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Discover Financial Services Announces Pricing Of Subordinated Debt Offering Of Discover Bank

April 12, 2010

RIVERWOODS, Ill., Apr 12, 2010 (BUSINESS WIRE) --Discover Financial Services (NYSE:DFS) today announced the pricing of an offering of $500 million of 7.00% Discover Bank subordinated notes due April 2020. The offering is expected to close on April 15, 2010. Discover Bank will receive estimated net proceeds from the offering of approximately $492 million, which will be used to increase Discover Bank's Tier 2 capital and for general corporate purposes. Barclays Capital Inc., Goldman, Sachs & Co. and J.P. Morgan Securities Inc. are acting as joint book-running managers for the subordinated debt offering.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers personal and student loans, online savings accounts, certificates of deposit and money market accounts through its Discover Bank subsidiary. Its payment businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Discover Financial Services' management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. These forward-looking statements speak only as of the date of this press release, and there is no undertaking to update or revise them as more information becomes available. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the actions and initiatives of current and potential competitors; our ability to manage credit risks and securitize our receivables at acceptable rates and under sale accounting treatment; changes in economic variables, such as the availability of consumer credit, the housing market, energy costs, the number and size of personal bankruptcy filings, the rate of unemployment and the levels of consumer confidence and consumer debt, and investor sentiment; the impact of current, pending and future legislation, regulation and legal actions, including new laws and rules limiting or modifying certain credit card practices, new laws and rule affecting securitizations, new laws and rules related to government programs to stabilize the financial markets, and regulations and supervisory guidance related to becoming a bank holding company; restrictions on the company's operations resulting from financing transactions including participation in the U.S. Treasury's Capital Purchase Program; the actions and initiatives of current and potential competitors; the company's ability to successfully achieve card acceptance across its networks and maintain relationships with network participants; the company's ability to manage its credit risk, market risk, liquidity risk, operational risk, legal and compliance risk, and strategic risk; the availability and cost of funding and capital; access to deposit, securitization, equity, debt and credit markets; the impact of rating agency actions; the level and volatility of equity prices, commodity prices and interest rates, currency values, investments, other market fluctuations and other market indices; losses in the company's investment portfolio; the company's ability to increase or sustain Discover card usage or attract new customers; the company's ability to attract new merchants and maintain relationships with current merchants; the effect of political, economic and market conditions, geopolitical events and unforeseen or catastrophic events; fraudulent activities or material security breaches of key systems; the company's ability to introduce new products or services; the company's ability to sustain its investment in new technology and manage its relationships with third-party vendors; the company's ability to collect amounts for disputed transactions from merchants and merchant acquirers; the company's ability to attract and retain employees; the company's ability to protect its reputation and its intellectual property; difficulty financing or integrating new businesses, products or technologies; and new lawsuits, investigations or similar matters or unanticipated developments related to current matters.

Additional factors that could cause Discover Financial Services' results to differ materially from those described in the forward looking statements can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's quarterly report on Form 10-Q for the quarter ended February 28, 2010 and in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's annual report on Form 10-K for the year ended November 30, 2009, which are filed with the SEC and available at the SEC's internet site (http://www.sec.gov).

SOURCE: Discover Financial Services

Discover Financial Services
Investors:
Craig Streem, 224-405-3575
craigstreem@discover.com
or
Media:
Jon Drummond, 224-405-1888
jondrummond@discover.com