BARCLAYCARD USA

Barclays has inked an agreement to acquire Delaware-based Juniper Financial and its US$1.4 billion credit card portfolio from Canada’s CIBC for US$293 million in cash.
The deal represents a premium of 15.2%. The news marks the entrance of
Barclaycard into the U.S. credit card market. Since its inception in
2000 by former First USA executives, Juniper has grown from US$160 million in credit card receivables for EOY2000 to US$1.3 billion EOY2003. Between 2001 and 2002 the issuer doubled its size, becoming the fastest growing issuer during the period. Juniper, with 700,000 accounts, also has co-branded relationships with AirTran Airways, Best Western, Caesars Entertainment, Frontier Airlines, Gulf Petroleum, Midwest Airlines and Sinclair Oil. Barclaycard Chief Executive, Gary Hoffman, will become Chairman of Juniper, and Juniper will become part of the Barclaycard International business. CIBC acquired a 51% interest in Juniper Financial in 2001 and subsequently increased its ownership to 98%. The remaining 2% is owned by Juniper senior management. Barclays is
purchasing 100% of Juniper Financial. For details on Juniper’s past
performance visit CardData (www.carddata.com).

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Barclaycard Enters US Card Market via Juniper Acquisition

Barclays has inked an agreement to acquire Juniper Financial and its $1.4 billion credit card portfolio from CIBC for $293 million in cash. The deal represents a premium of 15.2%. The news marks the entrance of Barclaycard into the U.S. credit card market. Since its inception in 2000 by former First USA executives, Juniper has grown from $160 million in credit card receivables for EOY2000 to $1.3 billion EOY2003. Between 2001 and 2002 the issuer doubled its size, becoming the fastest growing issuer during the period. Juniper, with 700,000 accounts, also has co-branded relationships with AirTran Airways, Best Western, Caesars Entertainment, Frontier Airlines, Gulf Petroleum, Midwest Airlines and Sinclair Oil. Barclaycard Chief Executive, Gary Hoffman, will become Chairman of Juniper, and Juniper will become part of the Barclaycard International business. CIBC acquired a 51% interest in Juniper Financial in 2001 and subsequently increased its ownership to 98%. The remaining 2% is owned by Juniper senior management. Barclays is purchasing 100% of Juniper Financial. For details on Juniper’s past performance visit CardData ([www.carddata.com][1]).

JUNIPER HISTORICAL OUTSTANDINGS
2000: $160 million
2001: $425 million
2002: $950 million
2003: $1.3 billion
2004: $1.4 billion
Source: CardData (www.carddata.com).

[1]: http://www.carddata.com

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Metavante Seeks Approval to Purchase Response Data Corp

Milwaukee-based Metavante is looking to purchase NJ-based Response Data Corporation for $34 million in cash. According to filings with regulators the acquisition would provide Metavante with a new line of credit card payment technology. RDC’s largest clients are Chase and BofA. The deal is the fourth acquisition by Metavante this year. In July, the firm purchased NYCE from First Data for $610 million in cash. In June, Metavante completed its acquisition of The Kirchman Corporation, a provider of automation software and compliance services to the banking industry. In May, Metavante signed a definitive agreement to acquire Advanced Financial Solutions of Oklahoma City, which provides check-imaging technology for over 7,000 financial institutions in the USA and 25 other countries. (CF Library 5/7/04; 6/1/04; 6/14/04).

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AmEx to Expand Prepaid Cards in School Fundraising

American Express Incentive Services has made an equity investment into Atlanta-based LoyaltyPoint and signed a five-year exclusive strategic marketing partnership with its Schoolpop subsidiary. Under the agreement, the two companies will launch exclusive new prepaid card products that offer access to national retailers. The cards will be themed to represent consumers’ typical spending categories such as clothing, home furnishings, electronics and groceries. The companies are also teaming up to create a unique series of new scrip cards that will be usable at multiple establishments and that will be introduced into the school and nonprofit markets under Schoolpop’s “Scrip & Earn” product line. Schools and nonprofit organizations purchase “Scrip & Earn” prepaid cards from Schoolpop and then resell the prepaid cards to their supporters for fundraising. LoyaltyPoint says current exclusive AEIS products have driven significant revenue for the company, comprising 73% of total company sales and 76% of prepaid stored-value card sales for the first half of this year.

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ActivCard Names Two New Board Members

ActivCard has named John Gordon and Richard Kashnow to its Board of Directors. Gordon brings extensive experiences in the security arena and Kashnow is a 33-year veteran of large and small business. Both men will bring the experience and expertise necessary to develop strategies for both government and enterprise markets and strengthen ActivCard’s dedication to the highest standards of corporate governance.

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Top Ten Delinquency Drops 111 BPS Year-Over-Year

With the exception of Household International, all top ten bank credit card issuers posted year-over-year declines in delinquency ratios at mid-year. As a group, the average rate for 30+day delinquency plunged from 6.14% in 2Q/03 to 5.03% for the just ended quarter. As expected, issuers with significant exposure in the sub-prime segment reported the largest improvements. Providian’s delinquency declined 328 basis points, as Metris dropped 170 basis points, and Capital One decreased 147 basis points. Household, which only reports 60+ day delinquency, reported a mere 2 basis points increase over one-year ago levels. Compared to the first quarter, average 30+ day delinquency dropped 44 basis points for 2Q/04. For the fourth quarter of 2003, the average rate was 5.97%, compared to 6.07% in 3Q/03. For complete detail on delinquency for U.S. issuers please visit CardData ([www.cardddata.com][1]).

TOP TEN ISSUERS DELINQUENCY (managed basis)
DAYS 2Q/04 1Q/04 2Q/03 Y/Y CHNG
1. Citigroup: 90 1.61% 1.83% 1.79% -18 bps
2. MBNA: 30 4.10% 4.27% 4.36% -26 bps
3. Bank One: 30 3.37% 3.75% 3.95% -58 bps
4. BofA: 30 3.86% 3.75% 3.99% -13 bps
5. Chase: 30 4.27% 4.43% 4.40% -13 bps
6. Discover: 30 4.88% 5.80% 6.21% -133 bps
7. Cap One: 30 3.95% 3.99% 5.42% -147 bps
8. Household: 60 4.21% 4.35% 4.19% + 2 bps
9. Providian: 30 6.44% 7.36% 9.72% -328 bps
10. Metris/DM: 30 9.40% 10.40% 11.10% -170 bps
AVERAGE (30day): 5.03% 5.47% 6.14% -111 bps
Note: excludes American Express
Source: CardData ( www.cardddata.com).

[1]: http://www.cardddata.com

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N.E.W. Attracts a Major Investment

TH Lee Putnam Ventures, Freeman Spogli, along with company management, have taken a major equity interest into VA-based N.E.W. Customer Service Companies, provider of VISA USA’s credit card enhancement programs. NEW creates and administers warranty and extended service programs that retailers can offer to consumers. This acquisition will mean an enterprise value of approximately $370 Million.

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The Detroit Lions Opt for PowerPay in Ford Field

NYC-based Smart System Technologies has signed a deal with the Detroit Lions to deploy its “PowerPay” payment and reward system at Ford Field. Lions fans will benefit from the wireless, cashless payment system at permanent as well as portable concession and merchandise stands. PowerPay will decrease the time to conduct transactions, allowing fans to spend less time away from the action of the game.

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TSYS Lands the FleetBoston Credit Card Portfolio

Bank of America yesterday confirmed it has selected TSYS to provide credit card processing for its recently acquired FleetBoston card portfolio. BofA is a long-term client of TSYS. TSYS processes BofA’s consumer, commercial and government services accounts on TS2. TSYS also processes BofA’s merchant accounts through Vital Processing Services, its joint venture company with VISA. Discussions for a definitive agreement is underway. Last month J.P. Morgan Chase delivered official notification to TSYS to continue providing processing for the combined Chase and Bank One card portfolio. (CF Library 7/8/04)

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