<PAGE> 1
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 21, 1994)
$125,000,000
USL CAPITAL CORPORATION
8 1/8% SENIOR NOTES DUE FEBRUARY 15, 2000
---------------------------
Interest on the Notes is payable semi-annually on February 15 and August 15
of each year, commencing August 15, 1995. The Notes are not redeemable prior to
maturity. The Notes will be represented by one or more global securities
registered in the name of a nominee of The Depository Trust Company, as
Depositary. Interests in the Notes will be shown on, and transfers thereof will
be effected only through, records maintained by the Depositary and its
participants. Except as described in "Description of the Notes--Book-Entry
System," owners of beneficial interests in the global securities will not be
entitled to receive Notes in definitive form and will not be considered the
holders thereof. Settlement for the Notes will be made in immediately available
funds. So long as the Notes are registered in the name of the Depository Trust
Company or its nominee, the Notes will trade in the Depositary's Same-Day Funds
Settlement System and secondary market trading activity in the Notes will
therefore settle in immediately available funds. See "Description of the
Notes--Same-Day Settlement and Payment."
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
============================================================================================
Price to Underwriting Proceeds to
Public(1) Discount(2) Company(1)(3)
- --------------------------------------------------------------------------------------------
Per Note................................. 99.717% .450% 99.267%
- --------------------------------------------------------------------------------------------
Total.................................... $124,646,250 $562,500 $124,083,750
============================================================================================
</TABLE>
(1) Plus accrued interest, if any, from February 7, 1995.
(2) The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $80,000.
---------------------------
The Notes offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriters and
to certain further conditions. It is expected that delivery of the Notes will be
made in book-entry form only through the facilities of The Depository Trust
Company on or about February 7, 1995.
---------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
January 31, 1995
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
<PAGE> 3
SELECTED FINANCIAL DATA
The selected financial data presented below for, and as of the end of, each
of the three years in the period ended December 31,1993, have been derived from
the financial statements of the Company audited by Coopers & Lybrand L.L.P.,
independent accountants. The selected financial data presented below for, and as
of the end of, the nine-month periods ended September 30, 1994 and 1993 have
been derived from unaudited financial statements of the Company. In the opinion
of management, the unaudited financial statements have been prepared on the same
basis as the audited financial statements and include all adjustments,
consisting only of a normal recurring nature, necessary for a fair presentation
thereof. This data should be read in conjunction with the financial statements,
related notes and other financial information described under "Information
Incorporated by Reference" in the Prospectus. Interim results are not
necessarily indicative of the results to be expected for the entire year.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 YEARS ENDED DECEMBER 31
------------------ -----------------------------
1994 1993 1993 1992 1991
------- ------- ------- ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
SELECTED CONSOLIDATED STATEMENT OF INCOME INFORMATION:
Revenues.................................................... $ 441.5 $ 411.0 $ 564.5 $ 501.4 $ 500.2
Expenses
Sales, administrative and general......................... 47.7 49.7 70.4 63.2 66.0
Interest.................................................. 160.8 139.3 189.9 154.2 147.0
Depreciation -- operating leases.......................... 93.2 98.2 131.1 159.3 177.8
Other..................................................... 30.3 37.1 50.9 35.6 23.3
------- ------- ------- ------- -------
Total expenses.......................................... 332.0 324.3 442.3 412.3 414.1
------- ------- ------- ------- -------
Income before taxes on income and cumulative effect of
accounting change......................................... 109.5 86.7 122.2 89.1 86.1
Income before cumulative effect of accounting change........ 74.6 53.1 77.1 59.8 54.8
Net income.................................................. 74.6 53.1 77.1 56.7 54.8
SELECTED CONSOLIDATED BALANCE SHEET INFORMATION
(at period end):
Earning assets
Investment in finance leases.............................. $2,300.9 $2,305.0 $2,364.1 $2,074.8 $1,462.5
Notes receivable.......................................... 728.6 675.1 721.3 502.1 416.0
Investment in operating leases............................ 698.8 652.5 694.7 557.8 492.1
Investment in leveraged leases............................ 229.3 77.0 190.5 3.9 0.0
Investment in securities.................................. 630.1 526.4 562.9 329.0 236.1
Inventory held for sale or lease.......................... 72.7 96.3 54.8 97.2 100.3
Investments in associated companies....................... 18.0 19.6 18.3 19.7 20.2
------- ------- ------- ------- -------
Total earning assets.................................... 4,678.4 4,351.9 4,606.6 3,584.5 2,727.2
Goodwill.................................................... 184.9 190.7 189.2 195.1 200.9
Total assets................................................ 4,913.6 4,588.8 4,851.2 3,839.3 2,992.7
Short-term notes payable.................................... 1,044.1 1,259.4 985.3 1,063.4 790.1
Payable to parent and affiliates............................ 45.6 74.4 79.5 75.0 17.0
Long-term debt.............................................. 2,473.8 2,117.3 2,548.3 1,683.3 1,305.0
Shareholder's equity........................................ 809.3 713.7 737.6 620.6 558.9
OTHER DATA:
Earning assets by business unit at period end (% of total)
Business equipment financing.............................. 29% 31% 32% 39% 48%
Fleet services............................................ 11 10 10 12 12
Transportation and industrial financing................... 24 24 24 21 16
Real estate financing..................................... 9 9 9 9 9
Rail services............................................. 10 10 9 9 6
Municipal and corporate financing......................... 17 16 16 10 9
------- ------- ------- ------- -------
Total................................................... 100% 100% 100% 100% 100%
------- ------- ------- ------- -------
Credit losses, net of recoveries (% of average earning
assets)................................................... 0.1% 0.2% 0.2% 0.3% 0.3%
Balance of accounts receivable 90-days delinquent at period
end
(% of earning assets)..................................... 0.7% 1.0% 1.0% 1.4% 0.8%
Allowance for doubtful accounts at period end (% of earning
assets)................................................... 1.3% 1.1% 1.2% 1.1% 1.1%
Ratio of earnings to fixed charges*......................... 1.67 1.61 1.63 1.57 1.57
</TABLE>
- ------------
* The ratio of earnings to fixed charges has been computed by dividing income
before taxes on income and fixed charges (after eliminating equity in
undistributed net income of associated companies) by fixed charges. Fixed
charges consist of interest, amortization of debt issue cost and discount or
premium, and one-third of rentals (representing the estimated interest factor
of such rentals).
S-3
<PAGE> 4
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Notes to
retire commercial paper issued by the Company, the proceeds of which were used
to fund the Company's financing business.
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes supplements
and, to the extent inconsistent therewith, replaces the description of the
general terms and provisions of the Debt Securities set forth under the heading
"Description of the Debt Securities" in the accompanying Prospectus, to which
description reference is hereby made.
GENERAL
The Notes are to be issued under an Indenture dated as of November 15, 1994
(the "Indenture") between the Company and The Chase Manhattan Bank (National
Association), as trustee (the "Trustee"). The Notes will be limited to
$125,000,000 aggregate principal amount and are issuable in fully registered
form only, initially in denominations of $1,000 and in integral multiples of
$1,000. Interest on the principal amount of the Notes at the rate of 8 1/8% per
annum is to be payable on February 15 and August 15 of each year, commencing
August 15, 1995, to holders of record on the February 1 or August 1 next
preceding such February 15 or August 15, as the case may be. The Notes will
mature on February 15, 2000 and are not redeemable prior thereto.
Principal and interest will be payable at the Corporate Trust Office of the
Trustee in the City of New York or at the office or agency of the Company
maintained for such purposes in the Borough of Brooklyn, the City of New York,
provided that the Company may pay interest by check mailed to the registered
holders. See "Book-Entry System."
BOOK-ENTRY SYSTEM
The Notes will be issued in the form of one or more fully registered global
securities (collectively, the "Global Note") which will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York (the "Depositary"),
and registered in the name of the Depositary's nominee. Except as set forth
below, the Global Note may be transferred, in whole and not in part, only to the
Depositary or another nominee of the Depositary.
The Depositary has advised as follows: it is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934. The Depositary holds
securities that its participants ("Participants") deposit with the Depositary.
The Depositary also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. "Direct
Participants" include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. The Depositary is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the Depositary system is also available to others such
as securities brokers and dealers, banks, and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly ("Indirect Participants"). The rules applicable to the Depositary
and its Participants are on file with the Securities and Exchange Commission.
Purchases of interests in the Global Note under the Depositary system must
be made by or through Direct Participants, which will receive a credit for such
interests on the Depositary's records. The ownership interest of each actual
purchaser of interests in the Global Note ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written
S-4
<PAGE> 5
confirmation from the Depositary of their purchase, but Beneficial Owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Global Note are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in the Global Note, except as described below.
To facilitate subsequent transfers, the Global Note deposited by
Participants with the Depositary is registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of the Global Note with the
Depositary and its registration in the name of Cede & Co. effects no change in
beneficial ownership. The Depositary has no knowledge of the actual Beneficial
Owners of the interests in the Global Note; the Depositary's records reflect
only the identity of the Direct Participants to whose accounts interests in the
Global Note are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Global Note. Under its usual procedures, the Depositary mails an Omnibus
Proxy to the issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts interests in the Global Note are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Note will be made to the
Depositary. The Depositary's practice is to credit Direct Participants' accounts
on the payment date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payment on the payment date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant
and not of the Depositary, the Paying Agent, or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to the Depositary is the responsibility of the
Company or the Paying Agent, disbursement of such payments to Direct
Participants shall be the responsibility of the Depositary, and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
The Depositary may discontinue providing its services as depositary with
respect to the Notes at any time by giving reasonable notice to the Company or
the Paying Agent. Under such circumstances, in the event that a successor
depositary is not obtained, definitive Note certificates are required to be
printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor depositary).
The Notes represented by the Global Note are exchangeable for certificated
Notes in definitive form of like tenor as such Notes in denominations of $1,000
and in any greater amount that is an integral multiple thereof if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Note or if at any time the Depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, and, in either case, a successor depositary is not appointed by the
Company within 90 days, (ii) the Company in its discretion at any time
determines not to have all of the Notes represented by the Global Note and
notifies the Trustee thereof, or (iii) an Event of Default has occurred and is
continuing with respect to the Notes. Any Note that is exchangeable pursuant to
the preceding sentence is exchangeable for certificated Notes issuable in
authorized denominations and registered in such names as the Depositary shall
direct. Subject to the foregoing, the Global Note is not exchangeable, except
for
S-5
<PAGE> 6
a Global Note or Global Notes of the same aggregate denominations to be
registered in the name of the Depositary or its nominee.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Depositary continues to make its Same-Day Funds
Settlement System available to the Company, all payments of principal of and
interest on the Notes will be made by the Company in immediately available
funds.
So long as the Notes are represented by Global Notes registered in the name
of the Depository Trust Company or its nominee, the Notes will trade in the
Depositary's Same-Day Funds Settlement System and secondary market trading
activity in the Notes will be required by the Depositary to settle in
immediately available funds. No assurance can be given as to the effect, if any,
of settlement in immediately available funds on trading activity in the Notes.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, dated as of January 31, 1995 (the "Underwriting Agreement"), the
Company has agreed to sell to each of the underwriters named below (the
"Underwriters"), and each of the Underwriters have severally agreed to purchase,
the principal amount of the Notes set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
NAME OF UNDERWRITER OF NOTES
------------------- ----------------
<S> <C>
Lehman Brothers Inc. ................................................ $ 31,250,000
Goldman, Sachs & Co. ................................................ 31,250,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated................... 31,250,000
J.P. Morgan Securities Inc. ......................................... 31,250,000
------------
Total...................................................... $125,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are obligated to take and pay for all of the Notes if any are
taken.
The Underwriters initially propose to offer the Notes directly to the
public at the public offering price set forth on the cover page of this
Prospectus Supplement and to certain dealers at such price less a concession not
in excess of .300% of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a discount not in excess of .250% of the
principal amount of the Notes to certain other dealers. After the initial public
offering, the public offering price and such concessions may be changed.
The Company does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriters that they intend
to make a market in the Notes. The Underwriters are not obligated, however, to
make a market in the Notes and may discontinue market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
the Notes.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
In the ordinary course of their respective businesses, the Underwriters and
their respective affiliates have engaged and may in the future engage in
investment banking and/or commercial banking transactions with the Company and
its affiliates.
S-6
<PAGE> 7
<PAGE> 1
PROSPECTUS
$1,500,000,000
USL CAPITAL CORPORATION
DEBT SECURITIES AND WARRANTS
USL Capital Corporation (the "Company") may offer from time to time its
debt securities consisting of debentures, notes, bonds and/or other evidences of
indebtedness ("Debt Securities") and warrants to purchase Debt Securities
("Warrants") with an aggregate initial public offering price of up to U.S.
$1,500,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies, including European Currency Units ("ECU"). The Debt
Securities and Warrants may be offered in separate series in amounts, at prices
and on terms to be set forth in supplements to this Prospectus (each a
"Prospectus Supplement"). The Debt Securities and Warrants may be sold for U.S.
dollars, one or more foreign currencies or amounts determined by reference to an
index, and the principal of and any interest on the Debt Securities may likewise
be payable in U.S. dollars, one or more foreign currencies or amounts determined
by reference to an index.
The terms of the Debt Securities and any Warrants, including, where
applicable, the specific designation, aggregate principal amount, initial public
offering price, currency, denomination, maturity, premium, rate (which may be
fixed or variable) and time of payment of interest, terms for redemption at the
option of the Company or the holder, for sinking fund payments, for payments of
additional amounts or for exercising the Warrants, will be set forth in the
applicable Prospectus Supplement.
The Debt Securities and Warrants may be sold through underwriting
syndicates led by one or more managing underwriters or through one or more
underwriters acting alone. The Debt Securities and Warrants may also be sold
directly by the Company or through agents designated from time to time. If any
underwriters or agents are involved in the sale of the Debt Securities or
Warrants, their names, the principal amount of Debt Securities or Warrants to be
purchased by them and any applicable fee, commission or discount arrangements
with them will be set forth in the Prospectus Supplement. See "Plan of
Distribution." With regard to the Warrants, if any, in respect of which this
Prospectus is being delivered, the applicable Prospectus Supplement will set
forth a description of the Debt Securities for which the Warrants are
exercisable and the offering price, if any, exercise price, duration,
detachability and any other specific terms of the Warrants.
The Debt Securities may be issued in registered form or bearer form with
coupons attached or both. In addition, all or a portion of the Debt Securities
of a series may be issuable in temporary or permanent global form. Debt
Securities in bearer form will be offered only to non-United States persons and
to offices located outside the United States of certain United States financial
institutions.
This Prospectus may not be used to consummate sales of Debt Securities or
Warrants unless accompanied by a Prospectus Supplement.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------
The date of this Prospectus is December 21, 1994.
<PAGE> 2
INFORMATION INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1993, and its Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994, June 30, 1994 and September 30, 1994, filed with the Securities and
Exchange Commission (the "Commission") are incorporated herein by reference. All
documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended, after the date of this
Prospectus and prior to the termination of the offering of the Debt Securities
and Warrants offered hereby shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing such documents. Any
statements contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes hereof to the extent that a
statement contained herein (or in any other subsequently filed document which
also is incorporated by reference herein) modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed to
Treasurer, USL Capital Corporation, 733 Front Street, San Francisco, California
94111 (telephone: 415-627-9000).
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports and
other information with the Commission. Such reports and other information can be
inspected and copied at Regional Offices of the Commission located at Northwest
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
7 World Trade Center, 13th Floor, New York, New York 10048; and at the public
reference facilities of the Commission located at 450 Fifth Street N.W.,
Washington, D.C. 20549. Copies of such material can be obtained from the public
reference facilities of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates.
------------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "dollars" or
"U.S. $").
The following information, which is being disclosed pursuant to Florida
law, is accurate as of the date of this Prospectus. Autolatina-Comercio,
Negocios e Participaces Ltda., a Brazilian company ("Autolina"), is a joint
venture between Ford Motor Company ("Ford"), an affiliate of the Company, and
Volkswagen AG in which Ford has a 49% ownership interest. Autolina occasionally
sells vehicles to persons located in Cuba. Each such sale is made pursuant to a
specific license granted to Ford by the U.S. Department of Treasury. The last
such sale, which involved one medical supply vehicle, was made to Cubanacan in
April 1991. Current information concerning Autolatina's or its Ford-related
affiliates' business dealings with the government of Cuba or with persons
located in Cuba may be obtained from the State of Florida Department of Banking
and Finance at The Capitol Building, Suite 1401, Tallahassee, Florida 32399-0350
(telephone number 904-488-0545).
2
<PAGE> 3
USL CAPITAL CORPORATION
USL Capital Corporation is a large and diversified commercial financing
company. The Company provides a wide range of financing services through six
core business units, including:
- Business Equipment Financing -- leasing and financing of office and
other business and commercial equipment directly with customers and
through vendor programs;
- Transportation and Industrial Financing -- leasing and financing of
large-balance transportation equipment (principally commercial aircraft)
and industrial and energy facilities;
- Fleet Services -- leasing and managing of commercial automobile, van and
light truck fleets;
- Municipal and Corporate Financing -- financing of essential-use
equipment for state and local governments and investing in publicly
traded and privately placed preferred stocks and senior and subordinated
debt of public and private companies;
- Real Estate Financing -- mortgage financing of income-producing real
estate, including apartments, office buildings, shopping centers and
warehouses; and
- Rail Services -- full-service leasing of railroad equipment to
industrial shippers and railroads.
Through these core business units, the Company operates principally in the
United States.
The Company, a Delaware corporation, has been a wholly owned subsidiary of
Ford Holdings, Inc. ("Ford Holdings") since October 1, 1989, on which date all
of the Company's capital stock was transferred by Ford to Ford Holdings, a then
newly formed Delaware corporation. All of the outstanding common stock of Ford
Holdings, representing 75% of the combined voting power of all classes of its
capital stock, is owned by Ford and Ford Motor Credit Company ("Ford Credit"), a
wholly owned subsidiary of Ford. The balance of the capital stock, consisting of
shares of Flexible Rate Auction Preferred Stock, accounts for the remaining 25%
of the total voting power. The Company changed its name from United States
Leasing International, Inc. to USL Capital Corporation on November 12, 1993 and
was originally organized as a California corporation on October 1, 1956. The
Company was purchased by Ford on November 18, 1987.
The principal executive offices of the Company are located at 733 Front
Street, San Francisco, California 94111 (telephone (415) 627-9000).
USE OF PROCEEDS
Except as otherwise described in the Prospectus Supplement, the Company
intends to use the net proceeds of the Debt Securities and Warrants for general
corporate purposes, principally to reduce short-term borrowings incurred
primarily for the purchase of equipment for lease to others and to fund other
commercial financing transactions. In addition, proceeds may be used to fund
possible future acquisitions.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges has been computed by dividing income
before taxes on income and fixed charges (after eliminating equity in
undistributed net income of associated companies, and related foreign exchange
gains or losses) by fixed charges. Fixed charges consist of interest,
amortization of debt issue cost and discount or premium, and one-third of
rentals (representing the estimated interest factor of such rentals).
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------- ----------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges.......................... 1.67 1.61 1.63 1.57 1.57 1.42 1.22
</TABLE>
3
<PAGE> 4
DESCRIPTION OF THE DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate and summaries of certain provisions of the
Indenture, which do not purport to be complete and are qualified in their
entirety by reference to the provisions of the Indenture. The particular terms
of the Debt Securities offered by any Prospectus Supplement and the extent, if
any, to which such general provisions may apply to the Debt Securities so
offered will be described in the Prospectus Supplement relating to such Debt
Securities. The Debt Securities are to be issued under an Indenture dated as of
November 15, 1994 (the "Indenture") between the Company and The Chase Manhattan
Bank (National Association), as Trustee (the "Trustee"). The form of the
Indenture (as defined below) is an exhibit to the Registration Statement.
Numerical references in parentheses below are to sections of the Indenture
and, unless otherwise indicated, capitalized terms shall have the meanings
ascribed to them in the Indenture.
GENERAL
Debt Securities and Warrants offered by this Prospectus will be limited to
an aggregate initial public offering price of U.S. $1,500,000,000 or the
equivalent thereof in one or more foreign currencies or composite currencies
(including ECU). The Indenture provides that Debt Securities in an unlimited
amount may be issued thereunder from time to time in one or more series.
(Section 301)
The Debt Securities will be unsecured and will rank on a parity with each
other and with all other unsecured and unsubordinated indebtedness of the
Company.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Debt Securities offered thereby:
(1) the title of the Debt Securities; (2) any limit on the aggregate principal
amount of the Debt Securities; (3) whether the Debt Securities are to be
issuable as Registered Securities or Bearer Securities or both, whether the Debt
Securities are to be issuable with or without coupons or both, whether any
Bearer Securities will be subject to any limitations on offering, sale and
distribution, whether any of the Debt Securities are to be issuable initially in
temporary global form and whether any of the Debt Securities are to be issuable
in permanent global form; (4) the price or prices (expressed as a percentage of
the aggregate principal amount thereof) at which the Debt Securities will be
issued; (5) the date or dates on which the Debt Securities will mature; (6) the
rate or rates at which the Debt Securities will bear interest, if any, or the
formula pursuant to which such rate or rates shall be determined, and the date
or dates from which any such interest will accrue; (7) the Interest Payment
Dates on which any such interest on the Debt Securities will be payable, and the
Regular Record Date for any interest payable on any Debt Securities which are
Registered Securities on any Interest Payment Date; (8) the manner in which or
the person to whom any interest on any Registered Security will be payable if
other than the person in whose name such Registered Security is registered at
the close of business on the Regular Record Date for such interest as described
under "Payment and Paying Agents" below, the manner in which, or the person to
whom, any interest on any Bearer Security will be paid if other than in the
manner described under "Payment and Paying Agents" below and the extent to
which, or the manner in which, any interest payable on a temporary global
Security on an Interest Payment Date will be paid if other than in the manner
described under "Temporary Global Securities" below; (9) the obligation, if any,
of the Company to redeem or purchase Debt Securities pursuant to any mandatory
or optional sinking fund or analogous provisions and the other detailed terms
and provisions upon which the Debt Securities shall be redeemed or purchased in
whole or in part, pursuant to such obligation; (10) each office or agency where,
subject to the terms of the Indenture as described below under "Payment and
Paying Agents," the principal of and any premium and interest on the Debt
Securities will be payable and each office or agency where, subject to the terms
of the Indenture as described under "Form, Exchange, Registration and Transfer"
below, the Debt Securities may be presented for registration of transfer or
exchange; (11) the date, if any, after which and the price or prices at which
the Debt Securities may be redeemed, in whole or in part at the option of the
Company or the Holder, or pursuant to mandatory redemption provisions, and the
other detailed terms and provisions of any such optional or mandatory redemption
provisions; (12) the denominations in which any Debt Securities will be
issuable;
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(13) the currency or currencies, including composite currencies, of payment of
principal of and any premium and interest on the Debt Securities if other than
the currency of the United States of America, and the agency or organization
responsible for overseeing such composite currency; (14) if the principal of and
any premium or interest on the Debt Securities are to be payable, at the
election of the Company or the Holder, in a currency or currencies, including
composite currencies, other than that or those in which the Debt Securities are
stated to be payable, the currency or currencies in which payment of the
principal of and any premium and interest on the Debt Securities as to which
such election is made shall be payable and the other detailed terms and
conditions upon which such election is to be made; (15) any index used to
determine the amount of payments of principal of and any premium and interest on
the Debt Securities; (16) the portion of the principal amount of the Debt
Securities, if other than the principal amount thereof, payable upon
acceleration of maturity thereof; (17) the application, if any, of either or
both of the defeasance or covenant defeasance sections of the Indenture as
described below under "Defeasance and Covenant Defeasance" to the Debt
Securities; (18) the Person who shall be the Security Registrar for Debt
Securities issuable as Registered Securities, if other than the Trustee, the
Person who shall be the initial Paying Agent and the Person who shall be the
initial Common Depositary or the depositary, as the case may be; (19) any other
terms of the Debt Securities not inconsistent with the provision of the
Indenture; and (20) the terms of any Warrants offered together with such Debt
Securities. Any such Prospectus Supplement will also describe any special
provisions for the payment of additional amounts with respect to the Debt
Securities of such series.
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their stated principal amounts. Special
United States federal income tax considerations applicable to Debt Securities
issued at an original issue discount will be set forth in the Prospectus
Supplement relating thereto. Special United States tax considerations applicable
to any Debt Securities that are denominated in a currency other than United
States dollars or that use an index to determine the amount of payments of
principal of and any premium and interest on the Debt Securities will be set
forth in a Prospectus Supplement relating thereto.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in definitive form solely as
Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Unless otherwise indicated in an applicable
Prospectus Supplement, definitive Bearer Securities (other than Bearer
Securities in global form) will have interest coupons attached. (Section 201)
The Indenture also will provide that Bearer Securities of a series may be
issuable in permanent global form. (Section 201) See "Permanent Global
Securities." If Bearer Securities are being offered, the applicable Prospectus
Supplement will set forth various limitations on their offering, sale and
distribution.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of authorized denominations and of a
like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both Registered Securities and Bearer Securities, at
the option of the Holder upon request confirmed in writing, and subject to the
terms of the Indenture, Bearer Securities (with all unmatured coupons, except as
provided below, and all matured coupons in default) of such series will be
exchangeable into Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Bearer
Securities surrendered in exchange for Registered Securities between the close
of business on a Regular Record Date or a Special Record Date and the relevant
date for payment of interest shall be surrendered without the coupon relating to
such date for payment of interest and interest will not be payable in respect of
the Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the terms
of the Indenture. Bearer Securities will not be issued in exchange for
Registered Securities. (Section 305) Each Bearer Security other than a temporary
global Bearer Security will bear a legend substantially to the following effect:
"Any United States Person who holds this obligation will be subject to
limitations under the United States income tax laws including the limitations
provided in Sections 165(j) and 1287(a) of the Internal Revenue Code."
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Debt Security issued in global form) may be
presented for registration of transfer (with the form of transfer
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endorsed thereon duly executed), at the office of the Security Registrar or at
the office of any transfer agent designated by the Company for such purpose with
respect to any series of Debt Securities and referred to in an applicable
Prospectus Supplement, without service charge and upon payment of any taxes and
other governmental charges as described in the Indenture. Such transfer or
exchange will be effected upon the Security Registrar or such transfer agent, as
the case may be, being satisfied with the documents of title and identity of the
person making the request. Unless the Prospectus Supplement provides otherwise,
the Trustee will be the initial Security Registrar for the Debt Securities.
(Sections 101 and 305) If a Prospectus Supplement refers to any transfer agents
(in addition to the Security Registrar) initially designated by the Company with
respect to any series of Debt Securities, the Company may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent (or Security Registrar) acts, except that,
if Debt Securities of a series are issuable solely as Registered Securities, the
Company will be required to maintain a transfer agent in each Place of Payment
for such series and, if Debt Securities of a series are issuable as Bearer
Securities, the Company will be required to maintain (in addition to the
Security Registrar) a transfer agent in a Place of Payment for such series
located outside the United States. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(Section 1002)
The Company shall not be required to (i) issue, register the transfer of or
exchange Debt Securities of any series during a period beginning at the opening
of business 15 days before (a) if Debt Securities of the series are issuable
only as Registered Securities, the day of mailing of the relevant notice of
redemption and ending at the close of business on the day for such mailing and
(b) if Debt Securities of the series are issuable as either Bearer Securities or
Registered Securities, the earlier of the day of the first publication of the
relevant notice of redemption or the mailing of the relevant notice of
redemption and ending on the close of business on such earlier day; (ii)
register the transfer of or exchange any Registered Security, or portion
thereof, called for redemption, except the unredeemed portion of any Security
being redeemed in part; or (iii) exchange any Bearer Security called for
redemption, except to exchange such Bearer Security for a Registered Security or
coupon, as the case may be, of the same series and like tenor which is
simultaneously surrendered for redemption. (Section 305)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Securities will be
payable, subject to any applicable laws and regulations, at the offices of such
Paying Agents outside the United States as the Company may designate from time
to time or, at the option of the Holder, by a check or by transfer to an account
maintained by the payee with a bank located outside the United States. (Section
1002) Unless otherwise indicated in an applicable Prospectus Supplement, payment
of interest on Bearer Securities on any Interest Payment Date will be made only
against surrender outside the United States, to a Paying Agent, of the coupon
relating to such Interest Payment Date. (Section 1001 and 1002) No payment with
respect to any Bearer Security will be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States. Notwithstanding the foregoing, payments of principal of and any premium
and interest on Bearer Securities denominated and payable in U.S. dollars will
be made at the office of the Company's Paying Agent in the Borough of Brooklyn,
The City of New York, if (but only if) payment of the full amount thereof in
U.S. dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions.
(Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities will be
made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment of
any interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register. Unless otherwise
indicated in an applicable Prospectus Supplement, payment of any installment of
interest on Registered Securities will be made to the Person in whose name such
Registered Security is registered at the close of business on the Regular Record
Date for such interest. (Sections 307 and 1001)
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Any Paying Agents outside the United States and any other Paying Agents in
the United States initially designated by the Company for the Debt Securities
will be named in an applicable Prospectus Supplement. The Company may at any
time designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that, if Debt Securities of a series are issuable solely as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in the Borough of Brooklyn, The City of New York, for payments with
respect to any Registered Securities of the series (and for payments with
respect to Bearer Securities of the series in the limited circumstances
described above, but not otherwise), and (ii) a Paying Agent in a Place of
Payment located outside the United States where Debt Securities of such series
and any coupons appertaining thereto may be presented and surrendered for
payment; provided that if the Debt Securities of such series are listed on The
International Stock Exchange of the United Kingdom and the Republic of Ireland
or the Luxemborg Stock Exchange or any other stock exchange located outside the
United States and such stock exchange shall so require, the Company will
maintain a Paying Agent in London or Luxemborg or any other required city
located outside the United States, as the case may be, for the Debt Securities
of such series. (Section 1002)
All moneys paid by the Company to a Paying Agent or held by the Company in
trust for the payment of principal of and any premium or interest on any Debt
Security, which remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable, will be discharged from
trust and repaid to the Company and the Holder of such Debt Security or any
coupon will thereafter, as an unsecured general creditor, look only to the
Company for payment thereof. (Section 1003)
TEMPORARY GLOBAL SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series which are issuable as Bearer Securities will
initially be represented by one or more temporary global Securities to be
deposited with a common depositary for Morgan Guaranty Trust Company of New
York, Brussels Office, as operator of the Euroclear System ("Euroclear") and
Cedel S.A. ("Cedel") for credit to the designated accounts. On and after the
date determined as provided in any such temporary global Security and described
in an applicable Prospectus Supplement, each such temporary global Security will
be exchangeable for definitive Bearer Securities, definitive Registered
Securities or all or a portion of a permanent global Bearer Security, or any
combination thereof, as specified in an applicable Prospectus Supplement, only
under the circumstances set forth in the accompanying pricing supplement to such
Prospectus Supplement. No definitive Bearer Security delivered in exchange for a
portion of a temporary global Security shall be mailed or otherwise delivered to
any location in the United States in connection with such exchange. (Section 303
and 304) Any special restrictions on delivery of a Debt Security issued in
permanent global form will be set forth in a Prospectus Supplement relating
thereto.
PERMANENT GLOBAL SECURITIES
If any Debt Securities of a series are issuable in permanent global form,
the applicable Prospectus Supplement will describe the distribution procedures
applicable to such securities in permanent global form (including any applicable
certification requirements) and the circumstances, if any, under which
beneficial owners of interests in any such permanent global Security may
exchange such interests for Debt Securities of such series and of like tenor and
principal amount of any authorized form and denomination. (Section 305) A Person
will, except with respect to payment of principal of and any premium and
interest on such permanent global Security, be treated as a Holder of such
principal amount of Outstanding Securities represented by such permanent global
Security as shall be specified in a written statement of the Holder of such
permanent global Security. (Section 203) Principal of and any premium and
interest on a permanent global Security will be payable in the manner described
in the applicable Prospectus Supplement.
CERTAIN COVENANTS OF THE COMPANY
Limitations on Liens. The Indenture provides that the Company will not
create or permit to continue in existence any Lien upon any of the Property of
the Company to secure Indebtedness of the Company other
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than (i) Liens securing taxes, assessments or governmental charges or levies or
the claims or demands of materialmen, mechanics, carriers, warehousemen,
landlords and other like persons; (ii) Liens incurred or deposits made in the
ordinary course of business (a) in connection with worker's compensation,
unemployment insurance, social security and other like laws or (b) to secure the
performance of letters of credit, bids, tenders, sales contracts, leases,
statutory obligations, surety, appeal and performance bonds and other similar
obligations not incurred in connection with the borrowing of money, the
obtaining of advances or the payment of the deferred purchase price of Property;
(iii) attachments, judgments and other similar liens arising in connection with
court proceedings, provided that the execution or other enforcement of such
liens is effectively stayed and the claims secured thereby are being actively
contested in good faith; (iv) any purchase money mortgage or other Lien on
Property acquired or constructed by the Company, or any mortgage or other Lien
created on such Property within 90 days after its acquisition or construction,
which secures Indebtedness (as defined below) representing all or a portion of
the purchase price or construction costs thereof; (v) any lease of Property in
which the Company is the lessee, other than a lease which is part of a sale and
leaseback transaction not entered into in the ordinary course of business; (vi)
Liens on Property subject to lease by the Company to others (including Liens on
the rights of the Company under such lease) in respect of which the holder of
the Indebtedness has no recourse against the Company except recourse to such
Property or to the proceeds from any sale or lease of such Property; (vii) Liens
on any Property existing at the time of acquisition of such Property (including
acquisition through merger or consolidation); (viii) Liens on Property or shares
of stock of a corporation at the time the corporation becomes a Subsidiary or
merges into or consolidates with the Company or a Subsidiary; (ix) Liens
securing indebtedness of a Subsidiary owing to the Company or another
Subsidiary; (x) Liens on Property which has been transferred by the Company in a
transaction which has been accounted for as a sale under generally accepted
accounting principles; (xi) exclusive of any other Lien permitted, other Liens,
provided that the outstanding aggregate principal amount of the Indebtedness of
the Company secured by all such other Liens shall not at any time exceed an
amount equal to 5% of the total assets of the Company after deducting its
intangible assets, all determined on a consolidated basis in accordance with
generally accepted accounting principles, consistently applied; and (xii) an
extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Lien or Liens referred to in the
foregoing provisions provided, however, that such extension, renewal or
replacement Lien shall be limited to all or a part of the same Property that
secured the Lien or Liens extended, renewed or replaced (plus improvements on
such property). In the event the Company creates or permits to continue a
non-permitted Lien, the Company will cause the Debt Securities to be secured
equally and ratably with all other obligations secured by such Lien. (Section
1007)
"Indebtedness" of any Person is defined in the Indenture as all obligations
thereof for (i) money borrowed, which obligations are incurred, assumed or
guaranteed by such Person and (ii) the present value of all payments due under
any lease or under any other arrangement for retention of title if such lease or
other arrangement is a financing lease under generally accepted accounting
principles which, in the case of (i) or (ii) above, in accordance with generally
accepted accounting principles, would be classified as liabilities in the
accounts of such Person or for which, in accordance with such principles, a
reserve would be set up in such accounts. The amount of any Indebtedness shall
equal the aggregate amount of such liabilities and reserves as reflected on such
Person's balance sheet at the date of any determination.
Limitations on Mergers. The Indenture provides that if any merger or
consolidation of the Company with or into any other corporation or any
conveyance or transfer to any person of all or substantially all of the property
or assets of the Company would subject any of the property or assets of the
Company owned immediately prior to such consolidation, merger, conveyance or
transfer to any mortgage, pledge, lien, lease, charge or other security
interest, the Company will, prior to such consolidation, merger, conveyance or
transfer, secure the Debt Securities, equally and ratably with any other Debt of
the Company then entitled to be so secured, by a direct lien on all such
property or assets equal to and ratable with all Liens other than any
theretofore existing thereon. (Section 803)
ABSENCE OF RESTRICTIVE COVENANTS AND EVENT RISK PROVISIONS
The Indenture does not contain any provision which will restrict the
Company in any way from paying dividends or making other distributions on its
capital stock or purchasing or redeeming any of its capital stock,
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or from incurring, assuming or becoming liable upon any type of debt or other
obligations of the Company. The Indenture does not contain any financial ratios
or specified levels of net worth or liquidity to which the Company must adhere.
In addition, the Indenture does not contain any provisions which would require
the Company to repurchase or redeem or otherwise modify the terms of any of its
Debt Securities upon a change in control or other events involving the Company
which may adversely affect the creditworthiness of the Debt Securities.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Securities under the Indenture, may consolidate with or merge into, or convey or
transfer its assets substantially as an entirety to, any Person that is a
corporation, partnership or trust organized and existing under the laws of any
domestic jurisdiction, provided that any successor Person assumes the Company's
obligations on the Debt Securities and under the Indenture, that after giving
effect to the transaction no Event of Default and no event which, after notice
or lapse of time, would become an Event of Default shall have occurred and be
continuing, and that certain other conditions are met. (Section 801)
DEFAULTS AND CERTAIN RIGHTS ON DEFAULT
An Event of Default with respect to any series of Debt Securities is
defined in the Indenture as being any of the following events and such other
event as may be established for the Debt Securities of such series: (i) default
for 30 days in any payment of interest on any Debt Security of such series; (ii)
default with respect to any Debt Security of such series in any payment of
principal or premium, if any, when due; (iii) default in the deposit of any
sinking fund instalment when due; (iv) default in performance of any other
covenant in the Indenture for 30 days after notice to the Company by the Trustee
or the Holders of 25% in principal amount of the Debt Securities of such series
then outstanding; (v) default for 10 days after notice in respect of any
Indebtedness of the Company or any Subsidiary as a result of which such
Indebtedness shall be declared due and payable prior to maturity; or (vi)
certain events in bankruptcy, insolvency or reorganization. No Event of Default
with respect to a particular series of Debt Securities issued under the
Indenture necessarily constitutes an Event of Default with respect to any other
series of Debt Securities issued thereunder. (Section 501) In case an Event of
Default shall occur and be continuing with respect to any series of Debt
Securities, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Debt Securities of the series then outstanding may
declare the principal of such series (or a portion of the principal amount in
the case of certain discounted Debt Securities) to be due and payable. (Section
502) Any Event of Default with respect to a particular series of Debt Securities
may be waived by the Holders of a majority in aggregate principal amount of the
outstanding Debt Securities of such series, except in each case a failure with
respect to any Debt Security to pay principal, premium, if any, or interest, if
any. (Section 513)
The Indenture requires the Company to file annually with the Trustee an
Officers' Certificate as to the absence of certain defaults under the terms of
the Indenture. (Section 1005) The Indenture provides that the Trustee may
withhold notice to the Holders of the Debt Securities of a particular series of
any default (except in payment of principal, premium, if any, or interest, if
any, or in the payment of any sinking fund installment) with respect to such
series of Debt Securities if it considers it in the interest of the Holders of
such series of Debt Securities to do so. (Section 602)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Indenture
provides that the Trustee shall be under no obligation to exercise any of its
rights or powers under the Indenture at the request, order or direction of the
Holders of the Debt Securities unless such Holders shall have offered to the
Trustee reasonable indemnity. (Section 603) Subject to such provisions for
indemnification and certain other rights of the Trustee, the Indenture provides
that the Holders of a majority in principal amount of the outstanding Debt
Securities of a particular series affected shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee with
respect to the Debt Securities of such series. (Section 512)
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MEETINGS, MODIFICATION AND WAIVER
Except as to certain modifications and amendments not adverse to holders of
Debt Securities, modifications and amendments of certain restrictive provisions
under the Indenture may be made only with the consent of the Holders of a
majority in aggregate principal amount of the outstanding Debt Securities of
each series affected by such modification or amendment; provided, however, that
no such modification or amendment may, without the consent of the Holder of each
Outstanding Security affected thereby: (i) change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any Debt
Security or related coupon, (ii) reduce the principal amount of, or premium or
interest on, any Debt Security or related coupon or any premium payable upon the
redemption thereof, (iii) change any obligation of the Company to pay additional
amounts, (iv) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the Maturity thereof, (v) change the coin
or currency in which any Debt Security or any premium or interest thereon is
payable, (vi) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security, (vii) reduce the percentage in
principal amount of Outstanding Securities of any series, the consent of whose
Holders is required for modification or amendment of the Indenture or for waiver
of compliance with certain provisions of the Indenture or for waiver of certain
defaults, (viii) reduce the requirements contained in the Indenture for quorum
or voting, (ix) change any obligation of the Company to maintain an office or
agency in the places and for the purposes required by the Indenture, (x)
adversely affect the right of repayment, if any, of the Debt Securities at the
option of the Holders thereof, or (xi) modify any of the above provisions.
(Section 902)
The Holders of at least a majority in aggregate principal amount of the
Outstanding Securities of each series may, on behalf of all Holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1009) The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of each series may, on behalf of all
Holders of Debt Securities of that series and any coupons appertaining thereto,
waive any past default and its consequences under the Indenture with respect to
Debt Securities of that series, except a default (i) in the payment of principal
of (or premium, if any) or any interest on any Debt Security or coupon of such
series, and (ii) in respect of a covenant or provision of the Indenture which
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series or coupon affected. (Section 513)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver thereunder or
whether a quorum is present at a meeting of Holders of Debt Securities or the
number of votes entitled to be cast by the Holder of any Debt Security (i) the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof, (ii) the principal amount of a Debt Security denominated in a
foreign currency or a composite currency shall be the U.S. dollar equivalent,
determined as of the date of original issuance of such Debt Security by the
Company in good faith, of the principal amount of such Debt Security (or, in the
case of an Original Issue Discount Security, the U.S. dollar equivalent,
determined as of the date of original issuance of such Debt Security, of the
amount determined as provided in (i) above) and (iii) except as specified in the
Indenture, Debt Securities owned by the Company or any other obligor upon the
Debt Securities or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding. (Section 101)
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series. (Section 1301) A meeting may be called at any time
by the Trustee, and also, upon request, by the Company or the Holders of at
least 10% in principal amount of the Outstanding Securities of such series, in
any such case upon notice given in accordance with "Notices" below. (Section
1302) Except for any consent which must be given by the Holder of each
Outstanding Security affected thereby, as described above, any resolution
presented at a meeting or adjourned meeting at which a quorum (as described
below) is present may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, any resolution with respect to any consent or waiver
which must be given by the Holders of not less than 66 2/3% in principal amount
of the Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly convened at which a quorum is present only by the
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affirmative vote of the Holders of not less than 66 2/3% in principal amount of
the Outstanding Securities of that series; and provided, further, that, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Securities of a series may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the Holders of at least such specified percentage in
principal amount of the Outstanding Securities of that series. Any resolution
passed or decision taken at any meeting of Holders of Securities of any series
duly held in accordance with the Indenture will be binding on all Holders of
Securities of that series and the related coupons. The quorum at any meeting
called to adopt a resolution, and at any reconvened meeting, will be persons
holding or representing a majority in principal amount of the Outstanding
Securities of a series; provided, however, that if any action is to be taken at
such meeting with respect to a consent or waiver which must be given by the
Holders of not less than 66 2/3% in principal amount of the Outstanding
Securities of a series, the persons holding or representing 66 2/3% in principal
amount of the Outstanding Securities of such series will constitute a quorum.
(Section 1304)
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides, unless the Company elects otherwise pursuant to
Section 301 of the Indenture with respect to the Debt Securities of any series,
that the Company may elect either (i) to defease and be discharged from any and
all obligations with respect to such Debt Securities (except for the obligations
to register the transfer or exchange of such Debt Securities, to replace
temporary or mutilated, destroyed, lost or stolen Debt Securities, to maintain
an office or agency in respect of the Debt Securities and to hold moneys for
payment in trust) ("defeasance") or (ii) to be released from its obligations
with respect to such Debt Securities under Sections 1006, 1007 and 1008 of the
Indenture ("covenant defeasance"), in either case upon the deposit with the
Trustee (or other qualifying trustee), in trust for such purpose, of money,
and/or U.S. Government Obligations which through the payment of principal and
interest in accordance with their terms will provide money, in an amount
sufficient to pay the principal of and any premium and interest on such Debt
Securities, and any mandatory sinking fund or analogous payments thereon, on the
scheduled due dates therefor and any amounts that may be payable at the option
of the Holder on any Repayment Date. Such a trust may only be established if,
among other things, the Company has delivered to the Trustee an opinion of
counsel (as specified in the Indenture) to the effect that the Holders of such
Debt Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance or covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or covenant defeasance
had not occurred and, in the case of Bearer Securities, there will be no adverse
federal tax consequences to the Holders of such Bearer Securities as a result of
such defeasance or covenant defeasance. Such opinion, in the case of defeasance
under clause (i) above, must refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable federal income tax law occurring after
the date of the Indenture. In the case of covenant defeasance, such termination
will not relieve the Company of its obligation to pay when due the principal of
or interest on the Debt Securities of such series if the Debt Securities of such
series are not paid from the money or U.S. Government Obligations held by the
Trustee for the payment thereof. The Prospectus Supplement may further describe
the provisions, if any, permitting such defeasance or covenant defeasance with
respect to the Debt Securities of a particular series. (Article Fourteen)
NOTICES
Except as otherwise provided in the Indenture, notices to Holders of Bearer
Securities will be given by publication at least twice in a daily newspaper in
The City of New York and in such other city or cities as may be specified in
such Securities. Notices to Holders of Registered Securities will be given by
mail to the addresses of such Holders as they appear in the Security Register.
(Sections 101 and 106)
TITLE
Title to any Bearer Securities and any coupons appertaining thereto will
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
and the registered owner of any Registered Security as the absolute owner
thereof
11
<PAGE> 12
(whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (Section 308)
REPLACEMENT OF DEBT SECURITIES AND COUPONS
Any mutilated Debt Security or a Debt Security with a mutilated coupon
appertaining thereto will be replaced by the Company at the expense of the
Holder upon surrender of such Debt Security to the Trustee. Debt Securities or
coupons that become destroyed, stolen or lost will be replaced by the Company at
the expense of the Holder upon delivery to the Trustee of the Debt Security,
coupon or coupons or evidence of the destruction, loss or theft thereof
satisfactory to the Company and the Trustee; in the case of any coupon which
becomes destroyed, stolen or lost, such coupon will be replaced by issuance of a
new Debt Security in exchange for the Debt Security to which such coupon
appertains. In the case of a destroyed, lost or stolen Debt Security or coupon
an indemnity satisfactory to the Trustee and the Company may be required at the
expense of the Holder of such Debt Security or coupon before a replacement Debt
Security will be issued. (Section 306)
CONCERNING THE TRUSTEE
The Trustee has from time to time made loans to the Company and has
performed other services for the Company in the normal course of its business
and the Company expects to continue to conduct such transactions with the
Trustee. Under the provisions of the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), upon the occurrence and continuance of a default
under an indenture, if a trustee has a conflicting interest (as defined in the
Trust Indenture Act) the trustee must, within 90 days, either eliminate such
conflicting interest or resign. Under the provisions of the Trust Indenture Act,
an indenture trustee shall be deemed to have a conflicting interest if, upon the
occurrence of a default under the indenture, the trustee is a creditor of the
obligor. If the trustee fails either to eliminate the conflicting interest or to
resign within 10 days after the expiration of such 90-day period, the trustee is
required to notify security holders to this effect and any security holder who
has been a bona fide holder for at least six months may petition a court to
remove the trustee and to appoint a successor trustee.
DESCRIPTION OF WARRANTS
The following description of the terms of the Warrants sets forth certain
general terms and provisions of the Warrants to which any Prospectus Supplement
may relate. The particular terms of the Warrants offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply to
the Warrants so offered will be described in the Prospectus Supplement relating
to such Warrants.
Warrants may be offered independently or together with any series of Debt
Securities offered by a Prospectus Supplement and may be attached to or separate
from such Debt Securities. Each series of Warrants will be issued under a
separate warrant agreement (a "Warrant Agreement") to be entered into between
the Company and a bank or trust company, as Warrant Agent (the "Warrant Agent"),
all as set forth in the Prospectus Supplement relating to such series of
Warrants. The Warrant Agent will act solely as the agent of the Company in
connection with the certificates for the Warrants (the "Warrant Certificates")
of such series and will not assume any obligation or relationship of agency or
trust for or with any holders of Warrant Certificates or beneficial owners of
Warrants. Copies of the forms of Warrant Agreements, including the forms of
Warrant Certificates, are filed as an exhibit to the Registration Statement to
which this Prospectus pertains. The following summaries of certain provisions of
the forms of Warrant Agreements and Warrant Certificates do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Warrant Agreements and the Warrant Certificates.
GENERAL
Reference is hereby made to the Prospectus Supplement relating to the
particular series of Warrants, if any, offered thereby for the terms of such
Warrants including, where applicable: (i) the offering price; (ii) the
currencies in which such Warrants are being offered; (iii) the designation,
aggregate principal amount, currencies, denominations and terms of the series of
Debt Securities purchasable upon exercise of such
12
<PAGE> 13
Warrants; (iv) the designation and terms of the series of Debt Securities with
which such Warrants are being offered and the number of such Warrants being
offered with each such Debt Security; (v) the date on and after which such
Warrants and the related series of Debt Securities will be transferable
separately; (vi) the principal amount of the series of Debt Securities
purchasable upon exercise of each such Warrant and the price at which and
currencies in which such principal amount of Debt Securities of such series may
be purchased upon such exercise; (vii) the date on which the right to exercise
such Warrants shall commence and the date (the "Expiration Date") on which such
right shall expire; (viii) federal income tax consequences; and (ix) any other
terms of such Warrants.
Warrant Certificates of each series will be in registered form and will be
exchangeable at the option of the holder thereof for Warrant Certificates of
such series of like tenor representing in the aggregate the number of Warrants
surrendered for exchange. Warrant Certificates of each series will be
transferable upon surrender without service charge, subject to the payment of
any taxes or other governmental charges due in respect of a transfer, and will
be exchangeable and transferable at the corporate trust office of the Warrant
Agent or any other office indicated in the Prospectus Supplement relating to
such series of Warrants. Prior to the exercise of their Warrants, holders of
Warrants will not have any of the rights of holders of the series of Debt
Securities purchasable upon such exercise, including the right to receive
payments of principal of, premium, if any, or interest on the series of Debt
Securities purchasable upon such exercise, or to enforce any of the covenants in
the Indenture.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal
amount of the related series of Debt Securities at such exercise price as shall
in each case be set forth in, or calculable as set forth in, the Prospectus
Supplement relating to such Warrant. Warrants of a series may be exercised at
the corporate trust office of the Warrant Agent for such series of Warrants (or
any other office indicated in the Prospectus Supplement relating to such series
of Warrants) at any time prior to 5:00 P.M., New York City time, on the
Expiration Date set forth in the Prospectus Supplement relating to such series
of Warrants. After the close of business on the Expiration Date relating to such
series of Warrants (or such later date to which such Expiration Date may be
extended by the Company), unexercised Warrants of such series will become void.
Warrants of a series may be exercised by delivery to the appropriate
Warrant Agent of payment, as provided in the Prospectus Supplement relating to
such series of Warrants, of the amount required to purchase the principal amount
of the series of Debt Securities purchasable upon such exercise, together with
certain information as set forth on the reverse side of the Warrant Certificate
evidencing such Warrants. Such Warrants will be deemed to have been exercised
upon receipt of the exercise price, subject to the receipt within five business
days of such Warrant Certificate. Upon receipt of such payment and such Warrant
Certificate, properly completed and duly executed, at the corporate trust office
of the appropriate Warrant Agent (or any other office indicated in the
Prospectus Supplement relating to such series of Warrants), the Company will, as
soon as practicable, issue and deliver the principal amount of the series of
Debt Securities purchasable upon such exercise. If fewer than all of the
Warrants represented by such Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining amount of Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities and the Warrants separately or
together (i) to one or more underwriters for public offering and sale by them
and (ii) to investors directly or through agents. The distribution of the Debt
Securities and the Warrants may be effected from time to time in one or more
transactions at a fixed price or prices (which may be changed from time to
time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Debt Securities and
the Warrants offered thereby.
In connection with the sale of the Debt Securities and the Warrants,
underwriters, dealers or agents may receive compensation from the Company or
from purchasers of the Debt Securities and the Warrants for whom they may act as
agents, in the form of discounts, concessions or commissions. The underwriters,
dealers
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<PAGE> 14
or agents which participate in the distribution of the Debt Securities and the
Warrants may be deemed to be underwriters under the Securities Act of 1933, as
amended, and any discounts or commissions received by them and any profit on the
resale of the Debt Securities and the Warrants received by them may be deemed to
be underwriting discounts and commissions thereunder. Any such underwriter,
dealer or agent will be identified and any such compensation received from the
Company will be described in the Prospectus Supplement. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
Under agreements that may be entered into with the Company, underwriters,
dealers and agents may be entitled to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended, or to contribution with respect to payments which the
underwriters, dealers or agents may be required to make in respect thereof.
All Debt Securities and Warrants will be new issues of securities with no
established trading market. Any underwriters to whom Debt Securities or Warrants
are sold by the Company for public offering and sale may make a market in such
securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any such securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company and Ford in
the ordinary course of business.
VALIDITY
The validity of the Debt Securities and the Warrants is being passed upon
for the Company by Henry Lerner, Esq., Senior Vice President, General Counsel
and Secretary to the Company and certain legal matters will be passed upon for
any underwriters or agents by Orrick, Herrington & Sutcliffe, San Francisco,
California.
EXPERTS
The consolidated financial statements and related supplemental schedules of
USL Capital Corporation and subsidiary companies appearing in the Company's 1993
Annual Report on Form 10-K have been audited by Coopers & Lybrand L.L.P.,
independent accountants, as stated in their opinion thereon incorporated herein
by reference. Such financial statements and related schedules have been so
incorporated in reliance upon such opinion given upon the authority of that firm
as experts in accounting and auditing.
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<PAGE> 8
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS NOR
ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Selected Financial Data................. S-3
Use of Proceeds......................... S-4
Description of the Notes................ S-4
Underwriting............................ S-6
PROSPECTUS
Information Incorporated by
Reference............................. 2
Available Information................... 2
USL Capital Corporation................. 3
Use of Proceeds......................... 3
Ratio of Earnings to Fixed Charges...... 3
Description of the Debt Securities...... 4
Description of Warrants................. 12
Plan of Distribution.................... 13
Validity................................ 14
Experts................................. 14
===============================================================================
</TABLE>
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$125,000,000
(LOGO)
USL CAPITAL
CORPORATION
8 1/8% SENIOR NOTES
DUE FEBRUARY 15, 2000
------------------------
PROSPECTUS SUPPLEMENT
JANUARY 31, 1995
------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
===============================================================================
