TEXT-S&P rates Discover Card Execution Note Trust class B(2012-3)

Mon Nov 12, 2012 5:25pm EST

OVERVIEW
     -- Discover Card Execution Note Trust's class B(2012-3) note issuance is 
an ABS securitization backed by undivided investor interest in Discover Card 
Master Trust I's series 2007-CC collateral certificate, which, in turn, is 
collateralized by receivables generated from designated Discover Card accounts.
     -- We assigned our preliminary 'AA+ (sf)' rating to the class B(2012-3) 
notes.
     -- The preliminary 'AA+ (sf)' rating reflects our view of the 
transaction's credit support, timely interest and principal payments, and 
payment and legal structures, among other factors.
 
NEW YORK (Standard & Poor's) Nov. 12, 2012--Standard & Poor's Ratings Services 
today assigned its preliminary 'AA+ (sf)' rating to Discover Card Execution 
Note Trust's $250 million class B(2012-3) DiscoverSeries notes.

The note issuance is an asset-backed securities transaction backed by 
undivided investor interest in Discover Card Master Trust I's series 2007-CC 
collateral certificate, which, in turn, is collateralized by receivables 
generated from designated Discover Card accounts.

The preliminary rating is based on information as of Nov. 12, 2012. Subsequent 
information may result in the assignment of final ratings that differ from the 
preliminary ratings.

The preliminary 'AA+ (sf)' rating reflects our view of: 
     -- The 19.0% credit support provided by the subordinated class B, C, and 
D notes, which we believe is likely sufficient to withstand the simultaneous 
stresses we apply to our 5.5%-7.5% base-case loss rate, 16.5%-18.5% base-case 
payment rate, 15.0%-17.0% base-case yield, and 1.5%-3.5% purchase rate 
assumptions for the notes. In addition, we used stressed excess spread and 
note interest rate assumptions to assess whether, in our opinion, sufficient 
credit support is available for the notes. All of the stress assumptions 
outlined above are based on our current criteria and assumptions (for more 
information, see "General Methodology And AssumptionsRELATED CRITERIA AND RESEARCH

Related Criteria
     -- Counterparty Risk Framework Methodology And Assumptions, May 31, 2012
     -- Revised Purchase And Payment Rate Assumptions For U.S. Credit Card 
ABS, Sept. 14, 2011 
     -- Principles Of Credit Ratings, Feb. 16, 2011
     -- Methodology: Credit Stability Criteria, May 3, 2010
     -- General Methodology And Assumptions For Rating U.S. ABS Credit Card 
Securitizations, April 19, 2010
 
Related Research
     -- Presale: Discover Card Execution Note Trust - Class B(2012-3), Nov. 
12, 2012
     -- U.S. Economic Forecast: Long Time No See, Oct. 15, 2012
     -- U.S. Credit Card Quality Index: Overall Improvements Are Expected To 
Continue Throughout 2012, Oct. 1, 2012 
     -- Industry Economic And Ratings Outlook: U.S. Credit Card ABS 
Fundamentals Remain Strong And Charge-Offs Are Low, Aug. 9, 2012
     -- Global Structured Finance Scenario And Sensitivity Analysis: The 
Effects Of The Top Five Macroeconomic Factors, Nov. 4, 2011
     -- Discover Financial Services Inc., Oct. 18, 2011
     -- Bulletin: Discover Financial Services Inc. Ratings Unchanged Following 
First-Quarter Results, March 23, 2011
     -- Ratings On 950 North America Structured Finance Tranches On Watch Neg 
After Counterparty Criteria Update, Jan. 18, 2011
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