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Filed Under Rule 424(b)(3)
File No. 33-48128
PRICING SUPPLEMENT NO. 36 DATED JANUARY 18, 1994
To Prospectus dated June 2, 1992 and
Prospectus Supplement dated July 24, 1992)
E. I. DUPONT DE NEMOURS AND COMPANY
MEDIUM-TERM NOTES, SERIES F
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(FIXED RATE)
DSE-CUSIP: 26353V BF5
Face Amount: $10,000,000.00 Net Proceeds to Company: $9,977,500
Issue Price: 100% Specified Currency: U.S. Dollars
Original Issue Date: January 19, 1994 Determination Agent: Morgan Stanley
Capital Services Inc.
Stated Maturity: January 19, 1996 Form: [X] Book-Entry
[ ] Certificated
Interest Rate: 0.50%
Interest Payment Dates: January 19 and July 19
Minimum Denominations: N/A
(only applicable if Specified Currency is
other than U.S. Dollars)
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Redemption: [X] The Notes cannot be redeemed prior to the Stated Maturity.
[ ] The Notes may be redeemed prior to the Stated Maturity.
Initial Redemption Date:
Initial Redemption Price:
Annual Redemption Price Reduction:
Repayment: [X] The Notes cannot be repaid prior to the Stated Maturity.
[ ] The Notes may be repaid prior to the Stated Maturity.
Initial Repayment Date:
Initial Repayment Price:
Annual Repayment Price Reduction:
Discount Note: [ ] Yes [X] No
Total Amount of OID:
Yield to Maturity:
Initial Accrual Period OID:
Principal Discount or Commission: 0.225% Agent: Morgan Stanley & Co.
Incorporated
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DESCRIPTION OF NOTES
The following description of the particular terms of the Notes
described herein (which are Currency Indexed Notes) supplements, and to the
extent inconsistent therewith replaces, the descriptions of the general
terms and provisions of Notes set forth in the accompanying Prospectus
Supplement and of Debt Securities set forth in the accompanying Prospectus,
to which descriptions reference is hereby made. All terms used but not
defined herein which are defined in the accompanying Prospectus or
Prospectus Supplement shall have the meanings therein assigned to them.
Payment of Interest
The Notes will bear interest at the fixed rate per annum specified
above. Interest will be payable on January 19 and July 19 and at Stated
Maturity.
Payment of Principal
The principal amount of a Note payable at Stated Maturity shall be
the greater of (i) 90% of the Face Amount or (ii) an amount determined by
the Determination Agent on the Reference Date based on the following
formula:
Face Amount x [90% + [100% x 3.05 x (Japanese Yen Exchange Rate -
112.35)/Japanese Yen Exchange Rate)].
For purposes of such formula:
"Business Day" means any day, other than a Saturday or Sunday,
that is not a day on which banking institutions are authorized or required
by law or regulation to close in either New York, London, or Tokyo.
"Determination Agent" means Morgan Stanley Capital Services Inc.
"Japanese Yen Exchange Rate" means the arithmetic mean (rounded
to the second decimal place, rounding up if the third decimal place, without
regard to rounding, is five or higher and otherwise truncating after the
second decimal place) of the spot bid quotations (expressed as a number of
Japanese Yen per one U.S. Dollar) received by the Determination Agent from
the Japanese Yen Reference Dealers (as defined below) at or about
10:00 a.m., New York time, on the Reference Date for the purchase by the
Japanese Yen Reference Dealers of U.S. $10,000,000 for settlement at Stated
Maturity or, if Stated Maturity is not a Business Day, on the first Business
Day following Stated Maturity. If fewer than two Japanese Yen Reference
Dealers provide such a spot bid quotation, then the Japanese Yen Exchange
Rate will be the arithmetic mean (rounded to the second decimal place,
rounding up if the third decimal place, without regard to rounding, is five
or higher and otherwise truncating after the second decimal place) of the
spot bid quotations (expressed as a number of Japanese Yen per one U.S.
dollar) received by the Determination Agent from three leading banks in
London, England (reasonably selected by the Determination Agent with the
approval of the Company) at or about 10:30 a.m. New York time, on the
Reference Date for the purchase by such banks of U.S. $10,000,000 for
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settlement at Stated Maturity; provided, however, that if such spot bid
quotations are only available from less than three such banks, then such
spot bid quotation or spot bid quotations as are available shall be used as
aforesaid to the extent practicable. If no such spot bid quotation is
provided or no such leading bank is selected and approved, the Japanese Yen
Exchange Rate will be such rate as the Determination Agent, in its absolute
discretion, determines to be fair and reasonable under the circumstances, at
or about 10:45 a.m., New York time, on the Reference Date.
"Japanese Yen Reference Dealers" means Bank of Tokyo, New York
Branch, Morgan Guaranty Trust Company of New York and Citibank, N.A., or any
substitute bank(s) or banking corporation(s) reasonably selected by the
Determination Agent with the approval of the Company.
"Reference Date" means the second Business Day prior to Stated
Maturity.
The principal amount of a Note payable at Stated Maturity thus
will be determined with reference to the Japanese Yen Exchange Rate but will
never be less than 90% of the Face Amount. Depending on the Japanese Yen
Exchange Rate, the principal amount payable at Stated Maturity will range
from 90% of the Face Amount to an amount in excess of the Face Amount. In
the absence of manifest error, the determination by the Determination Agent
of the principal amount payable at Stated Maturity shall be final and
binding.
Hypothetical Repayment Amount
The following table sets forth for purposes of illustration the
repayment amount that will be payable at Stated Maturity if the Japanese Yen
Exchange Rate set forth therein is the Japanese Yen Exchange Rate for
purposes of determining the principal amount of a Note payable at Stated
Maturity.
Hypothetical
Japanese Yen Repayment Amount
Exchange Rate (per U.S. $100.00)
105 90.00
112 90.00
116 99.60
120 109.44
124 118.66
128 127.29
132 135.40
136 143.04
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IMPORTANT INFORMATION
An investment in the Notes entails significant risks that are not
associated with a similar investment in other Debt Securities. Such risks
include, without limitation, the possibility of significant changes in rates
of exchange between the U.S. Dollar and the Japanese Yen and the possibility
of the imposition or modification of foreign exchange controls by either the
United States or foreign governments. Such risks generally depend on
factors over which the Company has no control. For example, the exchange
rates between the U.S. Dollar and the Japanese Yen are at any moment a
result of the supply of, and demand for, each currency. Changes in exchange
rates result over time from the interaction of many factors directly or
indirectly affecting economic conditions in the United States and Japan, as
well as economic, military and political developments in other countries.
Of particular importance are rates of inflation, interest rate levels, the
balance of payments and the extent of government surpluses and deficits in
the respective countries, all of which are in turn sensitive to the
monetary, fiscal and trade policies pursued by the governments in such
countries and in other countries important to international trade and
finance.
Also, sovereign governments use a variety of techniques, such as
intervention by a country's central bank or imposition of regulatory
controls or taxes, to affect the level of interest rates and exchange rates
of their currencies. Governments may also issue a new currency to replace
an existing currency or alter the exchange rate or relative exchange
characteristics by devaluation or revaluation of a currency. Thus, a
special risk in purchasing the Notes is that governmental actions could
interfere with or change theretofore freely determined currency valuations
and fluctuations in market forces. There will be no adjustment or change in
the terms of the Notes in the event that exchange rates should become fixed,
or in the event of any devaluation or revaluation or imposition of exchange
or other regulatory controls or taxes, or in the event of other developments
affecting the U.S. Dollar or the Japanese Yen.
THIS PRICING SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND
PROSPECTUS SUPPLEMENT DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN THE
NOTES. THE COMPANY BELIEVES THAT THESE RISKS ARE POTENTIALLY TOO VARIABLE
TO ASCERTAIN AND DESCRIBE WITH ANY REASONABLE DEGREE OF CERTAINTY AND
INCORPORATING EVERY ECONOMIC, FINANCIAL, POLITICAL AND MILITARY
CIRCUMSTANCE, AMONG OTHER THINGS, WOULD BE IMPRACTICAL. PROSPECTIVE
INVESTORS SHOULD THEREFORE CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS
TO THE RISKS ENTAILED BY AN INVESTMENT IN THE NOTES. SUCH NOTES ARE NOT AN
APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.
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EXCHANGE RATES
The following table sets forth certain historical Japanese
Yen/U.S. Dollar exchange rates based on the noon buying rate in New York
City for cable transfer as certified for customs purposes by the Federal
Reserve Bank of New York on the last New York Business Day of the month
indicated:
Japanese Yen/
U.S. $1.00
Month-End Exchange Rate
1989:
March 132.77
June 144.00
September 139.60
December 143.80
1990:
March 157.82
June 152.35
September 138.27
December 135.75
1991:
March 140.60
June 137.90
September 132.85
December 124.90
1992:
March 132.92
June 125.87
September 120.00
December 124.85
1993:
March 114.90
June 106.80
September 106.05
December 111.70
On January 12, 1994, the noon buying rate in New York City for
cable transfers of Japanese Yen per U.S. $1.00 was 112.40 Japanese Yen =
U.S. $1.00, as certified for customs purposes by the Federal Reserve Bank of
New York. Recent exchange rates are also published in The Wall Street
Journal.
The information presented in the above table is furnished as a
matter of information only. In recent years, the rates of exchange for the
U.S. Dollar and the Japanese Yen have been highly volatile and such
volatility may occur in the future. The fluctuations in the Japanese
Yen/U.S. Dollar exchange rates that have occurred in the past, however, are
not necessarily indicative of fluctuations in the rates that may occur over
the term of the Notes.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In addition to the consequences summarized in the Prospectus
Supplement under the heading "United States Taxation", set forth below is a
summary of certain United States Federal income tax consequences to original
Holders of the Notes that have purchased the Notes at their Issue Price.
The Federal income tax treatment of the payments on the Notes is
not clear because Holders are not guaranteed to receive aggregate payments
on the Notes at least equal to the Issue Price. Under the proposed
regulations (the "Proposed Regulations") dealing with the tax treatment of
"contingent payment obligations", such as the Notes, payments of interest on
each Interest Payment Date except for Stated Maturity will be treated as a
non-taxable return of principal and reduce the U.S. Holder's tax basis in
the Note. At Stated Maturity, a U.S. Holder will recognize ordinary income
(treated as interest) to the extent the payment made by the Company exceeds
the Note's remaining principal balance (i.e., the Note's Issue Price minus
payments of interest treated as returns of principal) and will recognize
capital loss to the extent such payment is less than such remaining
principal balance (or possibly ordinary loss to the extent the loss is
attributable to changes in the Japanese Yen/U.S. Dollar exchange rate
between the Note's Issue Date and its Stated Maturity). In the case of
non-U.S. Holders, such interest will be treated as described in the
Prospectus Supplement under "Non-United States Persons".
It is unclear whether the Proposed Regulations reflect the IRS's
current position with respect to contingent payment debt obligations. It is
thus possible that the IRS might issue new Regulations that would apply to
the Notes and that would require Holders to account for income with respect
to the Notes in a manner different than that described above. For example,
in lieu of the approach taken by the Proposed Regulations, such Regulations
might require U.S. Holders to accrue original issue discount ("OID") into
income, as described in the Prospectus Supplement, based on the expected
yield of the Note using a reasonable estimate of the payment at Stated
Maturity determined as of the end of a taxable year or as of the issue date,
or a market yield for the Note determined as of the issue date. Such
amounts would be subject to subsequent adjustment to the extent that
the estimate proved incorrect. In such case, payments of interest on each
Interest Payment Date would be treated first as payments of accrued but
previously unpaid OID and then as a return of principal. (This approach is
based on proposed contingent payment debt regulations that were announced by
the IRS in January 1993 but were subsequently withdrawn (the "Withdrawn
Regulations").
It is not clear whether any gain recognized on the sale or
exchange of a Note would ordinary income or capital gain (in whole of part),
although any loss would generally be a capital loss (except, possibly, to
the extent the loss is attributable to changes in the Japanese Yen/U.S.
Dollar exchange rate and, under certain circumstances, under the approach
taken by the Withdrawn Regulations).
Backup Withholding. The rate of backup withholding has been
increased from 20% to 31%.
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