Fitch Rates Discover Financial's Unsecured Notes 'BBB'

Fitch Ratings has assigned a rating of 'BBB' to Discover Financial Services' (Discover) $307.5 million of unsecured notes due April 2022 with a coupon of 5.2%. These new notes are being exchanged with an equal amount of existing 10.25% unsecured notes maturing July 2019.

Fitch believes the exchange has been conducted in an effort to reduce Discover's cost of funding, given the attractive interest rate environment, and extend the maturity of the existing notes. The issuance is not expected to impact Discover's capitalization or funding profile.

Fitch's current ratings on Discover are as follows:

Discover Financial Services
-- Long-term Issuer Default Rating (IDR) 'BBB';
-- Short-term IDR 'F2';
-- Viability Rating 'bbb';
-- Senior debt 'BBB';
-- Support '5';
-- Support Floor 'NF'.

Discover Bank
-- Long-term IDR 'BBB';
-- Short-term IDR 'F2';
-- Viability Rating 'bbb';
-- Short-term Deposits 'F2';
-- Long-term Deposits 'BBB+';
-- Subordinated Debt 'BBB-';
-- Support '5';
-- Support Floor 'NF'.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Global Financial Institutions Criteria,', Aug. 16, 2011;
--'Bank Holding Companies', Aug. 16, 2011;
--'Finance and Leasing Companies Criteria,' Dec. 12, 2011).

Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=649171
Bank Holding Companies
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648612
Finance and Leasing Companies Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=659834

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