Pricing Supplement No. ED95 Dated June 1, 1994 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
(Bearer Notes--Fixed Rate)
Due More Than Nine Months from Date of Issue
Principal Amount or Face Amount: $10,000,000.
Issue Price: 85.50%
Proceeds to Company on original issuance: $8,550,000.
Commission or Discount on original issuance: $0.
Salomon Brothers International Limited's capacity on original issuance:
|X| As agent | | As principal
If as principal:
| | The Bearer Notes are being offered at varying prices related to
prevailing market prices at the time of resale.
| | The Bearer Notes are being offered at a fixed initial public
offering price of % of Principal Amount or Face Amount.
Original Issue Date: June 2, 1994
Stated Maturity: June 2, 1999
Specified Currency:
(If other than U.S. Dollars)
Authorized Denominations:
(If other than as set forth in the Prospectus Supplement)
Interest Payment Dates: March 2, June 2, September 2 and December 2,
beginning September 2, 1994.
(If other than as set forth in the Prospectus Supplement)
Indexed Principal Note: |X| Yes (see attached) | | No
Interest Rate: See Attached
Interest Rate Reset: | | The Interest Rate may not be changed prior to Stated
Maturity.
|X| The Interest Rate may be changed prior to Stated
Maturity (see attached).
Optional Reset Dates (if applicable):
Amortizing Note: | | Yes |X| No
Amortizing Schedule:
Optional Redemption: | | Yes |X| No
Optional Redemption Dates:
Redemption Prices:
Optional Repayment: | | Yes |X| No
Optional Repayment Dates:
Optional Repayment Prices:
Discount Note: | | Yes |X| No
Total Amount of OID:
Yield to Maturity:
Pricing Supplement dated June 1, 1994
(to Prospectus Supplement dated December 14, 1993
to Prospectus dated December 14, 1993)
RISK FACTORS
The principal amount payable on this Note is linked to
"3 Month LIBOR." The amount of indexed principal payable will
decline in proportion to the number of days in the period from
December 2, 1994 to June 2, 1995 that "3 Month LIBOR" is above
the "Strike Rate". Under certain circumstances, the indexed
principal amount payable on this Note will be less than its face
amount or its issue price, although in no case will it be less
than 80% of the face amount. Holders of the Note should be
prepared to suffer a loss of a portion of principal.
The interest rate on this Note is also linked to "3
Month LIBOR," and will decline as the number of days in the
period from June 2, 1994 to December 2, 1995 that "3 Month LIBOR"
is above the "Strike Rate" increases. If "3 Month LIBOR" is
above the "Strike Rate" during this entire period, no interest
will be payable on this Note. Holders of the Note should be
prepared not to earn any interest on their principal.
Accordingly, as interest rates rise, the return to a
holder will decline, and may decline substantially, so that a
holder may sustain a substantial loss on its purchase of the
Note.
DESCRIPTION OF THE NOTE
General
The description in this Pricing Supplement of the
particular terms of the Bearer Note offered hereby (the "Note")
supplements, and to the extent inconsistent therewith replaces,
the descriptions of the general terms and provisions of the
Bearer Notes set forth in the accompanying Prospectus and
Prospectus Supplement, to which descriptions reference is hereby
made.
A "New York and London Banking Day" means a day in
which commercial banks in (i) the City of New York and (ii)
London, England are open for business (including dealings in
foreign exchange and foreign currency deposits).
An "Interest Reset Date" means any New York and London
Banking Day.
The Calculation Agent will be Salomon Brothers Inc,
which is a wholly-owned subsidiary of the Company.
"3 Month LIBOR" means, with respect to any Interest
Reset Date, the rate for deposits in dollars for a period of
three months which appears on the Telerate Page 3750 (or any
successor page thereto) at 11:00 a.m. London Time on the second
preceding New York and London Banking Day. However, if the rate
described in the preceding sentence does not appear on any such
second preceding New York and London Banking Day, 3 Month LIBOR
shall be the rate determined on the basis of the rates at which
deposits in dollars are offered by the "Reference Banks" (as
defined below) at approximately 11:00 a.m., London Time on the
relevant New York and London Banking Day to prime banks in the
London market for a period of 3 months commencing on the relevant
Interest Reset Date and in a "Representative Amount" (as defined
below). The Calculation Agent will request the principal office
of each of the Reference Banks to provide a quotation of its
rate. If at least two such quotations are provided, 3 Month
LIBOR will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, 3 Month LIBOR will
be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Calculation Agent, at approximately
11:00 a.m. New York City time on any day for loans in dollars to
leading European banks for a period of three months commencing on
the relevant Interest Reset Date and in a Representative Amount.
"Representative Amount" means an amount that is
representative of a single transaction in the relevant market at
the specified time.
"Reference Banks" means four major banks in the London,
England interbank market.
Indexed Principal
The Principal Amount payable at Stated Maturity of the
Note (the "Indexed Principal Amount") is to be determined in
accordance with the formula set out below:
IPA = (0.8 x FA) + (0.2 x N/182), where
"IPA" means the Indexed Principal Amount payable at
Stated Maturity of the Note.
"FA" means the Face Amount of the Note.
"N" means the number of days during the period from
and including December 2, 1994 to but excluding June 2, 1995 (the
"Accrual Period") that 3 Month LIBOR, determined with respect to
such day, or, if such day is not an Interest Reset Date, the
immediately preceding Interest Reset Date, is at or below the
Strike Rate (as defined below) with respect to such day. There
are 182 days in the Accrual Period, and "N" may be any number
from 0 to and including 182.
The Strike Rate shall be:
5.25% for the period from and including June
2, 1994 to but excluding September 2, 1994;
5.75% for the period from and including
September 2, 1994 to but excluding December
2, 1994;
5.875% for the period from and including
December 2, 1994 to but excluding June 2,
1995; and
6.25% for the period from and including June
2, 1995 to but excluding December 2, 1995.
The table below sets forth the Indexed Principal Amount
as a percentage of the Face Amount that will be payable for
certain hypothetical combinations of numbers of days on which 3
Month LIBOR is (i) at or below and (ii) above the Strike Rate
during the Accrual Period. There are 182 days in the Accrual
Period and thus the number of days on which 3 Month LIBOR is at
or below or above the Strike Rate will always sum to 182. The
hypothetical combinations set forth below are for illustrative
purposes only.
Days during the
Accrual Period Days during the
that Accrual Period
3 Month LIBOR that
is at or below 3 Month LIBOR
the Strike Rate is above
("N") the Strike Rate IPA as % of FA
0 182 80.0%
20 162 82.20%
40 142 84.40%
50 132 85.49%
60 122 86.59%
80 102 88.79%
100 82 90.99%
120 62 93.19%
140 42 95.38%
160 22 97.58%
182 0 100.00%
As the table above shows, the Indexed Principal Amount
payable at Stated Maturity to the holder of the Note will vary
inversely with 3 Month LIBOR. In particular, if 3 Month LIBOR is
above the Strike Rate at any time during the Accrual Period, the
Indexed Principal Amount payable at Stated Maturity in respect of
the Note will be less than its Face Amount. If 3 Month LIBOR is
above the Strike Rate for more than 132 days during the Accrual
Period, the Indexed Principal Amount will be below the Issue
Price. As the table above shows, the Indexed Principal Amount
payable in respect of the Note at Stated Maturity may decline to
80% of the Face Amount.
Interest
For the period from the Issue Date to but excluding
December 2, 1995, the Note will bear interest each day at a rate
equal to (i) 7.00%, if 3 Month LIBOR determined with respect to
such day is at or below the Strike Rate with respect to such day
or (ii) 0%, otherwise. Thereafter, the Note will bear interest
at a rate equal to the product of (i) 7.00%, and (ii) N/182,
where "N" is defined as above. If "N" is less than 182, the Note
will pay interest from December 2, 1995 to Stated Maturity at a
rate of less than 7.00%. If "N" is equal to 0, the Note will not
pay interest from December 2, 1995 to Stated Maturity. If 3
Month LIBOR is above the Strike Rate during the entire period
from June 2, 1994 to December 2, 1995, the Note will not pay
interest for any period.
