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REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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IBM CREDIT CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 22-2351962
(State or other jurisdiction (I.R.S. employer
of identification
incorporation or organization) number)
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NORTH CASTLE DRIVE
ARMONK, NEW YORK 10504-1785
(914) 765-1900
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JOHN J. SHAY, JR.
VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
IBM CREDIT CORPORATION
NORTH CASTLE DRIVE
ARMONK, NEW YORK 10504-1785
(914) 765-6100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED (A) PER UNIT (B) PRICE (A)(B) FEE
<S> <C> <C> <C> <C>
Debt Securities................................. $ 10,000,000,000(1) 100% $ 10,000,000,000(1) $ 2,780,000
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(a) The initial public offering price of any debt securities denominated in any
foreign currencies or currency units shall be their U.S. dollar equivalent
based on the prevailing exchange rates at the respective times the debt
securities are first offered. For debt securities issued with an original
issue discount, the amount to be registered is calculated as the initial
accreted value of these debt securities.
(b) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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(1) UNDER RULE 429 OF THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS INCLUDED IN THIS
REGISTRATION STATEMENT ALSO RELATES TO $898,150,000 OF SECURITIES PREVIOUSLY
REGISTERED UNDER THE REGISTRANT'S REGISTRATION STATEMENT ON FORM S-3 (FILE NO.
333-42755), LESS ANY AMOUNT OF DEBT SECURITIES WE OFFER ON OR AFTER THE DATE OF
THE FILING OF THIS REGISTRATION STATEMENT AND BEFORE THE DATE THIS REGISTRATION
STATEMENT IS DECLARED EFFECTIVE. THE AMOUNT OF THE FILING FEE WE PREVIOUSLY PAID
UNDER REGISTRATION STATEMENT 333-42755 WAS $1,112,000. THIS REGISTRATION
STATEMENT ALSO CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION
STATEMENT 333-42755).
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SUBJECT TO COMPLETION SEPTEMBER 7, 1999
PROSPECTUS
IBM CREDIT CORPORATION
NORTH CASTLE DRIVE
ARMONK, NEW YORK 10504-1785
(914) 765-6100
$10,898,150,000
DEBT SECURITIES
----------------
WE WILL PROVIDE SPECIFIC TERMS OF THESE SECURITIES IN SUPPLEMENTS TO THIS
PROSPECTUS. YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENT CAREFULLY BEFORE
YOU INVEST.
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These securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have these organizations
determined that this prospectus is accurate or complete. Any representation to
the contrary is a criminal offense.
The date of this prospectus is , 1999.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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TABLE OF CONTENTS
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PAGE
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Prospectus Summary..................................................................... 2
Ratio of Earnings to Fixed Charges..................................................... 3
Where You Can Find More Information.................................................... 3
The Company............................................................................ 4
Use of Proceeds........................................................................ 4
Description of the Debt Securities..................................................... 4
Plan of Distribution................................................................... 13
Legal Opinions......................................................................... 14
Experts................................................................................ 14
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IBM CREDIT CORPORATION
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SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS AND MAY
NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU. TO UNDERSTAND THE
TERMS OF OUR DEBT SECURITIES, YOU SHOULD CAREFULLY READ THIS ENTIRE DOCUMENT
WITH THE ATTACHED PROSPECTUS SUPPLEMENT. TOGETHER, THESE DOCUMENTS WILL GIVE THE
SPECIFIC TERMS OF THE SECURITIES WE ARE OFFERING. YOU SHOULD ALSO READ THE
DOCUMENTS WE HAVE INCORPORATED BY REFERENCE INTO THIS PROSPECTUS FOR INFORMATION
ON OUR COMPANY AND OUR FINANCIAL STATEMENTS. CAPITALIZED TERMS USED IN THIS
SUMMARY ARE DEFINED ELSEWHERE IN THIS PROSPECTUS.
THE DEBT SECURITIES WE MAY OFFER
This prospectus is part of a registration statement (No. 333- ) that we
filed with the SEC utilizing a "shelf" registration process. Under this shelf
process, we may offer from time to time up to $10,898,150,000 of our debt
securities. This prospectus provides you with a general description of the debt
securities we may offer. Each time we offer debt securities, we will provide you
with a prospectus supplement and, where applicable, a pricing supplement, that
will describe the specific amounts, prices and terms of the debt securities we
offer. The prospectus supplement and the pricing supplements may also add,
update or change information contained in this prospectus.
The debt securities we may offer are unsecured general obligations of our
company. We will refer to these obligations simply as the "debt securities". The
debt securities will have the same rank as all of our other unsecured,
unsubordinated debt.
The debt securities will be issued under an indenture between us and The
Chase Manhattan Bank. The Chase Manhattan Bank is the trustee under the
indenture. The indenture is a very detailed contract between us and The Chase
Manhattan Bank. We have summarized general features of the debt securities from
the indenture. We encourage you to read our indenture, which is an exhibit to
the registration statement. We also encourage you to read our periodic and
current reports, which we file with the SEC.
GENERAL INDENTURE PROVISIONS THAT APPLY TO OUR DEBT SECURITIES
The indenture does not limit the amount of debt that we may issue. We may
also issue as many distinct series of debt securities under the indenture as we
wish.
The indenture limits our ability to enter into debt secured by liens on
certain of our property without also securing the debt securities we offer here,
unless the total amount of our secured debt does not exceed 10% of our
Consolidated Net Tangible Assets.
The indenture also limits our ability to consolidate, merge, or otherwise
transfer our properties and assets to other companies. But we can consolidate,
merge, or transfer our properties and assets, if the company we consolidate,
merge or transfer our properties and assets to is a company of which IBM, our
parent, owns all of the voting stock. Also, the company into which we
consolidate, merge or transfer our properties will be substituted for us under
the indenture.
The indenture provides that holders of a majority of the outstanding
principal amount of any series of debt securities may vote to change our
obligations, or your rights, under that series. However, to change the amount or
timing of principal, interest or other payments under the debt securities, every
holder in the series must consent.
We may discharge our obligations under the indenture relating to the debt
securities by depositing with the trustee sufficient funds or government
obligations to pay those debt securities when due.
EVENTS OF DEFAULT. Our indenture provides that the following are events of
default:
- If we do not pay interest for 30 days after its due date.
- If we do not pay principal or premium when due.
- If we do not deposit any sinking fund payment when due.
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- If we continue to breach a covenant for 90 days after notice.
- If we enter bankruptcy or become insolvent.
- Any other event of default to which we agree for a series of debt
securities.
If an event of default occurs under any series of debt securities, the
trustee or holders of 25% of the outstanding principal amount of that series may
declare the principal amount of the series immediately payable. However, holders
of a majority of the principal amount can rescind this action.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods indicated are
as follows:
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SIX MONTHS
ENDED
JUNE 30 YEAR ENDED DECEMBER 31,
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<S> <C> <C> <C> <C> <C> <C> <C>
1999 1998 1998 1997 1996 1995 1994
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Ratio of earnings to
fixed charges....... 2.15 1.78 1.83 1.83 2.02 1.96 2.34
</TABLE>
We compute the ratio of earnings to fixed charges by dividing earnings,
which includes income before taxes and fixed charges, by fixed charges. We
exclude from this calculation the effects of accounting changes which have been
made over time. "Fixed charges" consist of interest on debt and a portion of
rentals we determine to represent interest.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with the
SEC. You may read and copy any document we file at the SEC's public reference
room at 450 Fifth Street, N.W., Washington D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on their public reference room. Our SEC
filings are also available to the public at the SEC's web site at
(http://www.sec.gov).
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
this information.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until our offering is completed:
- Annual Report on Form 10-K for the year ended December 31, 1998;
- Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999 and
June 30, 1999; and
- Current Reports on Form 8-K, filed on January 25, 1999, April 29, 1999,
and July 21, 1999.
You may also request a copy of these filings at no cost, by contacting us at
the following address:
Manager of External Financial Reporting
IBM Credit Corporation
North Castle Drive
Armonk, New York 10504
(914) 765-1900
You should rely only on the information incorporated by reference or
provided in this prospectus, any prospectus supplement and pricing supplement.
We have not authorized anyone else to provide you with different information. We
are not making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus, any
prospectus supplement or pricing supplement is accurate as of any date other
than the date on the front of those documents.
We also have an Internet website on the world wide web, which contains
general information about our company. Please understand that we are NOT
incorporating by reference any of the information on that website. Therefore, do
not consider our website, or any of its contents, as part of this prospectus.
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THE COMPANY
IBM Credit Corporation (the company) was incorporated in Delaware on March
4, 1981. Our principal business is to finance IBM products and services. All of
our outstanding capital stock is owned by International Business Machines
Corporation (IBM), a New York corporation. In addition to financing the purchase
and lease of IBM products and related products and services by customers of IBM
in the United States, we also finance inventory and accounts receivable for
dealers and remarketers of IBM and non-IBM products and services.
OUR SUPPORT AGREEMENT WITH IBM
We have a support agreement in place with IBM. We've described important
provisions from this agreement here:
- IBM has agreed with us to hold 100 percent of our voting capital stock.
- IBM also agreed with us that it will not pledge or encumber our stock nor
will it dispose of our stock unless it is required to do so under a court
decree or other order of a governmental authority that IBM's legal counsel
believes may not be successfully challenged.
- IBM has also agreed to cause us to have a tangible net worth of at least
$1.00 at all times.
- We've agreed that the support agreement is NOT a guarantee by IBM of the
payment of our liabilities, debt, or other obligations of any kind.
- Finally, our support agreement with IBM can't be modified, amended or
terminated while there is any debt of the company outstanding unless all
the debt holders have consented in writing.
USE OF PROCEEDS
Unless we otherwise specify in a prospectus supplement, the net proceeds we
receive from the sale of the debt securities offered under this prospectus and
the accompanying prospectus supplement will be used for general corporate
purposes. General corporate purposes may include the repayment of debt,
investments in or extensions of credit to our affiliates and business partners,
or the financing of our business expansion. The net proceeds may also be
invested temporarily or applied to repay short-term debt until they are used for
their stated purpose.
DESCRIPTION OF THE DEBT SECURITIES
The following description of the terms of the debt securities sets forth
general terms that apply to the debt securities. The particular terms of any
debt securities will be described more specifically in each prospectus
supplement (and pricing supplement, where applicable) relating to those debt
securities.
The debt securities will be issued under an indenture dated as of January
15, 1989, as supplemented on April 29, 1997, between us and The Chase Manhattan
Bank, as trustee. We will be referring to this indenture in this prospectus
simply as the "indenture".
We are summarizing the indenture below. Since this is only a summary, it
does not contain all of the information which may be important to you. A copy of
the entire indenture is an exhibit to the registration statement of which this
prospectus is a part. When we make parenthetical section references in this
prospectus, those are references to sections of the indenture. We incorporate
the entire indenture by reference, and encourage you to read the indenture.
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GENERAL
The indenture does not limit the amount of debt securities that we may
issue. It also does not limit the number of series of debt securities we may
issue. The indenture provides that debt securities may be issued up to the
principal amount which is authorized by our company from time to time. The debt
securities we issue under the indenture will be unsecured and will have the same
rank as all of our other unsecured and unsubordinated debt.
The debt securities can be issued in one or more separate series. The
prospectus supplement relating to the particular series of debt securities being
offered will describe more specifically the amounts, prices and terms of those
debt securities. These terms may include:
- the title of the debt securities;
- any limit upon the aggregate principal amount of the debt securities;
- the maturity date or dates, or the method of determining the maturity
dates;
- the interest rate or rates, or the method of determining those rates;
- the interest payment dates and, for debt securities in registered form,
the regular record dates;
- the places where payments may be made;
- any mandatory or optional redemption provisions;
- any sinking fund or similar provisions;
- any conversion or exchange provisions;
- any terms for the attachment to the debt securities of warrants, options
or other rights to purchase or sell our securities;
- the portion of principal amount of the debt security payable upon an
acceleration of its maturity if other than the full principal amount;
- any deletions of, or changes or additions to, the events of default or
covenants;
- if other than U.S. dollars, the currency or currencies, including the euro
and other composite currencies, in which payments on the debt securities
will be payable and whether the holder may elect payment to be made in a
different currency;
- the method of determining the amount of any payments on the debt
securities which are linked to an index;
- whether the debt securities will be issued in fully registered form
without coupons or in bearer form, with or without coupons, or any
combination of these, and whether they will be issued in the form of one
or more global securities in temporary or definitive form;
- whether and on what terms we will pay additional amounts to holders of the
debt securities that are not U.S. persons for any tax, assessment or
governmental charge withheld or deducted and, if so, whether and on what
terms we will have the option to redeem the debt securities rather than
pay the additional amounts; and
- any other specific terms of the debt securities. (Sections 202 and 301)
Unless we otherwise specify in a prospectus supplement:
- the debt securities will be registered debt securities;
- the registered debt securities denominated in U.S. dollars and will be
issued in denominations of $1,000 or an integral multiple of $1,000; and
- bearer debt securities denominated in U.S. dollars will be issued in
denominations of $5,000. (Section 401)
If any of the debt securities are sold for any foreign currency or currency
unit, or if any payments on the debt securities are payable in any foreign
currency or currency unit, we will describe, in the prospectus supplement, the
applicable restrictions, elections, tax consequences, specific terms and other
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information for the debt securities and the foreign currency or currency unit.
Debt securities may bear appropriate legends, as required by United States
Federal tax and securities laws, rules and regulations.
Some of the debt securities may be issued as original issue discount debt
securities. Original issue discount debt securities bear no interest or bear
interest at below-market rates. These are sold at a discount below their stated
principal amount. If we issue these original discount debt securities, the
prospectus supplement will describe special tax, accounting or other information
relating to these securities.
EXCHANGE, REGISTRATION AND TRANSFER
Debt securities may be transferred or exchanged at the corporate trust
office of the security registrar or at any other office or agency which is
maintained for these purposes. No service charge will be payable upon the
transfer or exchange, except for any applicable tax or governmental charge.
(Section 404)
Our designated security registrar in the United States is The Chase
Manhattan Bank. It maintains an office located at 450 West 33rd Street, New
York, New York 10001.
If debt securities are issuable in both registered and bearer form, the
bearer securities will be exchangeable for registered securities. If a bearer
security with related coupons is surrendered in exchange for a registered
security between a record date and the date set for the payment of interest, the
bearer security will be surrendered without the coupon that relates to that
interest payment. That interest payment will be made only to the holder of the
coupon when due.
In the event any series of debt securities is redeemed, we will not be
required to:
- issue, register the transfer of, or exchange, debt securities of any
series between the opening of business 15 business days before any
selection of debt securities of that series to be redeemed and the close
of business on:
- the day of mailing of the relevant notice of redemption, if the debt
securities are issuable only in registered form,
- the day of the first publication of the relevant notice of redemption,
if the debt securities are issuable in bearer form, or,
- the day of mailing of the relevant notice of redemption, if the debt
securities are issuable in bearer and registered form, and there is no
publication;
- register the transfer of, or exchange, any registered security selected
for redemption, in whole or in part, except the unredeemed portion of any
registered security being redeemed in part; or
- exchange any bearer security selected for redemption, except to exchange
it for a registered security which is simultaneously surrendered for
redemption. (Section 404)
PAYMENT AND PAYING AGENT
We will pay principal, interest and any premium on fully registered
securities in the designated currency or currency unit at the office of the
paying agent. Payment of interest on fully registered securities may be made by
check mailed to the persons in whose names the debt securities are registered on
the days specified in the indenture or any prospectus supplement. (Sections 406
and 410)
We will pay principal, interest and any premium on bearer securities in the
designated currency or currency unit at the office of the paying agent or agents
outside of the United States. Payments will be made at the offices of the paying
agent in the United States only if the designated currency is U.S. dollars and
payment outside of the United States is illegal or effectively precluded.
(Sections 410 and 1102)
If any amount payable on any debt security or coupon remains unclaimed at
the end of two years after the amount became due and payable,
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the paying agent will release any unclaimed amounts to us. (Section 1103)
Our paying agent in the United States for the debt securities is The Chase
Manhattan Bank, which is located at 450 West 33rd Street, New York, New York
10001.
GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with a depositary
we identify in a prospectus supplement. Global debt securities may be issued in
either registered or bearer form and in either temporary or definitive form. All
global securities in bearer form will be deposited with a depositary outside of
the United States. We will describe the specific terms of the depositary
arrangement with respect to a series of debt securities in a prospectus
supplement.
Other than for payments, we may treat a person having a beneficial interest
in a definitive global security as the holder of the principal amount of
outstanding debt securities represented by the global security. For these
purposes, we may rely upon a written statement delivered to the trustee by the
holder of the definitive global security, or, in the case of a definitive global
security in bearer form, by Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euro-clear System, and Cedelbank, societe anonyme.
(Section 411)
Neither we, the trustee nor any of our respective agents will be responsible
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a global security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. (Section 411)
Unless we otherwise specify in a prospectus supplement, we anticipate that
the following provisions will apply to our depositary arrangements.
TEMPORARY GLOBAL SECURITIES
- All or any portion of the debt securities of a series that are issuable in
bearer form initially may be represented by one or more temporary global
securities, without interest coupons. The temporary global securities will
be deposited with a depositary in London for Euro-clear and Cedelbank for
credit to the accounts of the beneficial owners of the debt securities or
to such other accounts as they may direct.
- On and after an exchange date provided in the applicable prospectus
supplement, each temporary global security will be exchangeable for
definitive securities in bearer form, registered form, definitive global
bearer form or any combination of these, as we may specify in a prospectus
supplement.
- No definitive bearer security delivered in exchange for a portion of a
temporary global security will be mailed or delivered to any location in
the United States.
- The prospectus supplement will describe any applicable ownership
certification requirements before a definitive bearer security is issued
or interest payments are made. (Section 403)
DEFINITIVE GLOBAL SECURITIES
BEARER SECURITIES. The applicable prospectus supplement will describe the
exchange provisions, if any, of debt securities issuable in definitive global
bearer form. We will not deliver any bearer securities in exchange for a portion
of a definitive global security to any location in the United States. (Section
404)
U.S. BOOK ENTRY SECURITIES. Debt securities of a series represented by a
definitive global registered security and deposited with or on behalf of a
depositary in the United States will be registered in the name of the depositary
or its nominee. These securities are referred to as "book-entry securities".
When a global security is issued and deposited with the depositary, the
depositary will
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credit, on its book-entry registration and transfer system, the respective
principal amounts represented by that global security to the accounts of
institutions that have accounts with the depositary or its nominee. Institutions
that have accounts with the depositary or its nominee are referred to as
"participants".
The accounts to be credited will be designated by the underwriters or agents
for the sale of the book-entry securities or by us, if we offer and sell the
securities directly.
Ownership of book-entry securities are limited to participants or persons
that may hold interests through participants. In addition, ownership of these
securities are evidenced only by, and the transfer of that ownership will be
effected only through, records maintained by the depositary or its nominee, or
by participants or persons that hold through other participants.
So long as the depositary, or its nominee, is the registered owner of a
global security, that depositary or nominee will be considered the sole owner or
holder of the book-entry securities represented by the global security for all
purposes under the indenture. Payments of principal, interest and premium on
those securities will be made to the depositary or its nominee as the registered
owner or the holder of the global security.
Owners of book-entry securities:
- will not be entitled to have the debt securities registered in their
names;
- will not be entitled to receive physical delivery of the debt securities
in definitive form; and
- will not be considered the owners or holders of those debt securities
under the indenture.
The laws of some jurisdictions require that purchasers of securities take
physical delivery of the securities in definitive form. These laws impair the
ability to purchase or transfer book-entry securities.
We expect that the depositary for book-entry securities of a series will
immediately credit participants' accounts with payments received by the
depositary or nominee in amounts proportionate to the participants' beneficial
interests, as shown on the records of the depositary.
We also expect that payments by participants to owners of beneficial
interests in a global security held through the participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"STREET NAME". The payments by participants to the owners of beneficial
interests will be the responsibility of those participants.
PRACTICAL IMPLICATIONS OF HOLDING DEBT SECURITIES IN STREET NAME
Investors who hold debt securities in accounts at banks or brokers will not
generally be recognized by us as the legal holders of debt securities. Since we
recognize as the holder the bank or broker, or the financial institution the
bank or broker uses to hold its debt securities, it is the responsibility of
these intermediary banks, brokers and other financial institutions to pass along
principal, interest and other payments on the debt securities, either because
they agree to do so in their agreements with their customers, or because they
are legally required to do so. If you hold debt securities in street name, you
should check with your own institution to find out:
- How it handles securities payments and notices;
- Whether it imposes additional fees or charges;
- How it would handle voting and related issues if ever required;
- How it would pursue or enforce rights under the debt securities if there
were a default or other event triggering the need for direct holders to
act to protect their interests;
- How it would react on other matters which are important to persons who
hold debt securities in "street name".
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COVENANTS AND OTHER LIMITATIONS
We have agreed to a number of covenants and other limitations in the
indenture. Covenants are promises we make. If we don't live up to our promises,
we could be placed in default. We have summarized these covenants for you below.
We encourage you to read the full text of these limitations in the indenture.
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
We have agreed in the indenture not to consolidate with, or merge into any
other company, nor sell substantially all of our assets to another company
unless that company:
- is owned by IBM (or any successor to IBM);
- is organized in the United States; and
- expressly assumes all of our rights and obligations under the debt
securities and the indenture, and immediately after giving effect to the
transaction, there is no default under the indenture. (Section 901 & 902)
LIMITATION ON LIENS
We have also agreed that neither we nor any Restricted Subsidiary of ours
will incur, issue, assume, or guarantee any debt which is secured by any pledge,
mortgage, security interest or other lien on any of our property, without
securing our debt securities equally and ratably with, or prior to, that debt,
unless the total amount of all of this secured debt would not exceed 10% of
Consolidated Net Tangible Assets.
To better understand this covenant, you'll need to know both what a
"Restricted Subsidiary" is, as well as what "Consolidated Net Tangible Assets"
are, and how we make this computation. We've summarized these definitions for
you below. (Section 101)
A "RESTRICTED SUBSIDIARY" is a subsidiary of ours organized under the laws
of any state of the United States or the District of Columbia.
"CONSOLIDATED NET TANGIBLE ASSETS" means the total assets of us and our
Restricted Subsidiaries, LESS:
- current liabilities,
- investments in and advances to subsidiaries other than our Restricted
Subsidiaries or other entities accounted for on the equity method of
accounting, and
- intangible assets.
We include in our definition of "intangible assets" the balance sheet
value of:
- all trade names, trademarks, licenses, patents, copyrights and
goodwill,
- organizational and development costs,
- deferred charges other than prepaid items such as insurance, taxes,
interest, commissions, rents and similar items and tangible items we
are amortizing, and
- unamortized debt discount and expense minus unamortized premium.
It is also important for you to understand that we can have certain debt and
liens which we don't have to consider under this covenant. Specifically, the
covenant does not apply to debt which is secured by:
- liens on property, shares of stock or debt of any company existing at the
time it becomes a Restricted Subsidiary;
- liens on property, shares of stock or debt existing at the time we, or any
Restricted Subsidiary, acquire it;
- liens on property, shares of stock or debt we, or any Restricted
Subsidiary, may in the future acquire, where the liens:
- are created prior to, at the time of or within one year after the
acquisition (or in the case of property, the completion of
construction or commencement of commercial operation, whichever is
later), and
9
<PAGE>
- are to secure or provide for the payment of all or part of the
purchase price (or, in the case of property, the construction price);
- liens in favor of us or any Restricted Subsidiary;
- liens in favor of the U.S. government, any state, the District of
Columbia, or any agency, department or other instrumentality, to secure
progress, advance or other payments under a contract or under a statute;
- liens to secure the performance of any contract which is not directly or
indirectly in connection with the borrowing of money, obtaining of
advances or credit or securing of debt, as long as these liens are made
and are continuing in the ordinary course of our business;
- liens incurred (no matter when created) in connection with leveraged or
single-investor lease transactions we, or a Restricted Subsidiary may
engage in, as long as the documentation provides that the borrowings are
payable solely out of the income and proceeds of the property subject to
the lien, and are not a general obligation of ours or of any Restricted
Subsidiary; and
- the extension, renewal or replacement of any lien otherwise excluded, as
long as:
- the extension, renewal or replacement lien is limited to all or a part
of the same property, shares of stock or debt that secured the lien
which is extended, renewed or replaced, and
- the debt secured by the lien at the time is not increased. (Section
1104)
WAIVER OF LIMITATIONS ON LIEN COVENANT
The holders of a majority in principal amount of all affected series of
outstanding debt securities can waive compliance with the limitation on liens
covenant. (Section 1106)
SATISFACTION AND DISCHARGE; DEFEASANCE
We may be discharged from our obligations on the debt securities of any
series that have matured or will mature or be redeemed within one year if we
deposit with the trustee enough cash to pay all the principal, interest and any
premium due to the stated maturity date or redemption date of the debt
securities. (Section 501)
The indenture contains a provision that permits us to elect:
- to be discharged after 90 days from all of our obligations (subject to
limited exceptions) with respect to any series of debt securities then
outstanding; or
- to be released from our obligations under the following covenants and from
the consequences of an event of default or cross-default resulting from a
breach of these covenants:
- the limitations on consolidation, merger, conveyance or transfer and
- the limitation on liens.
To make either of the above elections, we must deposit in trust with the
trustee enough money to pay in full the principal, interest and premium on the
debt securities. This amount may be made in cash and/or U.S. government
obligations, if the debt securities are denominated in U.S. dollars. This amount
may be made in cash, and/or foreign government securities if the debt securities
are denominated in a foreign currency. As a condition to either of the above
elections, we must deliver to the trustee an opinion of counsel that the holders
of the debt securities will not recognize income, gain or loss for Federal
income tax purposes as a result of the action. (Section 503)
If either of the above events occur, the holders of the debt securities of
the series will not be entitled to the benefits of the indenture, except for
registration of transfer and exchange of debt securities and replacement of
lost, stolen or mutilated debt securities. (Sections 501 and 503)
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<PAGE>
EVENTS OF DEFAULT, NOTICE AND WAIVER
If an event of default for any series of debt securities occurs and
continues, the trustee or the holders of at least 25% in principal amount of the
debt securities of the series may by giving written notice to us, declare the
entire principal amount of all the debt securities of that series, together with
accrued interest, to be due and payable immediately. This declaration may be
annulled and past defaults may be waived by the holders of a majority of the
principal amount of the debt securities of that series. However, payment
defaults that are not cured may only be waived by all holders of debt securities
of the series. (Sections 602 and 613)
The indenture defines an "event of default" for any series of debt
securities as including one or more of the following events:
- we fail to pay interest on any debt security of a series when it becomes
due, and the default continues for 30 days;
- we fail to pay the principal or any premium on any debt securities of the
series when due;
- we fail to make any sinking fund payment when due;
- we fail to perform any other covenant in the indenture for a series of
debt securities and that default continues for 90 days after being given
notice;
- we enter into bankruptcy or become insolvent; and
- any other event of default, as we may agree upon for a particular series
of debt securities occurs under the terms of that particular series.
An event of default for one series of debt securities is not necessarily an
event of default for any other series of debt securities. (Section 601)
The indenture requires the trustee to give the holders of an affected series
of debt securities notice of a default within 90 days, unless the default is
cured or waived. However, the trustee may withhold this notice if it determines
in good faith that it is in the interest of those holders. The trustee may not,
however, withhold this notice in the case of a payment default. (Section 702)
Other than the duty to act with the required standard of care during an
event of default, a trustee is not obligated to exercise any of its rights or
powers under the indenture at the request or direction of any of the holders of
debt securities, unless the holders have offered to the trustee reasonable
indemnification. (Section 703)
Generally, the holders of a majority in principal amount of outstanding debt
securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee, or exercising any trust or
other power conferred on the trustee. (Section 612)
The indenture includes a covenant that we will file annually with the
trustee a certificate of no default, or specifying any default that exists.
(Section 1105)
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON THEIR REQUIREMENTS FOR GIVING NOTICE OR TAKING OTHER ACTIONS
UPON A DEFAULT.
MODIFICATION OF THE INDENTURE
Together with the trustee, we may modify the indenture without the consent
of the holders for limited purposes, including adding to our covenants or events
of default, establishing forms or terms of debt securities, curing ambiguities
and other purposes which do not adversely affect existing holders in any
important way. (Section 1001)
Together with the trustee, we may also modify and amend the indenture with
the consent of the holders of a majority in principal amount of the outstanding
debt securities of all affected series. However, without the consent of each
affected holder, no modification may:
- change the stated maturity of any debt security;
11
<PAGE>
- reduce the principal, premium (if any) or rate of interest on any debt
security;
- change any place of payment or the currency in which any debt security is
payable;
- impair the right to enforce any payment after the stated maturity or
redemption date;
- adversely affect the terms of any conversion right;
- reduce the percentage of holders of outstanding debt securities of any
series required to consent to any modification, amendment or waiver under
the indenture;
- change any of our obligations for outstanding debt securities of a series
to maintain an office or agency in the places and for the purposes
specified in the indenture for that series; or
- change certain amendment or waiver provisions in the indenture. (Section
1002)
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW APPROVAL MAY BE GRANTED OR DENIED IF WE WISH TO CHANGE
THE INDENTURE OR THE DEBT SECURITIES, REQUEST A WAIVER, OR OTHERWISE MODIFY THE
INDENTURE.
MEETINGS
The indenture provides for convening meetings of the holders of debt
securities of a series. (Section 1401) A meeting may be called at any time by
the trustee, upon our request, or upon the request of the holders of at least
10% in principal amount of the outstanding debt securities of the series. In
each case, notice will be given to the holders of debt securities of the series.
(Section 1402)
Persons holding a majority in principal amount of the outstanding debt
securities of a series will constitute a quorum at a meeting. A meeting called
by us or the trustee that did not have a quorum may be adjourned for not less
than 10 days, and if there is not a quorum at the adjourned meeting, the meeting
may be further adjourned for not less than 10 days. Generally, any resolution
presented at a meeting at which a quorum is present may be adopted by the
affirmative vote of the holders of a majority in principal amount of the
outstanding debt securities of that series. However, to change the amount or
timing of payments under the debt securities, every holder in the series must
consent. In addition, in those instances where the indenture provides that an
action may be taken by the holders of a specified percentage in principal amount
of outstanding debt securities of a series, that action may be taken at a
meeting at which a quorum is present by the affirmative vote of the holders of
that specified percentage in principal amount of the outstanding debt securities
of that series. Any resolution passed or decision taken at any meeting of
holders of debt securities of any series duly held under the terms of the
indenture will be binding on all holders of debt securities of that series and
the related coupons. (Section 1404)
NOTICES TO HOLDERS
In most instances, where the indenture requires that notice be provided to
holders, notice to holders of registered securities will be given by mail to the
addresses of the holders as they appear in the security register. Notices to
holders of bearer securities will be given by publication at least once in a
daily newspaper in The City of New York and in London. Notices may also be
published in another city or cities as may be specified in the bearer
securities. In addition, notices to holders of bearer securities will be mailed
to those persons whose names and addresses were previously filed with the
applicable trustee. (Section 106)
TITLE
Title to any bearer securities and any related coupons will pass by
delivery. We, the trustee and any agent of ours or the trustee may treat the
holder of any bearer security or related coupon as the absolute owner of that
security for all purposes. We may also treat the registered owner of any
registered security as the absolute owner of that security for all purposes.
(Section 407)
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REPLACEMENT OF SECURITIES AND COUPONS
It's important to keep your debt securities safe. We will replace debt
securities or coupons that have been mutilated at the expense of the holder when
the mutilated debt security or coupon is surrendered to the trustee. Debt
securities or coupons that become destroyed, stolen or lost will be replaced by
us at the expense of the holder when the trustee receives evidence of its
destruction, loss or theft satisfactory to us and the trustee. In the case of a
destroyed, lost or stolen debt security or coupon, the holder of the debt
security or coupon may be required to indemnify the trustee and us before a
replacement debt security will be issued. (Section 405)
GOVERNING LAW
The indenture, the debt securities and the coupons will be governed by, and
construed under, the laws of the State of New York. (Section 112)
OUR RELATIONSHIP WITH THE TRUSTEE
We maintain lines of credit, and have other customary banking relationships,
with the trustee under the indenture.
PLAN OF DISTRIBUTION
We may sell the debt securities:
- through underwriters,
- through agents or
- directly to purchasers.
We will describe, in the prospectus supplement, the terms of the offering of our
debt securities, including the following:
- the name or names of any underwriters;
- the purchase price and the proceeds we will receive from the sale;
- any underwriting discounts and other items constituting underwriters'
compensation;
- any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers;
- any securities exchanges on which the debt securities of the series may be
listed; and
- any other information we think is important.
If we use underwriters in the sale, the debt securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
The securities may be either offered to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a
syndicate. The obligations of the underwriters to purchase securities will be
subject to certain conditions, and the underwriters will be obligated to
purchase all the debt securities of a series if any are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Debt securities may be sold directly by us or through agents we designate
from time to time. Any agent involved in the offer or sale of the debt
securities under which this prospectus is delivered will be named and any
commissions we pay to that agent will be described in the prospectus supplement.
Unless we otherwise indicate in a prospectus supplement, any agent will be
acting on a best efforts basis for the period of its appointment.
We may authorize agents or underwriters to solicit offers by certain types
of institutions to purchase securities from us at the public offering price set
forth in the prospectus supplement under delayed delivery contracts. These
contracts will provide for payment and delivery on a
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<PAGE>
specified date in the future. The conditions to these contracts and the
commissions payable for solicitation of these contracts will be set forth in a
prospectus supplement.
Agents and underwriters may be entitled to indemnification by us against
civil liabilities arising out of this prospectus, including liabilities under
the Securities Act of 1933, or to contribution for payments which the agents or
underwriters may be required to make relating to those liabilities. Agents and
underwriters may be customers of, engage in transactions with, or perform
services for, us in the ordinary course of business.
Each series of securities will be a new issue of securities with no
established trading market. Any underwriter may make a market in the securities,
but will not be obligated to do so and may discontinue any market making at any
time without notice. Neither we, nor any underwriter, can provide any assurance
as to the liquidity of the trading market for any of the debt securities.
LEGAL OPINIONS
The legality of the debt securities will be passed upon by John J. Shay,
Jr., our Vice President, General Counsel and Secretary. Mr. Shay, together with
members of his family, owns, has options to purchase and has other interests in
shares of common stock of our parent company, IBM.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to our Annual Report on Form 10-K for the year ended December 31, 1998
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of that firm as experts in
auditing and accounting. Before the July 1, 1998 merger of Price Waterhouse LLP,
our former independent accountant, and Coopers & Lybrand L.L.P. (C&L) to form
PricewaterhouseCoopers LLP, the retirement plan of C&L purchased 14,500 shares
of our capital stock. All 14,500 shares were sold on December 1, 1998.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following statement sets forth the estimated amounts of expenses, other
than underwriting discounts, which may be borne by us in connection with the
offering described in this Registration Statement:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............. $2,780,000
Trustee's Fees.................................................. 50,000
Printing, Engraving and Bindery Expenses........................ 230,000
Rating Agency Fees.............................................. 100,000
Accounting Fees and Expenses.................................... 200,000
Legal Fees and Expenses......................................... 200,000
Blue Sky Fees and Expenses...................................... 50,000
Listing Fees.................................................... 5,000
Miscellaneous Expenses.......................................... 21,000
---------
Total Expenses................................................ $3,636,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Our By-Laws (Article VII, Section 3) provides as follows:
"The Corporation shall, to the fullest extent permitted by applicable
law as in effect at any time, indemnify any person made, or threatened to be
made, a party to an action or proceeding whether civil or criminal
(including an action or proceeding by or in the right of the Corporation or
any other corporation of any type or kind, domestic or foreign, or any
partnership, joint venture, trust, employee benefit plan or other
enterprise, for which any director or officer of the Corporation served in
any capacity at the request of the Corporation), by reason of the fact that
such person or such person's testator or intestate representative was a
director or officer of the Corporation, or served such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
in any capacity, against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees actually and necessarily
incurred as a result of such action or proceeding, or any appeal therein.
Such indemnification shall be a contract right and shall include the right
to be paid advances of any expenses incurred by such person in connection
with such action, suit or proceeding, consistent with the provisions of
applicable law in effect at any time. Indemnification shall be deemed to be
"permitted' within the meaning of the first sentence hereof if it is not
expressly prohibited by applicable law as in effect at the time."
Our Certificate of Incorporation (Article SEVENTH) provides as follows:
"Pursuant to Section 102(b) of the General Corporation Law of the State
of Delaware, the liability of the Corporation's directors to the Corporation
or its stockholders for damages for breach of fiduciary duty as a director
shall be eliminated to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as it exists on the date hereof or
as it may hereafter be amended. No amendment to or repeal of this Article
shall apply to or have any effect on the liability or alleged liability of
any director of the Corporation for or with respect to any acts or omissions
of such director occurring prior to such amendment or repeal."
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
that a corporation may indemnify directors and officers as well as other
employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than
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an action by or in the right of the corporation--a "derivative action"), if they
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal actions or proceedings, had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) actually and reasonably incurred in connection with the defense
or settlement of such action, and the DGCL requires court approval before there
can be any indemnification where the person seeking indemnification has been
found liable to the corporation. The DGCL provides that it is not exclusive of
other indemnification that may be granted by a corporation's by-laws,
disinterested director vote, stockholder vote, agreement or otherwise.
Section 102(b)(7) of the DGCL permits a provision in the certificate of
incorporation of each corporation organized thereunder, such as the company,
eliminating or limiting, with certain exceptions, the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director. The Certificate of Incorporation of the company
eliminates the liability of directors to the extent permitted by the DGCL.
The Company, through its parent, IBM, maintains directors' and officers'
insurance policies.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C> <C>
(1)(a) -- Form of Underwriting Agreement (incorporated by reference to Exhibit 1(a) to the
Company's Current Report on Form 8-K dated November 9, 1990, electronically
transmitted to the Securities and Exchange Commission on November 9, 1990).
(1)(b) -- Form of Agency Agreement dated March 13, 1992, as amended August 12, 1992, April
13, 1993, June 11, 1993, August 17, 1993, January 6, 1994, November 17, 1994,
August 8, 1996, June 27, 1997 and January 12, 1998, among the Company, Credit
Suisse First Boston Corporation, Goldman Sachs & Co., Lehman Brothers, Lehman
Special Securities Inc., Lehman Brothers Inc., Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated, Salomon
Brothers Inc, and Smith Barney Inc., as Agents (incorporated by reference to
Exhibit 1 to the Company's Current Report on Form 8-K dated March 13, 1992,
electronically transmitted to the Securities and Exchange Commission on March 13,
1992, incorporated by reference to Exhibit 1 to the Company's Current Report on
Form 8-K dated August 12, 1992, electronically transmitted to the Securities and
Exchange Commission on August 12, 1992, incorporated by reference to Exhibit 1 to
the Company's Current Report on Form 8-K dated April 13, 1993, electronically
transmitted to the Securities and Exchange Commission on April 13, 1993,
incorporated by reference to Exhibit 1 to the Company's Current Report on Form 8-K
dated June 11, 1993, electronically transmitted to the Securities and Exchange
Commission on June 11, 1993, incorporated by reference to Exhibit 1 to the
Company's Current Report on Form 8-K dated August 17, 1993, electronically
transmitted to the Securities and Exchange Commission on August 17, 1993,
incorporated by reference to Exhibit 1 to the Company's Current Report on Form 8-K
dated November 17, 1994, electronically transmitted to the Securities and Exchange
Commission on November 18, 1994, incorporated by reference to Exhibit 1 to the
Company's Current Report on Form 8-K dated August 9, 1996 and electronically
transmitted to the Securities and Exchange Commission on August 9, 1996,
incorporated by reference to Exhibit 1 to the Company's Current Report on Form 8-K
dated June 27, 1997 and electronically transmitted to the Securities and Exchange
Commission on June 27, 1997, and incorporated by reference to Exhibit 1 to the
Company's Current Report on Form 8-K dated January 16, 1998 and electronically
transmitted to the Securities and Exchange Commission on January 16, 1998).
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C> <C>
(4)(a) -- Form of Indenture dated as of January 15, 1989, between the Company and The Chase
Manhattan Bank (National Association), as Trustee (incorporated by reference to
Exhibit 4 to Amendment No. 1 to the Company's Registration Statement on Form S-3
(Registration No. 33-27339) ("Amendment No. 1"), electronically transmitted to the
Securities and Exchange Commission on April 3, 1989).
(4)(b) -- First Supplemental Indenture dated as of April 29, 1997 to the Indenture dated as
of January 15, 1989 between the Company and The Chase Manhattan Bank (National
Association) (incorporated by reference to Exhibit 4(b) to the Company's
Registration Statement on Form S-3 (Registration No. 333-26211), electronically
transmitted to the Securities and Exchange Commission on April 30, 1997).
(4)(c) -- Form of Fixed Rate Non-Redeemable Medium-Term Note (incorporated by reference to
Exhibit 4(a) to Amendment No. 1).
(4)(d) -- Form of Fixed Rate Redeemable Medium-Term Note (incorporated by reference to
Exhibit 4(b) to Amendment No. 1).
(4)(e) -- Form of Floating Rate Non-Redeemable Medium-Term Note (incorporated by reference
to Exhibit 4(c) to Amendment No. 1).
(4)(f) -- Form of Fixed Rate Security with Optional Redemption (incorporated by reference to
Exhibit 4(g) to Amendment No. 1).
(4)(g) -- Form of Fixed Rate Security with Optional Redemption and Sinking Fund
(incorporated by reference to Exhibit 4(h) to Amendment No. 1).
(4)(h) -- Form of Extendible Security with Optional Redemption (incorporated by reference to
Exhibit 4(i) to Amendment No. 1).
(4)(i) -- Form of Zero Coupon Security with Optional Redemption (incorporated by reference
to Exhibit 4(j) to Amendment No. 1).
(4)(j) -- Form of Original Issue Discount Security with Optional Redemption (incorporated by
reference to Exhibit 4(k) to Amendment No. 1).
(5) -- Opinion of John J. Shay, Jr., Esq.*
(12) -- Computation of Ratio of Earnings to Fixed Charges.*
(23)(a) -- Consent of PricewaterhouseCoopers LLP.*
(23)(b) -- Consent of Counsel (included in Exhibit 5).*
(24)(a) -- Powers of Attorney.*
(24)(b) -- Certified Copy of resolutions of our Company's Board of Directors authorizing the
execution of the registration statement by power of attorney. *
(25) -- Statement of Eligibility and Qualification on Form T-1 of The Chase Manhattan Bank
to act as Trustee under the Indenture.*
</TABLE>
- ------------------------
* Filed electronically with this registration statement.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement (other than as
provided in the proviso and instructions to
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Item 512(a) of Regulation S-K) (i) to include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the
prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in
the information set forth in the registration statement; and (iii) to
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(5) To file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a) of Section 310 of the
Trust Indenture Act in accordance with the rules and regulations prescribed
by the Commission under Section 305(b)(2) of the Trust Indenture Act.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person in the successful defense of any action,
suit or proceeding) is asserted by such officer, director or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
or not such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of North Castle, State of New York, on the 7th day of
September, 1999.
<TABLE>
<S> <C> <C>
IBM CREDIT CORPORATION
(Registrant)
By: *
-----------------------------------------
Joseph C. Lane
PRESIDENT AND DIRECTOR
(PRINCIPAL EXECUTIVE OFFICER)
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
* President and Director
- ------------------------------ (Principal Executive September 7, 1999
Joseph C. Lane Officer)
Vice President, Finance
* and Director (Principal
- ------------------------------ Financial and Accounting September 7, 1999
Paula L. Summa Officer)
*
- ------------------------------ Director September 7, 1999
Walter S. Berman
</TABLE>
<TABLE>
<S> <C>
By: /s/ JOHN J. SHAY, JR.
--------------------------------------
John J. Shay, Jr.
Attorney-in-Fact
</TABLE>
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EXHIBIT 12
IBM CREDIT CORPORATION
STATEMENT RE COMPUTATION OF RATIOS
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30 YEAR ENDED DECEMBER 31,
---------------------- ------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1999 1998 1998 1997 1996 1995 1994
- ------------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed Charges:
Interest expense.................... $ 278,690 $ 311,336 $ 611,206 $ 538,560 $ 436,109 $ 394,572 $ 306,125
Approximate portion of rental
expense representative of the
interest factor................... 48 120 239 283 479 507 2,780
---------- ---------- ------------ ---------- ---------- ---------- ----------
Total fixed charges................. 278,738 311,456 611,445 538,843 436,588 395,079 308,905
Net earnings........................ 193,693 147,295 308,765 283,893 271,082 230,475 250,589
Provision for income taxes.......... 125,933 95,766 200,748 163,215 176,122 149,455 162,703
Earnings before income taxes and
fixed charges..................... $ 598,364 $ 554,517 $ 1,102,958 $ 985,951 $ 883,792 $ 775,009 $ 722,197
---------- ---------- ------------ ---------- ---------- ---------- ----------
---------- ---------- ------------ ---------- ---------- ---------- ----------
Ratio of earnings to fixed
charges........................... 2.15 1.78 1.83 1.83 2.02 1.96 2.34
---------- ---------- ------------ ---------- ---------- ---------- ----------
---------- ---------- ------------ ---------- ---------- ---------- ----------
</TABLE>
<PAGE>
EXHIBIT 5
IBM CREDIT CORPORATION
Office of the Vice President, General Counsel and Secretary
North Castle Drive
Armonk, New York 10504
September 7, 1999
Dear Ladies and Gentlemen:
As the Vice President, General Counsel and Secretary of IBM Credit
Corporation, a Delaware corporation (hereinafter called the "Company"), I am
giving this opinion in connection with the proposed issuance of up to
$10,898,150,000 principal amount of debt securities (the "Debt Securities")
of the Company to be issued under an Indenture dated as of January 15, 1989,
as amended or supplemented from time to time (the "Indenture"), between the
Company and The Chase Manhattan Bank, as Trustee (the "Trustee").
I, together with competent securities counsel for the Company acting under
my direct control and supervision, have examined originals, or copies certified
or otherwise identified to my satisfaction, of such documents, corporate records
and other instruments as I have deemed necessary for the purposes of this
opinion, including: (a) the Certificate of Incorporation of the Company; (b) the
By-laws of the Company; and (c) the Indenture.
Based upon the foregoing, I am of the following opinion:
1. The Company has been duly incorporated and is a validly existing
corporation under the laws of the State of Delaware.
2. Assuming that the Indenture has been duly executed and delivered by the
Company and the Trustee and that the Debt Securities have been duly authorized,
executed and delivered on behalf of the Company in accordance with the
Indenture, authenticated by the Trustee and sold by the Company, the Debt
Securities will constitute valid and binding obligations of the Company and will
be entitled to the benefits of the Indenture,
<PAGE>
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights generally
from time to time in effect, and subject further to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
I understand that I may be referred to as legal counsel who has passed upon
the validity of the Debt Securities on behalf of the Company in a prospectus
forming a part of the Registration Statement on Form S-3 relating to the Debt
Securities filed with the Securities and Exchange Commission under the
Securities Act of 1933, and I hereby consent to such use of my name in that
Registration Statement and to the use of this opinion for filing with that
Registration Statement in accordance with Item 601 of Regulation S-K.
Very truly yours,
/s/John J. Shay, Jr.
John J. Shay, Jr.
Vice President, General Counsel
and Secretary
JJS:ssm
<PAGE>
EXHIBIT 12
IBM CREDIT CORPORATION
STATEMENT RE COMPUTATION OF RATIOS
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30 YEAR ENDED DECEMBER 31,
---------------------- ------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1999 1998 1998 1997 1996 1995 1994
- ------------------------------------ ---------- ---------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed Charges:
Interest expense.................... $ 278,690 $ 311,336 $ 611,206 $ 538,560 $ 436,109 $ 394,572 $ 306,125
Approximate portion of rental
expense representative of the
interest factor................... 48 120 239 283 479 507 2,780
---------- ---------- ------------ ---------- ---------- ---------- ----------
Total fixed charges................. 278,738 311,456 611,445 538,843 436,588 395,079 308,905
Net earnings........................ 193,693 147,295 308,765 283,893 271,082 230,475 250,589
Provision for income taxes.......... 125,933 95,766 200,748 163,215 176,122 149,455 162,703
Earnings before income taxes and
fixed charges..................... $ 598,364 $ 554,517 $ 1,102,958 $ 985,951 $ 883,792 $ 775,009 $ 722,197
---------- ---------- ------------ ---------- ---------- ---------- ----------
---------- ---------- ------------ ---------- ---------- ---------- ----------
Ratio of earnings to fixed
charges........................... 2.15 1.78 1.83 1.83 2.02 1.96 2.34
---------- ---------- ------------ ---------- ---------- ---------- ----------
---------- ---------- ------------ ---------- ---------- ---------- ----------
</TABLE>
<PAGE>
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 21, 1999 (except as to the
Subsequent Events note on page 43, which is as of February 25, 1999) which
appears in IBM Credit Corporation's Annual Report on Form 10-K for the year
ended December 31, 1998. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Stamford, CT
September 3, 1999
<PAGE>
EXHIBIT (24)(A)
POWER OF ATTORNEY OF DIRECTORS
KNOW ALL PERSONS BY THESE PRESENTS, that I, a Director of IBM Credit
Corporation, a Delaware corporation (the "Corporation"), which may file with the
Securities and Exchange Commission (the "SEC"), Washington, D.C., under the
provisions of the Securities Act of 1933, a shelf registration statement
pursuant to Rule 415 under the Securities Act of 1933 for $10,000,000,000 (plus
any amounts issuable under Rule 429 pursuant to Registration Statement No.
333-42755), of Indebtedness of the Corporation, hereby constitute and appoint
Walter S. Berman, Joseph C. Lane, Paula L. Summa, John V. Palermo, Cassio A.
Calil, John J. Shay, Jr., and Joanne H. Barbrack, and each of them, my true and
lawful attorneys-in-fact and agents, with full power to act, together or each
without the others, for me and in my name, place and stead, in any and all
capacities, to sign, or cause to be signed electronically, such registration
statement and any and all amendments to the aforementioned registration
statement, and to file said registration statement and amendments thereto so
signed with all exhibits thereto, and any and all other documents in connection
therewith, with the SEC, hereby granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, we have each executed this Power of Attorney as of
this 19th day of August, 1999.
/s/ Walter S. Berman
Walter S. Berman
Director
/s/ Joseph C. Lane
Joseph C. Lane
Director
/s/ Paula L. Summa
Paula L. Summa
Director
<PAGE>
EXHIBIT (24)(A)
POWER OF ATTORNEY OF THE PRINCIPAL EXECUTIVE OFFICER
KNOW ALL PERSONS BY THESE PRESENTS, that I, Joseph C. Lane, the
President of IBM Credit Corporation, a Delaware corporation (the "Corporation"),
which may file with the Securities and Exchange Commission (the "SEC"),
Washington, D.C., under the provisions of the Securities Act of 1933, a shelf
registration statement pursuant to Rule 415 under the Securities Act of 1933 for
$10,000,000,000 (plus any amounts issuable under Rule 429 pursuant to
Registration Statement No. 333-42755), of Indebtedness of the Corporation,
hereby constitute and appoint Walter S. Berman, Paula L. Summa, John V. Palermo,
Cassio A. Calil, John J. Shay, Jr., and Joanne H. Barbrack, and each of them, my
true and lawful attorneys-in-fact and agents, with full power to act, together
or each without the others, for me and in my name, place and stead, in any and
all capacities, to sign, or cause to be signed electronically, such registration
statement and any and all amendments to the aforementioned registration
statement, and to file said registration statement and amendments thereto so
signed with all exhibits thereto, and any and all other documents in connection
therewith, with the SEC, hereby granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have executed this Power of Attorney as of this
19th day of August, 1999.
/s/ Joseph C. Lane
-----------------------
Joseph C. Lane
President
<PAGE>
EXHIBIT (24)(A)
POWER OF ATTORNEY OF THE PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER
KNOW ALL PERSONS BY THESE PRESENTS, that I, Paula L. Summa, the Vice
President, Finance of IBM Credit Corporation, a Delaware corporation (the
"Corporation"), which may file with the Securities and Exchange Commission (the
"SEC"), Washington, D.C., under the provisions of the Securities Act of 1933, a
shelf registration statement pursuant to Rule 415 under the Securities Act of
1933 for $10,000,000,000 (plus any amounts issuable under Rule 429 pursuant to
Registration Statement No. 333-42755), of Indebtedness of the Corporation,
hereby constitute and appoint Walter S. Berman, Joseph C. Lane, John V. Palermo,
Cassio A. Calil, John J. Shay, Jr., and Joanne H. Barbrack, and each of them, my
true and lawful attorneys-in-fact and agents, with full power to act, together
or each without the others, for me and in my name, place and stead, in any and
all capacities, to sign, or cause to be signed electronically, such registration
statement and any and all amendments to the aforementioned registration
statement, and to file said registration statement and amendments thereto so
signed with all exhibits thereto, and any and all other documents in connection
therewith, with the SEC, hereby granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, we have each executed this Power of Attorney as of
this 19th day of August, 1999.
/s/ Paula L. Summa
----------------------
Paula L. Summa
Vice President, Finance
<PAGE>
EXHIBIT (24)(B)
IBM Credit Corporation
Secretary's Certificate
The undersigned, John J. Shay, Jr., Secretary of IBM Credit Corporation (the
"Corporation"), does hereby certify that appended hereto as Attachment A is a
true, correct and complete copy of resolutions adopted by the Board of Directors
of the Corporation, authorizing the execution of the registration statement by
power of attorney.
IBM Credit Corporation
By:/s/ John J. Shay, Jr.
-------------------------
John J. Shay, Jr.
Secretary
<PAGE>
ATTACHMENT A TO EXHIBIT (24)(B)
RESOLVED, that the Board of Directors of the Corporation hereby
authorizes (in addition to the authority previously granted by resolutions of
the Board of Directors or the Pricing Committee thereof, all of which other
resolutions remain in full force and effect on the date hereof) the issuance and
sale by the Corporation of notes, debentures or other debt instruments (the
"Indebtedness") of the Corporation from time to time under a registration
statement to be filed with the Securities and Exchange Commission pursuant to
these resolutions of an additional $10,000,000,000 of Indebtedness; and be it
further
RESOLVED, that the Indebtedness, for purposes of these resolutions,
shall exclude all notes, debentures or other debt having a maturity of less than
nine months at the time of issuance, and all notes issued to banks pursuant to
lines of credit and all debt which is privately placed or sold pursuant to an
exemption from the U.S. or other foreign securities laws. The Indebtedness shall
include, without limitation, debt denominated in U.S. dollars or in a foreign
currency computed at a conversion rate prevailing on dates determined by either
the President, any Vice President, Treasurer or Assistant Treasurer to be
relevant to the issuance of such Indebtedness, with such Indebtedness to be
registered under the Securities Act of 1933 or sold pursuant to an exemption
therefrom, or outside the scope thereof; and be it further
RESOLVED, that the President, any Vice President, Treasurer or
Assistant Treasurer or any of them acting individually be, and they hereby are,
delegated full power and authority to authorize and approve the issuance of
Indebtedness of the Corporation pursuant to any of the resolutions referenced
herein, and, in connection therewith, to determine the terms and provisions of
such Indebtedness and of the issuance and sale thereof, including, without
limitation, the following: (I) the principal amount of such Indebtedness, (ii)
the final maturity date of such Indebtedness and any sinking fund or other
repayment provisions, (iii) the effective rate of interest of such Indebtedness,
(iv) the price at which such Indebtedness shall be sold by the Corporation, (v)
the provisions, if any, for the redemption of such Indebtedness and the
premiums, if any, to be paid upon any such redemption, (vi) the right to convert
such Indebtedness into or exchange such Indebtedness for shares or other
securities of the Corporation or any other corporation, (vii) the form, terms
and provisions of any indentures, fiscal
<PAGE>
agency agreements or other instruments under which such Indebtedness may be
issued and the banks or trust companies to act as trustees, fiscal agents and
paying agents thereunder, (viii) the preparation and filing of all documents
necessary or appropriate in connection with the registration of the Indebtedness
under the Securities Act of 1933, the qualification of an indenture under the
Trust Indenture Act of 1939 and the qualification under any other applicable
Federal, foreign, state, local or other governmental requirements, (ix) the
preparation of any offering memorandum or other descriptive material relating to
the issuance of such Indebtedness, (x) the listing of the Indebtedness on any
United States or non-United States stock exchange, and (xi) underwriting
arrangements; and be it further
RESOLVED, that the proper officers of the Corporation be, and hereby
are, authorized, and directed to prepare for filing with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of the
Securities Act of 1933, a shelf registration statement pursuant to Rule 415
under the Securities Act of 1933, for a total amount which includes both the
$10,000,000,000 authorized by these resolutions plus all amounts then available
for issuance under Rule 429 pursuant to Registration Statement No. 333-42755, of
Indebtedness of the Corporation that may be issued in the future pursuant to
these resolutions, and that each of Walter S. Berman, Joseph C. Lane, Paula L.
Summa, John V. Palermo, Cassio A. Calil, John J. Shay, Jr., and Joanne H.
Barbrack be, and each of them is hereby vested with full power to act, together
or each without the others, in any and all capacities, in the name and on behalf
of the Corporation to sign, or cause to be signed electronically, such
registration statement (which may constitute a post-effective amendment to a
registration statement previously filed with the SEC) and any and all amendments
to the aforementioned registration statement, and to file said registration
statement and amendments thereto so signed with all exhibits thereto, and any
and all other documents in connection therewith, with the SEC, and all actions
in connection with the preparation, execution and filing of said registration
statement with the SEC on behalf of and as attorneys for the Corporation are
hereby ratified, approved and adopted in all respects; and be it further
RESOLVED, that the President, any Vice President, Treasurer or
Assistant Treasurer or any of them acting individually be, and they hereby are,
authorized in the name and on behalf of the Corporation, to take any and all
action which they may deem necessary or advisable in order to effect the
registration or
2
<PAGE>
qualification (or exemption therefrom) of the Indebtedness for issue, offer,
sale or trade under the Blue Sky or securities laws of any of the States of the
United States of America as well as in any foreign jurisdiction and political
subdivisions thereof, and in connection therewith to execute, acknowledge,
verify, deliver, file or cause to be published any applications, reports,
consents to service of process, appointments of attorneys to receive service of
process and other papers and instruments which may be required under such laws,
and to take any and all further action which they may deem necessary or
advisable in order to maintain any such registration, qualification or exemption
for as long as they deem necessary or as required by law, and that the execution
by such officers of any such paper or document, or the doing by them of any act
in connection with the foregoing matters shall conclusively establish their
authority therefor from the Corporation and the ratification by the Corporation
of the papers and documents so executed and the actions so taken; and be it
further
RESOLVED, that the Corporation is hereby authorized to list the
Indebtedness on any public exchanges, and that the President, any Vice
President, Treasurer or Assistant Treasurer, or any of them acting individually
be, and they hereby are authorized on behalf of the Corporation to execute all
listing applications, fee agreements and other documents in connection with the
foregoing; and be it further
RESOLVED, that the President, any Vice President, Treasurer or
Assistant Treasurer, or any of them acting individually be, and they hereby are,
authorized to take all such further action and to execute all such further
instruments and documents in the name and on behalf of the Corporation and under
its corporate seal or otherwise, and to pay all expenses and taxes as in their
own good judgment shall be necessary, proper or advisable in order fully to
carry out the intent and accomplish the purposes of the foregoing Resolutions;
and be it further
RESOLVED, that the President, any Vice President, Treasurer or
Assistant Treasurer or any of them acting individually shall have the authority
to further delegate, in whole or in part, the authority provided in these
Resolutions to any other officer or employee of the Corporation or any of its
affiliates.
3
<PAGE>
EXHIBIT 25
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-----------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
--------------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer identification No.)
if not a national bank)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
IBM Credit Corporation
--------------------------------------------
(Exact name of obligor as specified in its charter)
<PAGE>
Delaware 22-2351962
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) No.)
One North Castle Drive
Armonk, New York 10504
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
DEBT SECURITIES
(Title of the indenture securities)
GENERAL
Item 1.
General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street,
New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence Business
(see Exhibit 2 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained in the
documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-76439, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit
6 to Form T-1 filed in connection with Registration Statement No. 33-50010,
which is incorporated by reference. On July 14, 1996, in connection with the
merger of Chemical Bank and The Chase Manhattan Bank (National Association),
Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published pursuant
to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 24th day of August, 1999.
THE CHASE MANHATTAN BANK
By /s/Jennifer F. Smith
--------------------
Jennifer F. Smith
Assistant Vice President
<PAGE>
EXHIBIT 7 TO FORM T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1999,
in accordance with a call made by the Federal
Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ............................................................... $ 15,364
Interest-bearing balances ....................................................... 3,811
Securities: .........................................................................
Held to maturity securities........................................................... 1,084
Available for sale securities......................................................... 49,894
Federal funds sold and securities purchased under
agreements to resell ............................................................ 27,638
Loans and lease financing receivables:
Loans and leases, net of unearned income $131,839
Less: Allowance for loan and lease losses 2,642
Less: Allocated transfer risk reserve ......... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve .......................................................... 129,197
Trading Assets ....................................................................... 45,483
Premises and fixed assets (including capitalized
leases).......................................................................... 3,124
Other real estate owned .............................................................. 242
Investments in unconsolidated subsidiaries and
associated companies............................................................. 171
Customers' liability to this bank on acceptances
outstanding ..................................................................... 974
Intangible assets .................................................................... 2,017
Other assets ......................................................................... 12,477
--------
TOTAL ASSETS ....................................................................... $291,476
--------
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ........................................................... $102,273
Noninterest-bearing ......................................... $39,135
Interest-bearing ............................................ 63,138
-------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ........................................................ 74,586
Noninterest-bearing ........................................$ 4,221
Interest-bearing ............................................. 70,365
Federal funds purchased and securities sold under agree-
ments to repurchase ................................................................ 41,039
Demand notes issued to the U.S. Treasury ........................................... 1,000
Trading liabilities ................................................................ 32,929
Otherborrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ................................. 4,353
With a remaining maturity of more than one year .
through three years..................................................... 14
With a remaining maturity of more than three years........................... 92
Bank's liability on acceptances executed and outstanding 974
Subordinated notes and debentures .................................................. 5,427
Other liabilities .................................................................. 9,684
TOTAL LIABILITIES .................................................................. 272,371
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock ....................................................................... 1,211
Surplus (exclude all surplus related to preferred stock)........................... 11,016
Undivided profits and capital reserves ............................................. 7,040
Net unrealized holding gains (losses)
on available-for-sale securities ................................................... (179)
Accumulated net gains (losses) on cash flow hedges.................................. 0
Cumulative foreign currency translation adjustments ................................ 17
TOTAL EQUITY CAPITAL ............................................................... 19,105
------
TOTAL LIABILITIES AND EQUITY CAPITAL ............................................... $291,476
--------
--------
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
