Gold & OFX Specs Coming

The Banking Industry Technology Secretariat announced yesterday that a new open framework for the exchange of financial data and instructions, covering the Integrion Financial Network’s GOLD and the Open Financial Exchange specifications, will be published in August 1998. Related announcements on the product plans and migration roadmaps for current OFX and Gold users will be made later this year. The draft specification will be make available to service providers for a preliminary review in June 1998. BITS is facilitating the convergence of one open specification for financial industry applications and moving the ongoing maintenance of the new specification into an open standard-setting body to allow for broad, worldwide participation. The specification is being developed as a cooperative industry effort to benefit financial services companies, service providers and information technology companies and their customers in the business and consumer markets.


Discover Bonds Rated

Discover Card Master Trust I’s $500 million 5.75% class A credit card pass-through certificates, series 1998- 4, are expected to be rated ‘AAA’ by Fitch IBCA. The corresponding $26.3 million 5.90% class B certificates are expected to be rated ‘A’.

Series 1998-4 expected ratings reflect the high quality of the receivables generated by Discover Card holders, 8.5% available subordinated amount supporting class A, 4% cash collateral account protecting class B, sound legal and cash flow structures, and excellent servicing provided by Greenwood TrustCo.

Economic and credit stress scenarios were applied to the collateral pool to determine the appropriate levels of credit enhancement for the certificates. One of the more severe ‘AAA’ scenarios involved decreasing yield by more than 30%, cutting monthly payment rate by 40% and increasing chargeoffs over 30%. The ‘A’ stress decreased yield by 25%, payment rate by 30% and increased chargeoffs to 23%. With the credit enhancement currently available, the securities could withstand these stresses simultaneously and still make full and timely payments of principal and interest to class A and class B investors.

Investors are protected from a deterioration in asset quality, seller insolvency or servicer default by early amortization triggers. If certain adverse events occur, an accelerated payout of investor principal will begin possibly earlier than expected. During such an amortization event, finance charge collections normally allocated to the seller will become available to cover trust expenses through a structural feature that fixes the finance charge allocation based upon pre-amortization invested amounts. Allocating finance charge collections in this manner allows funds otherwise designated to the seller to flow through to the trust. Greenwood has the option to allocate collections on a floating basis, which would require enhancement levels to be increased to 13.5% for class A and 8.5% for class B.

Class A and B certificateholders will receive semiannual interest payments at a fixed rate of 5.75% and 5.90% per annum, respectively, throughout the revolving and accumulation periods and on the expected final payment date, provided an early amortization event does not occur. Interest will be paid the 15th of each October and April, commencing October 1998. Following a variable accumulation period, principal is expected to be paid to class A certificateholders on the April 2001 distribution date and to class B one month later. As a part of Group One, series 1998-4 will share excess finance charge and principal collections with other Group One series.


Household Merger Positive

Duff & Phelps Credit Rating Co. (DCR) has reaffirmed the ratings for Household International (Household), senior debt rated ‘A’ (Single-A), following the announced merger agreement with Beneficial Corporation (Beneficial). DCR has also reaffirmed Household Finance Corp.’s (HFC) ratings, senior debt rated ‘A+’ (Single-A-Plus). DCR has placed Beneficial’s ratings, senior debt rated ‘A’ (Single-A), on Rating Watch- Positive, reflecting the expectation that Beneficial will become a wholly- owned direct subsidiary of Household Finance Corp.

Beneficial’s ratings were placed on Rating Watch-Uncertain on February 17, 1998, following the company’s announcement that it was evaluating strategic alternatives. The affected entities are listed below. DCR’s rating action is in response to yesterday’s announcement that Household and Beneficial have agreed to merge. The resulting entity will continue to be called Household International with approximately 67 percent of the combined company shares owned by current Household shareholders and 33 percent by current Beneficial shareholders. The merger is subject to various regulatory approvals as well as approval from the shareholders of Household and Beneficial. If approved by all parties, the merger will be accounted for using the pooling-of-interest method. Household has a record of successfully integrating acquisitions and exceeding targeted operating efficiency goals. The acquisition of Beneficial will more than double Household’s branch network and provide opportunities to dramatically reduce Beneficial’s costs. The companies project annual cost savings of approximately $450 million, or approximately 42 percent of Beneficial’s 1997 operating expenses. The companies have cost savings potential in their U.S. branch networks, private label credit cards, and corporate operations. To cover transaction costs, asset writedowns and other related expenses, a one time charge of approximately $1 billion is expected at the closing of the transaction.

In Beneficial’s branches, Household will install its proven technology to support the sales function while moving back-room collection and customer service operations to off-site centralized service centers. This fundamental change to Beneficial’s decentralized consumer finance model is expected to cost approximately one quarter of what Beneficial was expecting to invest over the next few years to accomplish the same objective. Household’s private label credit card business will approximately double, making it a much stronger competitor in this segment, which has experienced increased competition and promotional pricing over the last three years. Managed receivables in the United Kingdom, which have produced the strongest growth and profitability for Household, will grow from $2 billion to $5 billion. Household should also benefit from Beneficial’s historically sound asset quality, core earnings performance and strong franchise value. From a competitive standpoint, the acquisition provides another opportunity for Household to drive down costs and build scale. Consolidation pressure in the industry will continue as smaller firms struggle to keep pace with companies lowering their funding and operational cost structures.

Rating issues for Household going forward include the integration of Beneficial, the ability to realize and maintain efficiency targets without sacrificing internal controls, further asset quality deterioration particularly given high levels of consumer debt and personal bankruptcy, and the general competitive nature of the consumer finance industry. Asset quality could temporarily decline as system conversions take place.

Household International, Inc. (Ratings Reaffirmed)
Notes A (Single-A)
Preferred Stock A- (Single-A-Minus)
Commercial Paper D-1 (Duff-One)
Household Finance Corp. (Ratings Reaffirmed)
Senior Debt A+ (Single-A-Plus)
Subordinated Debt A (Single-A)
Preferred Stock A- (Single-A-Minus)
Commercial Paper D-1+ (Duff-One-Plus)
Household Bank, f.a.s. (Ratings Reaffirmed)
Long-Term Obligations A (Single-A)
Subordinated Notes A- (Single-A-Minus)
Short-Term Obligations D-1 (Duff-One)
Beneficial Corporation (Rating Watch Positive)
Notes A (Single-A)
Preferred Stock A- (Single-A-Minus)
Commercial Paper D-1 (Duff-One)


Incredible Card

Incredible Card Corporation (ICC) today received a ComputerWorld Smithsonian Awards Medal in the Medicine category for its KidzKard Instant Information System.

“Incredible Card Corporation is using information technology to make great strides toward remarkable social achievements in medicine,” said Dr. David Allison, chairman of the National Museum of American History’s Division of Information Technology and Society.

The system was built with Computer Associates’ Jasmine object-oriented database, which inherently understands how to store and process complex digital images, giving Incredible Card Corp. the ability to do facial recognition (digital imaging) and fingerprint matching (biometric identification) over the Internet.

ICC () is the first company worldwide to combine smart card containment devices, biometric security and a pure object-oriented database to form its award winning KidzKard system. The system is currently installed at more than 30 locations on Long Island, including hospitals, shopping malls and theme parks.

“We’re excited to be using state-of-the-art technology as part of our KidzKard architecture,” said Mark R. Basile, CEO of Incredible Card Corporation. “The contributions made by development partners such as Computer Associates helped form the basis of this innovative system.”

The KidzKard system combines three separate and highly sophisticated resource devices to allow emergency service personnel instant access to its members’ medical profile. KidzKard is a smart card device carried by the parent and a smaller version called KidzTag is carried by the child. These devices can be inserted directly into a card reader, and the members’ profile is instantly extracted from the card’s microchip. A finger scanner (biometrics) is used as a security gate to gain access to the system, and to identify the member through an Internet connection to ICC’s Jasmine database.

“The Jasmine database is the foundation that allows the other technologies to function as part of the KidzKard system,” said Charles Fishman, ICC’s Chief Technical Officer. “Sophisticated and highly detailed text, graphics, fingerprints and digital pictures stored in the Jasmine database can be quickly accessed and searched by hospitals, law enforcement personnel and physicians through a biometrically-protected Internet connection. Jasmine also functions as a fingerprint repository that allows searches to be conducted quickly to identify members during an emergency.”

Even if the child or parent has lost their KidzKard, a thumbprint scan can be quickly obtained, sent over the Internet to the Jasmine database, and used to identify the child or to access his or her medical records. In addition, the information associated with each child is updated continually with each new medical situation. When a child visits his or her pediatrician, for example, the child’s medical records can be uploaded automatically via modem from the physician’s office to the central KidzKard database. Authorized medical personnel, law enforcement agencies, school administrators, and other individuals can instantly access the database following a biometric security screening.

Basile said ICC chose Jasmine as its information repository because, “When you need potentially lifesaving information that includes digital images in a hurry, a pure object database solution is required. CA’s reputation as a database innovator and security leader made our decision an easy one.”


Interact Loan Machine

ALLTEL’s front-end Systems announced yesterday the availability of a system utilizing current technology to increase loan origination capacity. The system, called the InterAct Loan Machine, is targeted at telemarketing and Internet-based loan origination, with tremendous impact to the streamlined refinancing of portfolio loans. The Loan Machine combines Access to existing loan servicing data Web and telemarketing based pre-qualification A product and pricing search and validation engine Internet/Intranet-based Uniform Residential Loan application Integrion with payment authorization systems (American Express, VISA & MasterCard) for application fees Integration with automated underwriting systems (Desktop Underwriter, Loan Prospector and PMI’s Decisionwise) Automated selection of proper fees and preparation of Truth in Lending (TIL) documents Automated ordering and handling of electronic responses for credit, appraisal, title, flood mortgage insurance, and tax service Closing document preparation and remote printing Loan setup of new data for servicing


Mondex Base 24

Applied Communications, Inc. (ACI), a subsidiary of Transaction Systems Architects, Inc., announces the first implementation of a Mondex Smart Card solution in a BASE24 processing environment in the Southern Hemisphere. Long-time ACI customer Australia and New Zealand Banking Group-Ltd. (ANZ) has added Mondex functionality to its current BASE24 processing platform for phase one of its implementation of Mondex in Australia.

Phase one of ANZ’s Mondex rollout went live in December 1997 utilizing POS (point of sale) terminals in the bank’s employee cafeteria. Participating employees are issued a chip card onto which they can load value from phones and special unattended load devices (ULDs) to make purchases in the employee cafeteria.

Future phases of the project, scheduled to go live throughout 1998 and 1999, include the addition of non-employee cardholders, POS terminals outside the cafeteria and the introduction of Mondex-capable ATMs.

“We are very happy with the level of response and usage by our staff of this exciting new technology,” said Bob Joubert, chief manager of smart cards at ANZ. “This initial implementation enables us to bed down the many technical, operational and customer support issues, prior to delivering the benefits of electronic cash more widely to consumers and merchants.”

ACI designed and built enhancements to its BASE24 application software that enable ANZ to accept, authorize and process smart card transactions using standards adopted by Mondex. Additional system components include device drivers for Mondex-capable devices as well as a value manager interface. As the pilot expands, additional enhancements will link the ANZ Mondex system to ATMs, interchanges and other participating banks.

“ACI is committed to providing our customers around the world with the advanced technology and functionality they need to offer innovative services via smart card,” said Stephen Bailey, vice president of ACI’s Asia Pacific operation, based in Singapore. “BASE24 offers a robust, flexible processing platform that gives customers like ANZ the ability to efficiently and effectively process ‘traditional’ transactions from ATMs and POS devices, while leveraging their systems to handle transactions from emerging technologies like smart cards.”

ANZ is Australia and New Zealand’s leading international bank with assets of AUD 138 billion and operations in 43 countries. In Australia, ANZ is one of the “big four” domestic banks providing a full range of retail and corporate financial services. Visit ANZ on the World Wide Web at .

Applied Communications, Inc. is a subsidiary of Transaction Systems Architects, Inc.. Transaction Systems’ software facilitates electronic payments and electronic commerce by providing consumers and companies access to their money. The company’s products are used to process transactions involving credit cards, debit cards, smart cards, remote banking services, checks, wire transfers and automated clearing and settlement. Its solutions are used on more than 2,800 product systems in 69 countries on six continents. Visit TSA and ACI on the World Wide Web at .


Viad Buys Moneygram

Viad Corp and MoneyGram Payment Systems, Inc. announced Tuesday that they have signed a definitive agreement in which Viad will acquire MoneyGram, one of the nation’s leading money wire transfer companies. Viad will commence a cash tender offer no later than April 10th for all outstanding MoneyGram shares at a purchase price of $17 per share. MoneyGram’s 1997 revenues were $141 million. The offer is subject to customary conditions, including regulatory approvals and the valid tender of a majority of MoneyGram’s outstanding shares. The transaction will be non-dilative to Viad’s 1998 income form continuing operations and is expected to be accretive to Viad’s 1999 earnings per share. Viad’s cost of the acquisition is expected to be $287 million, excluding transaction costs. The board of directors of MoneyGram has recommended approval of the transaction.


Summer Promotion

To kick off the summer travel season, three leading hotel brands owned by Starwood Hotels & Resorts Worldwide, Inc. are delivering unprecedented choices and destinations for vacation travelers. Sheraton Hotels & Resorts and Westin Hotels & Resorts announce the return of their popular Sheraton Bed & Breakfast Retreat and Westin Good Buy Getaways(R), respectively. For the first time, travelers can take advantage of a new Stay 4 Fun offer from Four Points Hotels by Sheraton. Together, the three summer programs give travelers a choice of more than 400 participating Sheraton, Westin and Four Points Hotels, and add special savings and extra benefits for guests who pay with their Visa cards.

“When Visa cardholders hit the road this summer they’ll have a multitude of opportunities to save at these leading properties worldwide,” said Thomas C. Edwards, Senior Vice President of Market Development and Acceptance at Visa U.S.A. “We’re pleased that this joint effort will bring added value to our cardholders and merchant partners alike,” Mr. Edwards added.

The Sheraton Bed & Breakfast Retreat will be back again for the third year by popular demand and available for 1998 at a record 264 participating Sheraton Hotels and Resorts in the U.S. and Canada – nearly double the number of participating hotels in 1997. The program, valid any day of the week, offers a savings of 5 – 40 percent off regular rates and includes breakfast for two daily, either in the hotel restaurant or as a credit through room service. Guests paying with Visa can extend their stays with a 4:00 p.m. late check out.

The Four Points Hotels’ Stay 4 Fun promotion begins May 22 and is valid through September 7, 1998 at more than 60 participating Four Points Hotels in the U.S. Families will find the new promotion especially attractive with a special offer for up to four kids ages 12 and under to eat free when they order from the children’s menu in the hotel restaurant and are accompanied by a dining adult. And those who pay with their Visa cards will receive additional savings off the already low Stay 4 Fun rates.

“We launched the Sheraton Bed & Breakfast Retreat in 1996 following an extensive research project involving more than 500 people who told us that they increasingly rely on short getaways to recharge their relationships and escape the stresses and strains of everyday life,” said David Van Kalsbeek, Senior Vice President, ITT Sheraton Corporation and Director of Marketing and Strategic Planning. “With the Sheraton Bed & Breakfast Retreat and the new Four Points Hotels Stay 4 Fun promotions, the choice is yours — from following the lure of the ocean for a relaxing escape to a beach in Florida, California or Hawaii, to indulging your passion for the culture, shopping and excitement that a big city like New York, Chicago, Boston or L.A. has to offer. The hard part is deciding where to go,” added Mr. Van Kalsbeek. Advance reservations for both the Sheraton Bed & Breakfast Retreat and Stay 4 Fun promotions are required and can be made by calling a travel agent or ITT Sheraton’s Worldwide Reservations Office at 1-800-325-3535.

Reservations can also be made over the world wide web by visiting the company’s web site at or . Rates are fully commissionable to travel agents.

Summer travelers have an added incentive to stay at any of Westin’s 113 hotels and resorts worldwide with the global launch of Westin Good Buy Getaways(R), available from May 23 through September 7, 1998. “Westin Good Buy Getaways(R) provides Westin customers with a 20 to 40 percent discount off regular corporate rates for both midweek and weekend stays,” remarked Marc Pujalet, Westin’s Senior Vice President of Sales and Marketing. “Our primary objective for Westin Good Buy Getaways(R) is to offer travelers an opportunity to save money while enjoying the upscale quality and comfort offered by Westin hotels and resorts around the world.”

A new element has been added to this year’s program. Guests paying for their Westin Good Buy Getaways(R) stays with their Visa cards will receive a $100 certificate for use between September 14, 1998 and February 28, 1999 on stays of three or more nights at non-discounted rates.

Although rates differ by property, all are fully commissionable to travel agents. Reservations are subject to a 14-day booking requirement and are based upon space availability. For more information, call 1-800-WESTIN-1, or contact your travel counselor.

ITT Sheraton Corporation offers guests a choice of more than 450 hotels and resorts in 64 countries around the world. Last year, more than a dozen publications and organizations around the globe voted ITT Sheraton the top hotel chain worldwide, and the company also received more than 100 awards for its divisions as top hotel company in their respective regions, covering every continent and its hotels’ individual destinations.

In 1997, Westin received the highest ranking in the Frequent Flyer magazine/J.D. Power and Associates “Domestic Hotel Guest Satisfaction Study – Upscale Hotel Chains,” and for the fourth consecutive year, has been recognized as the #1 upscale hotel chain by readers of Business Travel News in its “Survey of Top Hotel Chains.” Additionally, Westin Hotels & Resorts has been ranked among the top 90 multinational companies doing business in Asia according to the Far Eastern Economic Review’s fifth annual survey of corporate leadership.

Both ITT Sheraton Corporation and Westin Hotels & Resorts are owned by Starwood Hotels & Resorts Worldwide, Inc., a hotel operating and management company whose shares are paired and trade together as a unit with Starwood Hotels & Resorts.

Sample Sheraton Bed & Breakfast Retreat, Westin Good Buy Getaways(R) and Stay 4 Fun rates follow:

Sheraton Bed & Breakfast Retreat Rates:

Hotel Rate
Sheraton San Marcos Golf Resort & Conference Ctr. $124
Chandler/Phoenix, AZ
Sheraton Sacramento Rancho Cordova Hotel, CA $89
Sheraton Colorado Springs Hotel, CO $109
Sheraton World Resort, Orlando, FL $139
Sheraton Uptown Albuquerque Hotel, NM $89
Sheraton South Padre Island Beach Resort, TX $99
Sheraton Burlington Hotel & Conference Center, VT $103
Westin Good Buy Getaways(R):
Hotel Midweek Rate Weekend Rate
The Westin La Paloma,
Tucson, AZ $99 $119
The Westin Mission Hills Resort, $89 $109
Rancho Mirage, CA The Westin Beach Resort,
Key Largo, FL $129 $149
The Westin Peachtree Plaza,
Atlanta, GA $109 $89
The Westin Grand,
Berlin, Germany $125 $119
The Westin Surabaya, Indonesia $65 $65
The Westin Regina Resort,
Cancun, Mexico $119 $119
The Westin Stamford, Singapore $109 $109
Four Points Hotels’ Stay 4 Fun Rates:
Visa Visa
Hotel Weekday Rate Weekend Rate
Four Points Hotel
Sunnyvale, CA $122* $65*
Four Points Hotel
Lakeland, FL $79* $65*
Four Points Hotel
Myrtle Beach
Oceanfront, SC $122* $132*
Four Points Hotel
Brownsville, TX $79* $62*
Four Points Hotel
Toronto Airport, CANADA $104* $95*

*Four Points Hotels’ Stay 4 Fun rates listed above are available only to guests who both book and pay for their stay with their Visa card.

All rates subject to availability and change. Advance reservations required. Not available to groups. Taxes and gratuities not included. Not combinable with other offers. Limited rooms may be available at these rates.


Household-Beneficial Merger

Household International and Beneficial Corporation announced Tuesday a definitive merger agreement that will create one of the countries leading consumer finance and credit card companies. Under the terms of the agreement, which has been unanimously approved by both companies’ boards of directors, Beneficial shareholders will receive 1.0222 shares of Household’s closing price on Monday. April 6, the transaction is valued at $150 per Beneficial share, or a total of over $8.6 billion. The transaction will be accounted for a pooling of interests and is expected to be tax free to beneficial shareholders. The companies will have combined pro forma 1997 managed revenues of over $7 billion, a market capitalization of $24 billion, managed receivables of $62 billion over 30 million customer accounts. The company will continue to be called Household International.


Paychex Access Card

Paychex has teamed up with First Chicago NBD Corporation to offer the Paychex Access Card, a debit card carrying the MasterCard logo, as an electronic alternative to a paper payroll check. Paychex, a heading U.S. payroll processor for businesses with 1 to 200 employees, provided payroll to more than 3.5 million of its clients’ employees in the past year. The Paychex Access Card is linked to an employee’s paycheck. Each pay period, and employee’s “paycheck” is electronically transferred to their Paychex Access Card account. The card can be used to make withdraws at ATMs displaying the Cirrus logo and to make all of the convenience and safeguards of MasterCard’s consumer debit program.


ICE to Latin America

Hypercom Corporation introduced Tuesday ICE (Interactive Customer Equipment) and its Pinnacle family of front-end client/server software solutions for payment processing and data transactions, including Pinnacle iCOM, to the Latin American market. These products were launched in the Asia Pacific market last week and in the U.S. last fall. Hypercom’s Pinnacle Internet Commerce Transaction System, announced in the U.S. in early 1998, is a comprehensive family of client/server payment and data transaction software solutions that brings consumers, merchants, financial processors and other institutions together in the virtual world of on-line transactions. Pinnacle iCOM incorporates the Secure Electronic Transactions protocol.