As filed with the Securities and Exchange Commission on April 8, 1998
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CHRYSLER FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 38-0961430
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27777 Franklin Road
Southfield, Michigan 48034
(248) 948-3062
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
CHRISTOPHER A. TARAVELLA, ESQ.
27777 Franklin Road
Southfield, Michigan 48034
(248) 948-3062
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with a copy to:
MICHAEL L. FITZGERALD, ESQ.
Brown & Wood LLP
One World Trade Center
New York, New York 10048
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
If only securities being registered on this Form are being offered to
dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
-------
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
-----------<PAGE>
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
===============================================================================
<TABLE>
<CAPTION>
Proposed Proposed
Amount maximum maximum Amount of
Title of each class of to be offering price aggregate registration
securities to be registered registered(1)(2) per unit(3) offering price(1)(3) fee
--------------------------- ---------------- ----------- -------------------- ------------
<S> <C> <C> <C> <C>
Debt Securities and Warrants
to Purchase Debt Securities..... $8,000,000,000(4) 100% $8,000,000,000 $2,360,000
===============================================================================
<FN>
(1) In U.S. dollars or the equivalent thereof in one or more foreign or
composite currencies.
(2) Plus such additional principal amount as may be necessary such that, if
Debt Securities or Warrants are issued with original issue discount, the
aggregate initial offering price of all Debt Securities and Warrants will
equal $8,000,000,000.
(3) Estimated solely for the purpose of calculating the registration fee.
(4) Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included herein also relates to a total of $1,895,250,600 of Debt
Securities and Warrants to Purchase Debt Securities originally registered
under Registration Statement No. 33-64179 and in connection with which
registration fees in the amount of $653,535 were previously paid. In the
event that any such previously registered Debt Securities and Warrants to
Purchase Debt Securities are offered and sold prior to the effective date
of this Registration Statement, the amount of the Debt Securities and
Warrants to Purchase Debt Securities so offered and sold will not be
included in any Prospectus hereunder. This Registration Statement
constitutes post-effective amendment No. 1 to Registration Statement No.
33-64179 and includes the combined Prospectus through which the
securities registered hereunder, together with the total amount of unsold
securities previously registered under the Registration Statement No.
33-64179, may be offered and sold.
</TABLE>
-----------
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
-----------
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement is a combined prospectus and relates
to the Registrant's Registration Statement No. 33-64179 on Form S-3.
===============================================================================
<PAGE>
Subject to Completion and Amendment
PROSPECTUS
[logo]
By this prospectus, we may offer
up to approximately $9,895,250,600 of:
DEBT SECURITIES
and
WARRANTS TO PURCHASE DEBT SECURITIES
We will provide specific terms of such debt securities and warrants to
purchase debt securities (in general, the "securities") in supplements to
this prospectus. For information on the general terms of these securities,
see "Description of Debt Securities", or "Description of Warrants". You
should read this prospectus and the supplements carefully before you invest.
------------------------------
These securities have not been approved by the Securities and Exchange
Commission (the "SEC") or any state securities commission. None of these
organizations has determined that this prospectus, or any accompanying
prospectus supplement or pricing supplement, is accurate or complete. Any
representation to the contrary is a criminal offense.
These securities have not been approved or disapproved by the
Commissioner of Insurance for the State of North Carolina, nor has the
Commissioner of Insurance ruled upon the accuracy or the adequacy of this
prospectus or any prospectus supplement.
------------------------------
The date of this Prospectus is , 1998.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.<PAGE>
ADDITIONAL INFORMATION -- INCORPORATION BY REFERENCE
As required by the Securities Exchange Act of 1934, as amended (the
"Securities Exchange Act"), Chrysler Financial corporation (the "Company" or
"we") files annual, quarterly and current reports and other information with
the Securities and Exchange Commission (the "SEC"). You may read and copy any
document that we file with the SEC at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549. To obtain information on the
operation of the Public Reference Room, you may call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC filings are also
available to the public from the SEC's web site (http:// www.sec.gov). In
addition, you, or any beneficial owner of the securities that you purchase,
may request copies of any or all of the information incorporated by reference
into this prospectus. Such copies will be provided at no cost to the
requester. Address your request, in writing or by phone, to: Office of the
Secretary, Chrysler Financial Corporation, 27777 Franklin Road, Southfield,
Michigan 48034. Telephone: (248) 948-3062.
The following documents, which we have filed or will file with the SEC
in compliance with the Securities Exchange Act, are "incorporated by
reference" in this prospectus:
o The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
o All other documents that we have filed or will file as prescribed in
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act since
December 31, 1997 and until we sell all the securities.
This means that important information about the Company and Chrysler
Corporation appears or will appear in these documents and will be regarded as
appearing in this prospectus also. To the extent that information appearing in
a document filed later is inconsistent with prior information, the later
statement will control.
We have filed a registration statement on Form S-3 with the SEC
covering the securities described in this prospectus. For further information
with respect to us and those securities, you should refer to our registration
statement and its exhibits. In this prospectus, we have summarized certain
key provisions of contracts and other documents. We have filed or
incorporated by reference copies of these documents as exhibits to our
registration statement. Because a summary may not contain all the information
that is important to you, you should review the full text of the documents so
included with our registration statement.
You should only rely on the information contained or incorporated by
reference in this prospectus, any prospectus supplement or any pricing
supplement. We have not authorized anyone to provide you with any other
information. You should not assume that the information in this prospectus,
any accompanying prospectus supplement or any document incorporated by
reference is accurate as of any date other than the date on the front of
those documents.
2
<PAGE>
CHRYSLER FINANCIAL CORPORATION
General
The Company is a financial services organization that principally
provides consumer and dealer automotive financing. The Company provides
retail and lease financing for vehicles, dealer inventory and other financing
needs, dealer property and casualty insurance, and dealership facility
development and management, primarily for Chrysler Corporation dealers and
their customers. All of the Company's common stock is owned by Chrysler
Corporation, a Delaware corporation (together with its subsidiaries,
"Chrysler"). The Company's primary objective is to provide financing for
automotive dealers and retail purchasers of Chrysler's products. The Company
sells significant amounts of automotive receivables acquired in transactions
subject to limited credit risk. The Company remains as servicer of such
receivables for which it is paid a servicing fee. At December 31, 1997, the
Company had approximately 3,200 employees and its portfolio of receivables
managed, which includes receivables owned and serviced for others, totaled
$39.4 billion. The Company's executive offices are located at 27777 Franklin
Road, Southfield, Michigan 48034; telephone (248) 948-3058.
This Prospectus contains brief summaries of certain more detailed
information contained in documents incorporated herein by reference. Such
summaries are qualified in their entirety by the more detailed information
contained in the incorporated documents.
Company Operations
The Company's portfolio of finance receivables managed includes
receivables owned and receivables serviced for others. Receivables serviced
for others includes securitized automotive receivables and retail leases. At
December 31, 1997, receivables serviced for others accounted for 72% of the
Company's portfolio of receivables managed. Total finance receivables managed
at the end of each of the five most recent years were as follows (in millions
of dollars):
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Automotive ............ $36,655 $36,858 $35,696 $29,962 $25,011
Nonautomotive ......... 2,715 2,204 2,391 2,775 3,251
------- ------- ------- ------- -------
Total financing ....... $39,370 $39,062 $38,087 $32,737 $28,262
======= ======= ======= ======= =======
</TABLE>
Automotive Financing. The Company conducts its automotive finance
business through Chrysler Financial Corporation in the United States and
Chrysler Credit Canada Ltd. in Canada. The Company is the major source of car
and truck wholesale financing and retail financing for Chrysler vehicles
throughout North America. The Company also offers dealers working capital
loans, real estate and equipment financing and financing plans for fleet
buyers. The automotive financing operations of the Company are conducted
through 29 zone offices in the United States and Canada. The Company also
provides automotive financial products and services in Europe and Asia.
During 1997, the Company financed or leased approximately 870,000
vehicles at retail in the United States, including approximately 611,000 new
Chrysler cars and trucks, representing 27 percent of Chrysler's U.S. retail
and fleet deliveries. During 1997, the Company financed approximately
2,603,000 vehicles at wholesale in the United States, including approximately
1,625,000 new Chrysler cars and trucks, representing 70 percent of Chrysler's
U.S. factory shipments.
Nonautomotive Financing. The Company conducts its nonautomotive finance
business through its subsidiary, Chrysler Capital Corporation. At December
31, 1997, the nonautomotive receivables managed throughout the United States
consisted primarily of $2.6 billion of leveraged leases.
3
<PAGE>
RISK FACTORS
Your investment in the securities will involve certain credit risks.
You should carefully consider the following discussion of risks before
deciding whether an investment in the securities is suitable for you.
Liquidity and Capital Resources.
We have significant liquidity requirements. If cash from operations,
bank borrowings, receivable sales, and the placement of term debt does not
provide the necessary liquidity, we would be required to restrict the
financing of Chrysler products and dealers. A significant reduction in such
financing support would have a material adverse effect on us and Chrysler.
Additionally, our inability to sell or securitize our receivables and a
variety of other factors could affect our ability to repay our debt at
maturity. See, "Chrysler Financial Corporation Selected Consolidated
Financial Data -- Liquidity and Capital Resources."
Relationship with Chrysler.
Our business is dependent upon Chrysler. Lower levels of production and
sales of Chrysler automotive products would result in a reduction of our level
of finance operations. The production and sale of Chrysler's automotive
products will depend significantly on Chrysler's ability to continue its
capital expenditure and vehicle development programs and to market its
vehicles successfully. See "Information Concerning Chrysler Corporation."
4
<PAGE>
CHRYSLER FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected financial data of the Company for each of the
last five years ended December 31, 1997 have been derived from the audited
consolidated financial statements of the Company. The consolidated financial
statements as of December 31, 1997 and 1996 and for each of the last three
years in the period ended December 31, 1997 and the report of Deloitte &
Touche LLP thereon are incorporated herein by reference. The following
selected consolidated financial data should be read in conjunction with such
consolidated financial statements, related notes and other financial
information incorporated herein by reference.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Earnings Statement Data:(1)
Total finance revenue ............................... $ 1,648 $ 1,663 $ 1,621 $ 1,366 $ 1,417
Interest expense .................................... 816 797 910 754 791
Depreciation on vehicles leased ..................... 169 92 46 11 --
Net margin .......................................... 663 774 665 601 626
Other revenues ...................................... 1,006 818 818 629 622
Operating and other expenses ........................ 501 523 508 603 463
Provision for credit losses ......................... 443 387 342 203 216
Earnings before income taxes and cumulative
effect of changes in accounting principles ........ 637 586 522 315 267
Net earnings(2) ..................................... 419 376 339 195 129
December 31,
-----------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Balance Sheet Data:(1) (dollars in millions)
Finance receivables -- net .......................... $10,926 $11,158 $12,644 $12,423 $ 9,626
Retained interests in sold receivables -- net ....... 3,111 3,153 2,733 2,251 2,620
Cash and cash equivalents ........................... 380 230 476 174 265
Marketable securities ............................... 408 472 674 583 348
Loans and other amounts due from affiliated
companies ........................................ 1,705 859 -- 66 --
Repossessed collateral .............................. 76 146 194 162 269
Dealership properties leased -- net ................. 281 319 363 407 423
Vehicles leased -- net .............................. 1,736 614 397 130 --
Other assets ........................................ 698 582 354 452 700
------- ------- ------- ------- -------
Total assets .................................... $19,321 $17,533 $17,835 $16,648 $14,251
======= ======= ======= ======= =======
Short-term notes (primarily commercial paper) ....... $ 2,970 $ 2,616 $ 2,435 $ 4,315 $ 2,772
Bank borrowings ..................................... 217 90 -- -- --
Senior term debt .................................... 9,324 8,435 9,234 6,069 5,139
Subordinated term debt .............................. -- -- -- 27 77
Other debt .......................................... 207 104 100 260 447
Accounts payable, accrued expenses and other ........ 1,474 1,372 1,236 1,155 1,147
Amounts due to affiliated companies ................. -- -- 29 -- 24
Deferred income taxes ............................... 1,832 1,628 1,499 1,549 1,514
------- ------- ------- ------- -------
Total liabilities ............................... 16,024 14,245 14,533 13,375 11,120
------- ------- ------- ------- -------
Shareholder's investment:
Common(3) ......................................... 3,297 3,288 3,302 3,273 3,131
------- ------- ------- ------- -------
Total shareholder's investment .................. 3,297 3,288 3,302 3,273 3,131
------- ------- ------- ------- -------
Total liabilities and shareholder's investment .. $19,321 $17,533 $17,835 $16,648 $14,251
======= ======= ======= ======= =======
<FN>
- ----------------
(1) Prior periods reclassified to conform to current classifications.
(2) Net earnings for 1993 included a $30 million after-tax charge from the
adoption of Statement of Financial Accounting Standards ("SFAS") No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
and SFAS No. 112, "Employers' Accounting for Postemployment Benefits."
(3) The Company paid dividends to Chrysler Corporation totaling $415 million,
$382 million, $335 million and $40 million for the years ended December
31, 1997, 1996, 1995, and 1994, respectively. The Company declared no
cash dividends in respect of its common stock during 1993.
</TABLE>
5
<PAGE>
Financial Review
The Company had net earnings of $419 million in 1997 compared to $376
million and $339 million in 1996 and 1995, respectively. The increase in net
earnings for the year ended December 31, 1997 reflects an increase in gains
and servicing fees from sales of receivables, higher levels of vehicles
leased, and lower operating expenses, partially offset by higher credit loss
provisions.
Total assets at December 31, 1997 totaled $19.3 billion compared to
$17.5 billion at December 31, 1996. The increase in total assets is primarily
attributable to the higher balance of vehicles leased and an increase in
loans and other amounts due from affiliated companies. Total debt outstanding
at December 31, 1997 was $12.7 billion compared to $11.2 billion at December
31, 1996. The increase in total debt is attributable to the need to fund
higher automotive volume. The Company's debt-to-equity ratio was 3.9 to 1 at
December 31, 1997, compared to 3.4 to 1 at December 31, 1996.
The Company's portfolio of receivables and leases managed, which
includes receivables owned and receivables serviced for others, totaled $39.4
billion at December 31, 1997, as compared to $39.1 billion at December 31,
1996. The increase in receivables and leases managed during the last two
years reflects higher automotive volume. Receivables serviced for others
totaled $29.1 billion at December 31, 1997 compared to $28.0 billion at
December 31, 1996.
The Company's allowance for credit losses totaled $559 million, $526
million, and $578 million at December 31, 1997, 1996, and 1995, respectively.
The allowance for credit losses as a percentage of related finance
receivables outstanding was 1.60 percent at December 31, 1997, 1.52 percent
at December 31, 1996 and 1.69 percent at December 31, 1995. The increase in
allowance for credit losses as a percentage of related finance receivables
outstanding is primarily attributable to higher credit loss provisions during
1997.
Net credit loss experience, including net losses on receivables sold
subject to limited credit risk, for the years ended December 31, 1997, 1996
and 1995 was as follows (dollars in millions):
<TABLE>
<CAPTION>
Net Credit Losses --
Finance Receivables
--------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Automotive .......................... $393 $358 $229
Nonautomotive ....................... 14 35 23
---- ---- ----
Total ........................... $407 $393 $252
==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Net Credit Losses --
Finance Receivables
to Average Gross
Finance Receivables Outstanding
------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Automotive .......................... 1.13% 1.06% .70%
Nonautomotive ....................... .38% 1.06% .69%
Total ........................... 1.06% 1.06% .70%
</TABLE>
6
<PAGE>
Liquidity and Capital Resources
Term debt, commercial paper and receivable sales represent the
Company's primary funding sources. During 1997, the Company issued $4.0
billion of term debt (primarily medium term notes), repaid $3.1 billion of
term debt and increased its commercial paper outstanding by $0.4 billion.
Receivable sales continued to be a significant source of funding during
1997 as the Company realized $9.0 billion of net proceeds from the sales of
automotive retail receivables, compared to $8.1 billion of net proceeds in
1996. Securitization of revolving wholesale account balances provided funding
which aggregated $6.1 billion and $6.8 billion at December 31, 1997 and 1996,
respectively.
At December 31, 1997, the Company had contractual debt maturities of
$6.0 billion in 1998 (including $3.0 billion of short-term notes with an
average remaining term of 53 days), $3.3 billion in 1999, $2.3 billion in
2000, $0.4 billion in 2001, $0.5 billion in 2002, and $0.2 billion
thereafter. The Company expects that 1998 debt maturities will be funded from
continued access to term debt markets, issuances of commercial paper,
receivables sales (including approximately $1.5 billion in eligible wholesale
receivables held by securitization trusts) and operating cash flows.
The Company's revolving credit facilities, which total $8.0 billion,
consist of a $2.0 billion facility expiring in April, 1998 and a $6.0 billion
facility expiring in April, 2002. These facilities include $1.0 billion
allocated to Chrysler Credit Canada Ltd. As of December 31, 1997, no amounts
were outstanding under these facilities.
The Company paid $415 million and $382 million in dividends to Chrysler
during 1997 and 1996, respectively.
For additional information regarding the results of operations and
financial condition of the Company, see the Company's Annual Report on Form
10-K for the year ended December 31, 1997, which is incorporated by reference
into this Prospectus.
Year 2000 Date Conversion
In 1996, the Company began the process of identifying, evaluating and
implementing changes to computer programs necessary to address the year 2000
issue. This issue affects computer systems that have time-sensitive
programs that may not properly recognize the year 2000. This could result in
major system failures or miscalculations. The Company is currently addressing
its internal year 2000 issue with modifications to existing programs and
conversions to new programs. The Company is also communicating with dealers,
financial institutions, software vendors and others with which it conducts
business to help them identify and resolve the year 2000 issue. If necessary
modifications and conversions are not completed in a timely manner, the year
2000 issue may have a material effect on the operations of the Company. The
total cost associated with the required modifications and conversions is not
known at this time, however, it is not expected to be material to the
Company's financial position and is being expensed as incurred.
New Accounting Standards
In June 1997, the Financial Accounting Standard Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income," effective for fiscal years beginning after December
15, 1997. This statement establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. This statement requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. Based on current
accounting standards, this new accounting statement is not expected to have a
material impact on the Company's consolidated financial statements. The
Company will adopt this accounting standard effective January 1, 1998, as
required.
In September 1997, the FASB issued SFAS No. 131. "Disclosures about Segments
of an Enterprise and Related Information," effective for financial statements
for periods beginning after December 15, 1997. This statement establishes
standards for reporting information about operating segments in annual
financial statements and requires that enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas and major customers. The Company has
not determined the impact that the adoption of this new accounting standard
will have on its consolidated financial statement disclosures. The Company
will adopt this accounting standard effective January 1, 1998, as required.
7
<PAGE>
INFORMATION CONCERNING CHRYSLER CORPORATION
The Company's results of operations depend significantly upon the
results of operations of Chrysler. Chrysler is subject to the informational
requirements of the Exchange Act, and in accordance therewith files reports
and other information with the Commission. Such reports and other information
can be inspected and copied at the public reference facilities of the
Commission referred to above under "Available Information."
The results of operations and balance sheet data set forth below for
Chrysler reflect the full consolidation of the accounts of all significant
majority-owned subsidiaries and entities over which Chrysler has a
controlling financial interest for each of the last three years ended
December 31, 1997. Such information has been derived from the audited
consolidated financial statements of Chrysler.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1997 1996 1995
---- ---- ----
Results of Operations Data (in millions of dollars)
<S> <C> <C> <C>
Sales of manufactured products ...................... $56,986 $57,587 $49,601
Finance and insurance revenues ...................... 1,636 1,746 1,589
Other revenues ...................................... 2,525 2,064 2,005
------- ------- -------
Total Revenues ...................................... 61,147 61,397 53,195
------- ------- -------
Total Expenses ...................................... 56,590 55,305 49,746
------- ------- -------
Earnings Before Income Taxes, Extraordinary Item
and Cumulative Effect of a Change in Accounting
Principle ......................................... 4,557 6,092 3,449
Provision for income taxes .......................... 1,752 2,372 1,328
------- ------- -------
Earnings Before Extraordinary Item and Cumulative
Effect of a Change in Accounting Principle ........ 2,805 3,720 2,121
Extraordinary item -- Loss on early extinguishment
of debt, net of taxes ............................. -- (191) --
Cumulative effect of a change in accounting
principle ......................................... -- -- (96)
------- ------- -------
Net Earnings ........................................ $ 2,805 $ 3,529 $ 2,025
Preferred stock dividends ........................... 1 3 21
------- ------- -------
Net Earnings on Common Stock ........................ $ 2,804 $ 3,526 $ 2,004
======= ======= =======
<CAPTION>
December 31,
---------------------------
1997 1996 1995
---- ---- ----
Balance Sheet Data (in millions of dollars)
<S> <C> <C> <C>
Cash, cash equivalents and marketable securities .... $ 7,848 $ 7,752 $ 8,125
Total assets ........................................ 60,418 56,184 53,756
Total debt .......................................... 15,485 13,396 14,193
Shareholders' equity ................................ 11,362 11,571 10,959
</TABLE>
Results of Operations
Chrysler reported earnings before income taxes, extraordinary item and
the cumulative effect of a change in accounting principle of $4,557 million
in 1997, compared with $6,092 million in 1996. Net earning for 1997 were
$2,805 million, or $4.15 per common share, compared with $3,529 million, or
$4.83 per common share, in 1996. Chrysler also reported earnings before
income taxes and extraordinary item of $1,316 million in the fourth quarter
of 1997, compared with $1,591 million in the fourth quarter of 1996. Net
earnings for the fourth quarter of 1997 were $852 million, or $1.30 per
common share, compared with $807 million, or $1.14 per common share, in the
fourth quarter of 1996.
Earnings decreased for calendar-year 1997 as compared with
calendar-year 1996 primarily as a result of an increase in average sales
incentives per vehicle, a decrease in vehicle shipments and an increase in
warranty costs, partially offset by lower profit-based employee compensation
costs. The
8
<PAGE>
increase in average sales incentives per vehicle reflects an increasingly
competitive automotive environment in 1997 resulting primarily from new
product offerings from competitors and greater flexibility in vehicle pricing
by Japanese manufacturers who have benefitted from currency exchange rate
changes between the Japanese yen and U.S. dollar. The decrease in shipments
for calendar-year 1997 was primarily due to the changeover to Chrysler's
all-new Dodge Intrepid and Chrysler Concorde sedans and the unfavorable
impact of a 29-day strike. The increase in warranty costs was primarily
related to customer service and recall actions, partially offset by lower
average warranty costs on 1997 and 1998 model-year vehicles.
Earnings before income taxes, extraordinary item and the cumulative
effect of a change in accounting principle for 1997 reflected the unfavorable
impact of a 29-day strike which reduced earnings by an estimated $590 million
$364 million after taxes) after considering partial recovery of production
losses from the strike, and a $41 million charge ($25 million after taxes)
for costs related to the decision to discontinue Chrysler's Eagle brand at
the end of the 1998 model year. The effect of these unfavorable items was
partially offset by the recognition of $97 million ($60 million after taxes)
of previously deferred profits from the sale of vehicles from Chrysler to
Dollar Thrifty Automotive Group, Inc. ("DTAG", formerly Pentastar
Transportation Group, Inc.) as a result of the December 1997 initial public
offering ("IPO") of Chrysler's common stock interest in DTAG.
Earnings before income taxes, extraordinary item and the cumulative
effect of a change in accounting principle for 1996 included a charge of $97
million ($61 million after taxes) for costs associated with a voluntary early
retirement program for certain salaried employees, a charge of $77 million
($51 million after taxes) related to a write-down of Pentastar Electronics,
Inc. ("PEI"), a charge of $65 million ($100 million after taxes) related to a
write-down of Thrifty Rent-A-Car System, Inc. ("Thrifty"), a charge of $50
million ($31 million after taxes) for lump-sum retiree pension costs related
to the 1996 UAW collective bargaining agreement, and a gain of $101 million
($87 million after taxes) from the sale of Electrospace Systems, Inc. ("ESI")
and Chrysler Technologies Airborne Systems, Inc. ("CTAS"). In addition, in
1996, Chrysler extinguished $550 million, or 50 percent, of the outstanding
principal amount of its Auburn Hills Trust Guaranteed Exchangeable
Certificates Due 2020 (the "Certificates") at a cost of $859 million. The
extinguishment of the Certificates resulted in an extraordinary after-tax
loss of $191 million (net of income tax benefit of $118 million).
Chrysler's worldwide vehicle shipments in 1997 were 2,886,981 units, a
decrease of 71,819 units or 2 percent compared with 1996 levels. Chrysler's
vehicle shipments outside of the U.S., Canada and Mexico ("North America") in
1997 were 237,439 units, an increase of 13,782 units or 6 percent compared
with 1996 levels.
Chrysler's revenues and results of operations are principally derived
from the U.S. and Canada automotive marketplaces. Retail industry sales
(including fleet) of new cars and trucks in the U.S. and Canada were 16.9
million units in 1997, compared with 16.6 million units in 1996, an increase
of 2 percent.
9
<PAGE>
Chrysler's U.S. and combined U.S. and Canada retail sales and market
share data for 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996 Decrease
---- ---- --------
<S> <C> <C> <C>
U.S. Retail Market(1):
Car sales .................................. 736,530 832,633 (96,103)
Car market share ........................... 8.9% 9.7% (0.8)%
Truck sales (including minivans) ........... 1,567,258 1,618,193 (50,935)
Truck market share ......................... 21.7% 23.4% (1.7)%
Combined car and truck sales ............... 2,303,788 2,450,826 (147,038)
Combined car and truck market share ........ 14.9% 15.9% (1.0)%
U.S. and Canada Retail Market(1):
Combined car and truck sales ............... 2,559,950 2,690,340 (130,390)
Combined car and truck market share ........ 15.1% 16.1% (1.0)%
<FN>
- ----------------
(1) All retail sales and market share data include fleet sales.
</TABLE>
The decrease in Chrysler's 1997 U.S. car market share was primarily due
to the changeover to Chrysler's all-new Intrepid and Concorde sedans and
decreased sales of Neons. The decrease in Chrysler's 1997 U.S. truck market
share was primarily due to decreased sales of its Dodge Ram pickup trucks and
Jeep(R) Grand Cherokees, which primarily reflects the effect of the 29-day
strike.
For the past several years, Chrysler has benefitted from the following
factors: (1) favorable economic conditions in the U.S. and Canada, where
Chrysler's sales are concentrated, and (2) a continuing shift in U.S. and
Canada consumer preferences toward trucks, as Chrysler manufactures a higher
proportion of trucks to total vehicles than its principal competitors in the
U.S. and Canada. A significant deterioration in either of these factors could
adversely affect Chrysler's consolidated operating results. Further, Chrysler
has benefitted from a strategy of focusing resources on its core automotive
business and an aggressive capital expenditure and vehicle development
program that has resulted in the replacement of substantially all of its car
and truck offerings over the last five years. Chrysler's long-term
profitability will depend significantly on its ability to continue its
capital expenditure and vehicle development programs and to market its
vehicles successfully in an increasingly competitive automotive environment.
During December 1997, Chrysler completed an IPO of its common stock
interest in DTAG for net proceeds of $387 million. The IPO of the common
stock interest resulted in a pretax and after-tax gain of $73 million. The
gain was deferred and will be recognized over the remaining term of the
vehicle supply agreements with DTAG, which end in 2001. The tax effect on
this transaction reflects the difference between the book and tax basis of
Chrysler's stock interest in DTAG for which deferred taxes were not provided,
in accordance with SFAS No. 109, "Accounting for Income Taxes." In addition,
fourth-quarter 1997 earnings include the recognition of $97 million ($60
million after taxes) of previously deferred profits from the sale of vehicles
from Chrysler to DTAG.
In 1996, Chrysler committed to a plan of disposal for Thrifty, a
subsidiary of DTAG, and recognized a $65 million pretax loss ($100 million
after taxes) to write down Thrifty's carrying value to estimated fair value
less cost to sell. The pretax loss is included in "Costs, other than items
below" in Chrysler's consolidated statement of earnings for 1996. The
after-tax loss includes the effect of not being able to claim a tax deduction
for the capital loss on Chrysler's investment in Thrifty.
In 1996, Chrysler sold ESI and CTAS for net proceeds of $476 million.
ESI and CTAS were engaged principally in the manufacture of defense
electronics and aircraft modification, respectively, and represented
substantially all of the operations of Chrysler Technologies Corporation
("CTC"), a wholly owned subsidiary of Chrysler. The sale resulted in a pretax
gain of $101 million ($87 million after taxes). In the fourth quarter of
1996, Chrysler signed an agreement to sell PEI for net proceeds of $17
million, which resulted in the recognition of a pretax loss of $77 million
($51 million after taxes) to write down
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<PAGE>
PEI's carrying value to estimated fair value less cost to sell. PEI
represented the remaining operations of CTC. The sale of PEI was completed on
January 10, 1997. The pretax gain on the sale of ESI and CTAS and the pretax
loss on the write-down of PEI are included in "Costs, other than items below"
in Chrysler's consolidated statement of earnings for 1996.
In 1995, Chrysler recorded a $263 million provision ($162 million after
taxes) for costs associated with production changes at its Newark assembly
plant. Newark production of the Chrysler Concorde and Dodge Intrepid was
reduced to one shift in August 1995 and terminated in July 1996. Production
of an all-new sport-utility vehicle, the Dodge Durango, began at the Newark
assembly plant in the fall of 1997. The provision reflects the recognition of
supplemental unemployment benefits, job security benefits and other related
employee costs, and the write-down of certain equipment and tooling. The
provision is included in "Costs, other than items below" in Chrysler's
consolidated statement of earnings for 1995.
Chrysler's effective tax rates in 1997, 1996 and 1995 were 38.4
percent, 38.9 percent and 38.5 percent, respectively.
Liquidity and Capital Resources
Chrysler's consolidated combined cash, cash equivalents and marketable
securities totaled $7.8 billion at December 31, 1997 (including $0.8 billion
held by the Company), $7.8 billion at December 31, 1996 (including $0.8
billion held by the Company and DTAG), and $8.1 billion at December 31, 1995
(including $1.2 billion held by the Company and DTAG).
Chrysler's long-term profitability will depend significantly on its
ability to continue its capital expenditure and vehicle development programs
and to market its vehicles successfully in an increasingly competitive
environment. Chrysler's expenditures for new product development and the
acquisition of productive assets were approximately $19 billion for the
three-year period ended December 31, 1997. Expenditures for these items
during the succeeding three-year period are expected to be at similar or
higher levels. At December 31, 1997, Chrysler had commitments for capital
expenditures, including commitments for assets currently under construction,
totaling approximately $1.3 billion.
During 1997, Chrysler repurchased 63 million shares of its common stock
at a cost of $2.1 billion. Chrysler plans to repurchase an additional $1.8
billion of its common stock in 1998 as part of a $2 billion repurchase plan
which began in November 1997. The planned 1998 common stock repurchases are
subject to market and general economic conditions. Since beginning its common
stock repurchase program in 1995, Chrysler has repurchased 175 million shares
of its common stock at a cost of $5.2 billion.
In February 1997, Chrysler sold $500 million of 7.45% Debentures due
2097 and $600 million of 7.45% Debentures due 2027 for net proceeds of $485
million and $592 million, respectively. In July 1997, Chrysler sold $500
million of 7.40% Debentures due 2097 for net proceeds of $495 million.
In August 1997, Chrysler extinguished its $267 million 10.95%
Debentures due 2017 and $245 million 10.40% Notes due 1999 for $529 million.
In December 1997, Chrysler prepaid certain 1998 nonpension employee
benefits by contributing $1.1 billion to a Voluntary Employees' Beneficiary
Association trust and other employee benefit plans.
Chrysler's ability to market its products successfully depends
significantly on the availability of vehicle financing for its dealers and,
to a lesser extent, the availability of financing for retail and fleet
customers, both of which are provided by the Company.
11
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges of the Company Consolidated and
Chrysler Consolidated for each of the last five years were as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
The Company Consolidated ........... 1.77X 1.72X 1.56X 1.41X 1.33X
Chrysler Consolidated .............. 4.25X 5.51X 3.45X 5.52X 3.62X
</TABLE>
The Company Consolidated. The ratios of earnings to fixed charges is
computed by dividing earnings available for fixed charges by total fixed
charges. Fixed charges consist of interest, amortization of debt discount and
expense, and rentals. Rentals included in fixed charges are the portion of
total rent expense representative of the interest factor (deemed to be
one-third).
Chrysler Consolidated. The ratio of earnings to fixed changes is computed
by dividing earnings available for fixed charges by total fixed charges.
12
<PAGE>
USE OF PROCEEDS
Unless otherwise provided in the applicable Prospectus Supplement, the
net proceeds to be received by the Company from the sale of the Debt
Securities and Warrants and the exercise of Warrants will be added to its
general corporate funds and may be used to repay long-term or short-term
borrowings and for other general corporate purposes. If the Company elects at
the time of the issuance of Debt Securities or Warrants to make different or
more specific use of proceeds other than as set forth herein, such use will
be described in the Prospectus Supplement.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities set forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Debt Securities so offered will be
described in the Prospectus Supplement relating to such Debt Securities.
The Debt Securities are to be issued under an Indenture dated as of
February 15, 1988, as amended (the "Indenture"), between the Company and
Manufacturers Hanover Trust Company, which has been succeeded by United
States Trust Company of New York as successor Trustee (the "Trustee"). The
Indenture is incorporated by reference as an exhibit to the Registration
Statement. The following summary of certain provisions of the Indenture does
not purport to be complete and is qualified in its entirety by reference to
the provisions of the Indenture. Numerical references in parentheses below
are to sections of the Indenture. Wherever particular sections or defined
terms of the Indenture are referred to, it is intended that such sections or
defined terms shall be incorporated herein by reference.
General
Debt Securities and Warrants offered by this Prospectus will be limited
to an aggregate initial public offering price of approximately $9,895,250,600
or the equivalent thereof in one or more foreign currencies or composite
currencies. The Indenture provides that Debt Securities in an unlimited amount
may be issued thereunder from time to time in one or more series.
(Section 301)
The Securities will rank pari passu in right of payment with all
existing and future unsecured and unsubordinated indebtedness of the Company.
Reference is hereby made to the Prospectus Supplement relating to the
particular series of Debt Securities offered thereby for the terms of such
Debt Securities, including, where applicable: (i) the designation, aggregate
principal amount, currency or currencies and denominations of such Debt
Securities; (ii) the price (expressed as a percentage of the aggregate
principal amount thereof) at which such Debt Securities will be issued; (iii)
the date or dates on which such Debt Securities will mature; (iv) the
currency or currencies in which such Debt Securities are being sold and in
which the principal of and any interest on such Debt Securities will be
payable, whether the holder of any such Debt Securities may elect the
currency in which payments thereon are to be made and, if so, the manner of
such election; (v) the rate or rates (which may be fixed or variable) per
annum at which such Debt Securities will bear interest; (vi) the date from
which such interest on such Debt Securities will accrue, the dates on which
such interest will be payable and the date on which payment of such interest
will commence; (vii) the dates on which and the price or prices at which such
Debt Securities will, pursuant to any mandatory sinking fund provision, or
may, pursuant to any optional redemption or required repayment provisions, be
redeemed or repaid and the other terms and provisions of any such optional
redemption or required repayment; (viii) whether such Debt Securities are to
be issuable as Registered Securities, Bearer Securities or both and the terms
upon which any Bearer Securities of such series may be exchanged for
Registered Securities of such series; (ix) whether such Debt Securities are
to be issued in whole or in part in the form of one or more Global Securities
and, if so, the identity of the Depositary for such Global Security or
Securities; (x) any special provisions for the payment of additional amounts
with respect to
13
<PAGE>
such Debt Securities; (xi) if a temporary Global Security is to be issued
with respect to such series, whether any interest thereon payable on an
interest payment date prior to the issuance of a permanent Global Security or
definitive Bearer Securities will be credited to the account of the persons
entitled thereto on such interest payment date; (xii) if a temporary Global
Security is to be issued with respect to such series, the terms upon which
interests in such temporary Global Security may be exchanged for interests in
a permanent Global Security or for definitive Debt Securities of the series
and the terms upon which interests in a permanent Global Security, if any,
may be exchanged for definitive Debt Securities of the series; (xiii) any
additional restrictive covenants included for the benefit of holders of such
Debt Securities; (xiv) additional Events of Default provided with respect to
such Debt Securities; and (xv) the terms of any Warrants offered together
with such Debt Securities.
The Debt Securities may be issuable as Registered Securities, Bearer
Securities or both. Debt Securities of a series may be issuable in whole or
in part in the form of one or more Global Securities, as described below
under "Global Securities." Unless the Prospectus Supplement relating thereto
specifies otherwise, Registered Securities denominated in U.S. dollars will
be issued only in denominations of $1,000 or any integral multiple thereof
and Bearer Securities denominated in U.S. dollars will be issued only in the
denomination of $5,000. See, however, "Limitations on Issuance of Bearer
Securities and Bearer Warrants" below. One or more Global Securities may be
issued in a denomination or aggregate denominations equal to the aggregate
principal amount of Outstanding Debt Securities of the series to be
represented by such Global Security or Securities. The Prospectus Supplement
relating to a series of Debt Securities denominated in a foreign or composite
currency will specify the denomination thereof. No service charge will be
made for any transfer or exchange of Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. (Sections 302 and 305)
At the option of the Holder upon request confirmed in writing, and
subject to the terms of the applicable Indenture, Bearer Securities (with all
unmatured coupons, except as provided below) of any series will be
exchangeable into an equal aggregate principal amount of Registered
Securities (if the Debt Securities of such series are issuable as Registered
Securities) or Bearer Securities of the same series (with the same interest
rate and maturity date), but no Bearer Security will be delivered in or to
the United States, and Registered Securities of any series (other than a
Global Security, except as set forth below) will be exchangeable into an
equal aggregate principal amount of Registered Securities of the same series
(with the same interest rate and maturity date) of different authorized
denominations. If a Holder surrenders Bearer Securities in exchange for
Registered Securities between a Regular Record Date or, in certain
circumstances, a Special Record Date, and the relevant interest payment date,
such Holder will not be required to surrender the coupon relating to such
interest payment date. Registered Securities may not be exchanged for Bearer
Securities. (Section 305)
Debt Securities may be presented for exchange, and Registered
Securities (other than a Global Security) may be presented for transfer (with
the form of transfer endorsed thereon duly executed), at the office of any
transfer agent or at the office of the Security Registrar, without service
charge and upon payment of any taxes and other governmental charges as
described in the applicable Indenture. (Section 305) Bearer Securities will
be transferable by delivery.
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Securities will
be described in the Prospectus Supplement relating thereto. "Original Issue
Discount Securities" means any Debt Securities that provide for an amount
less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof upon the occurrence of an
Event of Default and the continuation thereof. (Section 101)
Global Securities
The Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued in either
registered or bearer form and in either temporary or permanent form. Unless
and until it is exchanged in whole or in
14
<PAGE>
part for Debt Securities in definitive form, a Global Security may not be
transferred except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor of such Depositary or a nominee of such
successor. (Sections 303 and 305)
The specific terms of the depositary arrangement with respect to any
Debt Securities of a series will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following
provisions will apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such
Global Security to the accounts of institutions that have accounts with such
Depositary ("participants"). The accounts to be credited shall be designated
by the underwriters of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by participants
or persons that hold through participants. The laws of some states require
that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
owner of such Global Security, such Depositary or such nominee, as the case
may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Indenture
governing such Debt Securities. Except as set forth below, owners of
beneficial interests in a Global Security will not be entitled to have Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in definitive form and will not be considered
the owners or holders thereof under the Indenture.
Subject to the restrictions discussed under "Limitations on Issuance of
Bearer Securities and Bearer Warrants" below, principal, premium, if any, and
interest payments on Debt Securities registered in the name of or held by a
Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner or the holder of the Global Security
representing such Debt Securities. None of the Company, the Trustee for such
Debt Securities, any Paying Agent or the Security Registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for Debt Securities of a
series, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security, will credit immediately participants'
accounts with payments in amounts proportionate to their respective
beneficial interests in the principal amount of such Global Security as shown
on the records of such Depositary. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name," and will be the
responsibility of such participants. Receipt by owners of beneficial
interests in a temporary Global Security of payments in respect of such
temporary Global Security will be subject to the restrictions discussed under
"Limitations on Issuance of Bearer Securities and Bearer Warrants" below.
If a Depositary for Debt Securities of a series is at any time
unwilling or unable to continue as depositary and a successor depositary is
not appointed by the Company within ninety days, the Company will issue Debt
Securities of such series in definitive form in exchange for all of the
Global Securities representing the Debt Securities of such series. In
addition, the Company may at any time and in its sole
15
<PAGE>
discretion determine not to have any Debt Securities of a series represented
by one or more Global Securities and, in such event, will issue Debt
Securities of such series in definitive form in exchange for all of the
Global Securities representing such Debt Securities. Further, if the Company
so specifies with respect to the Debt Securities of a series, an owner of a
beneficial interest in a Global Security representing Debt Securities of such
series may, on terms acceptable to the Company and the Depositary for such
Global Security, receive Debt Securities of such series in definitive form.
In any such instance, an owner of a beneficial interest in a Global Security
will be entitled to physical delivery in definitive form of Debt Securities
of the series represented by such Global Security equal in principal amount
to such beneficial interest and to have such Debt Securities registered in
its name (if the Debt Securities of such series are issuable as Registered
Securities). Debt Securities of such series so issued in definitive form will
be issued (a) as Registered Securities in denominations, unless otherwise
specified by the Company, of $1,000 and integral multiples thereof if the
Debt Securities of such series are issuable as Registered Securities, (b) as
Bearer Securities in the denomination, unless otherwise specified by the
Company, of $5,000 if the Debt Securities of such series are issuable as
Bearer Securities or (c) as either Registered or Bearer Securities, if the
Debt Securities of such series are issuable in either form. (Section 305)
See, however, "Limitations on Issuance of Bearer Securities and Bearer
Warrants" below for a description of certain restrictions on the issuance of
a Bearer Security in definitive form in exchange for an interest in a Global
Security.
Payment and Paying Agents
Payment of principal of and premium, if any, and interest on Bearer
Securities will be payable in the currency designated in the Prospectus
Supplement, subject to any applicable laws and regulations, at such paying
agencies outside the United States as the Company may appoint from time to
time. Any such payment may be made by a check in the designated currency. No
payment with respect to any Bearer Securities will be made at the Corporate
Trust Office of the Trustee or any other paying agency maintained by the
Company in the United States nor will any such payment be made by transfer to
an account, or by mail to an address, in the United States. Notwithstanding
the foregoing, payments of principal of and premium, if any, and interest on
Bearer Securities will be made in U.S. dollars at the Corporate Trust Office
of the Trustee in The City of New York if payment of the full amount thereof
at all paying agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 1002)
Payment of principal of and premium, if any, on Registered Securities
will be made in the designated currency against surrender of such Registered
Securities at the Corporate Trust Office of the Paying Agent in The City of
New York. Unless otherwise indicated in the Prospectus Supplement, payment of
any installment of interest on Registered Securities will be made to the
person in whose name such Debt Security is registered at the close of
business on the regular record date for such interest. Unless otherwise
indicated in the Prospectus Supplement, payments of such interest will be
made at the Corporate Trust Office of the Paying Agent in The City of New
York, or by a check in the designated currency mailed to each Holder at such
Holder's registered address.
(Sections 307 and 1001)
The paying agents outside the United States initially appointed by the
Company for a series of Debt Securities will be named in the Prospectus
Supplement. The Company may terminate the appointment of any of the paying
agents from time to time, except that the Company will maintain at least one
paying agent in The City of New York for payments with respect to Registered
Securities and at least one paying agent in a city in Europe so long as any
Bearer Securities are outstanding where Bearer Securities may be presented
for payment and may be surrendered for exchange, provided that so long as any
series of Debt Securities is listed on The International Stock Exchange of
the United Kingdom and the Republic of Ireland or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and
such stock exchange shall so require, the Company will maintain a paying
agent in London or Luxembourg or any other required city located outside the
United States, as the case may be, for such series of Debt Securities.
(Section 1002)
All moneys paid by the Company to a paying agent for the payment of
principal of or premium, if any, or interest on any Debt Security that
remains unclaimed at the end of two years after such
16
<PAGE>
principal, premium or interest shall have become due and payable may be
repaid to the Company and the Holder of such Debt Security or any coupon
appertaining thereto will thereafter look only to the Company for payment
thereof. (Section 1003)
Covenants
The Indenture imposes the following restrictive covenants on the
Company.
Limitation on Liens. The Company will not subject its assets or assets
of a Restricted Subsidiary to liens without securing the Debt Securities
equally and ratably with other indebtedness for borrowed money so secured
except for (1) liens securing exports to or marketing of goods in foreign
countries other than Canada, (2) liens on receivables payable in foreign
currencies to secure borrowings in foreign countries other than Canada, (3)
deposits in connection with public obligations or legal proceedings, (4)
liens securing intercompany indebtedness, (5) purchase money mortgages on
fixed assets hereafter acquired by the Company or any of its Restricted
Subsidiaries for use in the Finance Business or the Finance-Related Insurance
Business, liens on such property at the time of its acquisition or liens on
fixed assets used in the Finance Business or the Finance-Related Insurance
Business existing when a company becomes a Subsidiary, and (6) renewals of
the foregoing. (Section 1004) The term "Restricted Subsidiary" means any
Subsidiary of the Company engaged in the Finance Business or in the
Finance-Related Insurance Business other than Subsidiaries that are organized
or conduct a major portion of their business outside the United States,
Puerto Rico or Canada. The term "Subsidiary" means a corporation a majority
of the outstanding voting stock of which is owned, directly or indirectly, by
the Company. (Section 101)
Limitation on Dividends. Cash dividends on or acquisitions for value of
capital stock of the Company subsequent to December 31, 1984 are limited to
the sum of (i) consolidated net income of the Company and its consolidated
Subsidiaries calculated in accordance with generally accepted accounting
principles and (ii) net proceeds from cash sales of or cash contributions to
capital stock, subsequent to December 31, 1984. Substantially concurrent
acquisitions of capital stock out of the net proceeds of sales of capital
stock are excluded. (Section 1005)
Restricted Subsidiary Stock and Debt. The Company will not, and will
not permit any Subsidiary to, sell or otherwise dispose of any shares of
stock or indebtedness for borrowed money of any Restricted Subsidiary except
to the Company or to a Restricted Subsidiary unless simultaneously therewith
all shares of stock and such indebtedness of such Restricted Subsidiary at
the time owned by the Company and all Subsidiaries are sold or transferred.
The Company will not permit any Restricted Subsidiary to issue, sell or
dispose of, except to the Company or to a Restricted Subsidiary, (i) any
preferred stock, except to any holders of the stock of such Restricted
Subsidiary in the exercise of a pre-emptive right to subscribe to such
preferred stock, or (ii) any other class of stock except on the condition
that the proportionate amount of shares of stock of such class and of the
total number of shares of stock of such Restricted Subsidiary held by persons
other than the Company and its Restricted Subsidiaries shall not be increased
and except for directors' qualifying shares. (Sections 1007 and 1008)
Modification of the Indenture
The Indenture permits the Company and the Trustee, with the consent of
the holders of not less than 66-2/3% in principal amount of the Debt
Securities at the time outstanding thereunder and affected thereby, to
execute a supplemental indenture modifying the Indenture or the rights of the
holders of such Debt Securities and any related coupons, provided that no
such modification shall, without the consent of the holder of each Debt
Security affected thereby, (i) change the maturity of any Debt Security or
coupon, or reduce the principal amount thereof, or reduce the rate or change
the time of payment of interest thereon, or change any Place of Payment or
change the coin or currency in which a Debt Security or coupon is payable or
affect the right of any holder to institute suit for the enforcement of
payment in accordance with the foregoing, or (ii) reduce the aforesaid
percentage of Debt Securities, the consent of the holders of which is
required for any such modification. (Section 902)
17
<PAGE>
The Indenture contains provisions for convening meetings of the Holders
of Debt Securities of a series if Debt Securities of that series are issuable
in whole or in part as Bearer Securities. (Section 1401) A meeting may be
called at any time by the Trustee, or upon the request of the Company or the
Holders of at least 10% in principal amount of the outstanding Debt
Securities of such series, in any such case upon notice given in accordance
with the Indenture. (Section 1402) The quorum at any meeting called to adopt
a resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the outstanding Debt
Securities of a series; provided, however, that if any action is to be taken
at such meeting with respect to a consent or waiver which may be given by the
Holders of not less than 66-2/3% in principal amount of the outstanding Debt
Securities of a series, the persons holding or representing 66-2/3% in
principal amount of the outstanding Debt Securities of such series will
constitute a quorum. (Section 1404) Except as limited by the proviso in the
preceding paragraph, any resolution presented at a meeting or adjourned
meeting at which a quorum is present may be adopted by the affirmative vote
of the Holders of a majority in principal amount of the outstanding Debt
Securities of that series; provided, however, that, except as limited by the
proviso in the preceding paragraph, any resolution with respect to any
consent or waiver that may be given by the Holders of not less than 66-2/3%
in principal amount of the outstanding Debt Securities of a series may be
adopted at a meeting or an adjourned meeting at which a quorum is present
only by the affirmative vote of 66-2/3% in principal amount of the
outstanding Debt Securities of that series; and provided further that, except
as limited by the proviso in the preceding paragraph, any resolution with
respect to any demand, consent, waiver or other action that may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of outstanding Debt Securities of a series may
be adopted at a meeting or adjourned meeting at which a quorum is present by
the affirmative vote of the Holders of such specified percentage in principal
amount of the outstanding Debt Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Debt Securities of any series duly held in accordance with the Indenture will
be binding on all Holders of Debt Securities of that series and the related
coupons.
Events of Default
The Indenture provides that the following shall constitute Events of
Default with respect to any series of Debt Securities thereunder: (i) default
in payment of principal of or premium, if any, on any Debt Security of such
series when due; (ii) default for 30 days in payment of interest on any Debt
Security of such series when due; (iii) default in the deposit of any sinking
fund payment on any Debt Security of such series when due; (iv) default in
performance of any other covenant in such Indenture, continued for 30 days
after written notice thereof by the Trustee thereunder or the holders of 25%
in principal amount of the Debt Securities of such series at the time
outstanding; (v) default resulting in acceleration of maturity of any other
indebtedness of the Company or any Restricted Subsidiary provided that such
acceleration has not been rescinded or annulled within 10 days of written
notice; and (vi) certain events of bankruptcy, insolvency or reorganization.
(Section 501) The Company is required to file with each Trustee annually an
Officers' Certificate as to the absence of certain defaults under the terms
of the Indenture. (Section 1010)
The Indenture provides that if an Event of Default specified therein
shall occur and be continuing, either the Trustee or the holders of 25% in
principal amount of the Debt Securities of such series then outstanding may
declare the principal of all such Debt Securities (or in the case of Original
Issue Discount Securities, such portion of the principal amount thereof as
may be specified in the terms thereof) to be due and payable. (Section 502)
In certain cases, the holders of a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the holders of all
such Debt Securities and any related coupons waive any past default or event
of default except a default not theretofore cured in payment of the principal
of or premium, if any, or interest on any of the Debt Securities of such
series and any related coupons. (Sections 502 and 513)
The Indenture contains a provision entitling the Trustee, subject to
the duty of such Trustee during default to act with the required standard of
care, to be indemnified by the holders of the Debt Securities of any series
or any related coupons before proceeding to exercise any right or power under
the
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Indenture with respect to such series at the request of such holders.
(Section 603) The Indenture provides that no holder of any Debt Securities of
any series or any related coupons may institute any proceeding, judicial or
otherwise, to enforce the Indenture except in the case of failure of the
Trustee, for 60 days, to act after it is given notice of default, a request
to enforce the Indenture by the holders of not less than 25% in aggregate
principal amount of the then outstanding Debt Securities of such series and
an offer of reasonable indemnity to such Trustee. (Section 507) This
provision will not prevent any holder of Debt Securities or any related
coupons from enforcing payment of the principal thereof and premium, if any,
and interest thereon at the respective due dates thereof. (Section 508) The
holders of a majority in aggregate principal amount of the Debt Securities of
any series then outstanding may direct the time, method and place of
conducting any proceedings for any remedy available to the Trustee or
exercising any trust or power conferred on it with respect to the Debt
Securities of such series. However, the Trustee may refuse to follow any
direction that conflicts with law or the Indenture or which would be unjustly
prejudicial to holders not joining therein. (Section 512)
The Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default with respect to any series of Debt
Securities thereunder known to it, give to the holders of the Debt Securities
of such series notice of such default if not cured or waived; but, except in
the case of a default in the payment of principal of (or premium, if any), or
interest on, any Debt Securities, the Trustee shall be protected in
withholding such notice if it determines in good faith that the withholding
of such notice is in the interests of the holders of such Debt Securities.
(Section 602)
Defeasance
The Company may terminate certain of its obligations under the
Indenture with respect to Debt Securities of any series, including its
obligations to comply with the covenants described under the heading
"Restrictive Covenants" above, with respect to the Debt Securities of such
series, on the terms and subject to the conditions contained in the
Indenture, by depositing in trust with the Trustee money or Government
Obligations sufficient to pay the principal of and interest on the Debt
Securities of such series to maturity. Such deposit and termination is
conditioned upon the Company's delivery of (a) an opinion of nationally
recognized independent counsel that the holders of the Debt Securities of
such series will have no federal income tax consequences as a result of such
deposit and termination, (b) an officer's certificate and (c) if the Debt
Securities of such series are then listed on the New York Stock Exchange, an
opinion of counsel that the Debt Securities of such series will not be
delisted as a result of the exercise of this option. Such termination will
not relieve the Company of its obligation to pay when due the principal of or
interest on the Debt Securities of such series if the Debt Securities of such
series are not paid from the money or Government Obligations held by the
Trustee for the payment thereof. (Section 1301)
Concerning the Trustee
The Trustee is also trustee under indentures dated as of June 15, 1984
and September 15, 1986 between it and the Company.
DESCRIPTION OF WARRANTS
The following description of the terms of the Warrants sets forth
certain general terms and provisions of the Warrants to which any Prospectus
Supplement may relate. The particular terms of the Warrants offered by any
Prospectus Supplement and the extent, if any, to which such general
provisions may apply to the Warrants so offered will be described in the
Prospectus Supplement relating to such Warrants.
Warrants may be offered independently or together with any series of
Debt Securities offered by a Prospectus Supplement and may be attached to or
separate from such Debt Securities. Each series of Warrants will be issued
under a separate warrant agreement ("Warrant Agreement") to be entered into
between the Company and a bank or trust company, as Warrant Agent (the
"Warrant Agent"), all as set
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forth in the Prospectus Supplement relating to such series of Warrants. The
Warrant Agent will act solely as the agent of the Company in connection with
the certificates for the Warrants (the "Warrant Certificates") of such series
and will not assume any obligation or relationship of agency or trust for or
with any holders of Warrant Certificates or beneficial owners of Warrants.
Copies of the forms of Warrant Agreements, including the forms of Warrant
Certificates, are filed as an exhibit to the Registration Statement to which
this Prospectus pertains. The following summaries of certain provisions of
the forms of Warrant Agreements and Warrant Certificates do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Warrant Agreements and the Warrant
Certificates. Numerical references in parentheses below are to sections of
the Warrant Agreements. Wherever particular sections or defined terms of the
Warrant Agreement are referred to, it is intended that such sections or
defined items shall be incorporated herein by reference.
General
Reference is hereby made to the Prospectus Supplement relating to the
particular series of Warrants, if any, offered thereby for the terms of such
Warrants, including, where applicable: (i) the offering price; (ii) the
currency or currencies in which such Warrants are being offered; (iii) the
designation, aggregate principal amount, currency or currencies,
denominations and terms of the series of Debt Securities purchasable upon
exercise of such Warrants; (iv) the designation and terms of the series of
Debt Securities with which such Warrants are being offered and the number of
such Warrants being offered with each such Debt Security; (v) the date on and
after which such Warrants and the related series of Debt Securities will be
transferable separately; (vi) the principal amount of the series of Debt
Securities purchasable upon exercise of each such Warrant and the price at
which and currency or currencies in which such principal amount of Debt
Securities of such series may be purchased upon such exercise; (vii) the date
on which the right to exercise such Warrants shall commence and the date (the
"Expiration Date") on which such right shall expire; (viii) whether such
Warrants are to be issuable as Bearer Warrants and the terms upon which any
Bearer Warrants of such series may be exchanged for Registered Warrants of
such series; (ix) federal income tax consequences; and (x) any other terms of
such Warrants.
Warrant Certificates of each series will be issuable as Registered
Warrants and may be issuable as Bearer Warrants. At the option of the holder
upon request confirmed in writing, and subject to the terms of the relevant
Warrant Agreement, Bearer Warrants of any series will be exchangeable into
Registered Warrants or Bearer Warrants of the same series representing in the
aggregate the number of Warrants surrendered for exchange, and Registered
Warrants of any series will be exchangeable into Registered Warrants of the
same series representing in the aggregate the number of Warrants surrendered
for exchange. Warrant Certificates may be presented for exchange, and
Registered Warrants may be presented for transfer (with the form of transfer
endorsed thereon duly executed), at the corporate trust office of the Warrant
Agent for such series of Warrants (or any other office indicated in the
Prospectus Supplement relating to such series of Warrants) without service
charge and upon payment of any taxes and other governmental charges as
described in the relevant Warrant Agreement. Such transfer or exchange will
be effected when the Warrant Agent for such series of Warrants is satisfied
with the documents of title and identity of the person making the request.
Bearer Warrants will be transferable by delivery. (Section 4.01) Prior to the
exercise of their Warrants, holders of Warrants will not have any of the
rights of holders of the series of Debt Securities purchasable upon such
exercise, including the right to receive payments of principal of, premium,
if any, or interest, if any, on the series of Debt Securities purchasable
upon such exercise, or to enforce any of the covenants in the Indenture.
(Section 3.01)
Exercise of Warrants
Each Warrant will entitle the holder thereof to purchase such principal
amount of the related series of Debt Securities at such exercise price as
shall in each case be set forth in, or calculable as set forth in, the
Prospectus Supplement relating to such Warrant. Warrants of a series may be
exercised at the corporate trust office of the Warrant Agent for such series
of Warrants (or any other office indicated in
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the Prospectus Supplement relating to such series of Warrants) at any time
prior to 5:00 P.M., New York City time, on the Expiration Date set forth in
the Prospectus Supplement relating to such series of Warrants. After the
close of business on the Expiration Date relating to such series of Warrants
(or such later date to which such Expiration Date may be extended by the
Company), unexercised Warrants of such series will become void. (Sections
2.02 and 2.03)
Warrants of a series may be exercised by delivery to the appropriate
Warrant Agent of payment, as provided in the Prospectus Supplement relating
to such series of Warrants, of the amount required to purchase the principal
amount of the series of Debt Securities purchasable upon such exercise,
together with certain information as set forth on the reverse side of the
Warrant Certificate evidencing such Warrants and, in the case of Bearer
Warrants, compliance with the procedures specified in the applicable
Prospectus Supplement. Such Warrants will be deemed to have been exercised
upon receipt of the exercise price, subject to the receipt within five
business days of such Warrant Certificate. Upon receipt of such payment and
such Warrant Certificate, properly completed and duly executed, at the
corporate trust office of the appropriate Warrant Agent (or any other office
indicated in the Prospectus Supplement relating to such series of Warrants),
the Company will, as soon as practicable, issue and deliver the principal
amount of the series of Debt Securities purchasable upon such exercise.
Registered Securities will be issued and delivered upon exercise of
Registered Warrants. At the option of the holder of any Bearer Warrants,
Registered Securities or Bearer Securities will be issued and delivered upon
exercise of such Bearer Warrants. If fewer than all of the Warrants
represented by a Registered Warrant are exercised, a new Registered Warrant
will be issued and delivered for the remaining amount of Warrants. If fewer
than all the Warrants represented by a Bearer Warrant are exercised, at the
option of the holder thereof, a new Registered Warrant or Bearer Warrant will
be issued and delivered for the remaining amount of Warrants. (Section 2.03)
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES AND BEARER WARRANTS
In compliance with United States federal tax laws and regulations
regarding the distribution of debt securities in bearer form, Bearer
Securities and Bearer Warrants may not, in connection with their original
issuance, be offered, sold, resold or delivered in the United States or to
United States persons (each as defined below) except as otherwise permitted
by Treasury Regulation Section 1.163-5(c)(2)(i)(D). Exceptions include offers
and sales to offices located outside the United States of certain United
States financial institutions that agree in writing to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations thereunder. Any
underwriters, agents and dealers participating in the offering of Bearer
Securities or Bearer Warrants will agree in writing that they will not offer,
sell or resell any Bearer Securities or Bearer Warrants to persons within the
United States or to United States persons (except as described above) nor
deliver Bearer Securities or Bearer Warrants within the United States. In
addition, any such underwriters, agents and dealers will agree to send
confirmations to each purchaser of a Bearer Security or Bearer Warrant
confirming that such purchaser represents that it is not a United States
person or is a financial institution described above and, if such person
is a dealer, that it will send similar confirmations to purchasers from it.
Bearer Securities and any coupons attached thereto will bear a legend
substantially to the following effect: "Any United States person who holds
this obligation will be subject to limitations under the United States income
tax laws, including the limitations provided in Sections 165(j) and 1287(a) of
the United States Internal Revenue Code."
Generally, for United States federal income tax purposes, any United
States person who holds a Bearer Security will not be allowed to deduct any
loss sustained on the sale, exchange, redemption or other disposition of such
Bearer Security and will be taxed at ordinary income rates on any gain (which
might otherwise be characterized as capital gain) recognized on such sale,
exchange, redemption or disposition.
As used herein, "United States" mean the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction, and "United States
person" means an individual who is a citizen or resident of the United
States, a
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corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or any estate
the income of which is subject to United States federal income taxation
regardless of its source, or a trust if a court within the United States is
able to exercise primary supervision of the administration of the trust and
one or more United States fiduciaries have the authority to control all
substantial decisions of the trust.
Pending the availability of a permanent Global Security or definitive
Bearer Securities, as the case may be, Debt Securities that are issuable as
Bearer Securities may initially be represented by a single temporary Global
Security, with or without interest coupons, each to be deposited with a
depositary in London for Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System ("Euroclear") and Cedel Bank,
soci|fet|fe anonyme ("Cedel") for credit to the designated accounts against
certifications to the effect described below. Following the availability of a
permanent Global Security or definitive forms of Bearer Securities and
subject to any further limitations described in the applicable Prospectus
Supplement, the temporary Global Security will be exchangeable for a
permanent Global Security or for definitive Bearer Securities, respectively,
only upon certification that an interest in such permanent Global Security or
such definitive Bearer Securities is not being acquired by or on behalf of a
United States person or, if a beneficial interest in such a Bearer Security
is being acquired by or on behalf of a United States person, that such United
States person is a financial institution described above; provided, however,
that no definitive Bearer Security will be issued if the Company has reason
to know that such certificate is false. No definitive Bearer Security will be
delivered in or to the United States. If so specified in the applicable
Prospectus Supplement, interest in respect of any portion of the temporary
Global Security payable in respect of an Interest Payment Date prior to the
issuance of a permanent Global Security or definitive Bearer Securities of
any series will be paid to each of Euroclear and Cedel with respect to the
portion of the temporary Global Security held for its account. Each of
Euroclear and Cedel will undertake in such circumstances to credit such
interest received by it in respect of the temporary Global Security to the
respective accounts for which it holds the temporary Global Security only
upon receipt in each case of (i) certification that as of the relevant
interest payment date the portion of the temporary Global Security on which
such interest is to be so credited is not beneficially owned by a United
States person or any person who has purchased its interest in the temporary
Global Security for resale to any United States person or (ii) if a
beneficial interest in the portion of the temporary Global Security on which
such interest is to be so credited is beneficially owned by a United States
person or any person who has purchased its interest in the temporary Global
Security for resale to any United States person, certification that such
United States person is a financial institution described above.
Bearer Warrants will be issued only on receipt of a certification that
the Bearer Warrant in question is not being acquired by or on behalf of a
United States person or, if a beneficial interest in such Bearer Warrant is
being acquired by or on behalf of a United States person, that such United
States person is a financial institution described above.
PLAN OF DISTRIBUTION
The Company may offer and sell Debt Securities and Warrants, separately
or together, to or through underwriters, acting as principals for their own
accounts and/or as agents, and also may offer and sell Debt Securities and
Warrants, separately or together, directly to dealers or other purchasers.
Any such Debt Securities and Warrants may be offered and sold upon their
original issuance or, if so indicated in the Prospectus Supplement, in
connection with a remarketing upon their purchase by or on behalf of the
Company, whether in accordance with a redemption or repayment pursuant to
their terms, in the open market or otherwise. Any underwriter and/or agent
will be identified and the terms of its agreement with the Company and its
compensation will be described in the Prospectus Supplement. Only
underwriters named in the Prospectus Supplement are deemed to be underwriters
in connection with the Debt Securities or Warrants offered thereby.
Debt Securities and Warrants, separately or together, also may be
offered and sold, if so indicated in the Prospectus Supplement, in connection
with a remarketing upon their purchase, in accordance with
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<PAGE>
a redemption or repayment pursuant to their terms, by one or more firms
("remarketing firms") acting as principals for their own accounts or as
agents for the Company. Any remarketing firm will be identified and the terms
of its agreement, if any, with the Company and its compensation will be
described in the Prospectus Supplement. Remarketing firms may be deemed to be
underwriters in connection with the Debt Securities and Warrants remarketed
thereby.
The distribution of the Debt Securities and Warrants may be effected
from time to time in one or more transactions at a fixed price or prices,
which may be changed, or at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities and Warrants, dealers
may receive compensation from the Company or from purchasers of Debt
Securities or Warrants for whom they may act as agents, in the form of
discounts, concessions or commissions. The dealers that participate in the
distribution of Debt Securities or Warrants may be deemed to be underwriters
and any discounts or commissions received by them and any profit on the
resale of Debt Securities or Warrants by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
compensation will be described in the Prospectus Supplement.
Under agreements that may be entered into with the Company,
underwriters, dealers, agents and remarketing firms may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act. Underwriters, dealers, agents and
remarketing firms may be customers of, engage in transactions with, or
perform services for the Company in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will
authorize dealers or other persons acting as the Company's agents to solicit
offers by certain institutions to purchase Debt Securities or Warrants from
the Company pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all
cases such institutions must be approved by the Company. The obligations of
any purchaser under any such contract will not be subject to any conditions
except that (i) the purchase of the Debt Securities or Warrants shall not at
the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject, and (ii) if the series of Debt Securities or
Warrants being sold to such institutions are also being sold to underwriters,
the Company shall have sold to such underwriters the Debt Securities or
Warrants not sold for delayed delivery. The dealers and such other persons
will not have any responsibility in respect of the validity of performance of
such contracts.
Each underwriter, dealer, agent and remarketing firm participating in
the distribution of any Debt Securities that are issuable as Bearer
Securities will agree that it will not offer, sell or deliver, directly or
indirectly, Bearer Securities in the United States or to United States
persons (other than qualifying financial institutions) in connection with the
original issuance of such Debt Securities.
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LEGAL MATTERS
The validity of the Debt Securities and Warrants offered hereby will be
passed upon for the Company by Christopher A. Taravella, Esq., Vice President
and General Counsel of the Company, and for any underwriters and agents by
Brown & Wood LLP, New York, New York. Mr. Taravella will rely as to all
matters of New York law on the opinion of Brown & Wood LLP, and Brown & Wood
LLP, will rely as to all matters of Michigan law on the opinion of Mr.
Taravella. Mr. Taravella owns and has options to purchase shares of common
stock of Chrysler. Brown & Wood LLP may from time to time render legal
services to the Company and its affiliates.
EXPERTS
The consolidated financial statements and the related financial
statement schedule of the Company as of December 31, 1997 and 1996 and for
each of the three years in the period ended December 31, 1997 incorporated in
this prospectus by reference from the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports, which are incorporated
herein by reference, and have been so incorporated in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.
<PAGE>
==================================== ====================================
You should only rely on the $9,895,250,600
information contained or incorporated
by reference in this prospectus, any
prospectus supplement or any pricing
supplement. We have not authorized Chrysler Financial Corporation
anyone to provide you with any other [ Logotype ]
information. You should not assume
that the information in this
prospectus, any accompanying
prospectus supplement or any document
incorporated by reference is accurate
as of any date other than the date on
the front of those documents. DEBT SECURITIES
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Available Information --
Incorporation by Reference.... 2
Chrysler Financial
Corporation................... 3
Risk Factors.................... 4 ---------------------
Chrysler Financial Corporation
Selected Consolidated PROSPECTUS
Financial Data................ 5
Information Concerning ---------------------
Chrysler Corporation.......... 8
Ratio of Earnings to Fixed
Charges....................... 12
Use of Proceeds................. 13
Description of Debt Securities.. 13
Description of Warrant.. ....... 19
Limitations on Issuance of
Bearer Securities and Bearer
Warrants...................... 21
Plan of Distribution............ 22
Legal Matters................... 24
Experts......................... 24
</TABLE>
April , 1998
==================================== ====================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
The Registrant estimates that expenses (other than underwriting
discounts and commissions) in connection with the offering described in this
Registration Statement will be as follows:
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<CAPTION>
<S> <C>
Registration fee .................................... $2,360,000
Printing and engraving expenses ..................... 250,000
Accounting fees and expenses ........................ 400,000
Blue Sky fees and expenses .......................... 50,000
Rating agency fees ................................. 1,500,000
Miscellaneous ....................................... 40,000
----------
Total ........................................... $4,600,000
==========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article IX of the Articles of Incorporation and Article V of the Bylaws
of the Registrant provide for the indemnification of the officers and
directors of the Registrant in the matter authorized by Sections 561-571 of
the Michigan Business Corporation Act. Generally, these Articles and Bylaws
permit the Registrant to indemnify officers and directors against expenses,
judgments and other amounts paid in connection with settlement of actions
brought against them by third parties if they acted in good faith and in a
manner they reasonably believed to be in the best interests of the
corporation. They also permit the Registrant to indemnify officers and
directors for certain expenses and amounts paid in settlement in connection
with an action brought by or in the right of the corporation provided that
the officer or director has not been adjudged to be liable for negligence or
misconduct in the performance of his duties to Registrant. Reference is made
to Exhibits 3(a) and 3(b) to this Registration Statement for the complete
texts of Article IX of the Articles of Incorporation and Article V of the
Bylaws. Pursuant to the provisions of the Underwriting Agreement annexed to
the Registration Statement as Exhibit 1-A and the Distribution Agreement
annexed to the Registration Statement as Exhibit 1-B, certain officers,
directors and controlling persons of the Registrant are indemnified by the
Underwriters thereunder for certain information provided by the Underwriters
expressly for use in the Registration Statement.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 by the Registrant may be permitted to directors, officers and
controlling persons of the Registrant under the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in said Act and therefore may be unenforceable. If a
claim for indemnification against such liabilities (except insofar as it
provides for the payment by the Registrant of expenses incurred or paid by a
director or officer in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by a director, officer or
controlling person in connection with the securities offered hereby and the
Securities and Exchange Commission is still of the same opinion, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether or not such indemnification by it is
against public policy as expressed in the Act, and will be governed by the
final adjudication of such issue.
II-1
<PAGE>
Item 16. Exhibits
(a)
Exhibit Number
(Referenced to
Item 601 of
Regulation S-K) Description of Exhibit
- --------------- ----------------------
1-A Copy of Form of Underwriting Agreement. Filed as
Exhibit 1-A to Registration No. 33-32484 of Chrysler
Financial Corporation, and incorporated herein by
reference.
1-B Copy of Form of Distribution Agreement. Filed as
Exhibit 1-B to Registration Statement No. 33-50385,
and incorporated herein by reference.
1-C Copy of Form of Remarketing Agreement. Filed as
Exhibit 1-C to Registration Statement No. 33-32484 of
Chrysler Financial Corporation, and incorporated
herein by reference.
3-A Copy of Restated Articles of Incorporation of
Chrysler Financial Corporation as adopted and filed
with the Corporation Division of Michigan Department
of Treasury on October 1, 1971. Filed as Exhibit 3-A
to Registration Statement No. 2-43097 of Chrysler
Financial Corporation, and incorporated herein by
reference.
3-B Copies of amendments to the Restated Articles of
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on December 26, 1975, April 23, 1985 and
June 21, 1985, respectively. Filed as Exhibit 3-B to
the Annual Report of Chrysler Financial Corporation
on Form 10-K for the year ended December 31, 1985,
and incorporated herein by reference.
3-C Copies of amendments to the Restated Articles of
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on August 12, 1987 and August 14, 1987,
respectively. Filed as Exhibit 3 to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q
for the quarter ended September 30, 1987, and
incorporated herein by reference.
3-D Copies of amendments to the Restated Articles of
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on December 11, 1987 and January 25, 1988,
respectively. Filed as Exhibit 3-D to the Annual
Report of Chrysler Financial Corporation on Form 10-K
for the year ended December 31, 1989, and
incorporated herein by reference.
3-E Copies of amendments to the Restated Articles of
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on June 13, 1989, June 23, 1989 (two
amendments), September 13, 1989, January 31, 1990 and
March 8, 1990, respectively. Filed as Exhibit 3-E to
the Annual Report of Chrysler Financial Corporation
on Form 10-K for the year ended December 31, 1989,
and incorporated herein by reference.
3-F Copy of amendments to the Restated Articles of
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on March 29, 1990 and May 10, 1990. Filed as
Exhibit 3-G to the Quarterly Report of Chrysler
Financial Corporation on Form 10-Q for the quarter
ended March 31, 1990, and incorporated herein by
reference.
II-2
<PAGE>
3-G Copy of the By-Laws of Chrysler Financial Corporation as
amended to August 1, 1990. Filed as Exhibit 3-I to the
Quarterly Report of Chrysler Financial Corporation on
Form 10-Q for the quarter ended September 30, 1990, and
incorporated herein by reference.
3-H Copy of the By-Laws of Chrysler Financial Corporation as
amended to January 1, 1992 and presently in effect.
Filed as Exhibit 3H to the Annual Report of Chrysler
Financial Corporation on Form 10-K for the year ended
December 31, 1991, and incorporated herein by reference.
4-A Copy of Indenture, dated as of February 15, 1988,
between Chrysler Financial Corporation and
Manufacturers Hanover Trust Company, Trustee,
thereafter succeded by United States Trust Company of
New York, as successor Trustee, related to Chrysler
Financial Corporation Senior Debt Securities. Filed
as Exhibit 4-A to Registration No. 33-23479 of
Chrysler Financial Corporation, and incorporated
herein by reference.
4-B Copy of First Supplemental Indenture, dated as of
March 1, 1988, between Chrysler Financial Corporation
and Manufacturers Hanover Trust Company, Trustee,
thereafter succeded by United States Trust Company of
New York, as successor Trustee, to the Indenture,
dated as of February 15, 1988, beween such parties,
related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-L to the Annual Report
of Chrysler Financial Corporation on Form 10-K for
the year ended December 31, 1987, and incorporated
herein by reference.
II-3
<PAGE>
4-C Copy of Second Supplemental Indenture, dated as of
September 7, 1990, between Chrysler Financial
Corporation and Manufacturers Hanover Trust Company,
Trustee, thereafter succeded by United States Trust
Company of New York, as successor Trustee, to the
Indenture, dated as of February 15, 1988, beween such
parties, related to Chrysler Financial Corporation
Senior Debt Securities. Filed as Exhibit 4-M to the
Quarterly Report of Chrysler Financial Corporation on
Form 10-Q for the quarter ended September 30, 1990,
and incorporated herein by reference.
4-D Copy of Third Supplemental Indenture, dated as of May
4, 1992, between Chrysler Financial Corporation and
United States Trust Company of New York, as successor
Trustee, to the Indenture, dated as of February 15,
1988 beween Chrysler Financial Corporation and
Manufacturers Hanover Trust Company, relating to
Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-N to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q
for the quarter ended June 30, 1992, and incorporated
herein by reference.
4-E Copy of Forms of Warrant Agreements. Filed as Exhibit
4-M to Registration Statement No. 33-27135 of
Chrysler Financial Corporation, and incorporated
herein by reference.
4-F Form of Fixed Rate Redeemable or Non-redeemable Note.
Filed as Exhibit 4-L to Registration Statement No.
33-50385 of Chrysler Financial Corporation, and
incorporated herein by reference.
4-G Form of Fixed Rate Medium-Term Note. Filed as Exhibit
4-M to Registration Statement No. 33-50385 of
Chrysler Financial Corporation, and incorporated
herein by reference.
4-H Form of Floating Rate Medium-Term Note. Filed as
Exhibit 4-N to Registration Statement No. 33-50385 of
Chrysler Financial Corporation, and incorporated
herein by reference.
4-I Form of Multi-Currency Fixed Rate Medium-Term Note.
Filed as Exhibit 4-O to Registration Statement No.
33-50385 of Chrysler Financial Corporation, and
incorporated herein by reference.
4-J Form of Multi-Currency Floating Rate Medium-Term
Note. Filed as Exhibit 4-P to Registration Statement
No. 33-50385 of Chrysler Financial Corporation, and
incorporated herein by reference.
4-K Form of Floating Rate (LIBOR-Based) Note. Filed as
Exhibit 4-Q to the Current Report on Form 8-K dated and
filed November 22, 1993, and incorporated herein by
reference.
5 Opinion of Christopher A. Taravella, Esq., Vice *
President and General Counsel of Chrysler Financial
Corporation, including consent.
12-A Chrysler Financial Corporation and Subsidiaries
Computations of Ratios of Earnings to Fixed Charges.
12-B Chrysler Corporation Consolidated Computations of
Ratios of Earnings to Fixed Charges.
23-A Consent of Christopher A. Taravella, Esq. (included
in Exhibit 5)
23-B Consent of Deloitte & Touche LLP.
II-4
<PAGE>
24 Power of attorney pursuant to which the signatures
of certain directors of Chrysler Financial Corporation
have been affixed to this Registration Statement.
25 Statement of Eligibility and Qualification of Trustee
on Form T-1.
- --------
* To be filed by amendment.
II-5
<PAGE>
Item 17. Undertakings.
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
provided, however, that paragraphs (i) and (ii) above do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(c) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Southfield and State of Michigan,
on the 8th day of April, 1998.
CHRYSLER FINANCIAL CORPORATION
(Registrant)
By /s/ D.L. DAVIS
------------------------
D.L. Davis
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Principal executive officer: Date
/s/ D.L. DAVIS Chairman of April 8, 1998
--------------------------- the Board
D.L. Davis
Principal financial officer:
/s/ D.M. CANTWELL Vice President April 8, 1998
--------------------------- and Treasurer
D.M. Cantwell
Principal accounting officer:
/s/ T.F. GILMAN Vice President and April 8, 1998
--------------------------- Controller
T.F. Gilman
II-7
<PAGE>
Board of Directors: Date
/s/ T.P. CAPO* Director April 8, 1998
---------------------------
T.P. Capo
/s/ D.L. DAVIS* Director April 8, 1998
---------------------------
D.L. Davis
/s/ R.L. FRANSON* Director April 8, 1998
---------------------------
R.L. Franso
/s/ W.J. O'BRIEN III* Director April 8, 1998
---------------------------
W.J. O'Brien III
/s/ G.C. VALADE* Director April 8, 1998
---------------------------
G.C. Valade
*By /s/ B.C. BABBISH
---------------------------
B.C. Babbish
Attorney-in-Fact
April 8, 1998
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibit
- --------------- ----------------------
1-A Copy of Form of Underwriting Agreement. Filed as *
Exhibit 1-A to Registration No. 33-32484 of Chrysler
Financial Corporation, and incorporated herein by
reference.
1-B Copy of Form of Distribution Agreement. Filed as *
Exhibit 1-B to Registration Statement No. 33-50385,
and incorporated herein by reference.
1-C Copy of Form of Remarketing Agreement. Filed as *
Exhibit 1-C to Registration Statement No. 33-32484 of
Chrysler Financial Corporation, and incorporated
herein by reference.
3-A Copy of Restated Articles of Incorporation of *
Chrysler Financial Corporation as adopted and filed
with the Corporation Division of Michigan Department
of Treasury on October 1, 1971. Filed as Exhibit 3-A
to Registration Statement No. 2-43097 of Chrysler
Financial Corporation, and incorporated herein by
reference.
3-B Copies of amendments to the Restated Articles of *
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on December 26, 1975, April 23, 1985 and
June 21, 1985, respectively. Filed as Exhibit 3-B to
the Annual Report of Chrysler Financial Corporation
on Form 10-K for the year ended December 31, 1985,
and incorporated herein by reference.
3-C Copies of amendments to the Restated Articles of *
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on August 12, 1987 and August 14, 1987,
respectively. Filed as Exhibit 3 to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q
for the quarter ended September 30, 1987, and
incorporated herein by reference.
3-D Copies of amendments to the Restated Articles of *
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on December 11, 1987 and January 25, 1988,
respectively. Filed as Exhibit 3-D to the Annual
Report of Chrysler Financial Corporation on Form 10-K
for the year ended December 31, 1989, and
incorporated herein by reference.
3-E Copies of amendments to the Restated Articles of *
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on June 13, 1989, June 23, 1989 (two
amendments), September 13, 1989, January 31, 1990 and
March 8, 1990, respectively. Filed as Exhibit 3-E to
the Annual Report of Chrysler Financial Corporation
on Form 10-K for the year ended December 31, 1989,
and incorporated herein by reference.
3-F Copy of amendments to the Restated Articles of *
Incorporation of Chrysler Financial Corporation filed
with the Department of Commerce of the State of
Michigan on March 29, 1990 and May 10, 1990. Filed as
Exhibit 3-G to the Quarterly Report of Chrysler
Financial Corporation on Form 10-Q for the quarter
ended March 31, 1990, and incorporated herein by
reference.
E-1
<PAGE>
3-G Copy of the By-Laws of Chrysler Financial Corporation *
as amended to August 1, 1990. Filed as Exhibit 3-I to
the Quarterly Report of Chrysler Financial Corporation
on Form 10-Q for the quarter ended September 30, 1990,
and incorporated herein by reference.
3-H Copy of the By-Laws of Chrysler Financial Corporation *
as amended to January 1, 1992 and presently in effect.
Filed as Exhibit 3H to the Annual Report of Chrysler
Financial Corporation on Form 10-K for the year ended
December 31, 1991, and incorporated herein by reference.
4-A Copy of Indenture, dated as of February 15, 1988, *
between Chrysler Financial Corporation and
Manufacturers Hanover Trust Company, Trustee,
thereafter succeded by United States Trust Company of
New York, as successor Trustee, related to Chrysler
Financial Corporation Senior Debt Securities. Filed
as Exhibit 4-A to Registration No. 33-23479 of
Chrysler Financial Corporation, and incorporated
herein by reference.
4-B Copy of First Supplemental Indenture, dated as of *
March 1, 1988, between Chrysler Financial Corporation
and Manufacturers Hanover Trust Company, Trustee,
thereafter succeded by United States Trust Company of
New York, as successor Trustee, to the Indenture,
dated as of February 15, 1988, beween such parties,
related to Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-L to the Annual Report
of Chrysler Financial Corporation on Form 10-K for
the year ended December 31, 1987, and incorporated
herein by reference.
E-2
<PAGE>
4-C Copy of Second Supplemental Indenture, dated as of *
September 7, 1990, between Chrysler Financial
Corporation and Manufacturers Hanover Trust Company,
Trustee, thereafter succeded by United States Trust
Company of New York, as successor Trustee, to the
Indenture, dated as of February 15, 1988, beween such
parties, related to Chrysler Financial Corporation
Senior Debt Securities. Filed as Exhibit 4-M to the
Quarterly Report of Chrysler Financial Corporation on
Form 10-Q for the quarter ended September 30, 1990,
and incorporated herein by reference.
4-D Copy of Third Supplemental Indenture, dated as of May *
4, 1992, between Chrysler Financial Corporation and
United States Trust Company of New York, as successor
Trustee, to the Indenture, dated as of February 15,
1988 beween Chrysler Financial Corporation and
Manufacturers Hanover Trust Company, relating to
Chrysler Financial Corporation Senior Debt
Securities. Filed as Exhibit 4-N to the Quarterly
Report of Chrysler Financial Corporation on Form 10-Q
for the quarter ended June 30, 1992, and incorporated
herein by reference.
4-E Copy of Forms of Warrant Agreements. Filed as Exhibit *
4-M to Registration Statement No. 33-27135 of
Chrysler Financial Corporation, and incorporated
herein by reference.
4-F Form of Fixed Rate Redeemable or Non-redeemable Note. *
Filed as Exhibit 4-L to Registration Statement No.
33-50385 of Chrysler Financial Corporation, and
incorporated herein by reference.
4-G Form of Fixed Rate Medium-Term Note. Filed as Exhibit *
4-M to Registration Statement No. 33-50385 of
Chrysler Financial Corporation, and incorporated
herein by reference.
4-H Form of Floating Rate Medium-Term Note. Filed as *
Exhibit 4-N to Registration Statement No. 33-50385 of
Chrysler Financial Corporation, and incorporated
herein by reference.
4-I Form of Multi-Currency Fixed Rate Medium-Term Note. *
Filed as Exhibit 4-O to Registration Statement No.
33-50385 of Chrysler Financial Corporation, and
incorporated herein by reference.
4-J Form of Multi-Currency Floating Rate Medium-Term *
Note. Filed as Exhibit 4-P to Registration Statement
No. 33-50385 of Chrysler Financial Corporation, and
incorporated herein by reference.
4-K Form of Floating Rate (LIBOR-Based) Note. Filed as *
Exhibit 4-Q to the Current Report on Form 8-K dated and
filed November 22, 1993, and incorporated herein by
reference.
5 Opinion of Christopher A. Taravella, Esq., Vice **
President and General Counsel of Chrysler Financial
Corporation, including consent.
12-A Chrysler Financial Corporation and Subsidiaries
Computations of Ratios of Earnings to Fixed Charges.
12-B Chrysler Corporation Consolidated Computations of
Ratios of Earnings to Fixed Charges.
23-A Consent of Christopher A. Taravella, Esq. (included
in Exhibit 5)
23-B Consent of Deloitte & Touche LLP.
E-3
<PAGE>
24 Power of attorney pursuant to which the signatures
of certain directors of Chrysler Financial Corporation
have been affixed to this Registration Statement.
25 Statement of Eligibility and Qualification of Trustee
on Form T-1.
- -----------
* Incorporated by reference.
** To be filed by amendment.
E-4
Exhibit 12-A
<TABLE>
<CAPTION>
Chrysler Financial Corporation and Subsidiaries
Computations of Ratios of Earnings to Fixed Charges
(dollars in millions)
Year Ended December 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net earnings before cumulative
effect of changes in
accounting principles $ 419 $ 376 $ 339 $ 195 $ 159
Add back:
Taxes on income 218 210 183 120 108
Fixed charges 832 813 927 772 810
------ ------ ------ ------ ------
Earnings available for fixed
charges $1,469 $1,399 $1,449 $1,087 $1,077
====== ====== ====== ====== ======
Fixed charges:
Interest expense $ 816 $ 797 $ 910 $ 754 $ 791
Rent 16 16 17 18 19
------ ------ ------ ------ ------
Total fixed charges $ 832 $ 813 $ 927 $ 772 $ 810
====== ====== ====== ====== ======
Ratio of earnings to fixed charges 1.77 1.72 1.56 1.41 1.33
====== ====== ====== ====== ======
</TABLE>
The ratio of earnings to fixed charges is computed by dividing earnings
available for fixed charges by total fixed charges. Fixed charges consist of
interest, amortization of debt discount and expense, and rentals. Rentals
included in fixed charges are the portion of total rent expense
representative of the interest factor (deemed to be one-third).
Exhibit 12-B
<TABLE>
<CAPTION>
Chrysler Corporation and Consolidated Subsidiaries
Computations of Ratios of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
(dollars in millions)
Year Ended December 31,
--------------------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Net earnings before extraordinary
item $2,805 $3,720 $2,121 $3,713 $2,415
Add back:
Taxes on income 1,752 2,372 1,328 2,117 1,423
Fixed charges 1,379 1,339 1,359 1,267 1,433
Amortization of previously capitalized
interest 114 111 103 87 94
Deduct:
Capitalized interest 194 156 204 177 176
Undistributed earnings from less
than fifty percent owned affiliates -- 14 18 15 2
------ ------ ----- ------ ------
Earnings available for fixed
charges $5,856 $7,372 $4,689 $6,992 $5,187
====== ====== ====== ====== ======
Fixed charges:
Interest expense $1,006 $1,007 $ 995 $ 937 $1,104
Capitalized interest 194 156 204 177 176
Credit line commitment fees 8 15 10 10 10
Interest portion of rent expense 171 161 150 143 143
------ ------ ------ ------ ------
Total fixed charges $1,379 $1,339 $1,359 $1,267 $1,433
====== ====== ====== ====== ======
Ratio of earnings to fixed charges 4.25 5.51 3.45 5.52 3.62
====== ====== ====== ====== ======
Preferred stock dividend
requirements 1 5 33 125 127
====== ====== ====== ====== ======
Ratio of earnings to fixed charges
and preferred stock dividend
requirements 4.24 5.49 3.37 5.02 3.33
====== ====== ====== ====== ======
</TABLE>
The ratio of earnings to fixed charges is computed by dividing earnings
available for fixed charges by total fixed charges. The ratio of earnings to
fixed charges and preferred stock dividend requirements is computed by
dividing earnings for fixed charges by the sum of total fixed charges and
preferred stock dividend requirements.
[Letterhead of Deloitte & Touche LLP]
Deloitte &
Touche LLP
____________ _________________________________________
Suite 900 Telephone (313) 396-3000
600 Renaissance Center
Detroit, Michigan 48243-1704
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Chrysler Financial Corporation on Form S-3 of our reports dated January
22, 1998 appearing in the Annual Report on Form 10-K of Chrysler Financial
Corporation for the year ended December 31, 1997 and to the references to us
under the headings "Selected Consolidated Financial Data" and "Experts" in
the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
April 8, 1998
_______________
Deloitte Touche
Tohmatsu
International
_______________
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
directors of Chrysler Financial Corporation hereby severally constitutes and
appoints CHRISTOPHER A. TARAVELLA, BYRON C. BABBISH and SILVIA M. KLEER, or
any one or more of them, to be his agents, proxies and attorneys-in-fact, to
sign and execute in his name, place and stead and on his behalf as a director
of Chrysler Financial Corporation, and to file with the Securities and
Exchange Commission, the Registration Statement of Chrysler Financial
Corporation on Form S-3, registering under the Securities Act of 1933, as
amended, debt securities and warrants to purchase debt securities having an
aggregate initial public offering price of $8 billion and any and all further
amendments (including post-effective amendments) to such Registration
Statement, and to file all exhibits thereto and other documents in connection
therewith, granting unto said attorneys-in-fact and agents and each of them,
full power and authority to do and perform each and every act and thing
required to be done that may be necessary or desirable, hereby approving,
ratifying and confirming all that the aforesaid agents, proxies and
attorneys-in-fact do, or that any one of them does or causes to be done, on
his behalf pursuant to this Power of Attorney.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands as of this 8 day of April, 1998.
/s/ T. P. Capo /s/ D. L. Davis
- -------------- ---------------
T. P. Capo D. L. Davis
/s/ R. L. Franson /s/ W. J. O'Brien, III
- ------------------ ----------------------
R. L. Franson W. J. O'Brien, III
/s/ G. C. Valade
----------------
G. C. Valade
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
--------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
--------------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _______
--------------------------
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-3818954
(Jurisdiction of incorporation (I. R. S. Employer
if not a U. S. national bank) Identification No.)
114 West 47th Street 10036
New York, New York (Zip Code)
(Address of principal
executive offices)
--------------------------
Chrysler Financial Corporation
(Exact name of registrant as specified in its charter)
Michigan 38-0961430
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
27777 Franklin Road 48034
Southfield, Michigan (Zip code)
(Address of principal executive offices)
--------------------------
Debt Securities and Warrants to Purchase Debt Securities
(Titles of the indenture securities)
=============================================================================
<PAGE>
- 2 -
GENERAL
1. General Information
-------------------
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Reserve Bank of New York (2nd District), New York, New
York (Board of Governors of the Federal Reserve
System).
Federal Deposit Insurance Corporation, Washington, D. C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
2. Affiliations with the Obligor
-----------------------------
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3,4,5,6,7,8,9,10,11,12,13,14 and 15.
The obligor is currently not in default under any of its outstanding
securities for which United States Trust Company of New York is
Trustee. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11,
12, 13, 14 and 15 of Form T-1 are not required under General
Instruction B.
16. List of Exhibits
T-1.1 -- Organization Certificate, as amended, issued by the
State of New York Banking Department to transact
business as a Trust Company, is incorporated by
reference to Exhibit T-1.1 to Form T-1 filed on
September 15, 1995 with the Commission pursuant to the
Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No.
33-97056).
<PAGE>
- 3 -
16. List of Exhibits
(cont'd)
T-1.2 - Included in Exhibit T-1.1.
T-1.3 - Included in Exhibit T-1.1.
T-1.4 - The By-Laws of United States Trust Company of New
York, as amended, is incorporated by reference to
Exhibit T-1.4 to Form T-1 filed on September 15, 1995
with the Commission pursuant to the Trust Indenture Act
of 1939, as amended by the Trust Indenture Reform Act
of 1990 (Registration No.
33-97056).
T-1.6 - The consent of the trustee required by Section
321(b) of the Trust Indenture Act of 1939, as amended
by the Trust Indenture Reform Act of 1990.
T-1.7 - A copy of the latest report of condition of the
trustee pursuant to law or the requirements of its
supervising or examining authority.
NOTE
As of April 3, 1998, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U. S.
Trust Corporation. The term "trustee" in Item 2, refers to each of
United States Trust Company of New York and its parent company, U. S.
Trust Corporation.
In answering Item 2 in this statement of eligibility, as to matters
peculiarly within the knowledge of the obligor or its directors, the
trustee has relied upon information furnished to it by the obligor
and will rely on information to be furnished by the obligor and the
trustee disclaims responsibility for the accuracy or completeness of
such information.
---------------------
<PAGE>
- 4 -
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, United States Trust Company of New York, a corporation
organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City of New
York, and State of New York, on the 3rd day of April, 1998.
UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee
By: /s/ Patricia Stermer
------------------------
Patricia Stermer
Assistant Vice President
<PAGE>
Exhibit T-1.6
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
September 1, 1995
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of
1939, as amended by the Trust Indenture Reform Act of 1990, and subject to
the limitations set forth therein, United States Trust Company of New York
("U.S. Trust") hereby consents that reports of examinations of U.S. Trust by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
/s/Gerard F. Ganey
---------------------
By: Gerard F. Ganey
Senior Vice President
<PAGE>
EXHIBIT T-1.7
<TABLE>
<CAPTION>
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
DECEMBER 31, 1997
($ IN THOUSANDS)
<S> <C>
ASSETS
Cash and Due from Banks $ 80,246
Short-Term Investments 386,006
Securities, Available for Sale 661,596
Loans 1,774,551
Less: Allowance for Credit Losses 16,202
Net Loans 1,758,349
Premises and Equipment 61,477
Other Assets 124,499
----------
Total Assets $3,072,173
==========
LIABILITIES
Deposits:
Non-Interest Bearing $ 686,507
Interest Bearing 1,773,254
----------
Total Deposits 2,459,761
Short-Term Credit Facilities 295,342
Accounts Payable and Accrued Liabilities 149,775
----------
Total Liabilities $2,904,878
==========
STOCKHOLDER'S EQUITY
Common Stock 14,995
Capital Surplus 49,541
Retained Earnings 100,235
Unrealized Gains on Securities
Available for Sale (Net of Taxes) 2,524
----------
Total Stockholder's Equity 167,295
----------
Total Liabilities and
Stockholder's Equity $3,072,173
==========
</TABLE>
I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named
bank do hereby declare that this Statement of Condition has been prepared in
conformance with the instructions issued by the appropriate regulatory
authority and is true to the best of my knowledge and belief.
Richard E. Brinkmann, SVP & Controller
February 9, 1998
