Pricing Supplement No. 673 Dated 5/17/94 Rule 424(b)(3)
(To Prospectus dated December 14, 1993 and File No. 33-51269,
Prospectus Supplement dated December 14, 1993) 33-57922 and 33-49136
SALOMON INC
Medium-Term Notes, Series D
(Registered Notes -- Floating Rate or Indexed Rate)
Due More Than Nine Months from Date of Issue
Principal Amount or Face Amount: $200,000,000.00
Issue Price: 100.0000000000%
Proceeds to Company on original issuance: $199,300,000.00
Commission or Discount on original issuance: $700,000.00
Salomon Brothers Inc's capacity on original issuance: |X| As agent
| | As principal
If as principal:
| | The Registered Notes are being offered at varying prices related
to prevailing market prices at the time of resale.
| | The Registered Notes are being offered at a fixed initial public
offering price of % of Principal Amount or Face Amount.
Original Issue Date: 5/18/94
Stated Maturity: 5/18/99
Specified Currency:
(If other than U.S. Dollars)
Authorized Denominations:
(If other than as set forth in the Prospectus Supplement)
Interest Payment Dates: 3rd Wednesday of March, June, September, and
December beginning June 1994.
(If other than as set forth in the Prospectus Supplement)
Indexed Principal Note: | | Yes (see attached) |X| No
Floating Rate: |X| Indexed Rate: | | (see attached)
Initial Interest Rate: 4.9750000%
Base Rate: | | CD Rate | | Commercial Paper Rate | | Federal Funds Rate
|X| LIBOR Telerate | | LIBOR Reuters | | Treasury Rate
| | Treasury Rate Constant Maturity | | Other (see attached)
Interest Reset Period or Interest Reset Dates:
Each Interest Payment Date.
Index Maturity: 3 month
Spread (+/-): see attached
Spread Multiplier:
Spread Reset: | | The Spread or Spread Multiplier may not be changed prior to
Stated Maturity.
|X| The Spread or Spread Multiplier may be changed prior to
Stated Maturity (see attached).
Optional Reset Dates (if applicable):
Maximum Interest Rate:
Minimum Interest Rate:
Amortizing Note: | | Yes |X| No
Amortization Schedule:
Optional Redemption: | | Yes |X| No
Optional Redemption Dates:
Redemption Prices:
Optional Repayment: | | Yes |X| No
Optional Repayment Dates:
Optional Repayment Prices:
Optional Extension of Stated Maturity: | | Yes |X| No
Final Maturity:
Discount Note: | | Yes |X| No
Total Amount of OID:
Yield to Maturity:
Pricing Supplement dated May 17, 1994
(to Prospectus Supplement dated December 14, 1993,
to Prospectus dated December 14, 1993)
DESCRIPTION OF THE NOTE
General
The description in this Pricing Supplement of the
particular terms of the Registered Note offered hereby (the
"Note") supplements, and to the extent inconsistent therewith
replaces, the descriptions of the general terms and provisions of
the Registered Notes set forth in the accompanying Prospectus and
Prospectus Supplement, to which description reference is hereby
made. Capitalized terms used but not otherwise defined herein
shall have the meanings specified in the Prospectus and
Prospectus Supplement.
"Base Rate" means LIBOR Telerate with an Index Maturity
of three months.
"Business Day" means any day, other than a Saturday or
Sunday, that is (i) not a day on which banking institutions are
authorized or required by law or regulation to be closed in the
City of New York and (ii) a day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market.
Interest
The Spread for any Interest Period will be determined
based on the rating of the Company's long-term senior debt (the
"Debt") on the LIBOR Determination Date for the related Interest
Reset Date (or for the Original Issue Date in the case of the
Initial Interest Period) by Moody's Investors Service, Inc.
("Moody's") and Standard & Poor's Corporation ("S&P").
If the Debt is rated: (i) Aa3 or higher by Moody's and
AA- or higher by S&P, the Spread is 35 basis points; (ii) A2 or
higher by Moody's and A or higher by S&P (and provided that
clause (i) above is not satisfied), the Spread is 50 basis
points; (iii) A3 or higher by Moody's and A- or higher by S&P
(and provided that neither clause (i) nor (ii) above is
satisfied), the Spread is 60 basis points; (iv) Baa1 or lower by
Moody's or BBB+ or lower by S&P (and provided that neither clause
(v) nor clause (vi) below are satisfied), the Spread is 75 basis
points; (v) Baa2 or lower by Moody's and BBB or lower by S&P (and
provided that clause (vi) below is not satisfied), the Spread is
100 basis points; and (vi) Ba1 or lower by Moody's and BB+ or
lower by S&P, the Spread is 150 basis points.
In the event Debt of the Company is not rated by
Moody's or S&P, the comparable ratings published by any other
nationally recognized statistical rating organization ("NRSRO"),
selected by the Calculation Agent, that rates the Debt may be
used to determine the Spread; provided, however, if the Debt is
not rated by at least two NRSROs, the Spread shall be 150 basis
points.
As of the date of this Pricing Supplement, (i) the Debt
of the Company is rated A3 by Moody's and A- by S&P and (ii) thus
the Spread is 60 basis points.
The Calculation Agent shall be Salomon Brothers Inc, a
wholly-owned subsidiary of the Company.
<PAGE>
Appendix I
The following information concerning the ratings
systems used by Moody's and S&P is based on information published
by Moody's and S&P. No independent representation by the Company
is made or intended concerning the accuracy of the information.
Nor is any representation made or intended by the Company to the
effect that the long-term senior debt of the Company will
continue to be rated by Moody's and/or S&P or that Moody's and
S&P will continue used ratings systems similar to those described
below.
The ratings systems used by Moody's and S&P are
estimates by Moody's and S&P of the investment quality of a
particular issue of debt by an issuer. Moody's and S&P rely on
information furnished by an issuer and any other sources they
consider reliable. Moody's and S&P do not perform any audit in
connection with assigning a rating and may, on occasion, rely on
unaudited financial information. The ratings are based on, among
other things, (i) the ability of the issuer to make timely
interest payments and to repay principal according to the terms
of the obligation, (ii) the nature and provisions of the
obligation and (iii) the protection afforded by, and the relative
position of, the obligation in the event of bankruptcy,
reorganization or other arrangement under the laws of bankruptcy
and other laws affecting creditors' rights. If changes in these
or other factors occur, Moody's or S&P or both may change the
rating assigned to a particular issue.
Moody's describes its ratings as follows:
Aaa Bonds which are rated Aaa are judged to be
the best quality. They carry the smallest degree
of investment risk and are generally referred to
as "gilt edge." Interest payments are protected
by a large or by an exceptionally stable margin
and principal is secure. While the various
protective elements are likely to change, such
changes as can be visualized are most unlikely to
impair the fundamentally strong position of such
issues.
Aa Bonds which are rated Aa are judged to be of
high quality by all standards. Together with Aaa
group they comprise what are generally known as
high grade bonds. They are rated lower than the
best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or
there may be other elements present which make the
long term risks appear somewhat larger than in Aaa
securities.
A Bonds which are rated A possess many favorable
investment attributes and are to be considered as
upper medium grade obligations. Factors giving
security to principal and interest are considered
adequate but elements may be present which suggest
a susceptibility to impairment sometime in the
future.
Baa Bonds which are rated Baa are considered as
medium grade obligations, i.e., they are neither
highly protected nor poorly secured. Interest
payment and principal security appear adequate for
the present but certain protective elements may be
lacking or may be characteristically unreliable
over any great length of time. Such bonds lack
outstanding investment characteristics and in fact
have speculative characteristics as well.
Ba Bonds which are rated Ba are judged to have
speculative elements; their future cannot be
considered as well assured. Often the protection
of interest and principal payments may be very
moderate and thereby not well safeguarded during
both good and bad times over the future.
Uncertainty of position characterizes bonds in
this class.
B Bonds which are rated B generally lack
characteristics of the desirable investment.
Assurance of interest and principal payments or of
maintenance of other terms of the contract over
any long period of time may be small.
Caa Bonds which are rated Caa are of poor
standing. Such issues may be in default or there
may be present elements of danger with respect to
principal or interest.
Ca Bonds which are rated Ca represent obligations
which are speculative in a high degree. Such
issues are often in default or have other marked
shortcomings.
C Bonds which are rated C are the lowest rated
class of bonds and issues so rated can be regarded
as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2 and 3 in
each generic rating classification from Aa through
B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in
the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the
lower end of its generic rating category.
S&P describes its ratings as follows:
AAA Debt rated 'AAA' has the highest rating
assigned by Standard & Poor's. Capacity to pay
interest and repay principal is extremely strong.
AA Debt rated 'AA' has a very strong capacity to
pay interest and repay principal and differs from
the higher rated issues only in small degree.
A Debt rated 'A' has a strong capacity to pay
interest and repay principal although it is
somewhat more susceptible to the adverse effects
of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB Debt rated 'BBB' is regarded as having an
adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions
or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay
principal for debt in this category than in higher
rated categories.
BB, B, CCC, CC, C Debt rated 'BB', 'B', 'CCC',
'CC', 'C', is regarded, on balance, as
predominantly speculative with respect to capacity
to pay interest and repay principal in accordance
with the terms of the obligation. 'BB' indicates
the lowest degree of speculation and 'C' the
highest degree of speculation. While such debt
will likely have some quality and protective
characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse
conditions.
BB Debt rated 'BB' has less near-term
vulnerability to default than other speculative
issues. However, it faces major ongoing
uncertainties or exposure to adverse business,
financial, or economic conditions which could lead
to inadequate capacity to meet timely interest and
principal payments. The 'BB' rating category is
also used for debt subordinated to senior debt
that is assigned an actual or implied 'BBB-'
rating.
B Debt rated 'B' has a greater vulnerability to
default but currently has the capacity to meet
interest payments and principal repayments.
Adverse business, financial, or economic
conditions will likely impair capacity or
willingness to pay interest and repay principal.
The 'B' rating category is also used for debt
subordinated to senior debt that is assigned an
actual or implied 'BB' or 'BB-' rating.
CCC Debt rated 'CCC' has a currently identifiable
vulnerability to default, and is dependent upon
favorable business, financial, or economic
conditions to meet timely payment of interest and
repayment of principal. In the event of adverse
business, financial, or economic conditions, it is
not likely to have the capacity to pay interest
and repay principal. The 'CCC' rating category is
also used for debt subordinated to senior debt
that is assigned an actual or implied 'B' or 'B-'
rating.
CC The rating 'CC' is typically applied to debt
subordinated to senior debt that is assigned an
actual or implied 'CCC' rating.
C The rating 'C' is typically applied to debt
subordinated to senior debt which is assigned an
actual or implied 'CCC-' debt rating. The 'C'
rating may be used to cover a situation where a
bankruptcy petition has been filed, but debt
service payments are continued.
CI The rating 'CI' is reserved for income bonds
on which no interest is being paid.
D Debt rated 'D' is in payment default. The 'D'
rating category is used when interest payments or
principal payments are not made on the date due
even if the applicable grace period has not
expired, unless S&P believes that such payments
will be made during such grace period. The 'D'
rating also will be used upon the filing of a
bankruptcy petition if debt service payments are
jeopardized.
Plus (+) or Minus (-): The ratings from 'AA' to
'CCC' may be modified by the addition of a plus or
minus sign to show relative standing within the
major categories.
