
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Item 6:
Item 6:
Selected Financial Data.
Item 7:
Item 7:
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 7A:
Item 7A:
Quantitative and Qualitative Disclosures about Market Risk.
Item 8:
Item 8:
Financial Statements and Supplementary Data.
Item 9:
Item 9:
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Item 9A:
Item 9A:
Controls and Procedures.
Item 9B:
Item 9B: Other Information.
None.
PART III
The following Items have been omitted in accordance with General Instruction J to Form 10-K:
Item 10:
Item 10:
Directors and Executive Officers of the Registrant.
Item 11:
Item 11:
Executive Compensation.
Item 12:
Item 12:
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Item 13:
Item 13:
Certain Relationships and Related Transactions.
Item 14:
Item 14:
Principal Accountant Fees and Services.
Substitute information provided in accordance with General Instruction J to Form 10-K:
Item 1119 of Regulation AB: Affiliations and Certain Relationships and Related Transactions.
Information required by Item 1119 of Regulation AB has been omitted from this report on Form 10-K in reliance on the Instruction to Item 1119.
Item 1122 of Regulation AB: Compliance with Applicable Servicing Criteria.
(a) Item 1122 Reports: Each of FIA, for itself and on behalf of its wholly-owned subsidiary MBNA Technology, Inc., and The Bank of New York (each, a “Servicing Participant”) has been identified by the registrant as a party participating in the servicing function with respect to the pool assets held by each of BA Master Credit Card Trust II and BA Credit Card Trust. Each of the Servicing Participants has completed a report on an assessment of compliance with the servicing criteria applicable to such Servicing Participant (each, a “Report on Assessment”) as of June 30, 2006 and for a period beginning no later than February 1, 2006 (the first day of the distribution period in which the BA Credit Card Trust first issued securities subject to Regulation AB) through and including June 30, 2006, which Reports on Assessment are attached as exhibits to this Form 10-K. In addition, each of the Servicing Participants has provided an attestation report (each, an “Attestation Report”) by a registered independent public accounting firm regarding its related Report on Assessment. Each Attestation Report is attached as an exhibit to this Form 10-K. None of the Reports on Assessment or the related Attestation Reports has identified any material instances of noncompliance with the servicing criteria described in the related Report on Assessment as being applicable to such Servicing Participant.
Regulations of the Securities and Exchange Commission (the “SEC”) require that each Servicing Participant complete a Report on Assessment at a “platform” level, meaning that the transactions covered by the Report on Assessment should include all asset-backed securities transactions involving such Servicing Participant that are backed by the same asset type. Recent guidance from the SEC staff identifies additional parameters which a Servicing Participant may apply to define and further limit its platform. For example, a Servicing Participant may define its platform to include only transactions that were completed on or after January 1, 2006 and that were registered with the SEC pursuant to the Securities Act of 1933.
In the Report on Assessment attached as Exhibit 33.2 to this Form 10-K, The Bank of New York defines its platform to include the asset-backed securities transactions for which it served as trustee that (i) are backed by the same asset type, (ii) were completed on or after January 1, 2006 and registered with the SEC pursuant to the Securities Act of 1933, and (iii) were issued by asset-backed issuers with a fiscal year end of June 30, 2006. We believe that the criterion set forth in clause (iii) in the preceding sentence is a parameter by which a servicing participant should be permitted to define and limit its platform; the guidance that is available at this time, however, is inconclusive. We have made request to The Bank of New York for a Report on Assessment that excludes the criterion set forth in clause (iii) above as a parameter by which it defines and limits its platform, but they would not comply with such request. None of FIA, BA Master Credit Card Trust II or BA Credit Card Trust is an affiliate of The Bank of New York.
(b) Other Reports in Connection with Regulation AB Transition: FIA has completed an assertion letter which states that, as of June 30, 2006, its controls over the functions performed as servicer of BA Master Credit Card Trust II and BA Credit Card Trust are effective in providing reasonable assurance that BA Master Credit Card Trust II and BA Credit Card Trust assets are safeguarded against loss from unauthorized use or disposition and that transactions are executed in accordance with management’s authorization in conformity with the agreements identified in such letter and are recorded properly to permit the preparation of the required financial reports. Further, FIA has completed an assertion letter which states that it has complied with the requirements of the relevant covenants and conditions of the agreements identified in Appendix II to such letter for each of the agreements identified therein during the periods specified in Appendix II to such letter. With regard to each of the FIA assertion letters discussed in the preceding two sentences, PricewaterhouseCoopers LLP has produced reports attesting to the fairness of such assertion as of the date or for the period to which each such report relates.
Item 1123 of Regulation AB: Servicer Compliance Statement.
FIA has provided a statement of compliance (a “Compliance Statement”) for the period from and including July 1, 2005 through and including June 30, 2006, which has been signed by an authorized officer of FIA. The Compliance Statement of FIA is attached as an exhibit to this Form 10-K.
Each of MBNA Technology, Inc., Bank of America, National Association (USA) and Banc of America Card Servicing Corporation has been identified by the registrant as a servicer with respect to the pool assets held by each of BA Master Credit Card Trust II and BA Credit Card Trust. Each of these servicers has provided a Compliance Statement, in each case signed by an authorized officer of the related servicer. The Compliance Statement of MBNA Technology, Inc. is for the period from and including February 1, 2006 (the first day of the distribution period in which the BA Credit Card Trust first issued securities subject to Regulation AB) through and including June 30, 2006. The Compliance Statement for each of Bank of America, National Association (USA) and Banc of America Card Servicing Corporation is for the period from and including May 10, 2006 (the date on which each such entity was appointed as a servicer in respect of the pool assets held by each of BA Master Credit Card Trust II and BA Credit Card Trust) through and including June 30, 2006. The Compliance Statement of each of MBNA Technology, Inc., Bank of America, National Association (USA) and Banc of America Card Servicing Corporation is attached as an exhibit to this Form 10-K.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
(a)(1) Not Applicable.
(a)(2) Not Applicable.
(a)(3) Not Applicable.
(b) Exhibits
(c) Not Applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BA Credit Card Trust
By:
FIA Card Services, National Association,
as Servicer
By:
/s/ Marcie E. Copson-Hall
Name:
Marcie E. Copson-Hall
Title:
Senior Vice President
Date: September 28, 2006
EXHIBIT INDEX