As filed with the Securities and Exchange Commission on February 11, 1999
Registration No. 333-71361
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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The CIT Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-2994534
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1211 Avenue of the Americas
New York, New York 10036
(212) 536-1390
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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ERNEST D. STEIN
Executive Vice President, General Counsel & Secretary
The CIT Group, Inc.
650 CIT Drive
Livingston, New Jersey 07039
(973) 740-5013
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------
Please send copies of all communications to:
ANDRE WEISS
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
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Approximate date of commencement of proposed sale to the public:
When market conditions warrant after the effective date
of this Registration Statement.
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If the only securities being registered on this Form are being offered pursuant
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, 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, 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, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
(continued on following page)
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(continued from previous page)
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed
maximum Proposed
Title of each offering maximum Amount of
class of securities Amount to be price per aggregate registration
to be registered registered unit offering price fee
================================================================================
Senior/Senior
Subordinated
Debt
Securities .. $5,000,000,000(1)(2) 100%(3) $5,000,000,000(2)(3) $1,389,722(2)
================================================================================
(1) If any Debt Securities are issued (i) with a principal amount denominated
in a foreign currency, such principal amounts as shall result in an
aggregate initial offering price the equivalent of U.S. $5,000,000,000 at
the time of initial offering, or (ii) at an original issue discount, such
greater principal amount as shall result in an aggregate initial offering
price of $5,000,000,000.
(2) The amount of Debt Securities to be registered hereunder includes
$1,000,000 of Debt Securities registered pursuant to the initial filing of
this Registration Statement on January 28, 1999 for which a registration
fee of $278.00 was previously paid by the Registrant.
(3) Estimated solely for the purpose of determining the registration fee.
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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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
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The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 11, 1999
PROSPECTUS
The CIT Group, Inc.
Debt Securities
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We may issue up to an aggregate of $5.0 billion of debt securities in one
or more series with the same or different terms. These debt securities may be
either senior or senior subordinated in priority of payment and will be direct
unsecured obligations. The terms that apply to the debt securities will be set
forth in a supplement that accompanies this Prospectus when any of the debt
securities are offered. Such information will also include the names of agents,
dealers or underwriters involved in the sale, if any, and any applicable agent's
commission, dealer's purchase price or underwriter's discount, if any, and the
net proceeds from the sale after any agent's commission, dealer's purchase price
or underwriter's discount.
The terms of any debt securities offered to the public will depend on
market conditions at the time of sale. We reserve the sole right to accept or
reject, in whole or in part, any proposed purchase of any offered debt
securities.
For a description of possible indemnification arrangements with agents,
dealers, and underwriters, see "Plan of Distribution."
We urge you to carefully read this Prospectus and the Prospectus
Supplement which will describe the specific terms of the offering before you
make your investment decision.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 1999.
<PAGE>
AVAILABLE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. We have also filed with the SEC a Registration
Statement on Form S-3, to register the debt securities (the "Debt Securities")
being offered in this Prospectus. This Prospectus, which forms part of the
Registration Statement, does not contain all of the information included in the
Registration Statement. For further information about us and the debt securities
offered in this Prospectus, you should refer to the Registration Statement and
its exhibits.
You may read and copy any document we file with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
Public Reference Room. We file our SEC materials electronically with the SEC, so
you can also review our filings by accessing the web site maintained by the SEC
at http://www.sec.gov. This site contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the SEC. Certain of our securities are listed on the New York Stock Exchange and
reports and other information concerning us can also be inspected at the offices
of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. You
can also obtain more information about us by visiting our web site at
http://www.citgroup.com.
You should rely only on the information contained or incorporated by
reference in this Prospectus. We have not authorized anyone to provide you with
information different from that contained or incorporated by reference in this
Prospectus. This Prospectus is an offer to sell, or a solicitation of offers to
buy, Debt Securities only in jurisdictions where offers and sales are permitted.
The information contained in this Prospectus is accurate only as of the date of
this Prospectus, regardless of the time of delivery of this Prospectus or of any
sale of Debt Securities. In this Prospectus, "the Company," "CIT," "we," "us"
and "our" refer to The CIT Group, Inc. and its subsidiaries.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means we can disclose important information to you by referring
you to those documents. The information included in the following documents is
incorporated by reference and is considered to be a part of this Prospectus. The
most recent information that we file with the SEC automatically updates and
supersedes more dated information. We have previously filed the following
documents with the SEC and are incorporating them by reference into this
Prospectus:
1. Our Annual Report on Form 10-K for the year ended December 31,
1997;
2. Our Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998, June 30, 1998 and September 30, 1998; and
3. Our current Reports on Form 8-K dated January 15, 1998, January
28, 1998, March 24, 1998, April 22, 1998, June 5, 1998, July 22, 1998,
July 29, 1998, August 27, 1998, October 15, 1998, December 2, 1998 and
January 28, 1999.
We also incorporate by reference all documents subsequently filed by us
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until all of the Debt Securities being offered in this Prospectus are sold.
We will provide without charge to each person to whom a Prospectus is
delivered, including any beneficial owner, a copy of any or all of the
information that has been incorporated by reference in this Prospectus but not
delivered with this Prospectus. If you would like to obtain this information
from us, please direct your request, either in writing or by telephone, to
Jeffrey Simon, Senior Vice President-Investor Relations, The CIT Group, Inc.,
1211 Avenue of the Americas, New York, New York 10036, telephone (212) 536-1390.
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THE COMPANY
The Company is a leading diversified finance organization offering secured
commercial and consumer financing primarily in the United States to smaller,
middle-market and larger businesses and to individuals through a nationwide
distribution network. The Company commenced operations in 1908 and has developed
a broad array of "franchise" strategic business units that focus on specific
industries, asset types and markets, which are balanced by client, industry and
geographic diversification. The Company believes that its strong credit risk
management expertise and long-standing commitment to its markets and its
customers provides it with a competitive advantage. The Company's principal
executive offices are at 1211 Avenue of the Americas, New York, New York 10036
and the telephone number is (212) 536-1390.
In November 1997, the Company issued 36,225,000 shares of Class A Common
Stock in an initial public offering. In November 1998, the Company filed a
Registration Statement on behalf of its largest stockholder, The Dai-Ichi Kangyo
Bank, Limited ("DKB"), to offer 49,000,000 shares of Class A Common Stock. Prior
to the offering, DKB held approximately 94% of the combined voting power and
approximately 77% of the economic interest of all of the Company's outstanding
Common Stock. Following the offering, DKB now holds approximately 44% of the
voting power and economic interest of the Company's outstanding Common Stock.
DKB continues to be the Company's largest stockholder and will be able to
exercise significant influence over us.
The Company operates through three business segments: two commercial
segments, Equipment Financing and Leasing and Commercial Finance and a consumer
segment. Each segment conducts its operations through strategic business units.
Commercial
The Company's commercial operations are diverse and provide a wide range
of financing and leasing products to small, midsize and larger companies across
a wide variety of industries, including aerospace, retailing, construction,
rail, machine tool, business aircraft, apparel, textiles, electronics and
technology, chemicals, manufacturing and transportation. The secured lending,
leasing and factoring products of the Company's commercial operations include
direct loans and leases, operating leases, leveraged and single investor leases,
secured revolving lines of credit and term loans, credit protection, accounts
receivable collection, import and export financing and factoring,
debtor-in-possession and turnaround financing and acquisition and expansion
financing.
Equipment Financing and Leasing
The Company's Equipment Financing and Leasing operations are conducted
through two strategic business units: (i) The CIT Group/Equipment Financing
("Equipment Financing"), which focuses on the broad distribution of its products
through manufacturers, dealers/distributors, intermediaries and direct calling
primarily with the construction, transportation and machine tool industries; and
(ii) The CIT Group/Capital Finance ("Capital Finance"), which focuses on the
direct marketing of customized transactions relating primarily to commercial
aircraft and rail equipment.
Equipment Financing and Capital Finance personnel have extensive expertise
in managing equipment over its full life cycle. For example, Capital Finance has
the expertise to repossess commercial aircraft, if necessary, to obtain required
maintenance and repairs for such aircraft, and to recertify such aircraft with
appropriate authorities. Equipment Financing's and Capital Finance's equipment
and industry expertise enable them to evaluate effectively residual value risk
and to manage equipment and residual value risks by locating alternative
equipment users and/or purchasers in order to minimize such risk and/or the risk
of equipment remaining idle for extended periods of time or in amounts that
could materially impact profitability.
Equipment Financing
Equipment Financing is the largest of the Company's strategic business
units with total financing and leasing assets of $8.7 billion at September 30,
1998, representing 38.3% of the Company's total financing and leasing assets.
Equipment Financing offers secured equipment financing and leasing products,
including direct secured loans, leases, revolving lines of credit, operating
leases, sale and leaseback arrangements, vendor financing and specialized
wholesale and retail financing for distributors and manufacturers.
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Equipment Financing is a leading nationwide asset-based equipment lender.
At September 30, 1998, its portfolio included significant outstandings to
customers in a number of different industries, with manufacturing being the
largest as a percentage of financing and leasing assets, followed by
construction and transportation. The Equipment Financing portfolio at September
30, 1998 included many different types of equipment, including construction,
transportation and manufacturing equipment and business aircraft.
Equipment Financing originates its products through direct calling on
customers and through its relationships with manufacturers, dealers/distributors
and intermediaries that have leading or significant marketing positions in their
respective industries. This provides Equipment Financing with efficient access
to equipment end-users in many industries across a variety of equipment types.
Capital Finance
Capital Finance had financing and leasing assets of $3.9 billion at
September 30, 1998, which represented 16.9% of the Company's total financing and
leasing assets. Capital Finance specializes in customized secured financing,
including leases, loans, operating leases, single investor leases, debt and
equity portions of leveraged leases, and sale and leaseback arrangements
relating primarily to end-users of commercial aircraft and railcars. Typical
Capital Finance customers are middle-market to larger-sized companies.
Capital Finance has provided financing to commercial airlines for over 30
years. The Capital Finance aerospace portfolio includes most of the leading U.S.
and foreign commercial airlines. Capital Finance has developed strong
relationships with most major airlines and all major aircraft and aircraft
engine manufacturers, which provide Capital Finance with access to technical
information. Such access supports customer service, and provides opportunities
to finance new business.
Capital Finance has over 25 years experience in financing the rail
industry, contributing to its knowledge of asset values, industry trends,
product structuring and customer needs. To strengthen its position in the rail
financing market, Capital Finance formed a dedicated rail equipment group in
1994 and currently maintains relationships with several leading railcar
manufacturers in the United States. The Capital Finance rail portfolio includes
all of the U.S. and Canadian Class I railroads and numerous shippers. The
Capital Finance operating lease fleet includes primarily covered hopper cars
used to ship grain and agricultural products and plastic pellets, gondola cars
for coal, steel coil and mill service, open hopper cars for coal and aggregates,
center beam flat cars for lumber, and boxcars for paper and auto parts.
New business is generated by Capital Finance through (i) direct calling
efforts with equipment end-users and borrowers, including major airlines,
railroads and shippers, (ii) relationships with aerospace, railcar and other
manufacturers and (iii) intermediaries and other referral sources.
Commercial Finance
The Company's Commercial Finance operations are conducted through three
strategic business units: (i) The CIT Group/Business Credit ("Business Credit"),
which provides secured financing primarily to middle-market to larger-sized
borrowers; (ii) The CIT Group/Credit Finance ("Credit Finance"), which provides
secured financing primarily to smaller-sized to middle-market borrowers; and
(iii) The CIT Group/Commercial Services which offers secured lending and
receivables/collection management products to small and mid-size companies.
Business Credit
Financing and leasing assets of Business Credit totaled $1.5 billion at
September 30, 1998 and represented 6.8% of the Company's total financing and
leasing assets. Business Credit offers senior revolving and term loans secured
by accounts receivable, inventories and fixed assets to middle-market and
larger-sized companies. Such loans are used by clients primarily for growth,
expansion, acquisitions, refinancings and debtor-in-possession and turnaround
financings. Business Credit sells and purchases participation interests in such
loans to and from other lenders.
Through its variable interest rate senior revolving and term loan
products, Business Credit meets its customers' financing needs for working
capital, growth, acquisition and other financing situations otherwise not met
through bank or other unsecured financing alternatives. Business Credit
typically structures financings
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on a fully secured basis, though, from time to time, it may look to a customer's
cash flow to support a portion of the credit facility. Revolving and term loans
are made on a variable interest rate basis based on published indexes such as
LIBOR or a prime rate of interest.
Business is originated through direct calling efforts and intermediary and
referral sources. Business Credit has focused on increasing the proportion of
direct business origination to improve its ability to capture or retain
refinancing opportunities and to enhance finance income.
Credit Finance
Financing and leasing assets of Credit Finance totaled $1.0 billion at
September 30, 1998 and represented 4.6% of the Company's total financing and
leasing assets. Credit Finance offers revolving and term loans to smaller-sized
and middle-market companies secured by accounts receivable, inventories and
fixed assets. Such loans are used by clients for working capital, refinancings,
acquisitions, leveraged buyouts, reorganizations, restructurings, turnarounds
and Chapter 11 financing and confirmation plans. Credit Finance sells
participation interests in such loans to other lenders and purchases
participation interests in such loans originated by other lenders. Credit
Finance borrowers are generally smaller and cover a wider range of credit
quality than those of Business Credit. While both Business Credit and Credit
Finance offer financing secured by accounts receivable, inventories and fixed
assets, Credit Finance places a higher degree of reliance on collateral and is
generally more focused on credit monitoring in its business.
Business is originated through the sales and regional offices and is also
developed through intermediaries and referral relationships and through direct
calling efforts. Credit Finance has developed long-term relationships with
selected finance companies, banks and other lenders and with many diversified
referral sources.
Commercial Services
The CIT Group/Commercial Services ("Commercial Services") factoring
operation had total financing and leasing assets of $2.8 billion at September
30, 1998, which represented 12.1% of the Company's total financing and leasing
assets. Commercial Services offers a full range of domestic and international
customized credit protection and lending services that include factoring,
working capital and term loans, receivable management outsourcing, bulk
purchases of accounts receivable, import and export financing and letter of
credit programs.
Commercial Services provides financing to its clients through the purchase
of accounts receivables owed to clients by their customers, usually on a
non-recourse basis, as well as by guaranteeing amounts due under letters of
credit issued to the clients' suppliers which are collateralized by accounts
receivable and other assets. The purchase of accounts receivable is
traditionally known as "factoring" and results in the payment by the client of a
factoring fee, generally a percentage of the factored sales volume. When
Commercial Services "factors" (i.e., purchases) a customer invoice from a
client, it records the customer receivable as an asset and also establishes a
liability for the funds due to the client ("credit balances of factoring
clients"). Commercial Services also may advance funds to its clients prior to
collection of receivables, typically in an amount up to 80% of eligible accounts
receivable (as defined for that transaction), charging interest on such advances
(in addition to any factoring fees) and satisfying such advances from
receivables collections.
Clients use Commercial Services' products and services for various
purposes, including improving cash flow, mitigating or reducing the risk of bad
debt chargeoffs, increasing sales, improving management information and
converting the high fixed cost of operating a credit and collection department
into a lower and variable expense based on sales volume.
Commercial Services generates business regionally from a variety of
sources, including direct calling and referrals from existing clients and other
referral sources.
Consumer
The Company's consumer business is focused primarily on home equity
lending through The CIT Group/Consumer Finance ("Consumer Finance") and on
retail sales financing secured by recreation vehicles, manufactured housing and
recreational boats through The CIT Group Sales Financing ("Sales Financing").
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Sales Financing also provides contract servicing for securitization trusts and
other third parties through a centralized Asset Service Center ("ASC").
Additionally, in the ordinary course of business, Consumer Finance and Sales
Financing purchase loans and portfolios of loans from banks, thrifts and other
originators of consumer loans.
Consumer Finance
Financing and leasing assets of Consumer Finance, which aggregated $2.1
billion at September 30, 1998, represented 9.3% of the Company's total financing
and leasing assets. The managed assets of Consumer Finance were $2.8 billion at
September 30, 1998, or 11.0% of total managed assets. Consumer Finance commenced
operations in December 1992. Its products include both fixed and variable rate
closed-end loans and variable rate lines of credit. The lending activities of
Consumer Finance consist primarily of originating, purchasing and selling loans
secured by first or second liens on detached, single family residential
properties. Such loans are primarily made for the purpose of consolidating
debts, refinancing an existing mortgage, funding home improvements, paying
education expenses and, to a lesser extent, purchasing a home, among other
reasons. Consumer Finance originates loans through brokers and correspondents as
well as on a direct marketing basis.
The Company believes that its network of Consumer Finance offices, located
in most major U.S. markets, enables it to provide a competitive, extensive
product offering complemented by high levels of service delivery. Through
experienced lending professionals and automation, Consumer Finance provides
rapid turnaround time from application to loan funding, a characteristic
considered to be critical by its broker and correspondent relationships.
Sales Financing
The financing and leasing assets of Sales Financing, which aggregated $2.7
billion at September 30, 1998, represented 11.7% of the Company's total
financing and leasing assets. The managed assets of Sales Financing were $4.6
billion at September 30, 1998, or 18.1% of total managed assets. The lending
activities of Sales Financing consist primarily of providing nationwide retail
financing for the purchase of new and used recreation vehicles, manufactured
housing and recreational boats. During 1997, Sales Financing began providing
wholesale manufactured housing and recreational boat inventory financing
directly to dealers. Sales Financing originates loans predominately through
recreation vehicle, manufactured housing and recreational boat dealer,
manufacturer and broker relationships.
Servicing
The ASC centrally services and collects substantially all of the Company's
consumer finance receivables including loans originated or purchased by Sales
Financing or Consumer Finance, as well as loans originated or purchased and
subsequently securitized with servicing retained. The servicing portfolio also
includes loans owned by third parties that are serviced by Sales Financing for a
fee on a "contract" basis. At September 30, 1998, the consumer finance servicing
portfolio aggregated approximately 285,600 loans, including $1.1 billion of
finance receivables serviced for third parties.
Securitization Program
The Company funds its balance sheet assets using its access to the
commercial paper, medium-term note and capital markets. In an effort to broaden
its funding sources and to provide an additional source of liquidity, the
Company, in 1992, established a program to opportunistically access the public
and private asset backed securitization markets. Current products utilized in
the Company's program include consumer loans secured by recreation vehicles,
recreational boats and residential real estate. The Company has sold $4.0
billion of finance receivables since the inception of the Company's asset backed
securitization program and the remaining pool balance at September 30, 1998 was
$2.6 billion or 10.2% of the Company's total managed assets.
Under a typical asset backed securitization, the Company sells a "pool" of
secured loans to a special purpose entity, that, in turn, issues certificates
and/or notes that are collateralized by the loan pool and that entitle the
holders thereof to participate in certain loan pool cash flows. The Company
retains the servicing of the securitized loans, for which it is paid a fee, and
also participates in certain "residual" loan pool cash flows (cash flows after
payment of principal and interest to certificate and/or note holders and after
credit losses). At the date of securitization, the Company estimates the
"residual" cash flows to be received over the life of the
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securitization, records the present value of these cash flows as an
interest-only receivable, or I/O (a retained interest in the securitization),
and recognizes a gain. The I/O is then amortized over the estimated life of the
related loan pool.
The Company, in its estimation of residual cash flows and related I/Os,
inherently employs a variety of financial assumptions, including loan pool
credit losses, prepayment speeds and discount rates. These assumptions are
empirically supported by both the Company's historical experience and
anticipated trends relative to the particular products securitized. Subsequent
to the recognition of I/Os, the Company regularly reviews such assets for
valuation impairment. These reviews are performed on a disaggregated basis. Fair
values of I/Os are calculated utilizing current and anticipated credit losses,
prepayment speeds and discount rates and are then compared to the Company's
carrying values. Carrying value of the Company's I/O's at September 30, 1998 was
$165.4 million and approximated fair value.
Equity Investments
The CIT Group/Equity Investments and its subsidiary The CIT Group/Venture
Capital (together "Equity Investments") originate and participate in merger and
acquisition transactions, purchase private equity and equity-related securities
and arrange transaction financing. Equity Investments also invests in emerging
growth opportunities in selected industries, including the life sciences,
information technology, communications and consumer products industries. Equity
Investments made its first investment in 1991 and had total investments of $87.3
million at September 30, 1998.
Competition
The Company's markets are highly competitive and are characterized by
competitive factors that vary based upon product and geographic region. The
Company's competitors include captive and independent finance companies,
commercial banks and thrift institutions, industrial banks, leasing companies,
manufacturers and vendors. Substantial national financial services networks have
been formed by insurance companies and bank holding companies that compete with
the Company. On a local level, community banks and smaller independent finance
and/or mortgage companies are a competitive force. Some competitors have
substantial local market positions. Many of the competitors of the Company are
large companies that have substantial capital, technological and marketing
resources. Some of these competitors are larger than the Company and may have
access to capital at a lower cost than the Company. Also, the Company's
competitors include businesses that are not related to bank holding companies
and, accordingly, may engage in activities such as short-term equipment rental
and servicing, which currently are prohibited to the Company. Competition has
been enhanced in recent years by an improving economy and growing marketplace
liquidity. The markets for most of the Corporation's products are characterized
by a large number of competitors. However, with respect to some of the
Corporation's products, competition is more concentrated.
The Company competes primarily on the basis of pricing, terms, and
structure, with other primary competitive factors including industry experience
and client service and relationships. From time to time, competitors of the
Company seek to compete aggressively on the basis of these factors and the
Company may lose market share to the extent it is unwilling to match its
competitors' pricing and terms in order to maintain its interest margins and/or
credit standards.
Other primary competitive factors include industry experience and client
service and relationships. In addition, demand for the Company's products with
respect to certain industries, such as the commercial airline industry, will be
affected by demand for such industry's services and products and by industry
regulations.
Regulation
DKB is a bank holding company within the meaning of the Bank Holding
Company Act of 1956 (the "Act"), and is registered as such with the Federal
Reserve. As a result, the Company is subject to certain provisions of the Act
and is subject to examination by the Federal Reserve. In general, the Act limits
the activities in which a bank holding company and its subsidiaries may engage
to those of banking or managing or controlling banks or performing services for
their subsidiaries and to continuing activities which the Federal
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Reserve has determined to be "so closely related to banking or managing or
controlling banks as to be a proper incident thereto." The Company's current
principal business activities constitute permissible activities for a nonbank
subsidiary of a bank holding company.
In addition to being subject to the Act, DKB is subject to Japanese
banking laws, regulations, guidelines and orders that affect permissible
activities of the Company. DKB and the Company have entered into an agreement in
order to facilitate DKB's compliance with applicable U.S. and Japanese banking
laws, or the regulations, interpretations, policies, guidelines, requests,
directives and orders of the applicable regulatory authorities or the staffs
thereof or a court (collectively, the "Banking Laws"). That agreement prohibits
the Company from engaging in any new activity or entering into any transaction
for which prior approval, notice or filing is required under Banking Laws
without the required prior approval having been obtained, prior notice having
been given or made by DKB and accepted or such filings having been made. The
Company is also prohibited from engaging in any activity as would cause DKB, the
Company or any affiliate of DKB or the Company to violate any Banking Laws. In
the event that, at any time, it is determined by DKB that any activity then
conducted by the Company is prohibited by any Banking Law, the Company is
required to take all reasonable steps to cease such activity. Under the terms of
that agreement, DKB is responsible for making all determinations as to
compliance with applicable Banking Laws.
Two of the subsidiaries of the Company are investment companies organized
under Article XII of the New York Banking Law and, as a result, the activities
of these subsidiaries are restricted by state banking laws and these
subsidiaries are subject to examination by state banking examiners. Also, any
person or entity seeking to purchase "control" of the Company would be required
to apply for and obtain the prior approval of the Superintendent of Banks of the
State of New York. "Control" is presumed to exist if a person or entity would,
directly or indirectly, own, control or hold (with power to vote) 10% or more of
the voting stock of the Company.
The operations of the Company are subject, in certain instances, to
supervision and regulation by state and federal governmental authorities and may
be subject to various laws and judicial and administrative decisions imposing
various requirements and restrictions, which, among other things, (i) regulate
credit granting activities, (ii) establish maximum interest rates, finance
charges and other charges, (iii) regulate customers' insurance coverages, (iv)
require disclosures to customers, (v) govern secured transactions and (vi) set
collection, foreclosure, repossession and claims handling procedures and other
trade practices.
The Company's consumer finance business is subject to detailed enforcement
and supervision by state authorities under legislation and regulations which
generally require licensing of the lender. Licenses are renewable and may be
subject to suspension or revocation for violations of such laws and regulations.
Applicable state laws generally regulate interest rates and other charges and
require certain disclosures. In addition, most states have other laws, public
policies and general principles of equity relating to the protection of
consumers, unfair and deceptive practices and practices that may apply to the
origination, servicing and collection of consumer finance loans. Depending on
the provision of the applicable law and the specific facts and circumstances
involved, violations of these laws, policies and principles may limit the
Company's ability to collect all or part of the principal of or interest on
consumer finance loans, may entitle the borrower to a refund of amounts
previously paid and, in addition, could subject the Company to damages and
administrative sanctions.
Federal laws preempt state usury ceilings on first mortgage loans and
state laws which restrict various types of alternative dwelling secured
receivables, except in those states which have specifically opted out, in whole
or in part, of such preemption. Loans may also be subject to other federal laws,
including: (i) the Federal Truth-in-Lending Act and Regulation Z promulgated
thereunder, which require certain disclosures to borrowers and other parties
regarding loan terms; (ii) the Real Estate Settlement Procedures Act and
Regulation X promulgated thereunder, which require certain disclosures to
borrowers and other parties regarding certain loan terms and regulates certain
practices with respect to such loans; (iii) the Equal Credit Opportunity Act and
Regulation B promulgated thereunder, which prohibit discrimination in the
extension of credit and administration of loans on the basis of age, race,
color, sex, religion, marital status, national origin, receipt of public
assistance or the exercise of any right under the Consumer Credit Protection
Act; (iv) the Fair Credit Reporting Act, which regulates the use and reporting
of information related to a borrower's credit experience; and (v) the Fair
Housing Act, which prohibits discrimination on the basis of, among other things,
familial status or handicap.
8
<PAGE>
Depending on the provisions of the applicable law and the specific facts
and circumstances involved, violations of these laws may limit the ability of
the Company to collect all or part of the principal of or interest on applicable
loans, may entitle the borrower to rescind the loan and any mortgage or to
obtain a refund of amounts previously paid and, in addition, could subject the
Company to damages and administrative sanctions.
The above federal and state regulation and supervision could limit the
Company's discretion in operating its businesses. For example, state laws often
establish maximum allowable finance charges for certain consumer and commercial
loans. Noncompliance with applicable statutes or regulations could result in the
suspension or revocation of any license or registration at issue, as well as the
imposition of civil fines and criminal penalties. No assurance can be given that
applicable laws or regulations will not be amended or construed differently,
that new laws and regulations will not be adopted or that interest rates the
Company charges will not rise to state maximum levels, the effect of any of
which could be to adversely affect the business or results of operations of the
Company. Under certain circumstances, the Federal Reserve has the authority to
issue orders which could restrict the ability of the Company to engage in new
activities or to acquire additional businesses or to acquire assets outside of
the normal course of business.
SUMMARY OF FINANCIAL INFORMATION
The following is a summary of certain financial information of the Company
and its subsidiaries. The data for the years ended December 31, 1997, 1996 and
1995 were obtained from the Company's audited consolidated financial statements
contained in the Company's 1997 Annual Report on Form 10-K. The data for the
years ended December 31, 1994 and 1993 were obtained from audited consolidated
statements of the Company that are not incorporated by reference in this
Prospectus. The data for the quarters ended September 30, 1998 and 1997 were
obtained from the Company's unaudited condensed consolidated financial
statements contained in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998. This summary should be read in conjunction
with the financial information of the Company included in the reports referred
to under "Documents Incorporated By Reference." Results for the nine-month
period ended September 30, 1998 are not necessarily indicative of operating
results that may be expected for a full year.
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Years Ended December 31,
------------------- -------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- -------- --------
(Dollar Amounts in Millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Finance income ................ $1,481.4 $1,352.0 $1,824.7 $1,646.2 $1,529.2 $1,263.8 $1,111.9
Interest expense .............. 766.2 693.7 937.2 848.3 831.5 614.0 508.0
-------- -------- -------- -------- -------- -------- --------
Net finance income ........... 715.2 658.3 887.5 797.9 697.7 649.8 603.9
Fees and other income ......... 196.1 186.0 247.8 244.1 184.7 174.4 133.8
Gain on Sale of Equity interest
acquired in loan workout ... -- 58.0 58.0 -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Operating revenue ............ 911.3 902.3 1,193.3 1,042.0 882.4 824.2 737.7
-------- -------- -------- -------- -------- -------- --------
Salaries and employee benefits 184.4 185.3 253.5 223.0 193.4 185.8 152.1
General operating expenses .... 126.6 128.8 174.9 170.1 152.3 152.1 130.1
-------- -------- -------- -------- -------- -------- --------
Salaries and general operating
expenses ................... 311.0 314.1 428.4 393.1 345.7 337.9 282.2
Provision for credit losses ... 75.0 91.8 113.7 111.4 91.9 96.9 104.9
Depreciation on operating
lease equipment ............ 121.4 108.3 146.8 121.7 79.7 64.4 39.8
Minority interest in subsidiary
trust holding solely
debentures of the company .. 14.4 11.5 16.3 -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Operating expenses ......... 521.8 525.7 705.2 626.2 517.3 499.2 426.9
-------- -------- -------- -------- -------- -------- --------
Income before provision for
income taxes ............... 389.5 376.6 488.1 415.8 365.1 325.0 310.8
Provision for income taxes .... 138.0 137.5 178.0 155.7 139.8 123.9 128.5
-------- -------- -------- -------- -------- -------- --------
Net income ................. $ 251.5 $ 239.1 $ 310.1 $ 260.1 $ 225.3 $ 201.1 $ 182.3
======== ======== ======== ======== ======== ======== ========
</TABLE>
9
<PAGE>
The following table sets forth the ratio of earnings to fixed charges for
each of the periods indicated.
Ratios of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Years Ended December 31,
------------------ ------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges 1.49 1.53 1.51 1.49 1.44 1.52 1.60
</TABLE>
The ratios of earnings to fixed charges have been computed in accordance
with requirements of the Commission's Regulation S-K. Earnings consist of income
from continuing operations before income taxes and fixed charges; fixed charges
consist of interest on indebtedness, minority interest in subsidiary trust
holding solely debentures of the Company, and the portion of rentals considered
to represent an appropriate interest factor.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities offered hereby will
provide additional working funds for the Company and its subsidiaries and will
be used initially to reduce short-term borrowings (currently represented by
commercial paper) incurred primarily for the purpose of originating and
purchasing receivables in the ordinary course of business. The amounts which the
Company itself may use in connection with its business and which the Company may
furnish to particular subsidiaries are not now determinable. From time to time
the Company may also use the proceeds to finance the bulk purchase of
receivables and/or the acquisition of other finance-related businesses.
DESCRIPTION OF DEBT SECURITIES
General
The Debt Securities will constitute either Superior Indebtedness or Senior
Subordinated Indebtedness of the Company. The senior debt securities (the
"Senior Securities") may be issued from time to time in one or more separate,
unlimited series under one or more separate indentures, each substantially in
the form of a global indenture (each such indenture and indentures supplemental
thereto are hereinafter referred to as a "Senior Indenture", and collectively as
the "Senior Indentures"), in each case between the Company and a banking
institution organized under the laws of the United States or one of the states
thereof (each such banking institution is hereinafter referred to as a "Senior
Trustee", and collectively as the "Senior Trustees"). The senior subordinated
debt securities (the "Senior Subordinated Securities") may be issued from time
to time as either (i) one or more separate, unlimited series of Debt Securities
constituting senior subordinated indebtedness under one or more separate
indentures, each substantially in the form of a global indenture (each such
indenture and indentures supplemental thereto are hereinafter referred to as a
"Senior Subordinated Indenture", and collectively as the "Senior Subordinated
Indentures"), in each case between the Corporation and a banking institution
organized under the laws of the United States or one of the states thereof (each
such banking institution is hereinafter referred to as a "Senior Subordinated
Trustee", and collectively as the "Senior Subordinated Trustees"), or (ii) one
or more separate, unlimited series of Debt Securities constituting senior
subordinated indebtedness under the Senior Subordinated Indentures which is
intended to qualify as "Tier II Capital" under the rules and regulations of the
Ministry of Finance of Japan and the risk-based capital guidelines of the
Federal Reserve Board, if such series have the limited rights of acceleration
described under "Description of Debt Securities--Senior Subordinated Securities"
and "Description of Debt Securities--Events of Default". The Senior Indentures
and the Senior Subordinated Indentures are sometimes herein referred to as the
"Indentures", and the Senior Trustees and the Senior Subordinated Trustees are
sometimes herein referred to as the "Trustees".
The statements under this heading are subject to the detailed provisions
of each Indenture. A form of global Senior Indenture and a form of global Senior
Subordinated Indenture are filed as exhibits to the Registration Statement of
which this Prospectus is a part. Wherever particular provisions of an Indenture
or terms defined therein are referred to, such provisions or definitions are
incorporated by reference as a part of the statements made and the statements
are qualified in their entirety by such reference.
The Debt Securities to be issued pursuant to this Prospectus, comprised of
the Senior Securities and the Senior Subordinated Securities, are limited to an
aggregate initial offering price of $5.0 billion (or (i) if the principal of the
Debt Securities is denominated in a foreign currency, the equivalent thereof at
the time of
10
<PAGE>
offering, or (ii) if the Debt Securities are issued at an original issue
discount, such greater principal amount as shall result in an aggregate initial
offering price of $5.0 billion). The Senior Indentures do not limit the amount
of Debt Securities or other unsecured Superior Indebtedness which may be issued
thereunder or limit the amount of subordinated debt, secured or unsecured, which
may be issued by the Company. Except as described herein under "Description of
Debt Securities--Certain Restrictive Provisions", the Senior Subordinated
Indentures do not limit the amount of Debt Securities or other unsecured Senior
Subordinated Indebtedness which may be issued thereunder or limit the amount of
Junior Subordinated Indebtedness, secured or unsecured, which may be issued by
the Company. At September 30, 1998, approximately $200 million of Senior
Subordinated Indebtedness was issued and outstanding. At September 30, 1998,
under the most restrictive provisions of the Senior Subordinated Indentures, the
Company could issue up to approximately $2.4 billion of additional Senior
Subordinated Indebtedness. The Debt Securities will be issued in fully
registered form and, with regard to each issue of securities in respect of which
this Prospectus is being delivered, in the manner and in the denominations set
forth in the accompanying Prospectus Supplement.
The Debt Securities may be issued in one or more separate series of Senior
Securities and/or one or more separate series of Senior Subordinated Securities,
in each case with the same or various maturities at par or at a discount.
Offered Debt Securities bearing no interest or interest at a rate which at the
time of issuance is below market rates ("Original Issue Discount Securities")
will be sold at a discount (which may be substantial) 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.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Debt Securities: (i) the designation, aggregate principal amount,
and authorized denominations of the Offered Debt Securities; (ii) the percentage
of their principal amount at which such Offered Debt Securities will be issued;
(iii) the date or dates on which the Offered Debt Securities will mature; (iv)
the rate or rates (which may be fixed or variable) per annum, if any, at which
the Offered Debt Securities will bear interest, or the method of determining
such rate or rates, or the original issue discount, if applicable; (v) the times
at which any such interest will be payable and the date from which any such
interest shall accrue; (vi) provisions for a sinking, purchase, or other
analogous fund, if any; (vii) any redemption terms; (viii) the designation of
the office or agency of the Company in the Borough of Manhattan, The City of New
York, where the Offered Debt Securities may be presented for payment and may be
transferred or exchanged by the registered holders thereof or by their attorneys
duly authorized in writing; (ix) if other than U.S. dollars, the currency
(including composite currencies) in which the principal of, premium, if any,
and/or interest on the Offered Debt Securities will be payable; (x) any currency
(including composite currencies) other than the stated currency of the Offered
Debt Securities in which the principal of, premium, if any, and/or interest on
the Offered Debt Securities may, at the election of the Company or the holders,
be payable, and the periods within which, and terms and conditions upon which,
such election may be made; (xi) if the amount of payments of principal of,
premium, if any, and/or interest on the Offered Debt Securities may be
determined with reference to an index, the manner in which such amounts will be
determined; (xii) whether the Offered Debt Securities are Senior Securities or
Senior Subordinated Securities, or include both; and (xiii) other specific
terms.
Principal, premium, if any, and interest, if any, less applicable
withholding taxes, if any, will be payable at the office or agency of the
Company maintained for such purpose in the Borough of Manhattan, The City of New
York, provided that payment of interest, if any, less applicable withholding
taxes, if any, may be made at the option of the Company by check mailed to the
address of the person entitled thereto as it appears on the register of the
Company. (Section 2.04 of the Indentures.)
The Indentures provide that the Debt Securities will be transferable by
the registered holders thereof, or by their attorneys duly authorized in
writing, at the office or agency of the Company maintained for such purpose in
such cities as will be designated in the Prospectus Supplement, in the manner
and subject to the limitations provided in the Indentures, and upon surrender of
the Debt Securities. No service charge will be made for any registration of
transfer or exchange of the Debt Securities, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge in connection
therewith. (Section 2.06 of the Indentures.)
11
<PAGE>
"Indebtedness", when used in the definition of the terms "Superior
Indebtedness", "Senior Subordinated Indebtedness", and "Junior Subordinated
Indebtedness", means all obligations which in accordance with generally accepted
accounting principles should be classified as liabilities upon a balance sheet
and in any event includes all debt and other similar monetary obligations,
whether direct or guaranteed.
"Superior Indebtedness" means all Indebtedness of the Company that is not
by its terms subordinate or junior to any other indebtedness of the Company. As
discussed below, the Senior Securities constitute Superior Indebtedness.
"Senior Subordinated Indebtedness" means all Indebtedness of the Company
that is subordinate only to Superior Indebtedness. As discussed below, the
Senior Subordinated Securities constitute Senior Subordinated Indebtedness.
"Junior Subordinated Indebtedness" means all Indebtedness of the Company
that is subordinate to both Superior Indebtedness and Senior Subordinated
Indebtedness.
Senior Securities
The Senior Securities will be direct, unsecured obligations of the
Company, and will constitute Superior Indebtedness issued on a parity with the
other Superior Indebtedness of the Company. At September 30, 1998, approximately
$17.6 billion of outstanding Superior Indebtedness was reflected in the
Company's consolidated unaudited balance sheet. The Senior Securities will be
senior to all Senior Subordinated Indebtedness, including the Senior
Subordinated Securities, which at September 30, 1998, totaled $200 million
outstanding, and Junior Subordinated Indebtedness, none of which was outstanding
at September 30, 1998. The subordination provisions applicable to the Senior
Subordinated Securities are discussed below under "Description of Debt
Securities--Senior Subordinated Securities".
Senior Subordinated Securities
The Senior Subordinated Securities will be direct, unsecured obligations
of the Company subordinated as to principal, premium, if any, and interest to
the prior payment in full of all Superior Indebtedness of the Company, including
the Senior Securities. In the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization, or similar proceedings or proceedings for voluntary
liquidation, dissolution, or other winding up of the Company, whether or not
involving insolvency or bankruptcy proceedings, the holders of Superior
Indebtedness will first be paid in full before any payment on account of
principal, premium, if any, or interest is made on the Senior Subordinated
Securities. An event of default under and/or acceleration of Superior
Indebtedness does not in itself result in the suspension of payments on Senior
Subordinated Securities. However, in the event the Senior Subordinated
Securities are declared due and payable before their expressed maturity because
of the occurrence of one of the events of default specified in the Senior
Subordinated Indentures, holders of the Senior Subordinated Securities will be
entitled to payment only after payment in full of Superior Indebtedness or
provision for such payment is made.
By reason of the foregoing subordination, in the event of insolvency,
holders of Superior Indebtedness may recover more, ratably, than the holders of
the Senior Subordinated Securities. The Senior Subordinated Securities are
intended to rank in all respects on a parity with all other Senior Subordinated
Indebtedness, including the Company's outstanding Senior Subordinated
Securities, and superior in right of payment to all Junior Subordinated
Indebtedness and all outstanding capital stock.
Senior Subordinated Securities of certain series may meet the requirements
necessary for such series to be considered "Tier II Capital" under the rules and
regulations of the Ministry of Finance of Japan and the risk-based capital
guidelines of the Federal Reserve Board. If it is intended that any series be
considered Tier II Capital, such series of the Senior Subordinated Securities
may provide that the maturity date of any such series so designated by the
Company in a supplement hereto will be subject to acceleration only in the event
of certain circumstances related to the insolvency of the Company.
12
<PAGE>
Certain Restrictive Provisions
Except as set forth in the next sentence, no Indenture limits the amount
of other securities which may be issued by the Company or its subsidiaries, but
each contains a covenant that the Company will not pledge or otherwise subject
to any lien ("Liens") any of its property or assets to secure indebtedness for
money borrowed, incurred, issued, assumed or guaranteed by the Company, except
Liens in favor of any subsidiary of the Company; purchase money Liens existing
on property, assets, shares of capital stock or indebtedness hereafter acquired;
Liens on any property or assets existing at the time of acquisition by the
Company; Liens securing the performance of letters of credit, bids, tenders,
sales contracts, purchase agreements, repurchase agreements, reverse repurchase
agreements, bankers' acceptances, leases, surety and performance bonds, and
other similar obligations incurred in the ordinary course of business; Liens
upon any real property acquired or constructed by the Company primarily for use
in the conduct of its business; arrangements providing for the leasing by the
Company of any property or assets, which property or assets have been or will be
sold or transferred by the Company with the intention that such property or
assets will be leased back to the Company, if the obligations in respect of such
lease would not be included as liabilities on a consolidated balance sheet of
the Company; Liens to secure non-recourse debt in connection with the Company
engaging in any leveraged or single-investor or other lease transactions;
consensual Liens in the ordinary course of business of the Company that secure
indebtedness that would not be included in total liabilities as shown on the
Company's consolidated balance sheet; Liens created by the Company in connection
with any transaction intended by the Company to be a sale of property or assets
of the Company; Liens on property or assets financed through tax-exempt
municipal obligations; any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any of the
foregoing, provided that any such extension, renewal or replacement is limited
to all or a part of the property or assets which secured the Lien so extended,
renewed or replaced (plus improvements on such property); Liens that secure
certain other indebtedness which, in an aggregate principal amount then
outstanding, does not exceed 10% of the Company's consolidated net worth; and
certain other minor exceptions. (Section 6.04 of the Indentures.) In addition,
the Senior Subordinated Indentures provide that the Company will not permit (i)
the aggregate amount of Senior Subordinated Indebtedness outstanding at any time
to exceed 100% of the aggregate amount of the par value of the capital stock
plus the surplus (including retained earnings) of the Company and its
consolidated subsidiaries or (ii) the aggregate amount of Senior Subordinated
Indebtedness and Junior Subordinated Indebtedness outstanding at any time to
exceed 150% of the aggregate amount of the par value of the capital stock plus
the surplus (including retained earnings) of the Company and its consolidated
subsidiaries. (Senior Subordinated Indenture Section 6.05.) Under the more
restrictive of such tests in the Senior Subordinated Indentures, as of September
30, 1998, the Company could issue up to approximately $2.4 billion of additional
Senior Subordinated Indebtedness. For information as to restrictions in other
agreements on the Company's ability to issue Senior Subordinated Indebtedness,
see "Description of Debt Securities--General" above.
The holders of at least a majority in principal amount of the outstanding
Debt Securities of any series may, on behalf of the holders of all Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with the foregoing restrictions. (Senior Indenture
Section 6.06, Senior Subordinated Indenture Section 6.07.)
Each Indenture provides that, subject to the restrictions described in the
first sentence of the first paragraph under this caption, nothing contained in
such Indenture will prevent the consolidation or merger of the Company with or
into any other corporation, or the merger into the Company of any other
corporation, or the sale by the Company of its property and assets as, or
substantially as, an entirety, or otherwise. Notwithstanding the foregoing: (i)
in the event of any such consolidation or merger in which the Company is not the
surviving corporation, the surviving corporation must succeed to and be
substituted for the Company and must expressly assume by an indenture executed
and delivered to the applicable Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest, if any, on all Debt Securities
then outstanding and the performance and observance of every covenant and
condition of such Indenture which is required to be performed or observed by the
Company, and (ii) as a condition to any sale of the property and assets of the
Company as, or substantially as, an entirety, the corporation to which such
property and assets will be sold must (a) expressly assume, as part of the
purchase price thereof, the due and punctual payment of the principal of (and
premium, if any) and interest, if any, on all Debt Securities and the
performance and observance of every covenant and condition of such Indenture
which is required to be performed or observed
13
<PAGE>
by the Company, and (b) simultaneously with the delivery to it of the
conveyances or instruments of transfer of such property and assets, execute and
deliver to the applicable Trustee a proper indenture in form satisfactory to
such Trustee, pursuant to which such purchasing corporation will assume the due
and punctual payment of the principal of (and premium, if any) and interest, if
any, on all Debt Securities then outstanding and the performance and observance
of every covenant and condition of such Indenture which is required to be
performed or observed by the Company, to the same extent that the Company is
bound and liable. (Senior Indenture Section 15.01, Senior Subordinated Indenture
Section 16.01.) Compliance by the Company with the foregoing restrictions may be
waived by or on behalf of the holders of the outstanding Debt Securities. For
information as to the modification of each Indenture, see "Description of Debt
Securities--Modification of Indenture" below.
Other than the foregoing restrictions, no Indenture contains covenants of
the Company or provisions which afford additional protection to holders of
outstanding Debt Securities in the event of a highly leveraged transaction
involving the Company.
Modification of Indenture
Each Indenture contains provisions permitting the Company and the Trustee
thereunder to add any provisions to or change in any manner or eliminate any of
the provisions of such Indenture or any indenture supplemental thereto or to
modify in any manner the rights of the holders of any series of Debt Securities
with the consent of the holders of not less than 66 2/3% in aggregate principal
amount of such series of Debt Securities at the time outstanding, except that no
such amendment or modification may (i) extend the fixed maturity of any Debt
Security, reduce the rate or extend the time of payment of interest thereon,
reduce the amount of the principal thereof, or premium, if any, payable with
respect thereto, or reduce the amount of an Original Issue Discount Security
payable upon the acceleration of the stated maturity thereof, without the
consent of the holder of such Debt Security, or (ii) reduce the aforesaid
percentage of any series of Debt Securities, the holders of which are required
to consent to any such amendment or modification, without the consent of the
holders of all the Debt Securities of such series then outstanding. (Section
14.02 of the Indentures.)
Outstanding Debt Securities
In determining whether the holders of the requisite principal amount of
outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent, or waiver under any Indenture, (i) the principal
amount of an Original Issue Discount Security that will be deemed to be
outstanding for such purposes will be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof upon an event of default and (ii) the
principal amount of a Debt Security denominated in a foreign currency or
currencies will be the U.S. dollar equivalent, determined on the date of
original issuance of such Debt Security, of the principal amount. (Section 1.02
of the Indentures.)
Events of Default
Each Indenture defines an "event of default" with respect to any series of
Debt Securities as being any one of the following events and such other events
as may be established for the Debt Securities of a particular series: (i)
default for thirty days in any payment of interest on such series; (ii) default
in any payment of principal of, and premium, if any, on such series when due;
(iii) default in the payment of any sinking fund installment of such series when
due; (iv) default for thirty days after appropriate notice in performance of any
other covenant in such Indenture (other than a covenant included in the
Indenture solely for the benefit of another series of Debt Securities); (v)
certain events in bankruptcy, insolvency, or reorganization; or (vi) default in
the payment of any installment of interest on any evidence of indebtedness of,
or assumed or guaranteed by, the Company (other than indebtedness subordinated
to such series), or in the payment of any principal of any such evidence of
indebtedness, and with respect to which any period of grace shall have expired,
after appropriate notice. (Section 7.01 of the Indentures.) Each Indenture
provides that the Trustee may withhold notice of any default (except in the
payment of principal of, premium, if any, or interest, if any, on any series of
Debt Securities) if it considers such withholding in the interests of the
holders of such series of Debt Securities issued thereunder. (Section 11.03 of
the Indentures.)
14
<PAGE>
Except as set forth below, each Indenture provides that the Trustee
thereunder or the holders of not less than 25% in principal amount of any series
of Debt Securities then outstanding may declare the principal of all Debt
Securities of such series to be due and payable on an event of default. (Section
7.02 of the Indentures.) Notwithstanding the foregoing, any series of Senior
Subordinated Securities which will be considered "Tier II" may provide that the
Senior Subordinated Trustee or the holders of at least 25% in aggregate
principal amount of the Senior Subordinated Securities of that series which are
then outstanding may declare the principal of all Senior Subordinated Securities
of that series to be due and payable immediately only if an event of default
pursuant to (v) above shall have occurred and be continuing. Any such series
will be designated by the Company in a supplement hereto.
Reference is made to the Prospectus Supplement relating to any series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an event of default and the continuation thereof.
Within 120 days after the close of each fiscal year, the Company must file
with each Trustee a statement, signed by specified officers, stating whether or
not such officers have knowledge of any default, and, if so, specifying each
such default, the nature thereof and what action, if any, has been taken to cure
such default. (Senior Indenture Section 6.05, Senior Subordinated Indenture
Section 6.06.)
Subject to provisions relating to its duties in case of default, no
Trustee is under any obligation to exercise any of its rights or powers
thereunder at the request, order, or direction of any holders of any series of
Debt Securities, unless such holders shall have offered to such Trustee
reasonable indemnity. (Section 11.01 of the Indentures.) Subject to such
provisions for indemnification, the holders of a majority in principal amount of
any series of Debt Securities outstanding may direct the time, method, and place
of conducting any proceeding for any remedy available to the Trustee thereunder,
or of exercising any trust or power conferred upon such Trustee. (Section 7.08
of the Indentures.)
Defeasance of the Indenture and Debt Securities
The Company at any time may satisfy its obligations with respect to
payments of principal of the Debt Securities, and premium, if any, and interest,
if any, on the Debt Securities of any series by irrevocably depositing in trust
with the Trustee money or U.S. Government Obligations (as defined in the
Indenture) or a combination thereof sufficient to make such payments when due.
If such deposit is sufficient, as verified by a written report of a nationally
recognized, independent public accounting firm, to make all payments of (i)
interest, if any, on the Debt Securities of such series prior to and on their
redemption or maturity, as the case may be, and (ii) principal of the Debt
Securities, and premium, if any, on the Debt Securities of such series when due
upon redemption or at the designated maturity date, as the case may be, then all
the obligations of the Company with respect to the Debt Securities of such
series and the Indenture insofar as it relates to the Debt Securities of such
series will be satisfied and discharged (except as otherwise provided in the
Indenture). In the event of any such defeasance, holders of the Debt Securities
of such series would be able to look only to such trust fund for payment of
principal of, premium, if any, and interest, if any, on the Debt Securities of
such series until the designated maturity date or redemption. (Sections 12.01,
12.02 and 12.03 of the Indentures.)
Such a trust may only be established if, among other things, (i) the
Company has obtained an opinion of legal counsel (which may be based on a ruling
from, or published by, the Internal Revenue Service) to the effect that holders
of the Debt Securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amounts and in
the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred and (ii) at that time, with
respect to any series of Debt Securities then listed on The New York Stock
Exchange, the rules of The New York Stock Exchange do not prohibit such deposit
with the Trustee.
15
<PAGE>
Information Concerning the Trustees
The Company from time to time may borrow from each of the Trustees, and
the Company and certain of its subsidiaries maintain deposit accounts and
conduct other banking transactions with some of the Trustees. A Trustee under a
Senior Indenture or a Senior Subordinated Indenture may act as trustee under any
of the Company's other indentures.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby (i) directly
to purchasers, (ii) through agents, (iii) to dealers, or (iv) through an
underwriter or a group of underwriters.
Offers to purchase Offered Debt Securities may be solicited directly by
the Company or by agents designated by the Company from time to time. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment (ordinarily five
business days or less). Agents may be entitled under agreements which may be
entered into with the Company to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act").
If a dealer is utilized in the sale of the Offered Debt Securities in
respect of which this Prospectus is delivered, the Company will sell such
Offered Debt Securities to the dealer, as principal. The dealer may then resell
such Offered Debt Securities to the public at varying prices to be determined by
such dealer at the time of resale. Dealers may be entitled under agreements
which may be entered into with the Company to indemnification by the Company
against certain civil liabilities, including liabilities under the Securities
Act.
If an underwriter or underwriters are utilized in the sale, the Company
may enter into an arrangement with such underwriters at the time of sale to them
providing for their indemnification against certain liabilities, including
liabilities under the Securities Act. The names of the underwriters and the
terms of the transaction will be set forth in the Prospectus Supplement which is
intended for use by the underwriters to make resales of the Offered Debt
Securities in respect of which this Prospectus is delivered to the public.
The underwriters, dealers, and agents may be deemed to be underwriters and
any discounts, commissions, or concessions received by them from the Company or
any profit on the resale of Offered Debt Securities by them may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such person
who may be deemed to be an underwriter and any such compensation received from
the Company will be described in the Prospectus Supplement. Underwriters,
dealers, and agents 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
underwriters and agents to solicit offers by certain institutions to purchase
Offered Debt Securities from the Company at the public offering price set forth
in the Prospectus Supplement pursuant to contracts providing for payment and
delivery on the date stated in the Prospectus Supplement ("Contracts"). Each
Contract will be for an amount not less than, and unless the Company otherwise
agrees the aggregate principal amount of Offered Debt Securities sold pursuant
to Contracts will be not less nor more than, the respective amounts stated in
the Prospectus Supplement. Institutions with whom Contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions, and other
institutions, but shall in all cases be subject to the approval of the
Corporation. Contracts will not be subject to any conditions except that the
purchase by an institution of the Offered Debt Securities covered by its
Contract must not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject. A
commission indicated in the Prospectus Supplement will be granted to
underwriters and agents soliciting purchases of Offered Debt Securities pursuant
to Contracts accepted by the Company. Underwriters and agents will have no
responsibility in respect of the delivery or performance of Contracts.
The place and time of delivery for the Offered Debt Securities in respect
of which this Prospectus is delivered will be set forth in the Prospectus
Supplement.
16
<PAGE>
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1997 and
1996 and the related consolidated statements of income, changes in stockholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1997 has been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG LLP, independent
certified public accountants, also incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
LEGAL OPINIONS
Schulte Roth & Zabel LLP, New York, New York, our counsel, is passing for
us on the validity of the Debt Securities to which this Prospectus relates. Paul
N. Roth, a director of the Company, is a partner of Schulte Roth & Zabel LLP.
17
<PAGE>
================================================================================
No salesman or any other person has been authorized by the Company or any
dealer, agent, or underwriter to give any information or to make any
representation, other than as contained in this Prospectus or the documents
incorporated by reference, in connection with the offer contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon. This Prospectus does not constitute an offer by any dealer, agent
or underwriter to sell, or a solicitaion of an offer to buy, securities in any
state to any person to whom it is unlawful for such dealer, agent or underwriter
to make such offer or solicitation in such state. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company and
its subsidiaries since the date of the information contained herein.
----------
TABLE OF CONTENTS
Page
----
Available Information ..................................................... 2
Documents Incorporated by Reference ....................................... 2
The Company ............................................................... 3
Summary of Financial Information .......................................... 9
Use of Proceeds ........................................................... 10
Description of Debt Securities ............................................ 10
Plan of Distribution ...................................................... 16
Experts ................................................................... 17
Legal Opinions ............................................................ 17
================================================================================
================================================================================
[LOGO] THE CIT GROUP
The CIT Group, Inc.
Debt Securities
----------
Prospectus
----------
, 1999
================================================================================
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS.
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses payable by the Registrant in
connection with the issuance and distribution of the securities being
registered. All the amounts shown are estimates, except for the registration
fee.
Registration fee .......................................... $1,390,000
Fees and expenses of accountants .......................... 209,000
Fees and expenses of counsel .............................. 500,000
Fees and expenses of Trustees and paying and
authenticating agents .................................... 450,000
Printing and engraving expenses ........................... 50,000
Rating Agencies ........................................... 600,000
Blue Sky fees and expenses ................................ 22,500
Miscellaneous ............................................. 12,000
----------
Total ................................................ $3,233,500
==========
Item 15. Indemnification of Directors and Officers
Subsection (a) of Section 145 of the General Corporation Law of Delaware
empowers a corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation except that no indemnification may be made in
respect of any claim, issue, or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine that despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
Section 145 further provides that to the extent a director, officer,
employee, or agent of a corporation has been successful in the defense of any
action, suit, or proceeding referred to in subsections (a) and (b) or in the
defense of any claim, issue, or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification provided for by Section 145 shall not
be deemed exclusive of any other rights to which the indemnified party may be
entitled; and empowers the corporation to purchase and maintain insurance on
behalf of any person acting in any of the capacities set forth in the second
preceding paragraph against any liability asserted against him or incurred by
him in any such capacity or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such liabilities under
Section 145.
II-1
<PAGE>
Article X of the By-laws of the Registrant provides, in effect, that, in
addition to any rights afforded to an officer, director or employee of the
Registrant by contract or operation of law, the Registrant may indemnify any
person who is or was a director, officer, employee, or agent of the Registrant,
or of any other corporation which he served at the request of the Registrant,
against any and all liability and reasonable expense incurred by him in
connection with or resulting from any claim, action, suit, or proceeding
(whether brought by or in the right of the Registrant or such other corporation
or otherwise), civil or criminal, in which he may have become involved, as a
party or otherwise, by reason of his being or having been such director,
officer, employee, or agent of the Registrant or such other corporation, whether
or not he continues to be such at the time such liability or expense is
incurred, provided that such person acted in good faith and in what he
reasonably believed to be the best interests of the Registrant or such other
corporation, and, in connection with any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Article X further provides that any person who is or was a director,
officer, employee, or agent of the Registrant or any direct or indirect
wholly-owned subsidiary of the Registrant shall be entitled to indemnification
as a matter of right if he has been wholly successful, on the merits or
otherwise, with respect to any claim, action, suit, or proceeding of the type
described in the foregoing paragraph.
In addition, the Registrant maintains directors' and officers'
reimbursement and liability insurance pursuant to standard form policies with
aggregate limits of $90,000,000. The risks covered by such policies include
liabilities under the Securities Act of 1933.
Item 16. Exhibits.
(g)1.1 -- Form of Underwriting Agreement.
(d)1.2 -- Form of Selling Agency Agreement.
(a)4.1a -- Proposed form of Debt Securities (Note).
(a)4.1b -- Proposed form of Debt Securities (Debenture).
(a)4.1c -- Proposed form of Debt Securities (Deep Discount Debenture).
(a)4.1d -- Proposed form of Debt Securities (Zero Coupon Debenture).
(a)4.1e -- Proposed form of Debt Securities (Extendible Note).
(b)4.1f -- Proposed form of Debt Securities (Floating Rate Renewable Note).
(b)4.1g -- Proposed form of Debt Securities (Floating Rate Note).
(c)4.1h -- Proposed form of Debt Securities (Medium-Term Senior Fixed Rate
Note).
(c)4.1i -- Proposed form of Debt Securities (Medium-Term Senior Floating
Rate Note).
(c)4.1j -- Proposed form of Debt Securities (Medium-Term Senior Subordinated
Fixed Rate Note).
(c)4.1k -- Proposed form of Debt Securities (Medium-Term Senior Subordinated
Floating Rate Note).
(e)4.2a -- Form of Global Indenture between the Registrant and each Senior
Trustee.
(e)4.2b -- Form of Global Indenture between the Registrant and each Senior
Subordinated Trustee.
(e)4.2c -- Standard Multiple-Series Indenture Provisions dated as of
September 24, 1998.
(g)5 -- Opinion of Schulte Roth & Zabel LLP in respect of the legality of
the Debt Securities registered hereunder, containing the consent
of such counsel.
II-2
<PAGE>
Item 16. Exhibits. (continued)
(g)12 -- Computation of Ratios of Earnings to Fixed Charges.
(g)23.1 -- Consent of KPMG LLP.
(g)23.2 -- Consent of Counsel. The consent of Schulte Roth & Zabel LLP is
included in its opinion filed herewith as Exhibit 5 to this
Registration Statement.
(f)24.1 -- Powers of Attorney.
(f)24.2 -- Board Resolutions.
(g)25.1 -- Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of The Bank of New York.
(g)25.2 -- Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of The First National Bank of Chicago.
(g)25.3 -- Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939 of Harris Trust and Savings Bank.
- ----------
(a) Incorporated by reference to Registration Statement No. 2-93960 on Form
S-3 filed October 25, 1984.
(b) Incorporated by reference to Registration Statement No. 33-30047 on Form
S-3 filed July 24, 1989.
(c) Incorporated by reference to the Registrant's Current Report on Form 8-K
dated July 21, 1992.
(d) Incorporated by reference to Registration Statement No. 33-58418 on Form
S-3 filed February 16, 1993.
(e) Incorporated by reference to Registration Statement No. 333-63793 on Form
S-3 filed September 18, 1998.
(f) Previously filed.
(g) Filed herewith.
Item 17. Undertakings.
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 (the "Securities Act");
(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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
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;
II-3
<PAGE>
provided, however, that paragraphs (1)(i) and (1)(ii) 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 Section 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, 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.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or 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.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, 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 and is, therefore, unenforceable. In the event
that a claim of 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 and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes (1) to use its best efforts
to distribute prior to the opening of bids, to prospective bidders,
underwriters, and dealers, a reasonable number of copies of a prospectus which
at the time meets the requirements of Section 10(a) of the Securities Act, and
relating to the securities offered at competitive bidding, as contained in the
registration statement, together with any supplements thereto, and (2) to file
an amendment to the registration statement reflecting the results of bidding,
the terms of the reoffering and related matters to the extent required by the
applicable form, not later than the first use, authorized by the issuer after
the opening of bids, of a prospectus relating to the securities offered at
competitive bidding, unless no further public offering of such securities by the
issuer and no reoffering of such securities by the purchasers is proposed to be
made.
II-4
<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 Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in The City of Livingston and State of New Jersey, on
the 10th day of February, 1999.
THE CIT GROUP, INC.
By /s/ ERNEST D. STEIN
-----------------------------------------
Ernest D. Stein
Executive Vice President, General Counsel
and Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
Signature and Title Date
------------------- ----
ALBERT R. GAMPER, JR.*
- --------------------------------------
Albert R. Gamper, Jr.
President, Chief Executive Officer,
and Director (principal
executive officer)
DANIEL P. AMOS*
- --------------------------------------
Daniel P. Amos
Director
YOSHIRO AOKI*
- --------------------------------------
Yoshiro Aoki
Director
______________________________________
Anthea Disney
Director
TAKASUKE KANEKO*
- --------------------------------------
Takasuke Kaneko
Director
HISAO KOBAYASHI*
- --------------------------------------
Hisao Kobayashi
Director *By /s/ ERNEST D. STEIN February 10, 1999
-------------------
JOSEPH A. POLLICINO* Ernest D. Stein
- -------------------------------------- Attorney-in-fact
Joseph A. Pollicino
Director
PAUL N. ROTH*
- --------------------------------------
Paul N. Roth
Director
PETER J. TOBIN*
- --------------------------------------
Peter J. Tobin
Director
TOHRU TONOIKE*
- --------------------------------------
Tohru Tonoike
Director
ALAN F. WHITE*
- --------------------------------------
Alan F. White
Director
/s/ JOSEPH M. LEONE* February 10, 1999
- --------------------------------------
Joseph M. Leone
Executive Vice President and Chief
Financial Officer (principal financial
and accounting officer)
Original powers of attorney authorizing Albert R. Gamper, Jr., Ernest D.
Stein, and Anne Beroza and each of them to sign this Amendment No. 1 to the
Registration Statement and amendments hereto on behalf of the directors and
officers of the Registrant indicated above are held by the Registrant and
available for examination pursuant to Item 302(b) of Regulation S-T.
II-5
Exhibit 1.1
THE CIT GROUP, INC.
Debt Securities
Underwriting Agreement
New York, New York
TO the Representative(s)
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
The CIT Group, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to you and the other underwriters named in Schedule II hereto
(the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of its debt securities identified in
Schedule I hereto (the "Securities") to be issued under an indenture identified
in Schedule I hereto (the "Indenture") between the Company and the trustee
specified in Schedule I hereto (the "Trustee"). If the firm or firms listed in
Schedule II hereto include only the firm or firms listed in Schedule I hereto,
then the terms "Underwriters" and "Representatives", as used herein, shall each
be deemed to refer to such firm or firms.
1. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto, the principal amount of the Securities set forth opposite
such Underwriter's name in Schedule II hereto.
2. Delivery and Payment. Delivery of and payment for the Securities shall
be made at the office, on the date and at the time specified in Schedule I
hereto (or such later date not later than five business days after such
specified date as the representatives shall designate), which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 7 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by certified or official bank check or checks payable in Federal or
otherwise immediately available funds. Certificates for the Securities shall be
registered in such names and in such denominations as the Representatives may
request not less than three full business days in advance of the Closing Date.
<PAGE>
The Company agrees to have the Securities available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 p.m. on the business day prior to the Closing Date.
3. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(a) Registration statement(s) (the file number(s) of which is (are)
set forth in Schedule I hereto), including a prospectus, relating to the
Securities has (have) been filed with the Securities and Exchange
Commission ("Commission") and has (have) become effective. "Registration
Statement" hereinafter refers respectively to each such registration
statement as such registration statement is amended to the date of this
Agreement. The prospectus used in connection with the Registration
Statement, as supplemented to reflect the terms of the Securities and
terms of offering thereof, including all material incorporated by
reference therein, is hereinafter referred to as the "Prospectus".
(b) On its effective date, the Registration Statement and the
prospectus included therein conformed in all respects to the requirements
of the Securities Act of 1933 ("Act"), the Trust Indenture Act of 1939
("Trust Indenture Act") and the rules and regulations of the Commission
("Rules and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and on
the date of this Agreement the Registration Statement and the Prospectus
conform, and on the Closing Date the Registration Statement and the
Prospectus and any supplement thereto will conform, in all respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations and neither of such documents includes, or on the Closing Date
will include, any untrue statement of a material fact or omits to state,
or on the Closing Date will omit to state, any material fact required to
be stated therein or necessary to make the statements therein not
misleading, except that the foregoing does not apply to statements in or
omissions from any such documents based upon, and in conformity with,
written information furnished to the Company by any Underwriter through
the Representatives, if any, specifically for use therein.
(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Securities Exchange Act of 1934 ("Exchange Act")
and the Rules and Regulations and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements of
the Exchange Act and the Rules and Regulations and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading.
4. Covenants of the Company. The Company covenants and agrees with the
several Underwriters that it has previously furnished to Simpson Thacher &
Bartlett one signed
2
<PAGE>
copy of the registration statement relating to the Securities, including all
exhibits, in the form it became effective and of all amendments thereto and
that:
(a) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus during the period of the distribution of the Securities, will
provide the Representatives with a reasonable opportunity to comment
thereon and will advise the Representatives promptly of the institution by
the Commission of any stop order proceedings in respect of the
Registration Statement or of any part thereof and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(b) If, at any time when a Prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Registration Statement or
the Prospectus to comply with the Act, the Company promptly will prepare
and file with the Commission an amendment or supplement which will correct
such statement or omission or an amendment which will effect such
compliance.
(c) As soon as practicable, but not later than 16 months after the
date of this Agreement, the Company will make generally available to its
security holders an earnings statement which will satisfy the provisions
of Section 11(a) of the Act.
(d) The Company will furnish to the Underwriters or the
Representatives copies of the Registration Statement, including all
exhibits, each preliminary prospectus supplement, the Prospectus and all
amendments and supplements to such documents, in each case as soon as
available and in such quantities as are reasonably requested.
(e) The Company will use its best efforts to qualify the Securities
for sale under the laws of such jurisdictions as the Representatives may
reasonably request, will continue such qualifications in effect so long as
required for the distribution of the Securities and will provide the
Representatives with a "blue sky" memorandum and legal investment
memorandum relating to the Securities; provided, however, that the Company
shall not be obligated (i) to qualify as a foreign corporation or as a
dealer in securities or to execute or file any consents to service of
process under the laws of any such state or (ii) to prepare more than one
legal investment memorandum per year relating to its debt securities
registered under the Registration Statement.
(f) The Company agrees that until the Closing Date it will not,
without the prior consent of the Representatives, offer, sell, contract to
sell or otherwise dispose of in the United States any debt securities
substantially similar to the securities.
(g) The Company will pay all expenses incident to the performance of
its obligations under this Agreement.
3
<PAGE>
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Securities will be subject
to the accuracy as of the Closing Date of the representations and warranties on
the part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(b) (i) There shall not have occurred any change, or any development
involving a prospective change, in or affecting the business, properties,
financial condition or results of operations of the Company or its
subsidiaries the effect of which is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or the delivery of the Securities
as contemplated by the Registration Statement and the Prospectus, (ii) no
public announcement shall have been given of any intended or potential
downgrading in the rating accorded any of the Company's debt securities,
or no rating of any debt securities of the Company shall have been
lowered, by Moody's Investors Service, Inc., Standard & Poor's Corporation
or Duff & Phelps, Inc., (iii) trading of securities generally on the New
York Stock Exchange or the NASD shall not have been suspended or
materially limited, (iv) a general moratorium on commercial banking
activities in New York shall not have been declared by either Federal or
New York State authorities, (v) trading of any securities of the Company
shall not have been suspended on any exchange or in any over-the-counter
market and (vi) there shall not have occurred any outbreak or escalation
of hostilities or national emergency the effect of which on the financial
markets of the United States is, in the judgment of the Representatives,
such as to make it impracticable to market the Securities.
(c) The Representatives shall have received, on behalf of the
Underwriters, a letter, dated the Closing Date, of KPMG LLP confirming
that they are independent public accountants within the meaning of the Act
and the published Rules and Regulations and to the effect that (i) in
their opinion, the financial statements and financial schedules examined
by them and included in the Prospectus comply in form in all material
respects with the applicable accounting requirements of the Act, the
Exchange Act and the related published Rules and Regulations, (ii) on the
basis of their review (which does not constitute an examination of
financial statements in accordance with generally accepted auditing
standards) of the financial statements and schedules referred to below,
inquiries of officials of the Company responsible for financial and
accounting matters and other specified procedures, nothing came to their
attention that caused them to believe that (x) the unaudited consolidated
condensed financial statements included in the Prospectus do not comply in
form in all material respects with the applicable accounting requirements
of the Exchange Act as it applies to Form 10-Q and the related published
Rules and Regulations or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with
that of the audited consolidated financial statements included in the
Prospectus or (y) with respect to the period after
4
<PAGE>
the date of the most recent financial statements incorporated in the
Registration Statement and the Prospectus, there were any changes, at a
specified date not more than five business days prior to the date of the
letter, in the consolidated paid-in capital, variable rate notes, fixed
rate notes, subordinated fixed rate notes or commercial paper of the
Company or any decreases in the consolidated net finance receivables,
total assets, retained earnings, finance receivables or reserve for credit
losses on finance receivables of the Company as compared with the amounts
shown on the most recent consolidated balance sheet included or
incorporated in the Registration Statement and the Prospectus or (z) for
the period from the date of the most recent financial statements
incorporated in the Registration Statement and the Prospectus to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated finance income
or net income, of the Company, except in all instances for changes or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter and (iii) they have compared specified
dollar amounts (or percentages derived from such dollar amounts) and other
financial information included in the Prospectus (in each case to the
extent that such dollar amounts or percentages or other financial
information are derived from the general accounting records of the Company
and consolidated subsidiaries which are subject to the internal controls
of the accounting systems of the Company and consolidated subsidiaries or
are derived directly from such records by analysis or computation, and are
not directly traceable to the publicly available audited consolidated
financial statements of the Company or unaudited condensed financial
statements contained in its reports on Form 10-Q) with the results
obtained from inquiries, a reading of such general accounting records of
the Company and consolidated subsidiaries and other procedures specified
in such letter and have found such dollar amounts and percentages and
other financial information to be in agreement with such results, except
as otherwise specified in such letter. All financial statements included
in material incorporated by reference into the Prospectus shall be deemed
included in the Prospectus for purposes of this subsection.
(d) The Representatives shall have received, on behalf of the
Underwriters, an opinion or opinions, dated the Closing Date, of Schulte
Roth & Zabel LLP or of the General Counsel of the Company or, with the
consent of the Representatives, the Associate General Counsel of the
Company, to the effect that:
(i) the Company is a corporation validly existing and in good
standing under the laws of the State of Delaware, with corporate
power and authority to conduct its business as described in the
Prospectus, and is duly qualified or licensed and in good standing
as a foreign corporation in each jurisdiction where its business
requires such qualification or licensing;
(ii) the Indenture has been duly authorized, executed and
delivered and is a valid instrument legally binding upon the
Company, enforceable in accordance with its terms (except as
enforcement thereof may be subject to (a) bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter
in effect relating to creditors' rights generally and (b) general
principles of equity and the discretion of the court before which
any proceeding therefor may be brought);
5
<PAGE>
(iii) the Securities have been duly authorized and executed
and, when authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters pursuant
to this Agreement, will constitute legal, valid and binding
obligations of the Company (except as enforcement thereof may be
subject to (a) bankruptcy, insolvency, reorganization, moratorium,
or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity and
the discretion of the court before which any proceeding therefor may
be brought and will be entitled to the benefits provided by the
Indenture;
(iv) the descriptions of the Securities and the Indenture in
the Registration Statement and the Prospectus are accurate in all
material respects, and the Indenture has been duly qualified under
the Trust Indenture Act;
(v) the Registration Statement and any amendment thereto have
become effective under the Act; and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement, as amended, or of any part thereof has been
issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Act;
(vi) the Registration Statement and the Prospectus, and any
amendment or supplement thereto, (other than the financial
statements and related schedules and other financial and statistical
data included or incorporated by reference therein, as to which such
counsel expresses no opinion) comply as to form in all material
respects with the requirements of the Act and the Rules and
Regulations; the Indenture complies as to form in all material
respects with the requirements of the Trust Indenture Act and the
Rules and Regulations;
(vii) the descriptions in the Registration Statement and
Prospectus of statutes and other documents insofar as such
descriptions purport to constitute a summary of the terms of the
statutes or documents referred to therein, constitute accurate
summaries of the matters described therein in all material respects,
and such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement
or Prospectus which are not described as required, or of any
contracts or documents of a character required to be described in
the Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement which are not described or filed as
required;
(viii) the documents incorporated by reference in the
Prospectus, when they were filed with the Commission, complied as to
form in all material respects with the requirements of the Exchange
Act and the Rules and Regulations; it being understood that such
counsel need express no opinion as to the financial statements and
related schedules and other financial or statistical data included
or incorporated by reference in such documents;
6
<PAGE>
(ix) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental
agency or body is required in connection with the execution and
delivery of the Indenture, the issuance and sale of the Securities
by the Company pursuant to this Agreement or consummation by the
Company of the transactions contemplated by the Indenture, the
Securities and this Agreement, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as
have been obtained under the Act and the Trust Indenture Act and as
may be required under state securities laws, as to which such
counsel need express no opinion;
(x) the issue and sale of the Securities and the compliance by
the Company with the provisions of the Securities and the Indenture
will not conflict with or constitute or result in a breach of or a
default under (or an event which with notice or passage of time or
both would constitute a default under) or a violation of (a) any of
the terms or provisions of any contract filed as an exhibit to the
Company's most recent annual or quarterly reports or other 1934 Act
filings with the Commission except for any such conflict, breach,
default, event or violation which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect
on the business of the Company and its subsidiaries, taken as a
whole, or (b) any statute, judgment, decree, order, rule or
regulation known to such counsel to be applicable to the Company or
any of its properties or assets, except for any such conflict,
breach, default, event or violation which would not, individually or
in the aggregate, reasonably be expected to have a material adverse
effect on the business of the Company and its subsidiaries, taken as
a whole (except that such counsel need express no opinion with
respect to state securities laws), nor will such action result in a
violation of the provisions of the Restated Certificate of
Incorporation or the By-laws of the Company; and
(xi) this Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Representatives shall have received, on behalf of the
Underwriters, from Simpson Thacher & Bartlett, counsel for the
Underwriters, such opinion or opinions, dated the Closing Date, with
respect to the incorporation of the Company, the validity of the
Securities, the Registration Statement, the Prospectus and other related
matters as they may require and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters.
(f) The Representatives shall have received, on behalf of the
Underwriters, a certificate, dated the Closing Date, of the principal
financial or accounting officer or the treasurer of the Company in which
such officer shall state, to the best of his knowledge after reasonable
investigation, that the representations and warranties of the Company in
this Agreement are true and correct as of the Closing Date, that the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date, that no stop order suspending the effectiveness of the Registration
7
<PAGE>
Statement or any part thereof has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission and
that, subsequent to the date of the most recent financial statements in
the Prospectus, there has been no material adverse change, or any
development involving a prospective material adverse change, in or
affecting the business, properties, financial condition or results of
operations of the Company or its subsidiaries, except as set forth in or
contemplated by the Prospectus or as described in such certificate.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as they reasonably request.
6. Indemnification and Contribution. (a) The Company agrees to indemnify,
defend and hold harmless each Underwriter and any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any loss, expense, liability or claim (including
the reasonable cost of investigation) which, jointly or severally, such
Underwriter or controlling person may incur under the Act or otherwise, insofar
as such loss, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus, any amendment or supplement thereto or
any related preliminary prospectus supplement, or arises out of or is based upon
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as any such loss, expense, liability or claim arises out of or is
based upon any alleged untrue statement of a material fact contained therein in
conformity with information furnished in writing by any Underwriter through the
Representatives, if any, to the Company expressly for use in any of such
documents or arises out of or is based upon any alleged omission to state
therein a material fact in connection with such information required to be
stated therein or necessary to make such information not misleading. The
Company's agreement to indemnify any such Underwriter or controlling person as
aforesaid is expressly conditioned upon its being notified of the action in
connection therewith brought against such Underwriter or controlling person by
letter or telegram addressed to the Company with reasonable promptness after the
first legal process which discloses the nature of the liability or claim shall
have been served upon such Underwriter or controlling person (or after it shall
have received notice of such service upon any agent designated by it), but
failure so to notify the Company shall not relieve the Company from any
liability which it may have to such Underwriter or controlling person otherwise
than on account of the indemnity agreement contained in this Section 6.
The Company shall assume the defense of any suit brought to enforce any
such liability or claim, including the employment of counsel satisfactory to the
Underwriters and the payment of all expenses. Any Underwriter or controlling
person against whom such suit is brought shall have the right to employ separate
counsel in any such suit and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Underwriter or
controlling person unless (i) the employment of such counsel has been
specifically authorized by the Company or (ii) the named parties to any such
suit (including any impleaded parties) include such Underwriter or controlling
person and the Company, and such Underwriter or controlling person shall have
been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
8
<PAGE>
the Company, in which case the Company shall not have the right to assume the
defense of such action on behalf of such Underwriter or controlling person, it
being understood, however, that the Company shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys for all such Underwriters and controlling persons, which firm shall be
designated in writing by the Underwriters or the Representatives, if any. The
Company shall not be liable for any settlement of any such action effected
without its consent (which will not be unreasonably withheld or delayed).
The Company agrees promptly to notify the Underwriters of the commencement
of any litigation or proceedings against the Company or any of its officers or
directors in connection with the issue and sale of the Securities or with the
Registration Statement or Prospectus.
(b) Each Underwriter represents and warrants that the information
furnished in writing by such Underwriter through the Representatives, if any, to
the Company expressly for use with reference to such Underwriter in the
Registration Statement or the Prospectus does not contain any untrue statement
of a material fact and does not omit to state a material fact in connection with
such information required to be stated in the Registration Statement or the
Prospectus or necessary to make such information not misleading.
Each Underwriter severally agrees to indemnify, defend and hold harmless
the Company and its directors and officers from and against any loss, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, the Company or any such person may incur under the Act or
otherwise, insofar as such loss, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus, any amendment or
supplement thereto or any related preliminary prospectus supplement which is in
reliance on and in conformity with information furnished in writing by such
Underwriter through the Representatives, if any, to the Company expressly for
use with reference to such Underwriter, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in any of such documents or necessary to make
such information not misleading. Each Underwriter's agreement to indemnify the
Company and any such person as aforesaid is expressly conditioned upon such
Underwriter's being notified of the action in connection therewith brought
against the Company or any such person by letter or telegram addressed to such
Underwriter or the Representatives, if any, at its address furnished to the
Company for the purpose, with reasonable promptness after the first legal
process which discloses the nature of the liability or claim shall have been
served upon the Company or any such person (or after the Company or any such
person shall have received notice of such service on any agent designated by the
Company or any such person), but failure so to notify such Underwriter shall not
relieve such Underwriter from any liability which it may have to the Company or
any such person otherwise than on account of the indemnity agreement contained
in this Section 6.
9
<PAGE>
Such Underwriter shall assume the defense of any suit brought to enforce
any such liability or claim, including the employment of counsel and the payment
of all expenses. The Company or such person against whom such suit is brought
shall have the right to employ separate counsel in any such suit and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the Company or such person unless (i) the employment of such
counsel has been specifically authorized by such Underwriter or the
Representatives, if any, or (ii) the named parties to any such suit (including
any impleaded parties) include the Company or such person and such Underwriter,
and the Company or such person shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to such Underwriter, in which case such
Underwriter shall not have the right to assume the defense of such action on
behalf of the Company or such person, it being understood, however, that the
Underwriters shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys for the Company and
such person, which firm shall be designated in writing by the Company. Such
Underwriter shall not be liable for any settlement of any such action effected
without its consent (which will not be unreasonably withheld or delayed).
(c) If the indemnification provided for in this Agreement is unavailable
to or insufficient to hold harmless an indemnified party under subsections (a)
and (b) above for any reason other than as specified therein in respect of any
losses, expenses, liabilities or claims referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand from the offering of the
Securities or (ii) if the allocation provided in clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company bear to the
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company on the one hand and of the Underwriters on the other shall
be determined by reference to, among other things, whether the untrue statement
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any claim or action.
10
<PAGE>
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Agreement were determined by pro rata
allocation (even if the Underwriters are treated as one entity) or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding the
provisions of this Agreement, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of the damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Agreement are several
in proportion to their respective underwriting commitments and not joint.
The obligations of the Company and the Underwriters under this Section 6
shall be in addition to any liability that each of them may otherwise have.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and the aggregate principal amount of
Securities which such defaulting Underwriter or Underwriters agreed but failed
to purchase does not exceed 10% of the total principal amount of Securities, the
Underwriters or the Representatives may make arrangements satisfactory to the
Company for the purchase of such Securities by other persons, including any of
the Underwriters, but if no such arrangements are made by the Closing Date, the
nondefaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Securities which such
defaulting Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters so default and the aggregate principal amount of Securities with
respect to which such default or defaults occur exceeds 10% of the total
principal amount of Securities and arrangements satisfactory to the Underwriters
or the Representatives and the Company for the purchase of such Securities by
other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any nondefaulting Underwriter or
the Company, except as provided in Section 8. As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives or
officers or directors or any controlling person and will survive delivery of and
payment for the Securities. If for any reason the purchase of the Securities by
the Underwriters pursuant to this Agreement is not consummated, the Company
shall remain responsible for the expenses to be paid by it pursuant to Section 4
and the respective obligations of the Company and the Underwriters pursuant to
Section 6 shall remain in effect.
11
<PAGE>
9. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their addresses furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company, will be mailed, delivered
or telegraphed and confirmed to it at 650 CIT Drive, Livingston, New Jersey
07039, Attention: Senior Vice President and Treasurer.
10. Successors. This Underwriting Agreement will inure to the benefit of
and be binding upon the parties hereto, the officers and directors and
controlling persons referred to in Section 6 and their respective heirs,
executors, administrators, successors and assigns, and no other person will have
any right or obligation hereunder.
11. Governing Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. This Agreement
may be executed in counterparts and the executed counterparts shall together
constitute a single instrument.
Very truly yours,
THE CIT GROUP, INC.
By: ____________________________________
Name:
Title:
12
<PAGE>
The foregoing Agreement is
hereby confirmed and
accepted as of the date
specified in Schedule I hereto.
[NAME OF REPRESENTATIVES]
By: _________________________________
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II
to the foregoing Agreement.
13
<PAGE>
SCHEDULE I
[ ] notes
Underwriting Agreement dated [ ]
Registration Statement No. 333-[ ]
Representative (Name and address for notices):
[
]
Indenture dated as of [ ], between The CIT Group, Inc. and
[ ], as Trustee.
Description of Securities:
Title: [ ] Notes Due [ ]
Aggregate Principal Amount: $[ ]
Interest: [ ]
Maturity Date: [ ]
Redemption: [ ]
Purchase Price to Public: [ ]
Proceeds to Corporation: [ ]
Underwriting Discount: [ ]
Form and Denomination: The Notes will be issued in fully registered
form only, without coupons, in
denominations of $1,000 and integral
multiples thereof. The Notes will be
<PAGE>
2
initially represented by one permanent
global Note registered in the name of The
Depositary Trust Company or its nominee.
Settlement: [ ]
Closing Date: [ ]
<PAGE>
SCHEDULE II
[ ] Notes due [ ]
Underwriter Principal Amount
----------- ----------------
[Name(s) of Underwriter(s)] ........................... $ [ ]
Total $ [ ]
Exhibit 5
February 11, 1999
The CIT Group, Inc.
1211 Avenue of the Americas
New York, New York 10036
Ladies and Gentlemen:
We are special counsel to The CIT Group, Inc., a Delaware corporation (the
"Corporation"), in connection with the Registration Statement on Form S-3 (the
"Registration Statement") of the Corporation covering $5,000,000,000 aggregate
principal amount of the Corporation's senior/senior subordinated debt securities
(the "Debt Securities"), which is being filed with the Securities and Exchange
Commission (the "Commission") on the date hereof, relating to the issuance from
and after the date hereof of up to $5,000,000,000 in aggregate principal amount
of the Debt Securities pursuant to the following indentures (each, an
"Indenture"): (i) the Indenture dated as of September 24, 1998, between the
Corporation and The First National Bank of Chicago, as Trustee; (ii) the
Indenture dated as of September 24, 1998, between the Corporation and Harris
Trust and Savings Bank, as Trustee; (iii) the Indenture dated as of September
24, 1998, between the Corporation and The Bank of New York, as Trustee; and (iv)
the Indenture dated as of September 24, 1998, between the Corporation and The
Bank of New York, as Senior Subordinated Trustee.
In this capacity, we have examined a signed copy of the Registration
Statement and originals, telecopies or copies, certified or otherwise identified
to our satisfaction, of such records of the Corporation and all such agreements,
certificates of public officials, certificates of officers or representatives of
the Corporation and others, and such other documents, certificates and corporate
or other records as we have deemed necessary or appropriate as a basis for this
opinion. As to all matters of fact (including, without limitation, matters of
fact set forth in this opinion), we have relied upon and assumed the accuracy of
statements and representations of officers and other representatives of the
Corporation and others. In our examination, we have assumed the genuineness of
all signatures, the legal capacity of natural persons signing or delivering any
instrument, the authority of all persons signing the Registration Statement, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. We have
also assumed that each Indenture has been duly authorized, executed and
delivered by the trustee named therein and constitutes a valid and binding
agreement of such trustee.
We are attorneys admitted to practice in the State of New York and the
opinion set forth below is limited to the laws of the State of New York and the
Delaware General Corporation Law. Paul N. Roth, a member of this firm, is a
director of the Corporation.
Based upon the foregoing and having regard for such legal considerations
as we deem relevant, we are of the opinion that the Debt Securities have been
duly authorized and, when duly executed by the Corporation and authenticated in
accordance with the terms of an Indenture and issued and delivered in accordance
with the terms of such Indenture against payment therefor as contemplated by the
Registration Statement, will constitute valid and binding obligations of the
Corporation.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm appearing under the
heading "Legal Opinions" in the Registration Statement and the Prospectus which
forms a part of the Registration Statement. In giving such consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the General Rules
and Regulations of the Commission thereunder.
Very truly yours,
Exhibit 12
THE CIT GROUP, INC. AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Years Ended December 31,
----------------- -----------------------------------------------
1998 1997 1997 1996 1995 1994 1993
----- ----- ----- ---- ----- ----- -----
(Dollar Amounts in Millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Net Income $ 251.5 $ 239.1 $ 310.1 $ 260.1 $ 225.3 $201.1 $182.3
Provision for income taxes 138.0 137.5 178.0 155.7 139.8 123.9 128.5
------- ------- ------- ------- ------- ------ ------
Earnings before provision
for income taxes 389.5 376.6 488.1 415.8 365.1 325.0 310.8
------- ------- ------- ------- ------- ------ ------
Fixed Charges:
Interest and debt expenses
on indebtedness 766.2 693.7 937.2 848.3 831.5 614.0 508.0
Interest factor-one third of rentals
on real and personal properties 7.4 6.7 8.5 8.1 7.9 7.9 8.0
Minority interest in subsidiary
trust holding solely debentures
of the company 14.4 11.5 16.3 -- -- -- --
-------- -------- -------- -------- -------- ------ ------
Total fixed charges 788.0 711.9 962.0 856.4 839.4 621.9 516.0
-------- -------- -------- -------- -------- ------ ------
Total earnings before provisions for
income taxes and fixed charges $1,177.5 $1,088.5 $1,450.1 $1,272.2 $1,204.5 $946.9 $826.8
======== ======== ======== ======== ======== ====== ======
Ratio of Earnings to Fixed Charges 1.49 1.53 1.51 1.49 1.44 1.52 1.60
</TABLE>
Exhibit 23.1
Independent Auditors' Consent
The Board of Directors
The CIT Group, Inc.:
We consent to the use of our report dated January 28, 1998 relating to the
consolidated balance sheets of The CIT Group, Inc. and subsidiaries as of
December 31, 1997 and 1996, and the related consolidated statements of income,
changes in stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1997, incorporated by reference in
Amendment No. 1 to Registration Statement No. 333-71361 on Form S-3 of The CIT
Group, Inc. which report appears in the December 31, 1997 Annual Report on Form
10-K of The CIT Group, Inc. and to the reference to our firm under the heading
"Experts" in the Registration Statement.
KPMG LLP
Short Hills, New Jersey
February 10, 1999
Exhibit 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) |__|
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
The CIT Group, Inc.
(Exact name of obligor as specified in its charter)
Delaware 13-2994534
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1211 Avenue of the Americas 10036
New York, New York (Zip code)
(Address of principal executive offices)
---------------------------
Senior/Senior Subordinated Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
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.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank 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 31st day of January, 1999.
THE BANK OF NEW YORK
By: /s/ MICHELE L. RUSSO
------------------------------
Name: MICHELE L. RUSSO
Title: Assistant Treasurer
- 3 -
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........ $ 7,301,241
Interest-bearing balances ................................. 1,385,944
Securities:
Held-to-maturity securities ............................... 1,000,737
Available-for-sale securities ............................. 4,240,655
Federal funds sold and Securities purchased under
agreements to resell ..................................... 971,453
Loans and lease financing receivables:
Loans and leases, net of unearned
income ...................................... 38,788,269
LESS: Allowance for loan and
lease losses................................. 632,875
LESS: Allocated transfer risk
reserve...................................... 0
Loans and leases, net of unearned income,
allowance, and reserve .................................. 38,155,394
Assets held in trading accounts .............................. 1,307,562
Premises and fixed assets (including capitalized
leases) ................................................... 670,445
Other real estate owned ...................................... 13,598
Investments in unconsolidated subsidiaries and
associated companies ...................................... 215,024
Customers' liability to this bank on acceptances ............. 974,237
outstanding
Intangible assets ............................................ 1,102,625
Other assets ................................................. 1,944,777
------------
Total assets ................................................. $ 59,283,692
============
LIABILITIES
Deposits:
In domestic offices ....................................... $ 26,930,258
Noninterest-bearing............................ 11,579,390
Interest-bearing............................... 15,350,868
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ................................. 16,117,854
Noninterest-bearing............................. 187,464
Interest-bearing................................ 15,930,390
Federal funds purchased and Securities sold under
agreements to repurchase ................................. 2,170,238
Demand notes issued to the U.S.Treasury ...................... 300,000
Trading liabilities .......................................... 1,310,867
Other borrowed money:
With remaining maturity of one year or less ............... 2,549,479
With remaining maturity of more than one year
through three years ..................................... 0
With remaining maturity of more than three years .......... 46,654
Bank's liability on acceptances executed and
outstanding ............................................... 983,398
Subordinated notes and debentures ............................ 1,314,000
Other liabilities ............................................ 2,295,520
------------
Total liabilities ............................................ 54,018,268
------------
EQUITY CAPITAL
Common stock ................................................. 1,135,284
Surplus ...................................................... 731,319
Undivided profits and capital reserves ....................... 3,385,227
Net unrealized holding gains (losses) on
available-for-sale securities ............................. 51,233
Cumulative foreign currency translation adjustments .......... (37,639)
------------
Total equity capital ......................................... 5,265,424
------------
Total liabilities and equity capital ......................... $ 59,283,692
============
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
- --------------------------------------------------------------------------------
Exhibit 25.2
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) __________________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
THE CIT GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-2994534
(State or other jurisdiction of (I.R.S.employer
incorporation or organization) Identification number)
1211 Avenue of the Americas 10036
New York, New York (Zip Code)
(Address of Principal Executive Offices)
Senior Debt Securities
(Title of the indenture securities)
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervision authority to
which it is subject.
Comptroller of Currency, Washington, D. C., Federal Deposit
Insurance Corporation, Washington, D. C., The Board of
Governors of the Federal Reserve System, Washington, D. C..
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of Exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not applicable.
6. The consent of the trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 16 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc., filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
2
<PAGE>
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago, and State of
Illinois, on the 28th day of January, 1999.
The First National Bank of Chicago,
Trustee,
By: /s/ Steven M. Wagner
----------------------------------
Steven M. Wagner
First Vice President
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 28, 1999
Securities and Exchange Commission
Washington, D. C. 20549
Gentlemen:
In connection with the qualification of an indenture between The CIT Group, Inc.
and The First National Bank of Chicago, as trustee, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State Authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Steven M. Wagner
--------------------------------
Steven M. Wagner
First Vice President
4
<PAGE>
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
Dollar Amounts in Thousands C400
RCFD BIL MIL THOU ------
---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RCFD
RC-A): ----
a. Noninterest-bearing balances and currency and coin(1)........... 0081 4,898,646 1.a.
b. Interest-bearing balances(2).................................... 0071 4,612,143 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)....... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).... 1773 9,817,318 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,071,229 3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)..................................................... 2122 26,327,215 4.a.
b. LESS: Allowance for loan and lease losses....................... 3123 412,850 4.b.
c. LESS: Allocated transfer risk reserve........................... 3128 0 4.c.
RCFD
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c)............................ 2125 25,914,365 4.d.
5. Trading assets (from Schedule RD-D)................................ 3545 6,924,064 5.
6. Premises and fixed assets (including capitalized leases)........... 2145 731,747 6.
7. Other real estate owned (from Schedule RC-M)....................... 2150 6,424 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)..................................... 2130 153,385 8.
9. Customers' liability to this bank on acceptances outstanding....... 2155 352,324 9.
10. Intangible assets (from Schedule RC-M)............................. 2143 295,823 10.
11. Other assets (from Schedule RC-F).................................. 2160 2,193,803 11.
12. Total assets (sum of items 1 through 11)........................... 2170 61,971,271 12.
- ----------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
Dollar Amounts in
Thousands
-----------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1)............................... 2200 20,965,124 13.a
(1) Noninterest-bearing(1)................................ 6631 9,191,662 13.a1
(2) Interest-bearing...................................... ` 6636 11,773,462 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)........................ 2200 15,912,956 13.b
(1) Noninterest bearing................................... 6631 475,182 13.b1
(2) Interest-bearing...................................... 6636 15,437,774 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,245,925 14.
15. a. Demand notes issued to the U.S. Treasury.................. RCON 2840 359,381 15.a
b. Trading Liabilities (from Schedule RC-D).................. RCFD 3548 5,614,049 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less................ 2332 4,603,402 16.a
b. With original maturity of more than one year............. A547 328,001 16.b
c. With original maturity or more than three years .......... A548 324,984 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding...... 2920 352,324 18.
19. Subordinated notes and debentures............................ 3200 2,400,000 19.
20. Other liabilities (from Schedule RC-G)....................... 2930 1,833,935 20.
21. Total liabilities (sum of items 13 through 20)............... 2948 56,940,081 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................ 3838 0 23.
24. Common stock......................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)..... 3839 3,192,857 25.
26. a. Undivided profits and capital reserves.................... 3632 1,614,511 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities............................................. 8434 27,815 26.b
27. Cumulative foreign currency translation adjustments........... 3284 (4,851) 27.
28. Total equity capital (sum of items 23 through 27)............. 3210 5,031,190 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)......................... 3300 61,971,271 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the most
comprehensive level of auditing work performed for the bank by independent external --------------- Number
auditors as of any date during 1996..................................................RCFD 6724........ N/A M.1.
---------------
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
= Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
Exhibit 25.3
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) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Carolyn Potter, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2531 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
The CIT Group, Inc.
(Name of obligor)
Delaware 13-2994534
(State of Incorporation) (I.R.S. Employer Identification No.)
1211 Avenue of the Americas
New York, New York 10036
(Address of principal executive offices)
Debt Securities
(Title of indenture securities)
<PAGE>
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.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164 West
Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance
Corporation, Washington, D.C.; The Board of Governors of the Federal
Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise corporate
trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee,
describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as now
in effect and includes the authority of the Trustee to commence
business and to exercise corporate trust powers was filed in
connection with the Registration Statement of Louisville Gas and
Electric Company, File No. 2-44295, and is incorporated herein by
reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 29th day of January, 1999.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
------------------------------
J. Bartolini
Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that
reports of examinations of said trustee by Federal and State authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ J. Bartolini
-----------------------------
J. Bartolini
Vice President
2
<PAGE>
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1998, as published in accordance with
a call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
[LOGO] HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1998, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
THOUSANDS
ASSETS OF DOLLARS
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin ...... $ 1,097,714
Interest bearing ......................................... $ 213,712
balances
Securities:
a. Held-to-maturity securities ................................. $ 0
b. Available-for-sale securities ............................... $ 5,036,734
Federal funds sold and securities purchased under agreements
to resell ..................................................... $ 48,950
Loans and lease financing receivables:
Loans and leases, net of unearned income .... $ 9,111,098
LESS: Allowance for loan and lease losses .. $ 104,900
-----------
Loans and leases, net of unearned income,
allowance, and reserve
(item 4.a minus 4.b) .................................... $ 9,006,198
Assets held in trading
accounts ........................................................ $ 202,008
Premises and fixed assets (including capitalized leases) ........ $ 245,290
Other real estate owned ......................................... $ 365
Investments in unconsolidated subsidiaries and associated
companies .................................................... $ 41
Customer's liability to this bank on acceptances outstanding .... $ 34,997
Intangible assets .............................................. $ 260,477
Other assets .................................................... $ 1,148,163
-----------
TOTAL ASSETS .................................................... $17,294,649
===========
3
<PAGE>
LIABILITIES
Deposits:
In domestic offices ............................................ $ 9,467,895
Non-interest bearing ......................... $ 2,787,471
Interest bearing ............................. $ 6,680,424
In foreign offices, Edge and Agreement subsidiaries, and IBF's . $ 1,268,759
Non-interest bearing ......................... $ 23,329
Interest bearing ............................. $ 1,245,430
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBF's: Federal funds
purchased & securities sold under agreements to repurchase ....... $ 3,118,548
Trading Liabilities .............................................. 110,858
Other borrowed money:
a. With remaining maturity of one year or less .................. $ 1,202,050
b. With remaining maturity of more than one year ................ $ 0
Bank's liability on acceptances executed and outstanding ......... $ 34,997
Subordinated notes and debentures ............................... $ 225,000
Other liabilities ................................................ $ 530,224
-----------
TOTAL LIABILITIES ................................................ $15,958,331
===========
EQUITY CAPITAL
Common stock .................................................... $ 100,000
Surplus ......................................................... $ 604,834
a. Undivided profits and capital reserves ...................... $ 580,271
b. Net unrealized holding gains (losses) on
available-for-sale securities ........................... $ 51,213
-----------
TOTAL EQUITY CAPITAL ............................................ $ 1,336,318
===========
Total liabilities, limited-life preferred stock, and equity
capital ......................................................... $17,294,649
===========
I, Pamela Piarowski, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
PAMELA PIAROWSKI
10/29/98
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and the
Commissioner of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
CHARLES SHAW
Directors.
4
