<PAGE> 1
Information contained herein is subject to completion or amendment.
Filed Pursuant to Rule 424(b)(5)
File No.: 333-45603
SUBJECT TO COMPLETION, DATED MAY 21, 1999
PRICING SUPPLEMENT
(To Prospectus Dated March 12, 1998) May , 1999
- --------------------------------------------------------------------------------
LOGO
$400,000,000
HOMESIDE LENDING, INC.
% NOTES DUE 2004
- --------------------------------------------------------------------------------
The Notes will mature on . We will pay interest on the
Notes semiannually on and , beginning
, 1999. The Notes are not subject to redemption at the
option of HomeSide Lending, Inc. or repayment at the option of the holders
thereof prior to maturity and will not be subject to any sinking fund. The Notes
represent senior unsecured obligations of HomeSide Lending.
INVESTING IN THE NOTES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 16 OF THE ACCOMPANYING PROSPECTUS.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined this
Pricing Supplement or the related Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE DISCOUNTS ISSUER
-------------- ------------ -----------
<S> <C> <C> <C>
Per Note........................... % % %
Total.............................. $ $ $
</TABLE>
Interest on the Notes will accrue from , 1999 to the
date of delivery.
The Underwriters are offering the Notes subject to various conditions. The
Underwriters expect to deliver the Notes, in book-entry form only, to purchasers
through The Depository Trust Company on or about June , 1999.
WARBURG DILLON READ LLC
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
MERRILL LYNCH & CO.
J.P. MORGAN & CO.
<PAGE> 2
You should rely only on the information contained or incorporated by
reference in this Pricing Supplement and the accompanying Prospectus. We have
not, and the underwriters have not, authorized any other person to provide you
with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this Pricing Supplement and the accompanying
Prospectus is accurate as of their dates. Our business, financial condition,
results of operations and prospects may have changed since then.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PRICING SUPPLEMENT
Use of Proceeds............................................. PS-3
Selected Consolidated Financial Information................. PS-4
Description of Notes........................................ PS-5
United States Federal Income Tax Considerations............. PS-6
Supplemental Plan of Distribution........................... PS-9
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 3
Prospectus Summary.......................................... 4
Risk Factors................................................ 16
HomeSide.................................................... 23
Use of Proceeds............................................. 25
Selected Consolidated Financial Information................. 26
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 32
Industry Overview........................................... 55
Business.................................................... 58
Management.................................................. 78
Security Ownership of Certain Beneficial Owners and
Management................................................ 87
Description of Certain Indebtedness......................... 87
Description of the Parent Notes............................. 90
Description of Notes........................................ 92
United States Federal Income Tax Considerations............. 113
Plan of Distribution........................................ 120
Legal Matters............................................... 121
Experts..................................................... 121
Index to Financial Statements............................... F-1
</TABLE>
PS-2
<PAGE> 3
USE OF PROCEEDS
We will use approximately $100 million of the net proceeds (estimated to be
$ million) from the sale of the Notes offered hereby to finance the
acquisition of the mortgage servicing assets of First Chicago National Bank. The
mortgage servicing rights to be acquired relate to mortgage loans of
approximately $18 billion. The total purchase consideration for the acquisition
is approximately $128 million. The balance of the net proceeds will be used for
working capital and general corporate purposes.
PS-3
<PAGE> 4
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The selected interim and annual consolidated financial and operating
information of "HomeSide Lending" set forth below should be read in conjunction
with, and is qualified in its entirety by reference to, the Consolidated
Financial Statements and the notes thereto included elsewhere in or incorporated
by reference in the accompanying Prospectus. All information after February 10,
1998 and for the periods beginning after February 10, 1998 refers to HomeSide
Lending after its acquisition by National Australia Bank, Ltd. (the "National").
All information as of or before February 10, 1998 and for the periods ending
prior to February 11, 1998 ("HomeSide Lending -- Predecessor Company") is for
HomeSide Lending prior to its acquisition by the National. The consolidated
operating results for HomeSide Lending -- Predecessor Company for the period
September 1, 1997 to February 10, 1998 and for HomeSide Lending for the periods
October 1, 1998 to March 31, 1999 and February 11, 1998 to March 31, 1998 and
the consolidated balance sheet date at March 31, 1999 are unaudited but, in the
opinion of management, contain all material adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation; such results of
operations are not necessarily indicative of results to be expected for the full
year. The consolidated operating results of HomeSide Lending Predecessor Company
for the periods March 16, 1996 to February 29, 1997, March 1, 1997 to February
10, 1998 and for HomeSide Lending for the period February 11, 1998 to September
30, 1998 and the consolidated balance sheet data at February 10, 1998 and
September 30 1998 are derived from, and are qualified by reference to, the
audited consolidated financial statements incorporated by reference in the
accompanying Prospectus and should be read in conjunction with those financial
statements and notes thereto.
<TABLE>
<CAPTION>
HOMESIDE LENDING
PREDECESSOR
HOMESIDE LENDING HOMESIDE COMPANY
PREDECESSOR COMPANY LENDING -------------------
------------------------------------------- -------------------- FOR THE PERIOD
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FROM
FROM FROM FROM SEPTEMBER 1, 1997
MARCH 16, 1996 MARCH 1, 1997 FEBRUARY 11, 1998 TO TO
TO FEBRUARY 29, 1997 TO FEBRUARY 10, 1998 SEPTEMBER 30, 1998 FEBRUARY 10, 1998
-------------------- -------------------- -------------------- -------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues:
Mortgage servicing fees...... $ 308,906 $ 393,292 $ 312,678 $ 192,475
Amortization of mortgage
servicing rights........... (153,694) (207,508) (189,881) (106,190)
--------- --------- --------- ---------
Net servicing revenue........ 155,212 185,784 122,797 86,285
Interest income.............. 81,507 97,050 99,749 51,166
Interest expense............. (66,833) (81,770) (62,476) (43,897)
--------- --------- --------- ---------
Net interest revenue......... 14,674 15,280 37,273 7,269
Net mortgage origination
revenue.................... 66,073 85,206 79,149 46,696
Other income................. 682 1,671 11,028 634
--------- --------- --------- ---------
Total revenues....... 236,641 287,941 250,277 140,884
Expenses:
Salaries and employee
benefits................... 72,976 75,419 73,983 36,167
Occupancy and equipment...... 11,770 15,447 13,107 7,820
Servicing losses on investor-
owned loans and foreclosure
related expenses........... 17,934 21,974 21,202 11,465
Goodwill amortization........ 150 592 22,283 283
Other expenses............... 40,616 37,639 39,156 18,480
--------- --------- --------- ---------
Total expenses....... 143,446 151,071 169,731 74,185
Income before income taxes... 93,195 136,870 80,541 66,699
Income tax expense........... 37,278 53,379 40,101 26,010
--------- --------- --------- ---------
Net income................... $ 55,917 $ 83,491 $ 40,440 $ 40,689
========= ========= ========= =========
OTHER DATA:
Ratio of earnings to fixed
charges.................... 2.36 2.65 2.26 2.49
<CAPTION>
HOMESIDE LENDING
------------------------------------------
FOR THE PERIOD FROM
FEBRUARY 11, 1998 FOR THE SIX MONTHS
TO MARCH 31, 1998 ENDED MARCH 31, 1999
------------------- --------------------
<S> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues:
Mortgage servicing fees...... $ 63,585 $276,734
Amortization of mortgage
servicing rights........... (36,976) 179,066)
-------- --------
Net servicing revenue........ 26,609 97,668
Interest income.............. 18,290 96,598
Interest expense............. (13,629) (62,301)
-------- --------
Net interest revenue......... 4,661 34,297
Net mortgage origination
revenue.................... 14,269 79,925
Other income................. 619 2,513
-------- --------
Total revenues....... 46,158 214,403
Expenses:
Salaries and employee
benefits................... 14,630 68,328
Occupancy and equipment...... 2,394 13,144
Servicing losses on investor-
owned loans and foreclosure
related expenses........... 1,823 18,643
Goodwill amortization........ 4,870 17,453
Other expenses............... 8,033 31,943
-------- --------
Total expenses....... 31,750 149,511
Income before income taxes... 14,408 64,892
Income tax expense........... 7,518 32,115
-------- --------
Net income................... $ 6,890 $ 32,777
======== ========
OTHER DATA:
Ratio of earnings to fixed
charges.................... 2.01 2.02
</TABLE>
<TABLE>
<CAPTION>
HOMESIDE HOMESIDE
LENDING LENDING
------------------ --------------
AT AT
SEPTEMBER 30, 1998 MARCH 31, 1999
------------------ --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Selected Balance Sheet Data:
Mortgage loans held for sale................................ $2,048,989 $1,849,792
Mortgage servicing rights................................... 1,766,214 2,813,128
Total assets................................................ 5,720,155 6,205,216
Notes payable............................................... 2,749,000 3,033,200
Long-term debt.............................................. 1,185,926 1,185,287
Total liabilities................................... 4,364,647 4,854,132
Total stockholder's equity.......................... 1,355,508 1,351,084
</TABLE>
PS-4
<PAGE> 5
DESCRIPTION OF NOTES
The following summaries of certain provisions of the Notes do not purport
to be complete and are qualified in their entirety by reference to the actual
provisions of the Notes. The particular terms of the Notes contained herein
supplement, and, to the extent inconsistent therewith, replace, the description
of the general terms and provisions of the Medium-Term Notes as set forth and
described in the accompanying Prospectus, to which description reference is
hereby made.
The % Notes due , 2004 (the "Notes") are Fixed Rate
Notes (as defined in the accompanying Prospectus) and are part of the
Medium-Term Note series of HomeSide Lending described in the accompanying
Prospectus. The Notes will be issued under an Indenture, dated as of May 15,
1997 (the "Indenture"), between HomeSide Lending and The Bank of New York, as
trustee (the "Trustee"). The following summaries of certain provisions of the
Notes and the Indenture do not purport to be complete and are qualified in their
entirety by reference to the actual provisions of the Notes and the Indenture,
including the definitions therein of certain terms.
The Indenture does not limit the aggregate principal amount of Notes that
we may issue thereunder and we may, from time to time, without the consent of
the holders of the Notes, provide for the issuance of additional Notes or other
debt securities under the Indenture in addition to the Notes offered hereby. The
bank credit agreement, dated January 31, 1997, as further amended as of
September 30, 1997 and December 31, 1997 (the "Bank Credit Agreement"), and an
indenture relating to outstanding debt of the Parent contain certain covenants
limiting HomeSide Lending's ability to incur indebtedness. See "Description of
Certain Indebtedness", "Description of the Parent Notes" and "Description of
Notes -- General" in the accompanying Prospectus.
The Notes will be unsecured and unsubordinated obligations of HomeSide
Lending and will rank equally with other unsecured and unsubordinated
indebtedness of HomeSide Lending, but will be effectively subordinated to all
present and future secured indebtedness of HomeSide Lending as to the assets of
HomeSide Lending securing such indebtedness and to the claims of creditors of
HomeSide Lending's subsidiaries as to the assets of those subsidiaries. As of
March 31, 1999, HomeSide Lending had total outstanding indebtedness of $4.2
billion, none of which was secured, consisting of $1.2 billion of
Medium--Term Notes outstanding under the Indenture, $1.8 billion outstanding
under HomeSide Lending's Credit Agreement with the National and $1.3 billion
outstanding under HomeSide Lending's commercial paper program. As of March 31,
1999 there was no outstanding indebtedness under the Bank Credit Agreement.
Under certain circumstances, amounts outstanding under the Bank Credit Agreement
become secured obligations. See "Description of Certain Indebtedness -- Bank
Credit Agreement" in the accompanying Prospectus.
Interest on the Notes will be payable semiannually on and
of each year (each, an "Interest Payment Date"), commencing on
to the persons in whose names the Notes are registered at the close of
business on the preceding or (each, a "record date"), as the
case may be (whether or not a Business Day, as defined below). The Notes will
bear interest at the rate per annum shown on the cover of this Pricing
Supplement from or from the most recent date to which
interest has been paid or duly made available for payment to, but excluding, the
applicable Interest Payment Date or the maturity date, as the case may be.
Interest payable at maturity will be payable to the persons to whom principal
shall then be payable. Interest on the Notes will be computed on the basis of a
360-day year of twelve 30-day months. If an Interest Payment Date or the
maturity date of the Notes falls on a day that is not a Business Day, the
payment will be made on the next succeeding Business Day as if made on the date
such payment was due, and no interest will accrue on such payment for the period
from and after such Interest Payment Date or the maturity date, as the case may
be, to the date of such payment on the next succeeding Business Day. "Business
Day" means any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions are authorized or required by
law, regulation or executive order to close in The City of New York. The Notes
will mature on , may not be redeemed at the option of
HomeSide Lending or repaid at the option of the holders prior to maturity and
will not be subject to any sinking fund. See "Description of Notes" in the
accompanying Prospectus.
PS-5
<PAGE> 6
The Notes will be issued in book-entry form on or about June , 1999
through the facilities of The Depository Trust Company in New York in minimum
denominations of $1,000 and integral multiples thereof. See "Description of
Notes -- Book-Entry Notes" in the accompanying Prospectus.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary representing the opinion of Hutchins,Wheeler &
Dittmar as to the United States Federal income tax consequences of the purchase,
ownership and disposition of the Notes is based upon laws, regulations, rulings
and decisions now in effect, all of which are subject to change (including
changes in effective dates) or possible differing interpretations. It deals only
with Notes held as capital assets and does not purport to deal with persons in
special tax situations, such as financial institutions, insurance companies,
regulated investment companies, dealers in securities or currencies, persons
holding Notes as a hedge against currency risks or as a position in a "straddle"
for tax purposes, or persons whose functional currency is not the United States
dollar. It also does not deal with holders other than original purchasers
(except where otherwise specifically noted). Persons considering the purchase of
the Notes should consult their own tax advisors concerning the application of
United States Federal income tax laws to their particular situations as well as
any consequences of the purchase, ownership and disposition of the Notes arising
under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States Federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia (other than a partnership that is not treated as a United
States person under any applicable Treasury regulations), (iii) an estate whose
income is subject to United States federal income tax regardless of its source,
(iv) a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust, or
(v) any other person whose income or gain in respect of a Note is effectively
connected with the conduct of a United States trade or business. Notwithstanding
the preceding clause (iv), to the extent provided in regulations, certain trusts
in existence on August 20, 1996 and treated as United States persons prior to
such date that elect to continue to be so treated also shall be considered U.S.
Holders. As used herein, the term "non-U.S. Holder" means a beneficial owner of
a Note that is not a U.S. Holder.
U.S. HOLDERS
Payments of Interest. Payments of interest on a Note generally will be
taxable to a U.S. Holder as ordinary interest income at the time such payments
are accrued or are received (in accordance with the U.S. Holder's regular method
of tax accounting).
MARKET DISCOUNT. If a U.S. Holder purchases a Note for an amount that is
less than its stated redemption price at maturity such U.S. Holder will be
treated as having purchased such Note at a "market discount," unless such market
discount is less than a specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment on, or any gain realized on the sale, exchange,
retirement or other disposition of, a Note as ordinary income to the extent of
the lesser of (i) the amount of such payment or realized gain or (ii) the market
discount which has not previously been included in income and is treated as
having accrued on such Note at the time of such payment or disposition. Market
discount will be considered to accrue ratably during the period from the date of
acquisition to the maturity date of the Note, unless the U.S. Holder elects to
accrue market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Note with market discount until the maturity of the Note or
certain earlier dispositions, because a current deduction is only allowed to the
extent the interest expense exceeds an allocable portion of market discount. A
U.S. Holder may elect to include market discount
PS-6
<PAGE> 7
in income currently as it accrues (on either a ratable or semiannual compounding
basis), in which case the rules described above regarding the treatment as
ordinary income of gain upon the disposition of the Note and upon the receipt of
certain cash payments and regarding the deferral of interest deductions will not
apply. Generally, such currently included market discount is treated as ordinary
interest for United States Federal income tax purposes. Such an election will
apply to all debt instruments acquired by the U.S. Holder on or after the first
day of the first taxable year to which such election applies and may be revoked
only with the consent of the IRS.
PREMIUM. If a U.S. Holder purchases a Note for an amount that is greater
than the sum of all amounts payable on the Note after the purchase date other
than payments of qualified stated interest, such U.S. Holder will be considered
to have purchased the Note with "amortizable bond premium" equal in amount to
such excess. A U.S. Holder may elect to amortize such premium using a constant
yield method over the remaining term of the Note and may offset interest
otherwise required to be included in respect of the Note during any taxable year
by the amortized amount of such excess for the taxable year. However, if the
Note may be optionally redeemed after the U.S. Holder acquires it at a price in
excess of its stated redemption price at maturity, special rules would apply
which could result in a deferral of the amortization of some bond premium until
later in the term of the Note. Any election to amortize bond premium applies to
all taxable debt instruments acquired by the U.S. Holder on or after the first
day of the first taxable year to which such election applies and may be revoked
only with the consent of the IRS.
DISPOSITION OF A NOTE. Except as discussed above, upon the sale, exchange
or retirement of a Note, a U.S. Holder generally will recognize taxable gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement (other than amounts representing accrued and unpaid interest) and
such U.S. Holder's adjusted tax basis in the Note. A U.S. Holder's adjusted tax
basis in a Note generally will equal such U.S. Holder's initial investment in
the Note increased by any accrued market discount included in income and
decreased by the amount of any payments, other than qualified stated interest
payments, received and amortizable bond premium taken with respect to such Note.
Such gain or loss generally will be long-term capital gain or loss if the Note
was held for more than one year. Noncorporate taxpayers are subject to reduced
maximum rates on long term capital gains and are generally subject to tax at
ordinary income rates on short term capital gains. The deductibility of capital
losses is subject to certain limitations. Prospective investors should consult
their own tax advisors concerning these tax law provisions.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest on a Note, unless such
non-U.S. Holder is a direct or indirect 10% or greater shareholder of the
Company, a controlled foreign corporation related to the Company or a bank
receiving interest described in section 881(c)(3)(A) of the Code. To qualify for
the exemption from taxation, the last United States payor in the chain of
payment prior to payment to a non-U.S. Holder (the "Withholding Agent") must
have received in the year in which a payment of interest or principal occurs, or
in either of the two preceding calendar years, a statement that (i) is signed by
the beneficial owner of the Note under penalties of perjury, (ii) certifies that
such owner is not a U.S. Holder and (iii) provides the name and address of the
beneficial owner. The statement may be made on an IRS Form W-8 or a
substantially similar form, and the beneficial owner must inform the Withholding
Agent of any change in the information on the statement within 30 days of such
change. If a Note is held through a securities clearing organization or certain
other financial institutions, the organization or institution may provide a
signed statement to the Withholding Agent. However, in such case, the signed
statement must be accompanied by a copy of the IRS Form W-8 or the substitute
form provided by the beneficial owner to the organization or institution. The
Treasury Department is considering implementation of further certification
requirements aimed at determining whether the issuer of a debt obligation is
related to holders thereof.
Final regulations dealing with withholding tax on income paid to foreign
persons and related matters (the "New Withholding Regulations") were issued by
the Treasury Department on October 6, 1997. The New Withholding Regulations will
generally be effective for payments made after December 31, 2000, subject to
PS-7
<PAGE> 8
certain transition rules. Prospective non-U.S. Holders are strongly urged to
consult their own tax advisors with respect to the New Withholding Regulations.
Generally, a non-U.S. Holder will not be subject to Federal income taxes on
any amount which constitutes capital gain upon retirement or disposition of a
Note, provided the gain is not effectively connected with the conduct of a trade
or business in the United States by the non-U.S. Holder. Certain other
exceptions may be applicable, and a non-U.S. Holder should consult its tax
advisor in this regard.
The Notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of the Company
or, at the time of such individual's death, payments in respect of the Notes
would have been effectively connected with the conduct by such individual of a
trade or business in the United States.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the Notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's taxpayer identification number) in the required
manner. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Payments made in
respect of the Notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section would establish
an exemption from backup withholding for those non-U.S. Holders who are not
exempt recipients.
In addition, upon the sale of a Note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-U.S.
Holder (and certain other conditions are met). Such a sale must also be reported
by the broker to the IRS, unless either (i) the broker determines that the
seller is an exempt recipient or (ii) the seller certifies its non-U.S. status
(and certain other conditions are met). Certification of the registered owner's
non-U.S. status would be made normally on an IRS Form W-8 under penalties of
perjury, although in certain cases it may be possible to submit other
documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PS-8
<PAGE> 9
SUPPLEMENTAL PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in a distribution agreement
(the "Distribution Agreement"), as supplemented by a terms agreement (the "Terms
Agreement"), relating to HomeSide Lending's Medium-Term Notes (including the
Notes), HomeSide Lending has agreed to sell to each of the Underwriters named
below (the "Underwriters"), and each of the Underwriters has severally agreed to
purchase, the respective principal amount of the Notes set forth opposite its
name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------- ----------------
<S> <C>
Warburg Dillon Read LLC..................................... $
Banc of America Securities LLC..............................
Chase Securities Inc........................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated..........
J.P. Morgan Securities Inc..................................
------------
Total............................................. $400,000,000
============
</TABLE>
In the Distribution Agreement and the Terms Agreement, the several
Underwriters have agreed, subject to the terms and conditions set forth therein,
to purchase all of the Notes offered hereby if any are purchased.
The Underwriters have advised HomeSide Lending that they propose to offer
the Notes directly to the public at the public offering price set forth on the
cover page of this Pricing Supplement, and to certain dealers at such price less
a concession not in excess of . % of the principal amount per Note. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of . % of the principal amount per Note to certain other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.
The Notes are a new issue of securities with no established trading market.
HomeSide Lending has been advised by the Underwriters that they intend to make a
market in the Notes but are not obligated to do so and may discontinue any
market making at any time without notice. The Notes will not be listed on any
stock exchange, and there can be no assurance that there will be a secondary
market for the Notes or that there will be liquidity in such market if one
develops.
The Underwriters and/or certain of their affiliates have engaged and may in
the future engage in various investment banking and/or commercial banking
transactions with HomeSide Lending and certain of its affiliates in the ordinary
course of business. See "Plan of Distribution" in the accompanying Prospectus.
HomeSide Lending has agreed to indemnify the several Underwriters against,
or to provide contribution with respect to, certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See "Plan of
Distribution" in the accompanying Prospectus.
The Underwriters are permitted to engage in certain transactions that
stabilize the price of the Notes. Such transactions consist of bids or purchases
for the purpose of pegging, fixing or maintaining the price of the Notes. If the
Underwriters create a short position in the Notes in connection with the
offering, i.e., if they sell Notes in an aggregate principal amount exceeding
that set forth on the cover page of this Pricing Supplement, the Underwriters
may reduce that short position by purchasing Notes in the open market.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.
Neither HomeSide Lending nor any of the Underwriters makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Notes. In
addition, neither the Issuer nor any of the Underwriters makes any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
HomeSide Lending estimates that it will incur offering expenses of
approximately $ .
PS-9
