{{5-31-02 p.C-754}}
[¶10,164A] In the Matter of MBNA America, National Association, Newark, Delaware,
Docket No. 91-12kk (1-14-91).
FDIC issues order conditionally granting approval for waiver of
cross-guaranty.
[.1][.3] Holding Company—Stock Restrictions—Condition of Cross-Guaranty Waiver
[.2] Holding Company—Assets—Establishment of Asset Pool Required
[.4] Holding Company—Payment Required
[.5] Effective Date of Order—Delayed Until Public Offering of Stock
[.6] Cross-Guaranty—Waiver—Revocation for Non-Compliance
In the Matter of
MBNA AMERICA, NATIONAL ASSOCIATION
NEWARK, DELAWARE
(which will be an Insured Depository Institution)
related to
MBNA AMERICA BANK, NATIONAL ASSOCIATION
NEWARK, DELAWARE
and
MBNA (DOVER) BANK
DOVER, DELAWARE
and
MARYLAND NATIONAL BANK
BALTIMORE, MARYLAND
and
AMERICAN SECURITY BANK, NATIONAL ASSOCIATION
WASHINGTON, DISTRICT OF COLUMBIA
(Commonly Controlled Insured Depository Institutions)
ORDER CONDITIONALLY GRANTING APPROVAL FOR WAIVER OF CROSS-GUARANTY
FDIC-91-12kk
WHEREAS, MNC Financial, Inc. (alternatively "Holding
Company" or "Applicant") has proposed to establish a holding
company which will be called MBNA Corporation ("New Co.") and
which will own an insured depository institution to be called MBNA
America, National Association, Newark, Delaware ("New MBNA")
which will conduct the credit card business presently conducted by MBNA
America Bank, National Association, Newark, Delaware ("Old
MBNA"), MBNA (Dover) Bank, Dover, Delaware ("Dover"), and
certain other subsidiaries of the Holding Company; and
WHEREAS, New MBNA, when created, will be a "commonly controlled
depository institution," within the meaning of section 5(e)(9) of the Federal Deposit Insurance Act ("Act") 12 U.S.C. § 1815 (e)(9), with
Old MBNA; Dover; Maryland - National Bank, Baltimore, Maryland
("Maryland National"); and American Security Bank, National
Association, Washington, District of Columbia ("American
Security") (collectively "Existing Banks") which are all
insured depository institutions commonly controlled by the Holding
Company; and
WHEREAS, in order to satisfy indebtedness of the Holding Company in the
form of variable rate renewable debt in the amount of $271,000,000 (two
hundred seventy one million dollars) due and payable on or about
January 15, 1991, the Holding Company borrowed said amount from
Maryland National and/or American Security, conditionally approved by
the Board of Governors of the Federal Reserve System ("Federal
Reserve"), and subject to certain requirements imposed by the
Federal Reserve; and
WHEREAS, in part, as consideration for the extension of credit
described above, the Holding Company assigned to Maryland National
and/or American Security participations in the proceeds of certain
assets held by, through, or for the benefit of the Holding Company.
Additionally, the Holding Company pledged to Maryland National and/or
American Security all stock which it held in Old MBNA and Dover.
WHEREAS, in order to effectuate a public offering of common stock
of New Co. for the purpose of satisfying Holding Company debt,
including the indebtedness described in the preceding paragraph, the
Holding Company has made application to the Federal Deposit Insurance
Corporation ("FDIC"), pursuant to the provisions of section
5(e)(5)(A) of the Act, 12 U.S.C. §1815(e)(5)(A), for an exemption
from liability as to New MBNA for any losses the FDIC suffers or
reasonably anticipates to suffer from, or as a result of assistance to,
the Existing Banks.
NOW THEREFORE, BE ADVISED that the Board of Directors ("Board")
of the FDIC, having fully considered the facts and information relating
to the application for exemption filed by the Holding Company, hereby
approves the application for exemption as to New MBNA, subject to the
conditions and restrictions set forth below, and issues this ORDER
CONDITIONALLY GRANTING APPROVAL FOR WAIVER OF CROSS-GUARANTY
("ORDER").
[.1]1. This ORDER is conditioned upon the stock in Old MBNA and Dover
pledged by the Holding Company to Maryland National and/or American
Security not being released by Maryland National and/or American
Security to the Holding Company unless the Holding Company shall
simultaneously pay to Maryland National and/or American Security
$338,655,800 (three hundred thirty-eight million, six hundred
fifty-five thousand, eight hundred dollars) from the proceeds of the
sale of New Co. Said payment shall be apportioned between Maryland
National and American Security in amounts to be determined by the
Office of the Comptroller of the Currency ("OCC").
[.2]2. Additionally, this ORDER is conditioned upon the immediate
establishment by the Holding Company of a pool of assets with a book
value of $600,000,000 (six hundred million dollars), the kind and
quality of which have been previously identified and deemed acceptable
to the FDIC, the Federal Reserve, and the OCC, for the purposes of
providing consideration for the release of the participations made by
the Holding Company to Maryland National and American Security as
described above, and making a capital contribution to Maryland National
and American Security in the amount of $450,000,000 (four hundred fifty
million dollars), with an interest in the $150,000,000 (one hundred
fifty million dollars) in remaining assets granted to Maryland National
and/or American Security, to serve as a pool of assets from which
Maryland National and/or American Security may substitute assets, all
as set out in the Transfer Agreement between the Holding Company and
Maryland National ("Transfer Agreement"), a copy of which is
attached hereto and made a part hereof. Failure to establish said pool
will render this ORDER null and void.
[.3]3. In addition to the transactions described above, Maryland National
has represented that it will merge into Old MBNA, subject to
application and prior approval by the OCC. Should this merger be
approved by the OCC and occur, assets of Old MBNA which are comprised
of approximately $42,000,000 (forty two million dollars) in highly
leveraged transaction loans and $8,000,000 (eight million dollars) in
construction loans, and subordinated debt capital of $35,000,000
(thirty five million dollars), and common equity of $15,000,000
(fifteen million dollars), shall inure to Maryland National as a result
of the merger. In order to provide assurances to the FDIC that these
items will inure to Maryland National should the merger described in
this paragraph be accomplished and to provide security to Maryland
National, this ORDER is also conditioned on the Holding Company
repledging all its stock in Old MBNA to Maryland National immediately
upon its return from Maryland National as contemplated in paragraph 1
above.
[.4]4. Simultaneously with the closing of the public offering of New Co.,
the Holding Company agrees to immediately pay to Maryland National and
American Security $338,655,800 (three hundred thirty-eight million, six
hundred fifty-five thousand, eight hundred dollars) first to repay the
extension of credit by Maryland National and American Security above
plus interest due, and the remainder as a capital contribution or
purchase of stock to be apportioned to Maryland National and American
Security in a manner to be determined by the OCC.
[.5]5. The effective date of this ORDER shall be delayed until such time as
New Co. stock is initially sold in a registered public offering of
common stock.
[.6]6. At any time after the public offering, should the Holding Company
reacquire control of New MBNA, this ORDER shall become null and void.
7. Should the FDIC determine that the Applicant has failed to comply
fully with the aforesaid provisions, the FDIC shall have the right to
revoke this ORDER after giving the Applicant written notice of said
revocation and a reasonable opportunity to be heard on the matter.
Notwithstanding the foregoing, should the Applicant violate the
conditions contained in paragraphs 1, 2, 4, or 6 above, this ORDER
shall be immediately null and void, without further hearing on the
matter.
Dated at Washington, D.C., this 14th day of January, 1991.
By order of the Board of Directors.
