Pricing Supplement No Euro D210 Dated 8/19/97 Rule 424(b)(3)
(To Prospectus dated April 5, 1996 and File No. 333-01807
Prospectus Supplement dated April 5, 1996)
This Pricing Supplement consists of 17 page(s)
SALOMON INC
Medium-Term Notes, Series D
(Bearer Notes)
Due More Than Nine Months from Date of Issue
Principal Amount or Face Amount: 20,000,000,000 Italian Lira(ITL)
Issue Price: 100.00%
Proceeds to Company on original issuance: ITL 20,000,000,000
Commission or Discount on original issuance: USD 22,500
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: 8/21/97
Stated Maturity: 8/21/2000
Specified Currency: ITL
(If other than U.S. Dollars)
Authorized Denominations: ITL 10,000,000
(If other than as set forth in the Prospectus Supplement)
Interest Payment Dates:
Accrue to Pay: | | Yes |X| No
Indexed Principal Note: |X| Yes (See Attached) | | No
Type of Interest on Note: | | Fixed Rate | | Floating Rate | | Indexed Rate
(See Attached)
Interest Rate (Fixed Rate Notes): None, See attached.
Initial Interest Rate (Floating Rate Notes): N.A.
Base Rate: | | CD Rate | | Commercial Paper Rate | | Federal Funds Rate
| | LIBOR Telerate | | LIBOR Reuters | | Treasury Rate
| | Treasury Rate Constant Maturity | | Other (See Attached)
Calculation Agent (If other than Citibank): |X| Salomon Brothers
| | Other (See Attached)
Computation of Interest: | | 30 over 360 | | Actual over Actual
| | Actual over 360 |X| Other (See Attached)
(If other than as set forth in the Prospectus Supplement)
Interest Reset Dates: N.A.
Rate Determination Dates: N.A.
(If other than as set forth in the Prospectus Supplement)
Index Maturity: N.A.
Spread (+/-): N.A.
Spread Multiplier: N.A.
Change in Spread, Spread Multiplier or Fixed Interest Rate prior to
Stated Maturity: | | Yes (See Attached) |X| No
Maximum Interest Rate: N.A.
Minimimum Interest Rate: N.A.
Amortizing Note: | | Yes (See Attached) |X| No
Optional Redemption: | | Yes |X| No
Optional Redemption Dates:
Redemption Prices:
Redemption: | | In whole only and not in part | | May be in whole or in part
Optional Repayment: | | Yes |X| No
Optional Repayment Dates:
Optional Repayment Prices:
Discount Note: | | Yes |X| No
Total Amount of OID:
Yield to Maturity:
Listed on Luxembourg Stock Exchange: | | Yes |X| No
Common Code: 79401492
ISIN: XS0079401492
Cusip: 99313J9A2
Pricing Supplement No. Euro D 210 dated August 19, 1997
(to Prospectus Supplement dated April 5, 1996
to Prospectus dated April 5, 1996)
DESCRIPTION OF THE NOTES
General
The description in this Pricing Supplement of the
particular terms of the ADR Basket Linked Bearer Notes offered
hereby (the "Notes") 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. The Notes offered hereby are Indexed
Principal Notes, as described under "Description of Bearer Notes"
in the accompanying Prospectus Supplement, to which description
reference is hereby made.
THIS PRICING SUPPLEMENT RELATES ONLY TO THE NOTES OFFERED
HEREBY AND DOES NOT RELATE TO THE UNDERLYING ADRS (AS DEFINED
BELOW UNDER "RISK FACTORS"). ALL DISCLOSURES CONTAINED IN THIS
PRICING SUPPLEMENT REGARDING THE UNDERLYING ADRS AND THE ISSUERS
THEREOF ARE DERIVED FROM PUBLICLY AVAILABLE DOCUMENTS. NEITHER
SALOMON INC (THE "COMPANY") NOR THE AGENT HAVE PARTICIPATED IN
THE PREPARATION OF SUCH DOCUMENTS OR MADE ANY DUE DILIGENCE
INQUIRY WITH RESPECT TO THE INFORMATION PROVIDED THEREIN. NEITHER
THE COMPANY NOR THE AGENT MAKES ANY REPRESENTATION THAT SUCH
PUBLICLY AVAILABLE DOCUMENTS OR ANY OF THE PUBLICLY AVAILABLE
INFORMATION REGARDING THE UNDERLYING ADRS OR THE ISSUERS THEREOF
ARE ACCURATE OR COMPLETE. THERE CAN BE NO ASSURANCE THAT ALL
EVENTS OCCURRING PRIOR TO THE DATE HEREOF (INCLUDING EVENTS THAT
WOULD AFFECT THE ACCURACY OR COMPLETENESS OF SUCH PUBLICLY
AVAILABLE DOCUMENTS) THAT WOULD AFFECT THE TRADING PRICE OF THE
UNDERLYING ADRS (AND THEREFORE THE AMOUNT PAYABLE IN RESPECT OF
PRINCIPAL ON THE NOTES AT STATED MATURITY) HAVE BEEN PUBLICLY
DISCLOSED. SUBSEQUENT DISCLOSURE OF ANY SUCH EVENTS OR THE
DISCLOSURE OR FAILURE TO DISCLOSE MATERIAL FUTURE EVENTS
CONCERNING THE ISSUERS OF THE UNDERLYING ADRS COULD AFFECT THE
AMOUNT PAYABLE IN RESPECT OF PRINCIPAL ON THE NOTES AT STATED
MATURITY AND THEREFORE THE VALUE OF THE NOTES. NEITHER THE
COMPANY NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION TO ANY
PURCHASER OF THE NOTES AS TO THE PERFORMANCE OF ANY OF THE
UNDERLYING ADRS.
The Company or its affiliates (including, but not limited
to, Salomon Brothers Inc, which will act as Calculation Agent in
respect of the Notes) may presently or from time to time engage
in business with one or more of the issuers of the Underlying
ADRs, including, but not limited to, extending loans to, or
making equity investments in, or providing advisory services to,
such issuers, including merger and acquisitions advisory
services. In the course of such business, the Company or its
affiliates may acquire non-public information with respect to the
one or more issuers of the Underlying ADRs
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and, in addition, one or more affiliates of the Company may
publish research reports with respect to such issuer or issuers.
The Company does not make any representation to any
purchaser of Notes with respect to any matters whatsoever
relating to the issuers of the Underlying ADRs or such stocks.
Any prospective purchaser of Notes should undertake an
independent investigation of the Underlying ADRs and the issuers
thereof as in its judgment is appropriate to make an informed
decision with respect to an investment in the Underlying ADRs.
Risk Factors
Indexed Notes; No Periodic Payments of Interest.
The Notes do not bear periodic payments of interest.
The Notes are Indexed Principal Notes. The amount in
respect of principal with respect to a Note that a Holder will
receive at Stated Maturity will be at least the face amount of
such Note. However, any amount in excess of such face amount that
may be payable in respect of principal will be determined by
reference to increases in the values of the American Depositary
Receipts or Global Depository Receipts, as the case
may be, of the nine selected Latin American issuers identified in
Appendix A, as traded on the New York Stock Exchange (the "NYSE")
(such securities, the "Underlying ADRs") during the period
between the Issue Date and Stated Maturity, as described below
under "Indexed Principal". Appendix A contains a list of the
issuers of the Underlying ADRs and details of such securities;
Appendix B contains short descriptions of the principal business
of each of the issuers of the Underlying ADRs, as derived from
publicly available sources, and Appendix C contains recent
trading histories for each of the Underlying ADRs. HOLDERS OF THE
NOTES SHOULD BE PREPARED NOT TO RECEIVE MORE THAN THE FACE AMOUNT
OF A NOTE IN RESPECT OF PRINCIPAL ON SUCH NOTE.
Relationship of the Notes and the Underlying ADRs
It is impossible to predict whether the price of any of the
Underlying ADRs will rise or fall. Trading prices of each of the
Underlying ADRs will be influenced by each issuer's operational
results and by complex and interrelated political, economic,
financial and other factors that can affect the capital markets
generally, the stock exchange on which each Underlying ADR and
the related equity securities are traded and the market segment
or industry sector of which each issuer is a part. Trading prices
of the Underlying ADRs also may be influenced if any of the
issuers or another principal shareholder of an issuer hereafter
issues securities with terms similar to those of the Notes or
otherwise transfers shares of the Underlying ADRs or the related
equity securities.
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Lack of Affiliation Between the Company and the Issuers of the
Underlying Stocks
The Company is not affiliated with any of the issuers of
the Underlying ADRs and, although the Company has no knowledge
that any of the events described below under "Indexed
Principal--Possible Adjustments to the Index Formula" are
currently being contemplated by any of the issuers of the
Underlying ADRs or of any events that would have a material
adverse effect on any of the issuers of the Underlying ADRs or on
the price of any of the Underlying ADRs, such events are beyond
the Company's ability to control and are difficult to predict.
The issuers of the Underlying ADRs are not involved in the
offering of the Notes and have no obligations with respect to the
Notes, including any obligation to take the needs of the Company
or of holders of Notes into consideration for any reason. The
issuers of the Underlying ADRs will not receive any of the
proceeds of the offering of the Notes made hereby and are not
responsible for, and have not participated in, the determination
of the timing of, prices for, or quantities of, the Notes to be
issued or in the determination or calculation of the amount
payable in respect of principal on the Notes at Stated Maturity.
The issuers of the Underlying ADRs are not involved with the
administration, marketing or trading of the Notes and have no
obligations with respect to any amounts payable in respect of the
Notes. Holders of the Notes will not be entitled to any rights
with respect to the Underlying ADRs (including, without
limitation, voting rights and the rights to receive any dividends
or other distributions in respect thereof).
All of the issuers of the Underlying ADRs are currently
subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Accordingly, the issuers of the Underlying ADRs file reports and
other information with the Securities and Exchange Commission
(the "Commission").Copies of such material can be inspected and
copied at the public reference facilities maintained by the
Commission and at the offices of the New York Stock Exchange,
Inc. at the addresses specified under "Available Information" in
the Prospectus. Certain portions of such material filed with the
Commission now may also be accessed electronically by means of
the Commission's home page on the world wide web on the Internet
at "http://www.sec.gov." There can be no assurance that any of
such issuers of the Underlying ADRs will continue to be subject
to the reporting requirements of the Exchange Act and distribute
reports and other information required thereby to their
respective stockholders. In the event that any issuer of an
Underlying ADR ceases to be subject to such reporting
requirements or otherwise fails to distribute such information
during the term of the Notes, pricing information for the Notes
may be more difficult to obtain and the value and liquidity of
the Notes may be adversely affected.
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Dilution of the Underlying ADRs
The Index Formula (as defined below under "Definitions")
and, therefore, the amount payable in respect of principal on a
Note that a Holder will receive at Stated Maturity, is subject to
adjustment by the Calculation Agent, acting solely in its
discretion, for certain events arising from, among others, stock
splits and combinations, stock dividends, extraordinary cash
dividends and certain other actions of any of the issuers of the
Underlying ADRs that modify their respective capital structures
as well as a merger or consolidation in which an issuer of an
Underlying ADR is not the surviving or resulting corporation, a
sale or transfer of all or substantially all of the assets of any
such issuer and the liquidation, dissolution, winding up or
bankruptcy of any such issuer. See "Indexed Principal--Possible
Adjustments to Index Formula." The Index Formula may not be
adjusted for other events, such as offerings of one or more of
the Underlying ADRs for cash or in connection with acquisitions,
that may adversely affect the price of one or more of the
Underlying ADRs and, therefore, the value of the Notes. There can
be no assurance that any issuer of an Underlying ADR will not
make offerings of such stock or take such other action in the
future or as to the amount of such offerings, if any.
Possible Illiquidity of the Secondary Market
It is not possible to predict how the Notes will trade in
the secondary market or whether such market will be liquid or
illiquid. The Notes are novel and innovative securities and there
is currently no secondary market for the Notes. Unlike the
Underlying ADRs, which are listed on the NYSE, the Notes will
only be listed on the Luxembourg Stock Exchange. Accordingly,
pricing information for the Notes may be more difficult to obtain
and the liquidity of the Notes may be limited. There can be no
assurance that a secondary market will develop or, if a secondary
market does develop, that it will provide the holders of the
Notes with liquidity or that it will continue for the life of the
Notes.
Definitions
"Business Day" means any day, other than a Saturday or
a Sunday, that is not a day on which banking institutions are
authorized or required by law or regulation to be closed in (i)
London, England, (ii) New York, New York, the United States, or
(iii) Milan, Italy. In the event that any calculation,
determination or payment with respect to the Notes would
otherwise be made on a day that is not a Business Day, such
calculation, determination or payment shall be postponed to the
next succeeding Business Day, except that, if such Business Day
is in the next succeeding calendar month, such calculation,
determination or payment shall be made on the immediately
preceding Business Day.
The Calculation Agent will be Salomon Brothers Inc, which
is a wholly-owned subsidiary of Salomon Inc.
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Indexed Principal
The amount payable in respect of principal on a Note at
Stated Maturity (the "Indexed Principal Amount") is to be
determined by the Calculation Agent in accordance with the
formula set out below (the "Index Formula"):
IPA = FA plus [FA times [75% times the greater of (A) (C1
minus C0)/C0 or (B) zero] where:
"IPA" means the Indexed Principal Amount payable in respect
of the Note at Stated Maturity.
"FA" means the Face Amount of the Note (as stated on the
cover of this Pricing Supplement.
C0 is equal to ITL 183,400.
C1 is equal to the sum of [(Telebras times .07716) plus
(Unibanco times .29828) plus (Telmex times .19863) plus
(Televisa times .33670) plus (CANTV times .24969) plus
(Coke Femsa times .19622) plus (Telefonica del Peru times
.45819) plus (Telefonica de Argentina times .27520) plus
(YPF times .33417)] multiplied by FX Rate, provided,
however, that in no event shall C1 be greater than ITL
302,610.
"Telebras" means the closing price of Telebras ADRs
(as defined in Appendix A) on the NYSE, as reported by
the BLOOMBERG screen-based information system (the
"BLOOMBERG"), on August 18, 2000 (or if such date is
not a Business Day, the next succeeding Business Day).
"Unibanco" means the closing price of Unibanco GDRs
(as defined in Appendix A) on the NYSE, as reported by
the BLOOMBERG, on August 18, 2000 (or if such date is
not a Business Day, the next succeeding Business Day).
"Telmex" means the closing price of Telmex ADRs (as
defined in Appendix A) on the NYSE, as reported by the
BLOOMBERG, on August 18, 2000 (or if such date is not
a Business Day, the next succeeding Business Day).
"Televisa" means the closing price of Televisa GDRs
(as defined in Appendix A) on the NYSE, as reported by
the BLOOMBERG, on August 18, 2000 (or if such date is
not a Business Day, the next succeeding Business Day).
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"CANTV" means the closing price of CANTV ADRs (as
defined in Appendix A) on the NYSE, as reported by the
BLOOMBERG, on August 18, 2000 (or if such date is not
a Business Day, the next succeeding Business Day).
"Coke Femsa" means the closing price of Coke Femsa
ADRs (as defined in Appendix A) on the NYSE, as
reported by the BLOOMBERG, on August 18, 2000 (or if
such date is not a Business Day, the next succeeding
Business Day).
"Telefonica del Peru" means the closing price of
Telefonica del Peru ADRs (as defined in Appendix A) on
the NYSE, as reported by the BLOOMBERG, on August 18,
2000 (or if such date is not a Business Day, the next
succeeding Business Day).
"Telefonica de Argentina" means the closing price of
Telefonica de Argentina ADRs (as defined in Appendix
A) on the NYSE, as reported by the BLOOMBERG, on
August 18, 2000 (or if such date is not a Business
Day, the next succeeding Business Day).
"YPF" means the closing price of YPF ADRs (as defined
in Appendix A) on the NYSE, as reported by the
BLOOMBERG, on August 18, 2000 (or if such date is not
a Business Day, the next succeeding Business Day).
"FX Rate" means, with respect to any Business Day, the
number of Italian Lire required to purchase one U.S.
Dollar on such day, as published at 4:00 p.m. New York
Time on Reuters Page FWEA (or any successor page
thereto). However, if the rate described in the first
sentence of this paragraph does not appear on any
Business Day, the FX Rate on such day shall mean the
midmarket foreign exchange cross-rate between the
Italian Lire and the U.S. Dollar prevailing in the
London foreign exchange market at 11:00 a.m. London
time on the next succeeding Business Day, as
determined by the Calculation Agent.
Possible Adjustments to Index Formula
The Calculation Agent shall have the right, in its sole
discretion, to adjust the Index Formula and any of the
constituent variables thereof in the case of any event effecting
one of more of the Underlying ADRs that could, in the judgment of
the Calculation Agent, have the effect of distorting the
continuity or consistency of the Index Formula.
Such events may include, but are not limited to:
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(i) the delisting of any of the Underlying ADRs from the NYSE
listed in Appendix A ;
(ii) any consolidation or merger of an issuer of an
Underlying ADR, or any surviving entity or subsequent surviving
entity of an issuer of an Underlying ADR (the "Issuer
Successor"), with or into another entity;
(iii) any sale, transfer, lease or conveyance to another
corporation of the property of the issuer of an Underlying ADR or
any issuer of an Issuer Successor as an entirety or substantially
as an entirety;
(iv) any statutory exchange of the securities of the issuer
of an Underlying ADR or any issuer of an Issuer Successor with
another corporation (other than in connection with a merger or
acquisition);
(v) any liquidation, dissolution or winding up of an
issuer of an Underlying ADR or any issuer of an Issuer Successor;
(vi) a dividend or other distribution declared (A) on any
Underlying ADR payable in such Underlying ADRs or other
securities or (B) on an Underlying ADR payable in cash in an
amount greater than 10% of the average closing price of such
Underlying ADR on the date fixed for the determination of the
shareholders of the issuer of such Underlying ADR entitled to
receive such cash dividend;
(vii) the subdivision of the outstanding Underlying
ADRs into a greater number of ADRs or other securities;
(viii) the change of an Underlying ADR into the same or a
different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification or otherwise;
(ix) the issuance of rights or warrants by an issuer of an
Underlying ADR to all holders of such Underlying ADRs entitling
them to subscribe for or purchase Underlying ADRs at a price per
share less than the market price of such Underlying ADRs (other
than rights to purchase such Underlying ADR pursuant to a plan
for the reinvestment of dividends or interest); and
(x) the payment by an issuer of an Underlying ADR of a
dividend or a distribution to all holders of such Underlying ADRs
of evidences of its indebtedness or other assets.
If trading in any of the Underlying ADRs on the New York
Stock Exchange is suspended or price quotations are otherwise
unavailable on any day on which the closing price of such
Underlying ADR is to be used for purposes of the Index Formula,
the Calculation Agent shall use the last reported sales price of
such Underlying ADR on such exchange for such purpose.
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If the BLOOMBERG discontinues reporting the closing prices of any
of the Underlying ADRs, the Calculation Agent, in its sole
discretion, on behalf of the Company, shall compile the requisite
closing prices of any of the Underlying ADRs based on data
reported by another recognized publisher of financial data, as
selected by the Calculation Agent in its sole discretion.
Neither the Calculation Agent nor the Company will have any
responsibility for errors or omissions in making any
calculations, determinations or adjustments in respect of the
Notes. The Calculation Agent shall not be an agent of the Holders
of Notes, and its calculations, determinations and adjustments
hereunder shall (except in the case of manifest error) be final
and binding on the Company and such Holders. Neither the Company
nor the Calculation Agent shall bear any liability for any
mistake, misstatement or misquotation of data by the BLOOMBERG or
any other publisher of financial data.
Payment Date
The Stated Maturity of the Notes is August 21, 2000. If
Stated Maturity would otherwise be a day that is not a Business
Day, Stated Maturity shall be postponed to the next succeeding
Business Day, except that, if such Business Day is in the next
succeeding calendar month, Stated Maturity shall be the
immediately preceding Business Day.
EUROPEAN MONETARY UNION
Stage III of the European Economic and Monetary Union
("Stage III") is presently scheduled to commence on January 1,
1999 for those member states of the European Union that satisfy
the economic convergence criteria set forth in the Treaty on
European Union, to which Italy is a signatory. Stage III includes
the introduction of a single currency (the "Euro") which will be
legal tender in such member states. It is anticipated that the
European Union will adopt regulations or other legislation
providing specific rules for the introduction of the Euro in
substitution for the respective national currencies of such
member states, which regulations or legislation may be
supplemented by legislation of the individual member states. In
the event that Italy adopts the Euro, the laws and regulations of
the European Union (and, if any, of Italy) relating to the Euro
implemented pursuant to or by virtue of the Treaty on European
Union shall apply to the Notes, and, except as provided in the
following paragraph, the payment of amounts in respect of
principal of the Notes at any time after the official date of
introduction of the Euro by Italy shall be effected in Euro in
conformity with any such legally applicable measures.
If, following the introduction of the Euro by Italy, the
Company has the option, pursuant to legally applicable measures,
to make payments of amounts in respect of principal of the Notes
in either Lire or Euro, the Company will make such payments in
Lire or Euro at its sole discretion. To the extent that the terms
and conditions of the
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Notes require the rounding up or down of certain amounts or
quotations expressed in Euro, such rounding will be made to the
smallest currency unit of the Euro.
The circumstances and consequences described in this
section and any resultant amendment to the terms and conditions
of the Notes will not entitle any Holder of the Notes (i) to any
legal remedy, including, without limitation, redemption,
rescission, notice, repudiation, adjustment or renegotiation of
the terms and conditions of the Notes or the Indenture, or (ii)
to raise any defense or make any claim (including, without
limitation, claims of breach, force majeure, frustration of
purpose or impracticability) or any other claim for compensation,
damages or any other relief, nor will any such events affect any
of the other obligations of the Company under the Notes.
DESCRIPTION OF ITALIAN LIRA
The Lira is the national currency of Italy. Italian bank
notes are issued by The Bank of Italy, which is Italy's central
bank and the sole bank of issue. On August 15, 1997, the noon
buying rate for cable transfers in New York City payable in Lire,
as reported by the Federal Reserve Bank of New York, was ITL
1781.00 = $1.00.
The exchange rate between the Lira and the U.S. dollar is,
at any moment, a result of the supply of and the demand for the
two currencies, and changes in such exchange rate result over
time from the interaction of many factors directly or indirectly
affecting economic conditions in Italy and in the United States,
including economic and political developments in other countries.
Of particular importance are rates of inflation, interest rate
levels, the balance of payments (both on capital and current
account) and the extent of governmental surpluses or deficits in
Italy and in the United States, all of which are in turn
sensitive to the monetary, fiscal and trade policies pursued by
the governments of Italy, the United States and other countries
prominent in international trade and finance. In recent years,
rates of exchange between the U.S. dollar and the Italian Lira
have been highly volatile.
USE OF PROCEEDS AND HEDGING
A portion of the proceeds to be received by the Company
from the sale of the Notes is being used by the Company or one or
more of its subsidiaries before and immediately following the
initial offering of the Notes to acquire the Underlying ADRs or
the related equity securities or listed or over-the-counter
options contracts in, or other derivative or synthetic
instruments related to, such Underlying ADRs or securities in
connection with hedging the Company's obligations under the
Notes. The balance of such proceeds will be used for general
corporate purposes. See "Use of Proceeds" in the Prospectus. From
time to time after the initial offering and prior to the maturity
of the Notes, depending on market conditions (including the
market price of the Underlying ADRs), in connection with hedging
with respect to the Notes, the Company expects that it or one or
more of its subsidiaries will increase or decrease their initial
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hedging positions using dynamic hedging techniques and may take
long or short positions in the Underlying ADRs or the related
equity securities, in listed or over-the-counter options
contracts in, or other derivative or synthetic instruments
related to, such Underlying ADRs or securities. In addition, the
Company or one or more of its subsidiaries may purchase or
otherwise acquire a long or short position in the Notes from time
to time and may, in their sole discretion, hold or resell such
Notes. The Company or one or more of its subsidiaries may also
take positions in other types of appropriate financial
instruments that may become available in the future. To the
extent that the Company or one or more of its subsidiaries have a
long hedge position in the Underlying ADRs or the related equity
securities or options contracts in, or other derivative or
synthetic instruments related to, such Underlying ADRs or
securities, the Company or one or more of its subsidiaries may
liquidate a portion of their holdings at or about the time of the
maturity of the Notes. Depending, among other things, on future
market conditions, the aggregate amount and the composition of
such positions are likely to vary over time. Profits or losses
from any such position cannot be ascertained until such position
is closed out and any offsetting position or positions are taken
into account.
TAXATION
The following disclosure supplements, and to the extent
inconsistent therewith, replaces, the disclosure in the
Prospectus Supplement under "Taxation in the United States":
The Notes will be treated by the Company as debt
instruments that provide for contingent payments for U.S. Federal
income tax purposes. Under U.S. Treasury regulations relating to
such debt instruments, gain realized on a sale or other
disposition of the Notes, and the excess of the redemption price
of the Notes over their issue price, will be classified as
interest income (rather than as gain) for U.S. tax purposes. Such
interest income will be exempt from withholding of U.S. Federal
income tax to the extent described in the Prospectus Supplement
under "Taxation in the United States."
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APPENDIX A
----------
List of Underlying ADRs
-----------------------
The following is a list of the Underlying ADRs, their issuers and
the country of incorporation of each of the issuers of the
Underlying ADRs.
Country of
----------
Issuer Underlying ADR Incorporation
- ------ -------------- ----------
1. Telecomunicacoes American Depository Receipts Brazil
Brasileiras S.A. evidencing American Depository Shares,
(TELEBRAS) each representing 1,000 preferred shares,
without par value, as traded on the NYSE
under the symbol "TBR" ("Telebras ADRs").
2. Unibanco-Uniao de Global Depository Receipts evidencing Brazil
Bancos Brasileiros Global Depository Shares, each
S.A. representing 500 Units; each Unit
representing one Unibanco Preferred
Share, without par value and one
Preferred B Share of Unibanco Holding
S.A., without par value, as traded on
the NYSE under the symbol "UBB"
("Unibanco GDRs").
3. Telefonos de Mexico, American Depository Receipts evidencing Mexico
S.A. de C.V. American Depository Shares, each
representing one Series L share,
without par value, as traded on the
NYSE under the symbol "TMX" ("Telmex
ADRs").
4. Grupo Televisa, S.A. Global Depository Receipts evidencing Mexico
de C.V. Global Depository Shares, each
representing two Ordinary
Participation Certificates (CPOs);
each CPO representing one Series A
Share, without par value, one Series L
Share, without par value, and one
Series D Share, without par value, as
traded on the NYSE under the symbol
"TV" ("Televisa GDRs").
11
<PAGE>
Country of
----------
Issuer Underlying ADR Incorporation
- ------ -------------- ----------
5. Compania Anonima American Depository Receipts evidencing Venezuela
Nacional Telefonos de American Depository Shares, each
Venezuela representing 7 Class D shares, par value
Venezuelan Bolivars 3,001.00 per
share, ,as traded on the NYSE under
the symbol "VNT" ("CANTV ADRs").
6. Coca-Cola Femsa, American Depository Receipts evidencing Mexico
S.A. de C.V. American Depository Shares, each
representing ten series L common
shares, par value one Mexican New Peso
per share, as traded on the NYSE under
the symbol "KOF" ("Coke Femsa ADRs").
7. Telefonica del Peru American Depository Receipts evidencing Peru
S.A. American Depository Shares, each
representing ten Class B common
shares, par value one Peruvian New
Sole per share, as traded on the NYSE
under the symbol "TDP" ("Telefonica
del Peru ADRs").
8. Telefonica de American Depository Receipts evidencing Argentina
Argentina S.A. American Depository Shares, each
representing ten Class B shares, par
value one Argentine Peso per share, as
traded on the NYSE under the symbol
"TAR" ("Telefonica de Argentina
ADRs").
9. YPF S.A. American Depository Receipts evidencing Argentina
American Depository Shares, each
representing one Class D share, par value
ten Argentine Pesos per share, as traded
on the NYSE under the symbol "YPF" ("YPF
ADRs").
12
<PAGE>
APPENDIX B
----------
Summary Description of the Issuers of the Underlying ADRs
---------------------------------------------------------
THIS PRICING SUPPLEMENT RELATES ONLY TO THE NOTES OFFERED
HEREBY AND DOES NOT RELATE TO THE UNDERLYING ADRS. ALL
DISCLOSURES CONTAINED IN THIS PRICING SUPPLEMENT REGARDING THE
ISSUERS OF THE UNDERLYING ADRS ARE DERIVED FROM PUBLICLY
AVAILABLE DOCUMENTS, INCLUDING DOCUMENTS FILED WITH THE
COMMISSION. NEITHER THE COMPANY NOR THE AGENT HAVE PARTICIPATED
IN THE PREPARATION OF SUCH DOCUMENTS OR MADE ANY DUE DILIGENCE
INQUIRY WITH RESPECT TO THE INFORMATION PROVIDED THEREIN. NEITHER
THE COMPANY NOR THE AGENT MAKES ANY REPRESENTATION THAT SUCH
PUBLICLY AVAILABLE DOCUMENTS OR ANY OF THE PUBLICLY AVAILABLE
INFORMATION REGARDING THE ISSUERS OF THE UNDERLYING ADRS ARE
ACCURATE OR COMPLETE.
Issuer Description
- ------ -----------
1. Telecomunicacoes TELEBRAS is a mixed-economy corporation
Brasileiras S.A. under the jurisdiction of Brazilian Ministry of
(TELEBRAS) Communications which acts as the holding company
of 28 telecommunication companies that form
the Brazilian national telecommunication
system and provide local, long distance
and international telecommunication
services, including voice, text, data,
sound and image transmission. TELEBRAS is
also engaged in the research and
development of telecommunication
technology.
2. Unibanco-Uniao de Unibanco is a Brazilian commercial bank
Bancos Brasileiros engaged in operations including retail and
S.A. corporate banking activities, deposit banking,
individual consumer and mortgage loans,
corporate banking and finance services,
home banking, investment banking, leasing,
factoring, trade finance, foreign exchange
operations, provision of computerized
collection services for trade bills,
underwriting and investment funds,
including fixed-yield investment funds,
pension funds and foreign capital funds.
13
<PAGE>
Issuer Description
- ------ -----------
3. Telefonos de Mexico, Telmex is engaged in the telecommunications
S.A. de C.V. services industry and is currently the only
licensed fixed- link public telecommunications
service in Mexico. Telmex operates under a
licensing agreement granted by the Ministry of
Communications and Transportation and
owns all public exchanges, the nationwide
network of local telephone lines, and the
principal public long distance telephone
transmission facilities in Mexico
4. Grupo Televisa, S.A. Televisa is a Mexican corporation
de C.V. primarily engaged in television broadcasting.
Through its television division, Televisa is
engaged in the operation of networks and
stations, and in the production and domestic
and international licensing of Spanish language
television programming. Televisa also operates
publication, audio, cable television and
other divisions.
5. Compania Anonima CANTV is a telecommunications provider
Nacional Telefonos de offering switched, fixed local, domestic
Venezuela and international long distance telephone
(CANTV) service throughout Venezuela. CANTV also
offers cellular services, paging services,
public telephones, community telecommunications
centers, private networks, rural telephone
services, packet-switched data transmission,
directory information services and
other services.
6. Coca-Cola Femsa, Coca-Cola Femsa is engaged in the
S.A. de C.V. production and distribution of soft
drink products in two territories in Mexico:
the Valley of Mexico territory, which include
Mexico City and most of the State of Mexico;
and the Southeast territory which includes
the state of Tabasco and contiguous
portions of the states of Oaxaca,
Chiapas and the southern portion of
the state of Veracruz. Through its
Argentine subsidiary, Coca-Cola Femsa
is engaged in the production and
distribution of soft drink products in
the greater metropolitan Buenos Aires
area.
14
<PAGE>
Issuer Description
- ------ -----------
7. Telefonica del Peru Telefonica del Peru is engaged in
S.A. the provision of data, text, voice,
sound, video, cellular and mobile
communication services in Peru.
Products and services include
telephones, telephone installation,
leased circuit and data transmission
services, voice mail, mobile telephone
services, paging services,
communication products and services,
as well as telephone directory, data
bank, videotex and allied services.
Telefonica del Peru's sound and video
services include cable television
services and its voice communications
services include domestic and
international telephony and domestic
and international leased voice
circuits.
8. Telefonica de Telefonica de Argentina is engaged
Argentina S.A. in the provision of telecommunication
services in Argentina, including
local, domestic long-distance and
international telephone services; as
well as mobile cellular telephone
services, digital paging, telex and
other data transmission and
customer-related services.
9. YPF S.A. YPF is engaged in the exploration
for oil as well as the development,
production, refining, distribution, sale,
and export of crude oil, natural gas,
petrochemical products, and derivatives.
15
<PAGE>
APPENDIX C
----------
Trading Histories of the Underlying ADRs
----------------------------------------
The following tables set forth the high and low daily closing
levels of each the Underlying ADRs for each quarter for the five
years from July 1, 1992 or, when applicable, the first day of
trading in such Underlying ADR on the NYSE, through August 15,
1997. The historical values of the Underlying ADRs should not be
taken as an indication of future performance.
- --------------------------------------------------------------------
Telebras ADRs
- --------------------------------------------------------------------
Lowest Level Highest Level
------------ -------------
- --------------------------------------------------------------------
1995:
- --------------------------------------------------------------------
4th Quarter (from November 1) 37.750 48.625
- --------------------------------------------------------------------
1996:
- --------------------------------------------------------------------
1st Quarter 47.375 57.125
- --------------------------------------------------------------------
2nd Quarter 49.125 71.500
- --------------------------------------------------------------------
3rd Quarter 69.375 82.500
- --------------------------------------------------------------------
4th Quarter 70.500 80.875
- --------------------------------------------------------------------
1997:
- --------------------------------------------------------------------
1st Quarter 75.125 109.000
- --------------------------------------------------------------------
2nd Quarter 102.375 156.250
- --------------------------------------------------------------------
3rd Quarter (through August 15) 126.000 164.875
- --------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------
Unibanco GDRs
- --------------------------------------------------------------------
Lowest Level Highest Level
------------ -------------
- --------------------------------------------------------------------
1997:
- --------------------------------------------------------------------
2nd Quarter (from April 22) 34.375 38.500
- --------------------------------------------------------------------
3rd Quarter (through August 15) 35.000 42.188
- --------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------
Telmex ADRs
- --------------------------------------------------------------------
Lowest Level Highest Level
------------ -------------
- --------------------------------------------------------------------
1992:
- --------------------------------------------------------------------
3rd Quarter 42.125 49.625
- --------------------------------------------------------------------
4th Quarter 44.250 57.000
- --------------------------------------------------------------------
1993:
- --------------------------------------------------------------------
1st Quarter 47.000 58.750
- --------------------------------------------------------------------
2nd Quarter 45.125 55.750
- --------------------------------------------------------------------
3rd Quarter 46.000 54.375
- --------------------------------------------------------------------
4th Quarter 50.125 67.625
- --------------------------------------------------------------------
1994:
- --------------------------------------------------------------------
1st Quarter 58.750 75.625
- --------------------------------------------------------------------
2nd Quarter 51.250 63.125
- --------------------------------------------------------------------
3rd Quarter 54.500 66.500
- --------------------------------------------------------------------
4th Quarter 37.750 63.500
- --------------------------------------------------------------------
1995:
- --------------------------------------------------------------------
1st Quarter 24.250 38.635
- --------------------------------------------------------------------
2nd Quarter 27.250 31.500
- --------------------------------------------------------------------
3rd Quarter 29.500 35.625
- --------------------------------------------------------------------
4th Quarter 25.750 34.625
- --------------------------------------------------------------------
1996:
- --------------------------------------------------------------------
1st Quarter 29.000 36.000
- --------------------------------------------------------------------
2nd Quarter 32.500 37.375
- --------------------------------------------------------------------
3rd Quarter 29.500 34.375
- --------------------------------------------------------------------
4th Quarter 29.625 33.250
- --------------------------------------------------------------------
1997:
- --------------------------------------------------------------------
1st Quarter 33.125 41.625
- --------------------------------------------------------------------
2nd Quarter 38.500 48.500
- --------------------------------------------------------------------
3rd Quarter (through August 15) 48.375 55.563
- --------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------
Televisa GDRs
- --------------------------------------------------------------------
Lowest Level Highest Level
------------ -------------
- --------------------------------------------------------------------
1993:
- --------------------------------------------------------------------
4th Quarter (from December 14) 63.500 71.000
- --------------------------------------------------------------------
1994:
- --------------------------------------------------------------------
1st Quarter 50.750 73.250
- --------------------------------------------------------------------
2nd Quarter 43.875 57.750
- --------------------------------------------------------------------
3rd Quarter 48.125 62.500
- --------------------------------------------------------------------
4th Quarter 29.875 57.875
- --------------------------------------------------------------------
1995:
- --------------------------------------------------------------------
1st Quarter 12.875 29.750
- --------------------------------------------------------------------
2nd Quarter 15.875 21.125
- --------------------------------------------------------------------
3rd Quarter 19.125 27.000
- --------------------------------------------------------------------
4th Quarter 16.250 24.250
- --------------------------------------------------------------------
1996:
- --------------------------------------------------------------------
1st Quarter 23.500 29.500
- --------------------------------------------------------------------
2nd Quarter 25.500 33.125
- --------------------------------------------------------------------
3rd Quarter 24.125 31.375
- --------------------------------------------------------------------
4th Quarter 24.000 30.250
- --------------------------------------------------------------------
1997:
- --------------------------------------------------------------------
1st Quarter 24.000 28.250
- --------------------------------------------------------------------
2nd Quarter 22.625 31.000
- --------------------------------------------------------------------
3rd Quarter (through August 15) 27.000 34.563
- --------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------
CANTV ADRs
- --------------------------------------------------------------------
Lowest Level Highest Level
------------ -------------
- --------------------------------------------------------------------
1996:
- --------------------------------------------------------------------
4th Quarter (from November 22) 24.875 28.125`
- --------------------------------------------------------------------
1997:
- --------------------------------------------------------------------
1st Quarter 27.250 33.125
- --------------------------------------------------------------------
2nd Quarter 29.000 43.125
- --------------------------------------------------------------------
3rd Quarter (through August 15) 41.125 45.313
- --------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------
Coke Femsa ADRs
- --------------------------------------------------------------------
Lowest Level Highest Level
------------ -------------
- --------------------------------------------------------------------
1993:
- --------------------------------------------------------------------
3rd Quarter (from September 14) 21.375 23.750
- --------------------------------------------------------------------
4th Quarter 23.750 33.375
- --------------------------------------------------------------------
1994:
- --------------------------------------------------------------------
1st Quarter 26.875 36.125
- --------------------------------------------------------------------
2nd Quarter 22.750 31.750
- --------------------------------------------------------------------
3rd Quarter 25.125 38.250
- --------------------------------------------------------------------
4th Quarter 21.000 36.125
- --------------------------------------------------------------------
1995:
- --------------------------------------------------------------------
1st Quarter 13.500 24.000
- --------------------------------------------------------------------
2nd Quarter 17.000 21.375
- --------------------------------------------------------------------
3rd Quarter 18.625 26.375
- --------------------------------------------------------------------
4th Quarter 16.625 22.125
- --------------------------------------------------------------------
1996:
- --------------------------------------------------------------------
1st Quarter 20.375 26.000
- --------------------------------------------------------------------
2nd Quarter 22.250 32.250
- --------------------------------------------------------------------
3rd Quarter 23.250 28.375
- --------------------------------------------------------------------
4th Quarter 23.250 29.625
- --------------------------------------------------------------------
1997:
- --------------------------------------------------------------------
1st Quarter 28.000 37.875
- --------------------------------------------------------------------
2nd Quarter 33.500 52.500
- --------------------------------------------------------------------
3rd Quarter (through August 15) 45.688 56.125
- --------------------------------------------------------------------
21
<PAGE>
- --------------------------------------------------------------------
Telefonica del Peru ADRs
- --------------------------------------------------------------------
Lowest Level Highest Level
------------ -------------
- --------------------------------------------------------------------
1996:
- --------------------------------------------------------------------
3rd Quarter (from July 2) 21.000 23.875
- --------------------------------------------------------------------
4th Quarter 17.500 23.250
- --------------------------------------------------------------------
1997:
- --------------------------------------------------------------------
1st Quarter 18.875 23.500
- --------------------------------------------------------------------
2nd Quarter 22.250 27.375
- --------------------------------------------------------------------
3rd Quarter (through August 15) 23.188 26.813
- --------------------------------------------------------------------
22
<PAGE>
- --------------------------------------------------------------------
Telefonica de Argentina ADRs
- --------------------------------------------------------------------
Lowest Level Highest Level
------------ -------------
- --------------------------------------------------------------------
1994:
- --------------------------------------------------------------------
1st Quarter (from March 8) 31.000 39.125
- --------------------------------------------------------------------
2nd Quarter 28.375 37.438
- --------------------------------------------------------------------
3rd Quarter 29.125 36.563
- --------------------------------------------------------------------
4th Quarter 24.563 34.688
- --------------------------------------------------------------------
1995:
- --------------------------------------------------------------------
1st Quarter 14.875 27.125
- --------------------------------------------------------------------
2nd Quarter 22.375 28.625
- --------------------------------------------------------------------
3rd Quarter 23.250 29.500
- --------------------------------------------------------------------
4th Quarter 19.875 27.500
- --------------------------------------------------------------------
1996:
- --------------------------------------------------------------------
1st Quarter 24.375 33.000
- --------------------------------------------------------------------
2nd Quarter 24.750 31.250
- --------------------------------------------------------------------
3rd Quarter 21.500 29.125
- --------------------------------------------------------------------
4th Quarter 22.625 26.875
- --------------------------------------------------------------------
1997:
- --------------------------------------------------------------------
1st Quarter 25.875 33.750
- --------------------------------------------------------------------
2nd Quarter 28.500 37.625
- --------------------------------------------------------------------
3rd Quarter (through August 15) 34.625 40.313
- --------------------------------------------------------------------
23
<PAGE>
- --------------------------------------------------------------------
YPF ADRs
- --------------------------------------------------------------------
Lowest Level Highest Level
------------ -------------
- --------------------------------------------------------------------
1993:
- --------------------------------------------------------------------
3rd Quarter (from June 29) 19.000 25.375
- --------------------------------------------------------------------
4th Quarter 24.000 28.750
- --------------------------------------------------------------------
1994:
- --------------------------------------------------------------------
1st Quarter 23.625 29.000
- --------------------------------------------------------------------
2nd Quarter 22.250 26.875
- --------------------------------------------------------------------
3rd Quarter 23.750 26.750
- --------------------------------------------------------------------
4th Quarter 20.625 25.250
- --------------------------------------------------------------------
1995:
- --------------------------------------------------------------------
1st Quarter 14.375 21.750
- --------------------------------------------------------------------
2nd Quarter 18.875 21.875
- --------------------------------------------------------------------
3rd Quarter 17.125 20.375
- --------------------------------------------------------------------
4th Quarter 17.000 21.875
- --------------------------------------------------------------------
1996:
- --------------------------------------------------------------------
1st Quarter 19.375 23.375
- --------------------------------------------------------------------
2nd Quarter 20.500 23.500
- --------------------------------------------------------------------
3rd Quarter 20.500 23.250
- --------------------------------------------------------------------
4th Quarter 22.625 25.375
- --------------------------------------------------------------------
1997:
- --------------------------------------------------------------------
1st Quarter 25.000 28.625
- --------------------------------------------------------------------
2nd Quarter 25.875 31.750
- --------------------------------------------------------------------
3rd Quarter (through August 15) 28.938 32.813
- --------------------------------------------------------------------
24
