PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 13, 1999)
$3,000,000,000
AMERICAN GENERAL FINANCE CORPORATION
MEDIUM-TERM NOTES, SERIES F
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
------------------------
THE COMPANY: American General Finance Corporation. Our principal executive
office is located at 601 N.W. Second Street, Evansville, Indiana 47708, and our
telephone number is (812) 424-8031.
THE NOTES: We plan to offer and sell notes from time to time with various terms,
including the following:
o Ranking as our senior indebtedness
o Stated maturities of nine months or more from date of issue
o Redemption and/or repayment provisions, if applicable, whether mandatory or
at our option or at the option of the noteholders
o Payments in U.S. dollars
o Minimum denominations of $1,000
o Book-entry (through DTC) or certificated form
o Interest payments on fixed rate notes on each April 15 and October 15
o Interest at fixed or floating rates, or no interest at all. Floating
interest rates may be based on one or more bases, including the following
bases, plus or minus a spread and/or times a spread multiplier:
o CD rate
o CMT rate
o Commercial paper rate
o Eleventh district cost of funds rate
o Federal funds rate
o LIBOR
o Prime rate
o Treasury rate
o Interest payments on floating rate notes on a monthly, quarterly,
semiannual or annual basis
We will specify the final terms for each note issuance, which may be different
from the terms described in this prospectus supplement, in the applicable
pricing supplement.
INVESTING IN THE NOTES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" ON PAGE S-3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement, the accompanying prospectus or any pricing supplement is
truthful or complete. Any representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
PUBLIC AGENTS' DISCOUNTS PROCEEDS, BEFORE EXPENSES, TO
OFFERING PRICE AND COMMISSIONS AMERICAN GENERAL FINANCE CORPORATION
----------------- ----------------------------- ---------------------------------------
<S> <C> <C> <C>
Per note............................. 100% Not to exceed .875% Not less than 99.125%
Total................................ $3,000,000,000 Not to exceed $26,250,000 Not less than $2,973,750,000
</TABLE>
We may sell notes to the agents referred to below as principal for resale
at varying or fixed offering prices or through the agents, on an agency basis,
using their reasonable efforts on our behalf. We may also sell notes through or
to other agents.
If we sell other debt securities referred to in the accompanying
prospectus, the amount of notes that we may offer and sell under this prospectus
supplement will be reduced.
------------------------
AMERICAN GENERAL SECURITIES INCORPORATED
FIRST UNION SECURITIES, INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
------------------------
The date of this prospectus supplement is November 1, 1999.
<PAGE>
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
Risk Factors ..................................................... S-3
Description of the Notes ......................................... S-4
United States Federal Income Taxation ............................ S-19
Plan of Distribution ............................................. S-25
PROSPECTUS
PAGE
----
About this Prospectus ............................................ 2
Where You Can Find More Information .............................. 2
Incorporation of Information We File with the SEC ................ 2
Special Note Regarding Forward-Looking Statements ................ 3
American General Finance Corporation ............................. 3
Use of Proceeds .................................................. 3
Selected Financial Information ................................... 4
Ratio of Earnings to Fixed Charges ............................... 5
Description of Debt Securities ................................... 5
Plan of Distribution ............................................. 14
Legal Opinions ................................................... 16
Experts .......................................................... 16
References in this prospectus supplement to "AGFC", "we", "us" and
"our" are to American General Finance Corporation.
References in this prospectus supplement to "AGSI" are to our affiliate,
American General Securities Incorporated, which is one of the agents through
which we may sell notes. References to the "Unaffiliated Agents" are to the
other agents named on the front cover of this prospectus supplement and
references to the "agents" are to AGSI and the Unaffiliated Agents,
collectively.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the accompanying prospectus and any
pricing supplement. Neither we nor any of the agents has authorized any other
person to provide you with different or additional information. If anyone
provides you with different or additional information, you should not rely on
it. Neither we nor any of the agents are making an offer to sell the notes in
any jurisdiction where the offer or sale is not permitted. You should assume
that the information contained or incorporated by reference in this prospectus
supplement, the accompanying prospectus and any pricing supplement is accurate
only as of the date of the applicable pricing supplement. Our business,
financial condition and results of operations may have changed since that date.
S-2
<PAGE>
RISK FACTORS
Your investment in the notes involves certain risks. In consultation with
your own financial and legal advisers, you should carefully consider, among
other matters, the following discussion of risks before deciding whether an
investment in the notes is suitable for you. The notes are not an appropriate
investment for you if you are unsophisticated with respect to the significant
components of the notes.
REDEMPTION MAY ADVERSELY AFFECT YOUR RETURN ON THE NOTES
If your notes are redeemable at our option or are otherwise subject to
mandatory redemption, we may, in the case of optional redemption, or must, in
the case of mandatory redemption, redeem your notes at times when prevailing
interest rates may be relatively low. In these situations, you generally will
not be able to reinvest the redemption proceeds in a comparable security at an
effective interest rate as high as that of the notes.
THERE MAY BE AN UNCERTAIN TRADING MARKET FOR YOUR NOTES; MANY FACTORS AFFECT THE
TRADING VALUE OF YOUR NOTES
We cannot assure you that a trading market for your notes will ever develop
or be maintained. Many factors independent of our creditworthiness may affect
the trading market for your notes. These factors include:
o the method of calculating the principal, premium and interest in
respect of the notes,
o the time remaining to the maturity of the notes,
o the outstanding amount of the notes,
o the redemption features of the notes, and
o the level, direction and volatility of market interest rates
generally.
In addition, because some notes may be designed for specific investment
objectives or strategies, these notes will have a more limited trading market
and experience more price volatility. There may be a limited number of buyers
for these notes. This may affect the price you receive for these notes or your
ability to sell these notes at all. You should not purchase notes unless you
understand and know you can bear the related investment risks.
OUR CREDIT RATINGS MAY NOT REFLECT ALL RISKS OF AN INVESTMENT IN THE NOTES
Our credit ratings are an assessment of our ability to pay our obligations.
Consequently, real or anticipated changes in our credit ratings will generally
affect the market value of your notes. Our credit ratings, however, may not
reflect the potential impact of risks related to market or other factors
discussed above on the value of your notes.
S-3
<PAGE>
DESCRIPTION OF THE NOTES
FOR EACH NOTE WE OFFER AND SELL, WE WILL PREPARE A PRICING SUPPLEMENT TO
THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS. THE PRICING SUPPLEMENT
WILL INCLUDE THE SPECIFIC TERMS OF THE NOTE OR NOTES TO WHICH IT RELATES AND MAY
INCLUDE MODIFICATIONS OF OR ADDITIONS TO THE MORE GENERAL TERMS DESCRIBED IN
THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS. THROUGHOUT THE FOLLOWING
DISCUSSION OF THE TERMS OF THE NOTES, WE WILL REFER TO VARIOUS "SPECIFIED"
TERMS OF THE NOTES, AND, UNLESS OTHERWISE STATED, THOSE REFERENCES MEAN THE
TERMS SPECIFIED IN THE APPLICABLE PRICING SUPPLEMENT AND THE NOTES. EXCEPT AS
OTHERWISE SPECIFIED IN THE PRICING SUPPLEMENT RELATING TO A NOTE, THE NOTE WILL
HAVE THE TERMS DESCRIBED BELOW AND IN THE ACCOMPANYING PROSPECTUS UNDER THE
CAPTION "DESCRIPTION OF DEBT SECURITIES". IF THE PRICING SUPPLEMENT RELATING
TO THE NOTE SPECIFIES DIFFERENT TERMS, THEN THE NOTE WILL HAVE THE TERMS
SPECIFIED IN THE PRICING SUPPLEMENT.
TERMS OF THE NOTES
The notes will be issued as a series of debt securities under the indenture
described in the accompanying prospectus. All of the debt securities, including
the notes, issued and to be issued under the indenture will be our unsecured
general obligations and will rank equally with all of our other unsecured and
unsubordinated indebtedness from time to time outstanding.
The indenture does not limit the aggregate principal amount of debt
securities that we may issue. We may, from time to time, without the consent of
the holders of the notes, provide for the issuance of notes or other debt
securities under the indenture in addition to the $3,000,000,000 aggregate
principal amount of notes offered by this prospectus supplement. The aggregate
principal amount of notes that may be offered and sold by this prospectus
supplement will be reduced if we sell other debt securities under the
registration statement of which this prospectus supplement and the accompanying
prospectus are a part.
We will offer the notes on a continuing basis. They will mature on a day
nine months or more from the date of issue, as selected by the purchaser and
agreed to by us. Each interest-bearing note will bear interest at either a fixed
or floating rate. Notes may be issued at significant discounts from their
principal amounts payable on their stated maturity dates or on any earlier date
on which the principal or an installment of principal becomes due and payable,
whether by the declaration of acceleration, call for redemption at our option,
repayment at the option of the holder or otherwise (the stated maturity date or
such earlier date, as the case may be, is referred to as a "Maturity"). Some
notes may not bear interest.
We may change from time to time the interest rates, interest rate bases and
other variable terms of the notes offered by this prospectus supplement, but no
change will affect any note already issued or as to which we have accepted an
offer to purchase. The interest rates we offer with respect to the notes may
differ depending upon, among other things, the aggregate principal amount of
notes purchased in any transaction. At any given time, we may offer notes with
different interest rates or other variable terms to different investors.
We will issue each note in fully registered form in a denomination of
$1,000 or an integral multiple of $1,000. We may issue notes either in
book-entry form or in certificated form. Notes in book-entry form may be
transferred or exchanged only through a participating member of the depositary
for the notes, which will be The Depository Trust Company, also known as DTC,
unless otherwise specified. See "-- Book-Entry Notes" in this prospectus
supplement and "Description of Debt Securities -- Global Debt Securities" in
the accompanying prospectus. Notes in certificated form may be transferred or
exchanged at the corporate trust office of the trustee. We will not impose a
service charge for any transfer or exchange of notes, but we may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection with any transfer or exchange, other than exchanges pursuant to the
indenture not involving any transfer.
We will pay the principal of, and premium and interest, if any, on notes in
book-entry form to the depositary or its nominee. See "-- Book-Entry Notes" in
this prospectus supplement and
S-4
<PAGE>
"Description of Debt Securities -- Global Debt Securities" in the accompanying
prospectus. In the case of notes in certificated form:
o We will pay the principal and premium, if any, due at Maturity in
immediately available funds upon presentation of the note and, in the
case of any repayment on an optional repayment date, upon submission
of a duly completed election form if and as required by the provisions
described below, at the corporate trust office of the trustee in the
Borough of Manhattan, The City of New York, or at any other place we
may designate.
o We will pay interest due at Maturity to the same person to whom we pay
the principal of the note.
o We will pay interest due other than at Maturity at the corporate trust
office of the trustee or, at our option, by check mailed to the
address of the person entitled to receive payment as the address
appears in the security register. Notwithstanding the immediately
preceding sentence, a holder of $1,000,000 or more in aggregate
principal amount of notes in certificated form, whether having
identical or different terms and provisions, having the same interest
payment dates will, at our option, be entitled to receive interest
payments, other than at Maturity, by wire transfer of immediately
available funds if appropriate wire transfer instructions have been
received in writing by the trustee not less than 15 days prior to the
applicable interest payment date. Any wire instructions received by
the trustee shall remain in effect until revoked by the holder.
REDEMPTION AT THE OPTION OF AGFC
The notes will not be subject to any sinking fund. We may redeem a note at
our option prior to its stated maturity date only if an initial redemption date
is specified for the note, in which case we may redeem the note in whole or from
time to time in part on any date on or after the specified initial redemption
date at the redemption price referred to below together with interest payable to
the redemption date. We will notify the holder of any note to be redeemed not
more than 60 nor less than 30 days before the redemption date. If we redeem a
note, we will do so in increments of $1,000, provided that any remaining
principal amount will be an authorized denomination of the note. Unless
otherwise specified, the redemption price will initially be a specified
percentage of the principal amount to be redeemed and will decline by a
specified percentage at each anniversary of the initial redemption date until
the redemption price is 100% of the principal amount to be redeemed. If we
redeem notes in book-entry form, we will send the notice of redemption to the
depositary. If less than all of the notes in book-entry form of like tenor and
terms are being redeemed, DTC's practice is to determine by lot the amount of
the interest of each participating member of DTC in the issue to be redeemed.
REPAYMENT AT THE OPTION OF THE HOLDER
We will repay a note before its stated maturity date at the option of the
holder of the note only if an optional repayment date is specified for the note,
in which case, at the option of the holder we will repay the note in whole or in
part on the specified repayment date. Any repayment in part will be in an amount
equal to $1,000 or an integral multiple of $1,000, provided that any remaining
principal amount will be an authorized denomination of the note. The price for
any note so repaid will be 100% of the principal amount to be repaid, together
with interest payable to the date of repayment. For any note to be repaid, the
trustee must receive, at its office maintained for such purpose in the Borough
of Manhattan, The City of New York, currently its corporate trust office, not
more than 60 nor less than 30 days before the optional repayment date, notice of
the holder's exercise of the repayment option, consisting of:
o in the case of a note in certificated form, the note and the form
entitled "Option to Elect Repayment" duly completed, or
S-5
<PAGE>
o in the case of a note in book-entry form, instructions to that effect
from the beneficial owner to the depositary and forwarded by the
depositary.
Notice of a holder's exercise of the repayment option must be received by the
trustee by 5:00 P.M., New York City time, on the last day for giving such
notice. Exercise of the repayment option by the holder of a note will be
irrevocable.
Only the depositary may exercise the repayment option in respect of global
securities representing notes in book-entry form. Accordingly, beneficial owners
of global securities that desire to have all or any portion of the notes in
book-entry form represented by global securities repaid must instruct the
participant through which they own their interest to direct the depositary to
exercise the repayment option on their behalf by forwarding the repayment
instructions to the trustee as discussed above. In order to ensure that the
instructions are received by the trustee on a particular day, the applicable
beneficial owner must so instruct the participant through which it owns its
interest before that participant's deadline for accepting instructions for that
day. Different firms may have different deadlines for accepting instructions
from their customers. Accordingly, beneficial owners of notes in book-entry form
should consult the participants through which they own their interest for the
respective deadlines. All instructions given to participants from beneficial
owners of notes in book-entry form relating to the option to elect repayment
will be irrevocable. In addition, at the time instructions are given, each
beneficial owner will cause the participant through which it owns its interest
to transfer its interest in the global security or securities representing the
related notes in book-entry form, on the depositary's records, to the trustee.
See "-- Book-Entry Notes".
If applicable, we will comply with the requirements of Section 14(e) of the
Exchange Act and the rules promulgated thereunder and any other securities laws
or regulations in connection with any repayment at the option of the holder.
We may at any time purchase notes at any price or prices in the open market
or otherwise. Notes so purchased may, at our discretion, be held, resold or
surrendered to the trustee for cancellation.
INTEREST
Each interest-bearing note will bear interest from and including the date
of issue at the rate per annum or, in the case of a floating rate note, pursuant
to the specified interest rate formula, until the principal of the note is paid
or made available for payment. Interest will be payable in arrears on each
interest payment date and at Maturity. The first payment of interest on any note
originally issued between a regular record date and the related interest payment
date will be made on the interest payment date immediately following the next
succeeding regular record date to the registered holder on the next succeeding
regular record date. The regular record date will be the fifteenth calendar day,
whether or not a Business Day, immediately preceding the related interest
payment date.
FIXED RATE NOTES
Each fixed rate note will bear interest from and including the date of
issue at the rate per annum stated on the face of the note until the principal
amount of the note is paid or made available for payment. Interest payments on
fixed rate notes will equal the amount of interest accrued from and including
the immediately preceding interest payment date in respect of which interest has
been paid, or from and including the date of issue if no interest has been paid,
with respect to the notes to, but excluding, the related interest payment date
or Maturity, as the case may be. Interest on fixed rate notes will be computed
on the basis of a 360-day year consisting of twelve 30-day months.
Interest on fixed rate notes will be payable semiannually on April 15 and
October 15 of each year and at Maturity. If any interest payment date or the
Maturity of a fixed rate note falls on a day that is not a Business Day, the
related payment of principal, premium, if any, or interest will be made on the
next succeeding Business Day as if made on the date the payment was due, and no
interest will accrue on the amount payable for the period from and after the
interest payment date or Maturity, as the case may be.
S-6
<PAGE>
For purposes of fixed rate notes, "Business Day" means each Monday,
Tuesday, Wednesday, Thursday and Friday that is not a day on which banking
institutions in The City of New York are authorized or obligated by law or
executive order to close.
FLOATING RATE NOTES
Interest on floating rate notes will be determined by reference to the
applicable interest rate basis or interest rate bases, which may be one or more
of:
o the CD Rate,
o the CMT Rate,
o the Commercial Paper Rate,
o the Eleventh District Cost of Funds Rate,
o the Federal Funds Rate,
o LIBOR,
o the Prime Rate,
o the Treasury Rate, or
o any other specified interest rate basis or interest rate formula.
A floating rate note may bear interest with respect to two or more interest
rate bases.
INTEREST TERMS. Each applicable pricing supplement will specify the terms
of the floating rate note being delivered, including:
o whether the floating rate note is
o a "Regular Floating Rate Note",
o an "Inverse Floating Rate Note" or
o a "Floating Rate/Fixed Rate Note",
o the interest rate basis or bases,
o the Interest Reset Dates (as defined below),
o the interest rate in effect on the floating rate note for the period
from the date of issue to the first Interest Reset Date (the "Initial
Interest Rate"),
o the interest payment dates,
o the period to maturity of the instrument or obligation with respect to
which the interest rate basis or bases will be calculated (the "Index
Maturity"),
o the Maximum Interest Rate (as defined below) and Minimum Interest Rate
(as defined below), if any,
o the number of basis points to be added to or subtracted from the
related interest rate basis or bases (the "Spread"),
o the percentage by which the interest rate basis or bases will be
multiplied to determine the applicable interest rate (the "Spread
Multiplier"),
o if one of the specified interest rate bases is LIBOR, the Designated
LIBOR Page, and
o if one of the specified interest rate bases is the CMT Rate, the
Designated CMT Telerate Page and the Designated CMT Maturity Index.
S-7
<PAGE>
The interest rates applicable to the floating rate notes will be determined
as follows:
REGULAR FLOATING RATE NOTES. Unless a floating rate note is designated as
a Floating Rate/Fixed Rate Note, an Inverse Floating Rate Note or as having an
Addendum attached or as having "Other Provisions" apply relating to a
different interest rate formula, it will be a "Regular Floating Rate Note"
and, except as described below or in an applicable pricing supplement, will bear
interest at the rate determined by reference to the applicable interest rate
basis or bases:
o plus or minus the applicable Spread, if any, and/or
o multiplied by the applicable Spread Multiplier, if any.
Commencing on the first Interest Reset Date, the rate at which interest on the
Regular Floating Rate Note will be payable will be reset as of each Interest
Reset Date; provided, however, that the interest rate in effect for the period
from the date of issue to the first Interest Reset Date will be the Initial
Interest Rate.
FLOATING RATE/FIXED RATE NOTES. If a floating rate note is designated as a
"Floating Rate/Fixed Rate Note", it will bear interest at the rate determined
by reference to the applicable interest rate basis or bases:
o plus or minus the applicable Spread, if any, and/or
o multiplied by the applicable Spread Multiplier, if any.
Commencing on the first Interest Reset Date, the rate at which interest on the
Floating Rate/Fixed Rate Note will be payable will be reset as of each Interest
Reset Date; provided, however, that:
o the interest rate in effect for the period from the date of issue to
the first Interest Reset Date will be the Initial Interest Rate, and
o the interest rate in effect commencing on, and including, the date on
which interest begins to accrue on a fixed rate basis will be the
specified interest rate or, if no interest rate is specified, the
interest rate in effect on the day immediately preceding the date on
which interest begins to accrue on a fixed rate basis, and such
interest rate will continue in effect until Maturity of the note.
INVERSE FLOATING RATE NOTES. If a floating rate note is designated as an
"Inverse Floating Rate Note", except as described below it will bear interest
equal to the specified fixed interest rate minus the rate determined by
reference to the applicable interest rate basis or bases:
o plus or minus the applicable Spread, if any, and/or
o multiplied by the applicable Spread Multiplier, if any;
provided, however, that unless otherwise specified, the interest rate on the
Inverse Floating Rate Note will not be less than zero percent. Commencing on the
first Interest Reset Date, the rate at which interest on the Inverse Floating
Rate Note will be payable will be reset as of each Interest Reset Date;
provided, however, that the interest rate in effect for the period from the date
of issue to the first Interest Reset Date will be the Initial Interest Rate.
Each interest rate basis will be the rate determined by the calculation
agent in accordance with the applicable provisions below. Except as set forth
above, the interest rate in effect on each day will be (i) if such day is an
Interest Reset Date, the interest rate determined as of the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date, or (ii) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date. Interest rate changes will take effect on the
Interest Reset Dates.
S-8
<PAGE>
INTEREST RESET DATES. The applicable pricing supplement will specify the
dates on which the interest rate will be reset (each, an "Interest Reset
Date"). The Interest Reset Date will be, in the case of floating rate notes
which reset:
o daily -- each Business Day;
o weekly -- the Wednesday of each week, with the exception of weekly
reset floating rate notes as to which the Treasury Rate is an
applicable interest rate basis, which will reset the Tuesday of each
week, except as described below;
o monthly -- the third Wednesday of each month, with the exception of
monthly reset floating rate notes as to which the Eleventh District
Cost of Funds Rate is an applicable interest rate basis, which will
reset on the first calendar day of the month;
o quarterly -- the third Wednesday of March, June, September and
December of each year;
o semiannually -- the third Wednesday of the two specified months of
each year; and
o annually -- the third Wednesday of the specified month of each year;
provided, however, that with respect to Floating Rate/Fixed Rate Notes, the
interest rate will no longer reset after it converts to a fixed rate.
If any Interest Reset Date falls on a day that is not a Business Day, it
will be postponed to the next Business Day, except that in the case of a
floating rate note as to which LIBOR is an applicable interest rate basis, if
that Business Day falls in the next calendar month, then the Interest Reset Date
will be advanced to the immediately preceding Business Day. In addition, in the
case of a floating rate note for which the Treasury Rate is an applicable
interest rate basis, if the Interest Determination Date falls on an Interest
Reset Date, then the Interest Reset Date will be postponed to the next Business
Day.
MAXIMUM AND MINIMUM INTEREST RATES. A floating rate note may also have
either or both of the following:
o a maximum numerical limitation, or ceiling, on the rate at which
interest may accrue during any period (a "Maximum Interest Rate"),
and
o a minimum numerical limitation, or floor, on the rate at which
interest may accrue during any period (a "Minimum Interest Rate").
The Indenture is, and any notes issued under the Indenture will be,
governed by and construed in accordance with the laws of the State of New York.
Under present New York law, the maximum rate of interest is 25% per annum on a
simple interest basis. This limit may not apply to securities in which
$2,500,000 or more has been invested. While we believe that New York law would
be given effect by a state or federal court sitting outside of New York, state
laws frequently regulate the amount of interest that may be charged to and paid
by a borrower, including, in some cases, corporate borrowers. It is suggested
that prospective investors consult their personal advisors with respect to the
applicability of these laws.
INTEREST PAYMENTS. Each applicable pricing supplement will specify the
dates on which interest will be payable. Each floating rate note will bear
interest from and including the date of issue until the principal of the note is
paid or made available for payment. Except as provided below or in the
applicable pricing supplement, the interest payment dates with respect to
floating rate notes will be, in the case of floating rate notes which reset:
o daily, weekly or monthly -- the third Wednesday of each month or the
third Wednesday of March, June, September and December of each year,
as specified;
o quarterly -- the third Wednesday of March, June, September and
December of each year;
o semiannually -- the third Wednesday of the two specified months of
each year;
o annually -- the third Wednesday of the specified month of each year;
and
S-9
<PAGE>
o at Maturity.
If any interest payment date for any floating rate note, other than an
interest payment date at Maturity, falls on a day that is not a Business Day,
the interest payment date will be postponed to the next Business Day, except
that, in the case of a floating rate note as to which LIBOR is an applicable
interest rate basis, if that Business Day falls in the next calendar month, then
the interest payment date will be advanced to the immediately preceding Business
Day. If the Maturity of a floating rate note falls on a day that is not a
Business Day, the payment of principal, premium, if any, and interest will be
made on the next Business Day, and no interest on such payment will accrue for
the period from and after the Maturity.
For purposes of floating rate notes, "Business Day" means each Monday,
Tuesday, Wednesday, Thursday and Friday that is not a day on which banking
institutions in The City of New York are authorized or obligated by law or
executive order to close; provided, however, that, with respect to notes as to
which LIBOR is an applicable interest rate basis, the day must also be a London
Business Day. "London Business Day" means a day on which commercial banks are
open for business in London.
All percentages resulting from any calculation on floating rate notes will
be rounded to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upward. For example,
5.876545%, or .05876545, would be rounded to 5.87655%, or .0587655. All dollar
amounts used in or resulting from any calculation on floating rate notes will be
rounded to the nearest cent, with one-half cent being rounded upward.
Interest payments on floating rate notes will equal the amount of interest
accrued from and including the immediately preceding interest payment date in
respect of which interest has been paid, or from and including the date of issue
if no interest has been paid, to but excluding the related interest payment date
or Maturity.
With respect to each floating rate note, accrued interest is calculated by
multiplying its face amount by an accrued interest factor. The accrued interest
factor is computed by adding the interest factor calculated for each day in the
period for which accrued interest is being calculated.
o In the case of notes for which the interest rate basis is the CD Rate,
the Commercial Paper Rate, the Eleventh District Cost of Funds Rate,
the Federal Funds Rate, LIBOR or the Prime Rate, the interest factor
for each day will be computed by dividing the interest rate applicable
to each day by 360.
o In the case of notes for which the interest rate basis is the CMT Rate
or the Treasury Rate, the interest factor for each day will be
computed by dividing the interest rate applicable to each day by the
actual number of days in the year.
o The interest factor for notes for which the interest rate is
calculated with reference to two or more interest rate bases will be
calculated in each period in the same manner as if only one of the
applicable interest rate bases applied.
INTEREST DETERMINATION DATES. The interest rate applicable to each
interest period commencing on the Interest Reset Date with respect to that
interest period will be the rate determined as of the applicable "Interest
Determination Date".
o The Interest Determination Date with respect to CD Rate Notes, CMT
Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes and
Prime Rate Notes will be the second Business Day preceding the related
Interest Reset Date.
o The Interest Determination Date with respect to Eleventh District Cost
of Funds Rate Notes will be the last working day of the month
immediately preceding the month in which the related Interest Reset
Date falls on which the Federal Home Loan Bank of San Francisco
normally publishes the Index, as defined below.
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o The Interest Determination Date with respect to LIBOR Notes will be
the second London Business Day preceding the related Interest Reset
Date.
o The Interest Determination Date with respect to Treasury Rate Notes
will be the day in the week in which the related Interest Reset Date
falls on which direct obligations of the United States ("Treasury
Bills") are auctioned; provided, however, that if due to a legal
holiday the auction normally held in that week is advanced to the
Friday of the prior week, the Interest Determination Date will be that
Friday. Treasury Bills are normally sold at auction on Monday of each
week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday or the preceding Friday. If the
auction is held on the following Tuesday or any other Interest Reset
Date, then the Interest Reset Date that otherwise would have been on
that day will be postponed to the next Business Day. If no auction is
held for a particular week, the Interest Determination Date pertaining
to the Interest Reset Date occurring in that week will be the first
Business Day of that week.
o The Interest Determination Date pertaining to a floating rate note the
interest rate of which is determined with reference to two or more
interest rate bases will be the latest Business Day which is at least
two Business Days before the related Interest Reset Date on which each
interest rate basis is determinable. Each interest rate basis will be
determined as of the Interest Determination Date, and the applicable
interest rate will take effect on the related Interest Reset Date.
CALCULATION AGENT AND CALCULATION DATE. Citibank, N.A. will be the
calculation agent. Upon the request of the holder of any floating rate note, the
calculation agent will provide the interest rate then in effect and, if
determined, the interest rate that will become effective as a result of a
determination made for the next Interest Reset Date with respect to that
floating rate note. The calculation date, if applicable, pertaining to any
Interest Determination Date will be the earlier of:
o the tenth calendar day after the applicable Interest Determination
Date, or, if the tenth calendar day is not a Business Day, the next
Business Day or
o the Business Day preceding the applicable interest payment date or
Maturity, as the case may be.
CD RATE. CD Rate Notes will bear interest at rates calculated with
reference to the CD Rate and the specified Spread and/or Spread Multiplier, if
any.
"CD Rate" means:
(1) the rate on the applicable Interest Determination Date for
negotiable United States dollar certificates of deposit having
the specified Index Maturity, as published in H.15(519) opposite
the caption "CDs (secondary market)", or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the
rate on the applicable Interest Determination Date for negotiable
United States dollar certificates of deposit having the specified
Index Maturity, as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying
the applicable rate, opposite the caption "CDs (secondary
market)", or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the
rate calculated by the calculation agent as the arithmetic mean
of the secondary market offered rates for Negotiable CDs, as
quoted as of 10:00 A.M., New York City time, on the applicable
Interest Determination Date by three leading non-bank dealers in
negotiable United States dollar certificates of deposit in The
City of New York (which may include one or more of the
Unaffiliated Agents or one or more of their affiliates) selected
by the calculation agent, or
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(4) if one or more of the dealers selected by the calculation agent
are not quoting as mentioned in clause (3), the rate in effect on
the applicable Interest Determination Date.
"Negotiable CDs" means negotiable United States dollar certificates of
deposit of major United States money center banks with a remaining maturity
closest to the specified Index Maturity and in an amount that is representative
for a single transaction in the market at the time.
"H.15(519)" means the weekly statistical release designated as H.15(519),
or any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication.
CMT RATE. CMT Rate Notes will bear interest at rates calculated with
reference to the CMT Rate and the specified Spread and/or Spread Multiplier, if
any.
"CMT Rate" means:
(1) the rate displayed on the Designated CMT Telerate Page under the
caption ". . . . Treasury Constant Maturities . . . . Federal
Reserve Board Release H.15 . . . . Mondays Approximately 3:45
P.M.", under the column for the Designated CMT Maturity Index for:
o if the Designated CMT Telerate Page is 7051, the applicable
Interest Determination Date, and
o if the Designated CMT Telerate Page is 7052, the specified
weekly or monthly average for the week or the month, as
applicable, ended immediately preceding the week or the month,
as applicable, in which the related Interest Determination
Date falls, or
(2) if the rate referred to in clause (1) is no longer displayed on
the relevant page or is not so displayed by 3:00 P.M., New York
City time, on the related calculation date, the treasury constant
maturity rate for the Designated CMT Maturity Index published in
H.15(519), or
(3) if the rate referred to in clause (2) is no longer published or is
not published by 3:00 P.M., New York City time, on the related
calculation date, the treasury constant maturity rate for the
Designated CMT Maturity Index, or other United States Treasury
rate for the Designated CMT Maturity Index, for the applicable
Interest Determination Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United
States Department of the Treasury that the calculation agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519), or
(4) if the rate referred to in clause (3) is not so published by 3:00
P.M., New York City time, on the related calculation date, the
rate calculated by the calculation agent as a yield to maturity
based on the arithmetic mean of the secondary market bid prices as
of approximately 3:30 P.M., New York City time, on the applicable
Interest Determination Date reported, according to their written
records, by three leading primary United States government
securities dealers in The City of New York (which may include one
or more of the Unaffiliated Agents or one or more of their
affiliates) (each, a "Reference Dealer") selected by the
calculation agent from five Reference Dealers selected by the
calculation agent after eliminating the highest quotation or, in
the event of equality, one of the highest, and the lowest
quotation or, in the event of equality, one of the lowest, for the
most recently issued direct noncallable fixed rate obligations of
the United States ("Treasury Notes") with an original maturity
of
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approximately the Designated CMT Maturity Index and a remaining
term to maturity of not less than such Designated CMT Maturity
Index minus one year, or
(5) if three or four and not five Reference Dealers selected by the
calculation agent are quoting as referred to in clause (4), the
rate will be calculated by the calculation agent as the arithmetic
mean of the offered rates obtained and neither the highest nor the
lowest of such quotes will be eliminated, or
(6) if the calculation agent is unable to obtain three applicable
Treasury Note quotations as referred to in clause (4), the rate
calculated by the calculation agent as a yield to maturity based
on the arithmetic mean of the secondary market bid prices as of
approximately 3:30 P.M., New York City time, on the applicable
Interest Determination Date of three Reference Dealers selected by
the calculation agent from five Reference Dealers selected by the
calculation agent after eliminating the highest quotation or, in
the event of equality, one of the highest, and the lowest
quotation or, in the event of equality, one of the lowest, for
Treasury Notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and
a remaining term to maturity closest to the Designated CMT
Maturity Index and in an amount of at least $100 million, or
(7) if three or four and not five Reference Dealers selected by the
calculation agent are quoting as referred to in clause (6), the
rate will be calculated by the calculation agent as the arithmetic
mean of the offered rates obtained and neither the highest nor the
lowest of such quotes will be eliminated, or
(8) if fewer than three Reference Dealers selected by the calculation
agent are quoting as mentioned in clause (6), the rate in effect
on the applicable Interest Determination Date.
If two Treasury Notes with an original maturity as described in clause (5)
have remaining terms to maturity equally close to the Designated CMT Maturity
Index, the calculation agent will obtain from five Reference Dealers quotations
for the Treasury Notes with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on Bridge Telerate, Inc.
or any successor service on the specified page or such other page as may replace
the specified page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519), or, if no page is specified, page
7052.
"Designated CMT Maturity Index" means the specified original period to
maturity of the U.S. Treasury securities, either 1, 2, 3, 5, 7, 10, 20 or 30
years, with respect to which the CMT Rate will be calculated or, if no maturity
is specified, 2 years.
COMMERCIAL PAPER RATE. Commercial Paper Rate Notes will bear interest at
rates calculated with reference to the Commercial Paper Rate and the specified
Spread and/or Spread Multiplier, if any.
"Commercial Paper Rate" means:
(1) the rate calculated by the calculation agent as the Money Market
Yield on the applicable Interest Determination Date of the rate for
commercial paper having the specified Index Maturity, as published
in H.15(519) under the caption "Commercial Paper-Nonfinancial",
or
(2) if the rate described in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate
calculated by the calculation agent as the Money Market Yield on
the applicable Interest Determination Date of the rate for
commercial paper having the specified Index Maturity, as published
in H.15 Daily
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Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption
"Commercial Paper -- Nonfinancial", or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate
calculated by the calculation agent as the Money Market Yield of
the arithmetic mean of the offered rates for commercial paper
having the specified Index Maturity placed for industrial issuers
whose bond rating is "Aa", or the equivalent, from a nationally
recognized statistical rating organization, as quoted as of
approximately 11:00 A.M., New York City time, on the applicable
Interest Determination Date by three leading dealers of United
States dollar commercial paper in The City of New York (which may
include one or more of the Unaffiliated Agents or one or more of
their affiliates) selected by the calculation agent, or
(4) if one or more of the dealers selected by the calculation agent are
not quoting as mentioned in clause (3), the rate in effect on the
applicable Interest Determination Date.
"Money Market Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.
ELEVENTH DISTRICT COST OF FUNDS RATE. Eleventh District Cost of Funds Rate
Notes will bear interest at rates calculated with reference to the Eleventh
District Cost of Funds Rate and the specified Spread and/or Spread Multiplier,
if any.
"Eleventh District Cost of Funds Rate" means:
(1) the rate equal to the monthly weighted average cost of funds for
the calendar month preceding the month in which the applicable
Interest Determination Date falls as set forth under the caption
"11th District" on the display on Bridge Telerate, Inc. or any
successor service on page 7058 or any other page as may replace
that page on that service ("Telerate Page 7058") as of 11:00
A.M., San Francisco time, on the applicable Interest Determination
Date, or
(2) if the rate referred to in clause (1) does not appear on Telerate
Page 7058 as of 11:00 A.M., San Francisco time, on the related
Interest Determination Date, the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan
Bank District that was most recently announced (the "Index") by
the Federal Home Loan Bank of San Francisco as such cost of funds
for the calendar month preceding the month in which the applicable
Interest Determination Date falls, or
(3) if the Federal Home Loan Bank of San Francisco fails to announce
the Index for the calendar month preceding the applicable Interest
Determination Date on or before the applicable Interest
Determination Date, the rate in effect on the applicable Interest
Determination Date.
FEDERAL FUNDS RATE. Federal Funds Rate Notes will bear interest at rates
calculated with reference to the Federal Funds Rate and the specified Spread
and/or Spread Multiplier, if any.
"Federal Funds Rate" means:
(1) the rate on the applicable Interest Determination Date for United
States dollar federal funds as published in H.15(519) under the
heading "Federal Funds (Effective)", as displayed on Bridge
Telerate, Inc. or any successor service on page 120 or any other
page as may replace the applicable page on that service ("Telerate
Page 120"), or
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(2) if the rate referred to in clause (1) does not appear on Telerate
Page 120 or is not so published by 3:00 P.M., New York City time,
on the related calculation date, the rate on the applicable
Interest Determination Date for United States dollar federal funds
as published in H.15 Daily Update, or such other recognized
electronic source used for the purpose of displaying the applicable
rate, opposite the caption "Federal Funds (Effective)", or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate
calculated by the calculation agent as the arithmetic mean of the
rates for the last transaction in overnight United States dollar
federal funds arranged before 9:00 A.M., New York City time, on the
applicable Interest Determination Date by three leading brokers of
United States dollar federal funds transactions in The City of New
York (which may include one or more of the Unaffiliated Agents or
one or more of their affiliates) selected by the calculation agent,
or
(4) if one or more of the brokers selected by the calculation agent are
not quoting as mentioned in clause (3), the rate in effect on the
applicable Interest Determination Date.
LIBOR. LIBOR Notes will bear interest at rates calculated with reference to
LIBOR and the specified Spread and/or Spread Multiplier, if any.
"LIBOR" means:
(1) if "LIBOR Telerate" is specified, or if neither "LIBOR Reuters"
nor "LIBOR Telerate" is specified, LIBOR will be the rate for
LIBOR Deposits that appears on the Designated LIBOR Page as of
11:00 A.M., London time, on the applicable Interest Determination
Date, or
(2) if "LIBOR Reuters" is specified, LIBOR will be the arithmetic
mean of the offered rates for LIBOR Deposits that appear on the
Designated LIBOR Page as of 11:00 A.M., London time, on the
applicable Interest Determination Date. If the Designated LIBOR
Page by its terms provides only for a single rate, then the single
rate will be used, or
(3) if, in the case of clause (1), no offered rate appears on the
Designated LIBOR Page, or if, in the case of clause (2), fewer than
two offered rates appear on the Designated LIBOR Page (and the
Designated LIBOR Page, by its terms, does not provide only for a
single rate), the rate calculated by the calculation agent as the
arithmetic mean of at least two quotations obtained by the
calculation agent after requesting the principal London offices of
each of four major reference banks in the London interbank market
(which may include one or more of the Unaffiliated Agents or one or
more of their affiliates) to provide the calculation agent with its
quotation for LIBOR Deposits to prime banks in the London interbank
market at approximately 11:00 A.M., London time, on the applicable
Interest Determination Date and in a principal amount that is
representative for a single transaction in United States dollars in
that market at that time, or
(4) if fewer than two quotations referred to in clause (3) are so
provided, the rate calculated by the calculation agent as the
arithmetic mean of the rates quoted at approximately 11:00 A.M.,
New York City time, on the applicable Interest Determination Date
by three major banks in The City of New York (which may include one
or more of the Unaffiliated Agents or one or more of their
affiliates) selected by the calculation agent for loans in United
States dollars to leading European banks having the specified Index
Maturity commencing on the second London Business Day following the
applicable Interest Determination Date and in a principal amount
that is
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representative for a single transaction in United States dollars in
that market at that time, or
(5) if one or more of the banks so selected by the calculation agent
are not quoting as mentioned in clause (4), the rate in effect on
the applicable Interest Determination Date.
"LIBOR Deposits" means deposits in United States dollars, having the
specified Index Maturity, commencing on the second London Business Day following
the applicable Interest Determination Date.
"Designated LIBOR Page" means either:
o if "LIBOR Telerate" is specified, or neither "LIBOR Reuters"
nor "LIBOR Telerate" is specified, the display on Bridge
Telerate, Inc. or any successor service on the specified page or
any page as may replace the specified page on that service for the
purpose of displaying the London interbank rates of major banks for
United States dollars, or
o if "LIBOR Reuters" is specified, the display on the Reuter
Monitor Money Rates Service or any successor service on the
specified page or any page as may replace the specified page on
that service for the purpose of displaying the London interbank
rates of major banks for United States dollars.
PRIME RATE. Prime Rate Notes will bear interest at rates calculated with
reference to the Prime Rate and the specified Spread and/or Spread Multiplier,
if any.
"Prime Rate" means:
(1) the rate on the applicable Interest Determination Date as published
in H.15(519) under the heading "Bank Prime Loan", or
(2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate
on the applicable Interest Determination Date published in H.15
Daily Update, or such other recognized electronic source used for
the purpose of displaying the applicable rate, opposite the caption
"Bank Prime Loan", or
(3) if the rate referred to in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the rate
calculated by the calculation agent as the arithmetic mean of the
rates of interest publicly announced by each bank (which may
include one or more of the Unaffiliated Agents or one or more of
their affiliates) that appears on the Reuters Screen US PRIME 1
Page as such bank's prime rate or base lending rate as of 11:00
A.M., New York City time, on the applicable Interest Determination
Date, or
(4) if, in the case of clause (3), fewer than four rates appear on the
Reuters Screen US PRIME 1 Page by 3:00 P.M., New York City time, on
the related calculation date, the rate calculated by the
calculation agent as the arithmetic mean of the prime rates or base
lending rates quoted on the basis of the actual number of days in
the year divided by a 360-day year as of the close of business on
the applicable Interest Determination Date by three major banks in
The City of New York (which may include one or more of the
Unaffiliated Agents or one or more of their affiliates) selected by
the calculation agent, or
(5) if one or more of the banks selected by the calculation agent are
not quoting as mentioned in clause (4), the rate in effect on the
applicable Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter
Monitor Money Rates Service or any successor service on the "US PRIME 1" page
or such other page as may replace that page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks.
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TREASURY RATE. Treasury Rate Notes will bear interest at rates calculated
with reference to the Treasury Rate and the specified Spread and/or Spread
Multiplier, if any.
"Treasury Rate" means:
(1) the rate from the auction held on the applicable Interest
Determination Date (the "Auction") of Treasury Bills having the
specified Index Maturity which appears under the caption
"INVESTMENT RATE" on the display on Bridge Telerate, Inc. or any
successor service on page 56 or any other page as may replace page
56 on that service ("Telerate Page 56") or page 57 or any other
page as may replace page 57 on that service ("Telerate Page
57"), or
(2) if the rate described in clause (1) is not so published by 3:00
P.M., New York City time, on the related calculation date, the
rate calculated by the calculation agent as the Bond Equivalent
Yield of the rate from the Auction of Treasury Bills having the
specified Index Maturity, as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of
displaying the applicable rate, opposite the caption "U.S.
Government securities/Treasury bills/Auction high", or
(3) if the rate described in clause (2) is not so published by 3:00
P.M., New York City time, on the related calculation date, the
rate calculated by the calculation agent as the Bond Equivalent
Yield of the auction rate of Treasury Bills having the specified
Index Maturity announced by the United States Department of the
Treasury, or
(4) in the event that the rate referred to in clause (3) is not
announced by the United States Department of the Treasury by 3:00
P.M., New York City time, on the related calculation date, or if
the Auction is not held, the rate calculated by the calculation
agent as the Bond Equivalent Yield of the rate on the applicable
Interest Determination Date of Treasury Bills having the specified
Index Maturity, as published in H.15(519) opposite the caption
"U.S. government securities / Treasury bills/Secondary market",
or
(5) if the rate referred to in clause (4) is not so published by 3:00
P.M., New York City time, on the related calculation date, the
rate calculated by the calculation agent as the Bond Equivalent
Yield of the rate on the applicable Interest Determination Date of
Treasury Bills having the specified Index Maturity, as published
in H.15 Daily Update, or such other recognized electronic source
used for the purpose of displaying the applicable rate, opposite
the caption "U.S. Government securities/Treasury bills/Secondary
market", or
(6) if the rate referred to in clause (5) is not so published by 3:00
P.M., New York City time, on the related calculation date, the
rate calculated by the calculation agent as the Bond Equivalent
Yield of the arithmetic mean of the secondary market bid rates for
the issue of Treasury Bills with a remaining maturity closest to
the specified Index Maturity, as quoted as of approximately 3:30
P.M., New York City time, on the applicable Interest Determination
Date by three primary United States government securities dealers
in The City of New York (which may include one or more of the
Unaffiliated Agents or one or more of their affiliates) selected
by the calculation agent, or
(7) if one or more of the dealers selected by the calculation agent
are not quoting as mentioned in clause (6), the rate in effect on
the applicable Interest Determination Date.
"Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Bond Equivalent Yield = D x N x 100
-------------
360 - (D x M)
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where "D" refers to the applicable per annum rate for Treasury Bills quoted on
a bank discount basis and expressed as a decimal, "N" refers to 365 or 366, as
the case may be, and "M" refers to the actual number of days in the interest
period for which interest is being calculated.
OTHER PROVISIONS; ADDENDA
Any provisions with respect to an issue of notes, including the
determination of one or more interest rate bases, the specification of one or
more interest rate bases, the calculation of the interest rate applicable to a
floating rate note, the applicable interest payment dates, the stated maturity
date, any redemption or repayment provisions or any other matter relating to the
applicable notes may be modified by the terms as specified under "Other
Provisions" on the face of the applicable notes or in an Addendum relating to
the applicable notes, if so specified on the face of the applicable notes and in
the applicable pricing supplement.
ORIGINAL ISSUE DISCOUNT NOTES
We may from time to time offer notes at a price less than their redemption
price at Maturity, resulting in the applicable notes being treated as if they
were issued with original issue discount for federal income tax purposes
("Original Issue Discount Notes"). Original Issue Discount Notes may currently
pay no interest or interest at a rate which at the time of issuance is below
market rates. See "United States Federal Income Taxation -- U.S.
Holders -- Original Issue Discount" in this prospectus supplement. Additional
considerations relating to any Original Issue Discount Notes will be described
in the applicable pricing supplement.
AMORTIZING NOTES
We may from time to time offer notes ("Amortizing Notes") with amounts of
principal and interest payable in installments over the term of the notes.
Interest on Amortizing Notes will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Payments with respect to Amortizing Notes
will be applied first to interest due and payable on the Amortizing Notes and
then to the reduction of the unpaid principal amount of the Amortizing Notes.
Further information concerning additional terms and conditions of any issue of
Amortizing Notes will be provided in the applicable pricing supplement. A table
setting forth repayment information in respect of each Amortizing Note will be
included in the applicable note and the applicable pricing supplement.
BOOK-ENTRY NOTES
The notes may be issued, in whole or in part, in book-entry form. Upon
issuance, all notes in book-entry form having the same date of issue, Maturity
and otherwise having identical terms and provisions will be represented by one
or more fully registered global notes. One fully registered global note will be
issued for each issue of notes, each in the aggregate principal amount of the
issue, unless the aggregate principal amount of any issue exceeds $400,000,000,
in which case one global note will be issued with respect to each $400,000,000
of principal amount and an additional global note will be issued with respect to
any remaining principal amount of the issue.
Each global note will be deposited with, or on behalf of, DTC or any other
specified depositary. The global notes will be issued as fully registered
securities and will be registered in the name of DTC or such other depositary
(or their nominees). See "Description of Debt Securities -- Global Debt
Securities" in the accompanying prospectus.
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UNITED STATES FEDERAL INCOME TAXATION
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change, including changes in effective dates, or possible differing
interpretations. It deals only with notes held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding notes as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers, except where otherwise specifically
noted. Persons considering the purchase of the notes should consult their own
tax advisors concerning the application of United States Federal income tax laws
to their particular situations as well as any consequences of the purchase,
ownership and disposition of the notes arising under the laws of any other
taxing jurisdiction.
As used in this prospectus supplement, the term "U.S. Holder" means a
beneficial owner of a note that is for United States Federal income tax
purposes:
(1) a citizen or resident of the United States,
(2) a corporation or a partnership (including an entity treated as a
corporation or a partnership for United States Federal income tax
purposes) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia (unless, in the
case of a partnership, Treasury regulations are adopted that provide
otherwise),
(3) an estate whose income is subject to United States Federal income tax
regardless of its source,
(4) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or
more United States persons have the authority to control all
substantial decisions of the trust, or
(5) any other person whose income or gain in respect of a note is
effectively connected with the conduct of a United States trade or
business.
Certain trusts not described in clause (4) above in existence on August 20, 1996
that elect to be treated as a United States person will also be a U.S. Holder
for purposes of the following discussion. As used herein, the term "non-U.S.
Holder" means a beneficial owner of a note that is not a U.S. Holder.
U.S. HOLDERS
PAYMENTS OF INTEREST. Payments of interest on a note generally will be
taxable to a U.S. Holder as ordinary interest income at the time such payments
are accrued or are received (in accordance with the U.S. Holder's regular method
of tax accounting).
ORIGINAL ISSUE DISCOUNT. The following summary is a general discussion of
the United States Federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of notes issued with original issue discount
("Discount Notes"). The following summary is based upon final Treasury
regulations (the "OID Regulations") released by the Internal Revenue Service
on January 27, 1994, as amended on June 11, 1996, under the original issue
discount provisions of the Code.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a note over its issue
price, if such excess equals or exceeds a DE MINIMIS amount (generally 1/4 of 1%
of the note's stated redemption price at maturity multiplied by the number of
complete years to its maturity from its issue date or, in the case of a note
providing for the payment of any amount other than qualified stated interest (as
defined below) prior to maturity, multiplied by the weighted average maturity of
the note). The issue price of each note of an issue of notes equals the first
price at which a substantial amount of the notes has been sold (ignoring sales
to bond houses, brokers, or similar persons or organizations acting in the
capacity of underwriters, placement agents, or wholesalers). The stated
redemption price at maturity of a note is the sum of all payments provided by
the note other than "qualified stated interest" payments. The term "qualified
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stated interest" generally means stated interest that is unconditionally
payable in cash or property (other than debt instruments of the issuer) at least
annually at a single fixed rate. In addition, under the OID Regulations, if a
note bears interest for one or more accrual periods at a rate below the rate
applicable for the remaining term of the note (e.g., notes with teaser rates or
interest holidays), and if the greater of either the resulting foregone interest
on the note or any "true" discount on the note (i.e., the excess of the note's
stated principal amount over its issue price) equals or exceeds a specified DE
MINIMIS amount, then the stated interest on the note would be treated as
original issue discount rather than qualified stated interest.
Payments of qualified stated interest on a note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Note must include original issue
discount in income as ordinary interest for United States Federal income tax
purposes as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of the U.S. Holder's
regular method of tax accounting. In general, the amount of original issue
discount included in income by the initial U.S. Holder of a Discount Note is the
sum of the daily portions of original issue discount with respect to the
Discount Note for each day during the taxable year (or portion of the taxable
year) on which the U.S. Holder held the Discount Note. The "daily portion" of
original issue discount on any Discount Note is determined by allocating to each
day in any accrual period a ratable portion of the original issue discount
allocable to that accrual period. An "accrual period" may be of any length and
the accrual periods may vary in length over the term of the Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the final day of an accrual
period or on the first day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between
o the product of the Discount Note's adjusted issue price at the
beginning of such accrual period and its yield to maturity (determined
on the basis of compounding at the close of each accrual period and
appropriately adjusted to take into account the length of the
particular accrual period) and
o the amount of any qualified stated interest payments allocable to such
accrual period.
The "adjusted issue price" of a Discount Note at the beginning of any
accrual period is the sum of the issue price of the Discount Note plus the
amount of original issue discount allocable to all prior accrual periods minus
the amount of any prior payments on the Discount Note that were not qualified
stated interest payments. Under these rules, U.S. Holders generally will have to
include in income increasingly greater amounts of original issue discount in
successive accrual periods.
If a U.S. Holder purchases a Discount Note for an amount that is greater
than its adjusted issue price as of the purchase date, the amount of original
issue discount which such U.S. Holder must include in its gross income with
respect to such Discount Note for any taxable year (or portion thereof in which
the U.S. Holder holds the Discount Note) will be reduced (but not below zero) by
the portion of the excess properly allocable to the period. If the purchase
price exceeds the adjusted issue price and the sum of amounts payable on the
Discount Note other than payments of qualified stated interest, the U.S. Holder
will also be entitled to deductions for amortizable bond premium as discussed
below.
Under the OID Regulations, floating rate notes (hereinafter "Variable
Notes") are subject to special rules whereby a Variable Note will qualify as a
"variable rate debt instrument" if
o its issue price does not exceed the total noncontingent principal
payments due under the Variable Note by more than a specified DE
MINIMIS amount and
o it provides for stated interest, paid or compounded at least annually,
at current values of:
o one or more qualified floating rates,
o a single fixed rate and one or more qualified floating rates,
o a single objective rate, or
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o a single fixed rate and a single objective rate that is a qualified
inverse floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Note is denominated. Although a multiple of a qualified floating rate
will generally not itself constitute a qualified floating rate, a variable rate
equal to the product of a qualified floating rate and a fixed multiple that is
greater than .65 but not more than 1.35 will constitute a qualified floating
rate. A variable rate equal to the product of a qualified floating rate and a
fixed multiple that is greater than .65 but not more than 1.35, increased or
decreased by a fixed rate, will also constitute a qualified floating rate. In
addition, under the OID Regulations, two or more qualified floating rates that
can reasonably be expected to have approximately the same values throughout the
term of the Variable Note (e.g., two or more qualified floating rates with
values within 25 basis points of each other as determined on the Variable Note's
issue date) will be treated as a single qualified floating rate. Notwithstanding
the foregoing, a variable rate that would otherwise constitute a qualified
floating rate but which is subject to one or more restrictions such as a maximum
numerical limitation (i.e., a cap) or a minimum numerical limitation (i.e., a
floor) may, under certain circumstances, fail to be treated as a qualified
floating rate under the OID Regulations unless such cap or floor is fixed
throughout the term of the note. An "objective rate" is a rate that is not
itself a qualified floating rate but which is determined using a single fixed
formula that is based on objective financial or economic information. A rate
will not qualify as an objective rate if it is based on information that is
within the control of the issuer (or a related party) or that is unique to the
circumstances of the issuer (or a related party), such as dividends, profits, or
the value of the issuer's stock (although a rate does not fail to be an
objective rate merely because it is based on the credit quality of the issuer).
A "qualified inverse floating rate" is any objective rate where such rate is
equal to a fixed rate minus a qualified floating rate, as long as variations in
the rate can reasonably be expected to inversely reflect contemporaneous
variations in the qualified floating rate. The OID Regulations also provide that
if a Variable Note provides for stated interest at a fixed rate for an initial
period of one year or less followed by a variable rate that is either a
qualified floating rate or an objective rate and if the variable rate on the
Variable Note's issue date is intended to approximate the fixed rate (e.g., the
value of the variable rate on the issue date does not differ from the value of
the fixed rate by more than 25 basis points), then the fixed rate and the
variable rate together will constitute either a single qualified floating rate
or objective rate, as the case may be.
If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument" under the OID Regulations, and
if the interest on a Variable Note is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually, then all
stated interest on the Variable Note will constitute qualified stated interest
and will be taxed accordingly. Thus, a Variable Note that provides for stated
interest at either a single qualified floating rate or a single objective rate
throughout the term thereof and that qualifies as a "variable rate debt
instrument" under the OID Regulations will generally not be treated as having
been issued with original issue discount unless the Variable Note is issued at a
"true" discount (i.e., at a price below the Variable Note's stated principal
amount) in excess of a specified DE MINIMIS amount. The amount of qualified
stated interest and the amount of original issue discount, if any, that accrues
during an accrual period on such a Variable Note is determined under the rules
applicable to fixed rate debt instruments by assuming that the variable rate is
a fixed rate equal to:
(1) in the case of a qualified floating rate or qualified inverse
floating rate, the value as of the issue date, of the qualified
floating rate or qualified inverse floating rate, or
(2) in the case of an objective rate (other than a qualified inverse
floating rate), a fixed rate that reflects the yield that is
reasonably expected for the Variable Note.
The qualified stated interest allocable to an accrual period is increased (or
decreased) if the interest actually paid during an accrual period exceeds (or is
less than) the interest assumed to be paid during the accrual period pursuant to
the foregoing rules.
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In general, any other Variable Note that qualifies as a "variable rate
debt instrument" will be converted into an "equivalent" fixed rate debt
instrument for purposes of determining the amount and accrual of original issue
discount and qualified stated interest on the Variable Note. The OID Regulations
generally require that such a Variable Note be converted into an "equivalent"
fixed rate debt instrument by substituting any qualified floating rate or
qualified inverse floating rate provided for under the terms of the Variable
Note with a fixed rate equal to the value of the qualified floating rate or
qualified inverse floating rate, as the case may be, as of the Variable Note's
issue date. Any objective rate (other than a qualified inverse floating rate)
provided for under the terms of the Variable Note is converted into a fixed rate
that reflects the yield that is reasonably expected for the Variable Note. In
the case of a Variable Note that qualifies as a "variable rate debt
instrument" and provides for stated interest at a fixed rate in addition to
either one or more qualified floating rates or a qualified inverse floating
rate, the fixed rate is initially converted into a qualified floating rate (or a
qualified inverse floating rate, if the Variable Note provides for a qualified
inverse floating rate). Under such circumstances, the qualified floating rate or
qualified inverse floating rate that replaces the fixed rate must be such that
the fair market value of the Variable Note as of the Variable Note's issue date
is approximately the same as the fair market value of an otherwise identical
debt instrument that provides for either the qualified floating rate or
qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the Variable Note is then converted into an
"equivalent" fixed rate debt instrument in the manner described above.
Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for the
"equivalent" fixed rate debt instrument by applying the general original issue
discount rules to the "equivalent" fixed rate debt instrument and a U.S.
Holder of the Variable Note will account for such original issue discount and
qualified stated interest as if the U.S. Holder held the "equivalent" fixed
rate debt instrument. Each accrual period appropriate adjustments will be made
to the amount of qualified stated interest or original issue discount assumed to
have been accrued or paid with respect to the "equivalent" fixed rate debt
instrument in the event that such amounts differ from the actual amount of
interest accrued or paid on the Variable Note during the accrual period.
If a Variable Note does not qualify as a "variable rate debt instrument"
under the OID Regulations, then the Variable Note would be treated as a
contingent payment debt obligation. On June 11, 1996, the Treasury Department
issued final regulations (the "CPDI Regulations") concerning the proper United
States Federal income tax treatment of contingent payment debt instruments. In
general, the CPDI Regulations would cause the timing and character of income,
gain or loss reported on a contingent payment debt instrument to substantially
differ from the timing and character of income, gain or loss reported on a
contingent payment debt instrument under general principles of current United
States Federal income tax law. Specifically, the CPDI Regulations generally
require a U.S. Holder of such an instrument to include future contingent and
noncontingent interest payments in income as such interest accrues based upon a
projected payment schedule. Moreover, in general, under the CPDI Regulations,
any gain recognized by a U.S. Holder on the sale, exchange, or retirement of a
contingent payment debt instrument will be treated as ordinary income and all or
a portion of any loss realized could be treated as ordinary loss as opposed to
capital loss (depending upon the circumstances). The CPDI Regulations apply to
debt instruments issued on or after August 13, 1996. The proper United States
Federal income tax treatment of Variable Notes that are treated as contingent
payment debt obligations will be more fully described in the applicable pricing
supplement. Furthermore, any other special United States Federal income tax
considerations, not otherwise discussed herein, which are applicable to any
particular issue of notes will be discussed in the applicable pricing
supplement.
We may issue notes which:
o may be redeemable at our option prior to their stated maturity (a
"call option") and/or
o may be repayable at the option of the holder prior to their stated
maturity (a "put option").
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Notes containing such features may be subject to rules that differ from the
general rules discussed above. Investors intending to purchase notes with such
features should consult their own tax advisors, since the original issue
discount consequences will depend, in part, on the particular terms and features
of the purchased notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, DE
MINIMIS original issue discount, market discount, DE MINIMIS market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
SHORT-TERM NOTES. Notes that have a fixed maturity of one year or less
("Short-Term Notes") will be treated as having been issued with original issue
discount. In general, an individual or other cash method U.S. Holder is not
required to accrue such original issue discount unless the U.S. Holder elects to
do so. If such an election is not made, any gain recognized by the U.S. Holder
on the sale, exchange or maturity of the Short-Term Note will be ordinary income
to the extent of the original issue discount accrued on a straight-line basis,
or upon election under the constant yield method (based on daily compounding),
through the date of sale or maturity, and a portion of the deductions otherwise
allowable to the U.S. Holder for interest on borrowings allocable to the
Short-Term Note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for United States Federal income tax
purposes under the accrual method, and certain other holders including banks and
dealers in securities, are required to accrue original issue discount on a
Short-Term Note on a straight-line basis unless an election is made to accrue
the original issue discount under a constant yield method (based on daily
compounding).
MARKET DISCOUNT. If a U.S. Holder purchases a note, other than a Discount
Note, for an amount that is less than its issue price (or, in the case of a
subsequent purchaser, its stated redemption price at maturity) or, in the case
of a Discount Note, for an amount that is less than its adjusted issue price as
of the purchase date, such U.S. Holder will be treated as having purchased the
note at a "market discount", unless such market discount is less than a
specified DE MINIMIS amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a Discount Note, any payment
that does not constitute qualified stated interest) on, or any gain realized on
the sale, exchange, retirement or other disposition of, a note as ordinary
income to the extent of the lesser of:
o the amount of such payment or realized gain or
o the market discount which has not previously been included in income
and is treated as having accrued on the note at the time of such
payment or disposition.
Market discount will be considered to accrue ratably during the period from the
date of acquisition to the maturity date of the note, unless the U.S. Holder
elects to accrue market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a note with market discount until the maturity of the Note or
certain earlier dispositions, because a current deduction is only allowed to the
extent the interest expense exceeds an allocable portion of market discount. A
U.S. Holder may elect to include market discount in income currently as it
accrues (on either a ratable or semiannual compounding basis), in which case the
rules described above regarding the treatment as ordinary income of gain upon
the disposition of the note and upon the receipt of certain cash payments and
regarding the deferral of interest deductions will not apply. Generally, such
currently included market discount is treated as ordinary interest for United
States Federal income tax purposes. Such an election will apply to all debt
instruments acquired by the U.S. Holder on or after the first day of the taxable
year to which such election applies and may be revoked only with the consent of
the IRS.
PREMIUM. If a U.S. Holder purchases a note for an amount that is greater
than the sum of all amounts payable on the note after the purchase date other
than payments of qualified stated interest,
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the U.S. Holder will be considered to have purchased the note with "amortizable
bond premium" equal in amount to such excess. A U.S. Holder may elect to
amortize such premium using a constant yield method over the remaining term of
the note and may offset interest otherwise required to be included in respect of
the note during any taxable year by the amortized amount of such excess for the
taxable year. However, if the note may be optionally redeemed after the U.S.
Holder acquires it at a price in excess of its stated redemption price at
maturity, special rules would apply which could result in a deferral of the
amortization of some bond premium until later in the term of the note. Any
election to amortize bond premium applies to all taxable debt obligations then
owned and thereafter acquired by the U.S. Holder and may be revoked only with
the consent of the IRS.
DISPOSITION OF A NOTE. Except as discussed above, upon the sale, exchange
or retirement of a note, a U.S. Holder generally will recognize taxable gain or
loss equal to the difference between the amount realized on the sale, exchange
or retirement (other than amounts representing accrued and unpaid interest) and
the U.S. Holder's adjusted tax basis in the note. A U.S. Holder's adjusted tax
basis in a note generally will equal the U.S. Holder's initial investment in the
note increased by any original issue discount included in income (and accrued
market discount, if any, if the U.S. Holder has included such market discount in
income) and decreased by the amount of any payments, other than qualified stated
interest payments, received and amortizable bond premium taken with respect to
the note. Such gain or loss generally will be long-term capital gain or loss if
the note were held for more than one year. Long-term capital gains of
individuals are subject to reduced capital gain rates while short-term capital
gains are subject to ordinary income rates. The deductibility of capital losses
is subject to certain limitations. Prospective investors should consult their
own tax advisors concerning these tax law provisions.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original issue
discount, if any) on a note, unless such non-U.S. Holder is a direct or indirect
10% or greater shareholder of AGFC, a controlled foreign corporation related to
AGFC or a bank receiving interest described in section 881(c)(3)(A) of the Code.
To qualify for the exemption from taxation, the last United States payor in the
chain of payment prior to payment to a non-U.S. Holder (the "Withholding
Agent") must have received in the year in which a payment of interest or
principal occurs, or in either of the two preceding calendar years, a statement
that (1) is signed by the beneficial owner of the note under penalties of
perjury, (2) certifies that such owner is not a U.S. Holder and (3) provides the
name and address of the beneficial owner. The statement may be made on an IRS
Form W-8 or a substantially similar form, and the beneficial owner must inform
the Withholding Agent of any change in the information on the statement within
30 days of such change. If a note is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent. However, in
such case, the signed statement must be accompanied by a copy of the IRS Form
W-8 or the substitute form provided by the beneficial owner to the organization
or institution. The Treasury Department is considering implementation of further
certification requirements aimed at determining whether the issuer of a debt
obligation is related to holders thereof.
On October 6, 1997, the Treasury issued new regulations (the "New
Regulations") which make certain modifications to the withholding, backup
withholding and information reporting rules. The New Regulations attempt to
unify certification requirements and modify reliance standards. The New
Regulations will generally be effective for payments made after December 31,
1999, subject to certain transition rules. Prospective investors are urged to
consult their own tax advisors regarding the New Regulations.
Generally, a non-U.S. Holder will not be subject to United States Federal
income taxes on any amount which constitutes capital gain upon retirement or
disposition of a note, provided the gain is not effectively connected with the
conduct of a trade or business in the United States by the non-U.S. Holder.
Certain other exceptions may be applicable, and a non-U.S. Holder should consult
its tax advisor in this regard.
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The notes will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of AGFC or, at
the time of such individual's death, payments in respect of the notes would have
been effectively connected with the conduct by such individual of a trade or
business in the United States.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the notes to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information,
such as the registered owner's taxpayer identification number, in the required
manner.
Generally, individuals are not exempt recipients, whereas corporations and
certain other entities generally are exempt recipients. Payments made in respect
of the notes to a U.S. Holder must be reported to the IRS, unless the U.S.
Holder is an exempt recipient or establishes an exemption. Compliance with the
identification procedures described in the preceding section would establish an
exemption from backup withholding for those non-U.S. Holders who are not exempt
recipients.
In addition, upon the sale of a note to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either:
o the broker determines that the seller is a corporation or other exempt
recipient or
o the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that such
seller is a non-U.S. Holder (and certain other conditions are met).
Such a sale must also be reported by the broker to the IRS, unless either:
o the broker determines that the seller is an exempt recipient or
o the seller certifies its non-U.S. status (and certain other conditions
are met).
Certification of the registered owner's non-U.S. status would be made normally
on an IRS Form W-8 under penalties of perjury, although in certain cases it may
be possible to submit other documentary evidence. In addition, prospective U.S.
Holders are strongly urged to consult their own tax advisors with respect to the
New Regulations. See "United States Federal Income Taxation -- Non-U.S.
Holders".
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
We are offering the notes for sale on a continuing basis through the
agents, who will purchase the notes, as principal, from us, for resale to
investors and other purchasers at varying prices relating to prevailing market
prices at the time of resale as determined by the agents, or, if so specified in
an applicable pricing supplement, for resale at a fixed public offering price.
Unless otherwise specified in an applicable pricing supplement, any note sold to
an Unaffiliated Agent as principal will be purchased by the Unaffiliated Agent
at a price equal to 100% of the principal amount of the note less a percentage
of the principal amount equal to the commission applicable to an agency sale as
described below of a note of identical maturity. If agreed to by us and an
agent, the agent may utilize its reasonable efforts on an agency basis to
solicit offers to purchase the notes at 100% of the principal amount of the
notes, unless otherwise specified in an applicable pricing supplement. Unless
otherwise provided in an applicable pricing supplement, we will pay to each of
the Unaffiliated Agents through which we sell a note on an agency basis, a
commission not to exceed .875% of the principal amount of the note. We may pay
commissions to AGSI in amounts not exceeding those payable to the Unaffiliated
Agents.
Each Unaffiliated Agent may sell notes it has purchased from us as
principal to other dealers for resale to investors, and may allow any portion of
the discount received in connection with such purchases from us to such dealers.
After the initial public offering of notes, the public offering price,
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in the case of notes to be resold at a fixed public offering price, the
concession and the discount allowed to dealers may be changed.
We have reserved the right to sell the notes through one or more other
agents or to other persons as principal. If we do so, we will specify the names
of the other agents or principals in the applicable pricing supplement.
We reserve the right to withdraw, cancel or modify the offer made by this
prospectus supplement without notice and may reject orders, in whole or in part,
whether placed directly with us or through the agents. The agents will have the
right, in their discretion reasonably exercised, to reject in whole or in part
any offer to purchase notes received by the agents.
Unless otherwise specified in an applicable pricing supplement, payment of
the purchase price of the notes will be required to be made in immediately
available funds in U.S. dollars in New York City on the date of settlement.
No note will have an established trading market when issued. Unless
specified in the applicable pricing supplement, we will not list the notes on
any securities exchange. The agents may from time to time purchase and sell
notes in the secondary market, but they are not obligated to do so, and there
can be no assurance that there will be a secondary market for the notes or
liquidity in the secondary market if one develops. From time to time, one or
more of the agents may make a market in the notes, but they are not obligated to
do so and may discontinue any market-making activity at any time.
The agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. We have agreed to indemnify the agents
against or to make contributions relating to certain civil liabilities,
including liabilities under the Securities Act, or to contribute to payments the
agents may be required to make in respect thereof. We have agreed to reimburse
the agents for certain expenses. We may make similar arrangements with any other
principals or agents to or through which we sell notes.
From time to time, each of the Unaffiliated Agents or their respective
affiliates have engaged and may engage in transactions with and/or perform
services, including investment banking or general financing and banking
services, for us and our affiliates in the ordinary course of business.
From time to time, we may issue and sell other debt securities described in
the accompanying prospectus, and the amount of notes that we may offer and sell
under this prospectus supplement would be reduced as a result of such sales.
In connection with the offering of notes purchased by the Unaffiliated
Agents as principal on a fixed price basis, the Unaffiliated Agents are
permitted to engage in certain transactions that stabilize the price of the
notes. These transactions may consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the notes. If the Unaffiliated
Agents create a short position in the notes in connection with the offering,
i.e., if they sell notes in an aggregate principal amount exceeding that set
forth in the applicable pricing supplement, then they may reduce that short
position by purchasing notes in the open market. In general, purchases of notes
for the purpose of stabilization or to reduce a short position could cause the
price of the notes to be higher than in the absence of those purchases.
Neither we nor the agents make any representation or prediction as to the
direction or magnitude of any effect that the transactions described above may
have on the price of the notes. In addition, neither we nor the agents make any
representation that the agents will engage in any such transactions or that such
transactions, once commenced, will not be discontinued without notice.
The distribution of the notes will conform to the requirements set forth in
the applicable sections of Rule 2720 of the Conduct Rules of the NASD.
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$3,000,000,000
AMERICAN GENERAL FINANCE CORPORATION
MEDIUM-TERM NOTES,
SERIES F
------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------
AMERICAN GENERAL SECURITIES INCORPORATED
FIRST UNION SECURITIES, INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
NOVEMBER 1, 1999
