<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-86879
THE INFORMATION CONTAINED IN THIS SUPPLEMENT
IS SUBJECT TO COMPLETION AND AMENDMENT.
SUBJECT TO COMPLETION, DATED NOVEMBER 24, 1999
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 23, 1999)
[GATX Logo] $300,000,000
GATX CAPITAL CORPORATION
____% NOTES DUE 200_
------------------
The notes will bear interest at a rate of % per year. Interest on the
notes is payable in arrears on and of each year,
beginning on . The notes will mature on .
The notes may not be redeemed prior to maturity.
The notes will be senior securities and will rank equally and ratably with
our other senior indebtedness.
------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the related prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
------------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- ------------
<S> <C> <C>
Public Offering Price....................................... 100% $300,000,000
Underwriting Discount....................................... % $
Proceeds to GATX Capital (before expenses).................. % $
</TABLE>
------------------
The underwriters expect to deliver the notes to purchasers in book-entry
form only, through the facilities of The Depository Trust Company, on or about
December , 1999.
------------------
Joint Book Running Managers
SALOMON SMITH BARNEY CHASE SECURITIES INC.
, 1999
<PAGE> 2
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION OR TO MAKE ANY
ADDITIONAL REPRESENTATIONS. 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 CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS
PROSPECTUS SUPPLEMENT.
Unless the context indicates otherwise, the words "GATX Capital," "we,"
"our," "ours" and "us" refer to GATX Capital Corporation and its consolidated
subsidiaries.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
GATX Capital................................................ S-1
Recent Developments......................................... S-1
Third Quarter Operating Results............................. S-2
Use of Proceeds............................................. S-2
Capitalization.............................................. S-2
Selected Financial Data..................................... S-3
Description of Notes........................................ S-4
Concerning the Trustee...................................... S-8
Underwriting................................................ S-9
Legal Opinions.............................................. S-10
PROSPECTUS
About This Prospectus....................................... 2
Where You Can Find More Information......................... 2
Information Incorporated By Reference....................... 3
Disclosure Regarding Forward-Looking Statements............. 3
The Company................................................. 4
Recent Developments......................................... 4
Risk Factors................................................ 5
Use of Proceeds............................................. 5
Ratio of Earnings to Fixed Charges.......................... 5
Description of Debt Securities.............................. 5
Plan of Distribution........................................ 10
Legal Opinions.............................................. 11
Experts..................................................... 11
</TABLE>
ii
<PAGE> 3
GATX CAPITAL
We are a diversified global financial services company which provides
asset-based financing for transportation, information technology and industrial
equipment. Our strategy is to invest in and manage assets by combining our asset
knowledge, transaction-structuring capabilities and portfolio management
expertise to control assets with significant upside potential. We and our
subsidiaries actively invest in a wide variety of assets. These investments are
made through a variety of financing instruments, primarily leases and loans,
either for our own account or through partnerships and joint ventures. We
actively manage our existing portfolio of investments as well as those of
institutional investors, and several joint ventures and partnerships in which we
participate. Key strategic partners include a cross section of domestic and
international commercial banks, insurance companies and large industrial
companies and manufacturers. Additionally, we arrange secured financing for
others.
GATX Corporation ("GATX") owns all of our common and preferred stock
through a wholly owned subsidiary. GATX founded GATX Capital as GATX Leasing
Corporation, a Delaware corporation, in 1968 to own, sell and finance equipment
independent of GATX's own specialized equipment activities. Since that time, we
have developed a portfolio of earning assets diversified across industries and
equipment classifications. At September 30, 1999, GATX Capital's investment
portfolio of approximately $2.6 billion, before reserves, consisted of
commercial jet aircraft (27%), railroad equipment (14%), information technology
equipment (26%), marine equipment (7%), warehouse and production equipment (4%),
and other equipment (22%).
We had a financial and management interest in 125 aircraft as of September
30, 1999, and orders and options for an additional 14 aircraft (excluding orders
of GATX Flightlease Aircraft Company Ltd. as discussed below under "Recent
Developments"). All of the aircraft portfolio is compliant with Stage 3 noise
regulations. GATX Capital also had a financial and management interest in 960
locomotives and 54,649 railcars as of September 30, 1999. The utilization rate
on the operating lease fleet for our aircraft, locomotives and railcars as of
that date was approximately 100%, 99.6% and 97.3%, respectively.
We regularly purchase assets from manufacturers, including those of
commercial aircraft, or others to acquire, directly or through joint ventures
and partnerships in which we participate, additional equipment to complement our
investment portfolio. Such purchases may be material in amount and have an
effect on our financial condition, results of operations and debt service
capability.
RECENT DEVELOPMENTS
In 1999, GATX Third Aircraft Corporation (a wholly owned subsidiary of GATX
Capital) entered into a joint venture with Flightlease Holdings (Guernsey)
Limited (a wholly owned subsidiary of Flightlease AG), to form GATX Flightlease
Aircraft Company Ltd. ("GFAC"). GFAC was formed as an aircraft ownership entity.
On September 21, 1999, we announced that GFAC had entered into an agreement to
purchase 38 Airbus Industrie aircraft with a list price in excess of $2 billion.
The aircraft order includes 32 new A320 family aircraft (including 12 A318
aircraft) and six A330 family aircraft, with deliveries beginning in 2001 and
continuing through 2006. The aircraft will be managed by GATX Flightlease
Management GmbH. GATX Capital has guaranteed 50% of the obligations of GFAC, on
a several basis, under the purchase agreement with Airbus Industries.
In the normal course of business we have identified two investments which
will require write-downs in the fourth quarter of 1999: (i) an aircraft lease
subject to a recently agreed upon restructuring plan, and (ii) a steel
production facility currently classified as a non-income earning investment. The
cumulative write-down for these investments has not yet been determined but is
likely to be between $15 million and $30 million and will be fully absorbed by
the allowance for possible losses.
S-1
<PAGE> 4
THIRD QUARTER OPERATING RESULTS
We reported net income of $19.4 million for the three months ended
September 30, 1999, up $1.6 million (9%) from the same period in 1998. The
increase in income was largely due to income from higher average investment
balances, the prepayment of several loans and the related prepayment fees, and
an increase in income from stock sales, partially offset by a decrease in asset
remarketing income. Stock sales generally relate to shares received upon
exercise of warrants received in connection with the financing of non-public,
start-up companies. Income from stock sales increased $6.3 million during the
third quarter of 1999 compared to the third quarter of 1998. Asset remarketing
income totaled $14.6 million and $27.0 million for the third quarters of 1999
and 1998, respectively. Earnings may be significantly affected by the amount of
asset remarketing income, which varies from quarter to quarter.
USE OF PROCEEDS
The net proceeds to us from the sale of the notes offered under this
prospectus supplement are estimated to be $ million. We intend to use the
proceeds to repay short-term debt and for general corporate purposes.
CAPITALIZATION
The following table sets forth the capitalization of GATX Capital (i) at
September 30, 1999 and (ii) as adjusted to give effect to the issuance of the
notes.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
-------------------------
ACTUAL ADJUSTED(1)
---------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
DEBT FINANCING:
Commercial paper and bankers' acceptances................... $ 238,800 $ 52,807
Notes payable............................................. 112,057 --
Obligations under capital leases.......................... 7,029 7,029
Senior term notes......................................... 1,150,000 1,450,000
---------- ----------
Total debt financing................................... $1,507,886 $1,509,836
========== ==========
STOCKHOLDER'S EQUITY:
Convertible preferred stock, par value $1, and additional
paid-in capital........................................ $ 125,000 $ 125,000
Common stock, par value $1, and additional paid-in
capital................................................ 28,960 28,960
Accumulated other comprehensive income.................... 6,496 6,496
Reinvested earnings....................................... 273,036 273,036
---------- ----------
Total stockholder's equity............................. $ 433,492 $ 433,492
========== ==========
</TABLE>
- ---------------
(1) Assumes net proceeds to us (after expenses) of $298.1 million.
S-2
<PAGE> 5
SELECTED FINANCIAL DATA
The following selected financial data of GATX Capital and its subsidiaries
should be read in conjunction with the detailed information and consolidated
financial statements and notes thereto included in the documents described under
"Information Incorporated by Reference" in the accompanying prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1999 1998 1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Lease income...................... $ 231,258 $ 196,985 $ 267,966 $ 245,523 $ 195,745 $ 139,712 $ 143,639
Gain on sale of assets............ 50,196 53,337 69,423 68,899 31,786 33,123 21,444
Equity earnings from investment in
joint ventures.................. 45,740 33,812 45,850 27,909 22,411 18,594 9,242
Fees.............................. 22,828 34,074 38,832 29,371 31,840 19,026 10,111
Interest.......................... 30,271 25,308 34,110 23,271 28,374 23,179 27,085
Other............................. 19,510 8,027 10,271 10,895 10,257 2,875 4,511
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total earned income............. 399,803 351,543 466,452 405,868 320,413 236,509 216,032
Expenses:
Operating leases.................. 128,537 101,403 139,160 118,096 77,289 50,424 50,621
Selling, general and
administrative.................. 77,928 56,395 77,439 83,657 62,500 43,517 39,296
Interest.......................... 83,502 84,030 110,187 94,305 85,836 68,396 62,744
Provision for losses on
investments..................... 8,251 7,775 11,029 11,033 12,744 18,000 19,000
Other............................. 3,579 2,430 5,479 8,487 4,444 828 735
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total expenses.................. 301,797 252,033 343,294 315,578 242,813 181,165 172,396
Income from continuing operations
before income taxes............. 98,006 99,510 123,158 90,290 77,600 55,344 43,636
Provision for income taxes........ 39,448 39,276 51,267 36,366 32,286 22,740 18,785
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations...................... 58,558 60,234 71,891 53,924 45,314 32,604 24,851
Discontinued operations:
(Loss) income from discontinued
operations, net of income
taxes........................... (4,642) (7,363) (12,574) (360) 541 -- --
Gain on sale of discontinued
operations, net of income tax
benefits of $1,853.............. 2,137 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income...................... 56,053 52,871 59,317 53,564 45,855 32,604 24,851
Reinvested earnings at beginning of
year.............................. 242,409 212,750 212,750 185,686 162,400 146,036 133,570
Dividends paid to stockholder....... (25,426) (23,258) (29,658) (26,500) (22,569) (16,240) (12,385)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Reinvested earnings at end of
period.............................. $ 273,036 $ 242,363 $ 242,409 $ 212,750 $ 185,686 $ 162,400 $ 146,036
========== ========== ========== ========== ========== ========== ==========
BALANCE SHEET DATA
(END OF PERIOD)
Total investments................... $2,556,591 $2,065,116 $2,160,168 $2,179,310 $1,779,568 $1,517,286 $1,284,807
Allowance for losses on
investments....................... (139,315) (122,880) (129,278) (121,576) (114,096) (92,489) (82,206)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net investments................... 2,417,276 1,942,236 2,030,890 2,057,734 1,665,472 1,424,797 1,202,601
Total assets........................ 2,551,349 2,151,111 2,275,682 2,317,143 1,848,629 1,518,383 1,269,590
Total debt financing................ 1,507,886 1,131,353 1,239,557 1,367,347 1,024,915 880,885 771,886
Nonrecourse obligations............. 338,527 369,950 381,390 329,820 268,044 193,446 55,270
Total liabilities................... 2,117,857 1,756,108 1,878,541 1,950,218 1,504,952 1,201,383 970,353
Stockholder's equity................ 433,492 395,003 397,141 366,925 343,677 317,000 299,237
SELECTED FINANCIAL RATIOS:
Return on average total
investments....................... 3.17%* 3.32%* 2.73% 2.71% 2.78% 2.33% 1.94%
Return on average common equity..... 25.74* 27.54* 23.08 23.26 22.33 17.80 14.77
Allowance for losses/total
investments....................... 5.45 5.95 5.98 5.58 6.41 6.10 6.40
Total debt financing/stockholder's
equity............................ 3.48x 2.86x 3.12x 3.73x 2.98x 2.78x 2.58x
Ratio of earnings to fixed
charges(1)........................ 1.75 1.85 2.01 2.17 1.83 1.88 1.85
</TABLE>
- ---------------
* annualized
(1) This ratio is computed by dividing earnings from continuing operations
before fixed charges and income taxes by the fixed charges and includes our
earnings and fixed charges as well as those of all of our consolidated
subsidiaries. Fixed charges consist of interest and debt expense and the
portion of rentals for real and personal properties in an amount we deem to
be representative of the interest factor.
S-3
<PAGE> 6
DESCRIPTION OF NOTES
The following description of the particular terms of the notes offered by
this prospectus supplement augments, and to the extent inconsistent replaces,
the description of the general terms and provisions of the debt securities under
"Description of Debt Securities" in the accompanying prospectus.
GENERAL TERMS OF THE NOTES
Indenture
The notes will be senior securities as described in the accompanying
prospectus. We will issue the notes under an indenture dated as of July 31,
1989, as supplemented and amended by supplemental indentures dated as of
December 18, 1991, January 2, 1996 and October 14, 1997 (together, the
"Indenture"), between us and The Chase Manhattan Bank, as Trustee. The Indenture
does not limit the amount of additional unsecured indebtedness ranking equally
and ratably with the notes that we may incur. We may, from time to time, without
the consent of the holders of the notes, issue notes under the Indenture in
addition, and with identical terms, to the $300,000,000 aggregate principal
amount of the notes offered in this prospectus supplement. The statements in
this prospectus supplement concerning the notes and the Indenture are not
complete and you should refer to the provisions in the Indenture which are
controlling. Whenever we refer to provisions of the Indenture, those provisions
are incorporated in this prospectus supplement by reference as a part of the
statements we are making, and the statements are qualified in their entirety by
these references.
Maturity
The notes will mature on , 200 .
Interest
The notes will bear interest at the rate of % per annum. Interest will
accrue from the date the notes are issued or from the most recent date on which
interest has been paid or provided for. We will pay interest on
and of each year to the person in whose name the note is
registered at the close of business on the date fifteen days prior to the date
we pay interest. We will make the first payment on .
Interest on the notes will be computed on the basis of a 360-day year or
twelve 30-day months. Payments on interest and principal will be made in United
States Dollars.
Ranking
The notes will be senior securities and will rank equally and ratably with
our other senior indebtedness.
Book Entry, Delivery and Form of the Notes
We will issue each note in fully registered form without coupons and each
note will be represented by a global note registered in the name of a nominee of
the depositary. Except as set forth in this prospectus supplement, notes will be
issuable only in global form. See "Description of Notes -- Book-Entry; Delivery
and Form." Your beneficial interest in a note will be shown on, and transfers of
beneficial interests will be effected only through, records maintained by the
depositary or its participants. Payments of principal of, premium, if any, and
interest, if any, on, notes represented by a global note will be made by us or
our paying agent to the depositary or its nominee. See "Description of
Notes -- Book-Entry; Delivery and Form."
S-4
<PAGE> 7
Denominations
The authorized denominations of the notes will be $100,000 or any amount in
excess of $100,000 which is an integral multiple of $1,000. No service charge
will be made for any registration of transfer or exchange of the notes, but we
may require payment of a sum sufficient to cover any tax or other governmental
charges that may be imposed in connection with that transaction.
Redemption
The notes are not subject to a call for redemption prior to maturity and
are not subject to any sinking fund.
Discharge, Defeasance and Covenant Defeasance
The notes are not subject to defeasance or covenant defeasance.
Registration, Transfer and Exchange
We appointed the Trustee as securities registrar for the purpose of
registering the notes and transfers and exchanges of the notes and, subject to
the terms of the Indenture, the notes may be presented for registration of
transfer and exchange at the offices of the Trustee.
Glossary
You should refer to the Indenture and the form of notes filed as exhibits
to the registration statement to which the accompanying prospectus relates for
the full definition of terms used in this prospectus supplement.
BOOK-ENTRY; DELIVERY AND FORM
Global Notes
Upon issuance, all notes will be represented by one or more fully
registered global notes (the "Global Notes"). Each Global Note will be deposited
with, or on behalf of, the depositary and registered in the name of the
depositary or its nominee.
The Depositary
The Depository Trust Company ("DTC") will be the initial depositary with
respect to the notes. DTC has advised us and the underwriters that it is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"). DTC was created to hold securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates.
DTC's participants include securities brokers and dealers (including the
underwriters), banks, trust companies, clearing corporations and certain other
organizations, some of which, and/or their representatives, own DTC. Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by DTC only through
participants. The rules applicable to DTC and its participants are on file with
the Securities and Exchange Commission.
S-5
<PAGE> 8
Ownership of Global Notes
When we issue the notes represented by a Global Note, the depositary will
credit, on its book-entry registration and transfer system, the participants'
accounts with the principal amounts of the notes represented by the Global Note
beneficially owned by those participants. The accounts to be credited will be
designated by the underwriters of those notes. Ownership of beneficial interests
in a Global Note will be limited to participants or persons that hold interests
through participants. Ownership of beneficial interests in notes represented by
a Global Note or Global Notes will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the depositary,
or by participants in the depositary or persons that may hold interests through
participants. The laws of some states require that purchasers of securities take
physical delivery of securities in definitive form. These limits and laws may
impair your ability to transfer beneficial interests in a Global Note.
So long as the depositary for a Global Note, or its nominee, is the
registered owner of the Global Note, the depositary or its nominee will be
considered the sole owner or holder of the notes represented by a Global Note
for all purposes under the Indenture. Except as provided below, you, as the
owner of beneficial interests in notes represented by a Global Note or Global
Notes (a) will not be entitled to register the notes represented by a Global
Note in your name, (b) will not receive or be entitled to receive physical
delivery of notes in definitive form and (c) will not be considered the owner or
holder of the notes under the Indenture.
Accordingly, you must rely on the procedures of the depositary or on the
procedures of the participant through which you own your interest, to exercise
any rights of a holder under the Indenture or a Global Note. We understand that
under existing policy of the depositary and industry practices, if (a) we
request any action of holders, or (b) you desire to give notice or take action
which a holder is entitled to under the Indenture or a Global Note, the
depositary would authorize the participants holding the beneficial interests to
give the notice or take the action.
If you are a beneficial owner that is not a participant, you must rely on
the contractual arrangements you have directly, or indirectly through your
financial intermediary, with a participant to give notice or take action.
To facilitate subsequent transfers, all Global Notes deposited by
participants with DTC are registered in the name of the DTC's partnership
nominee, Cede & Co. The deposit of Global Notes with DTC and their registration
in the name of Cede & Co. causes no change in beneficial ownership. DTC has no
knowledge of the actual beneficial owners of the book-entry notes; DTC's records
reflect only the identity of the direct participants to those accounts the
book-entry notes are credited, which may or may not be the beneficial owners.
The participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Neither DTC nor Cede & Co. will consent or vote with respect to book-entry
notes. Under its usual procedures, DTC will mail an "Omnibus Proxy" to us as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
book-entry notes are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
A beneficial owner shall give notice to elect to have its book-entry notes
purchased or tendered, through its participant, to the paying agent, and shall
effect delivery of the book-entry notes by causing the direct participant to
transfer the participant's interest in the book-entry notes, on the depositary's
records, to the paying agent. The requirement for physical delivery of
book-entry notes in connection with a demand for purchase or a mandatory
purchase will be deemed satisfied when the ownership rights in the book-entry
notes are transferred by a direct participant on the depositary's records.
Neither we, the Trustee, any paying agent nor the registrar for the notes
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in a Global
Note or for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.
S-6
<PAGE> 9
Payments
We will make payments of principal of, premium, if any, and interest, if
any, on, the notes represented by a Global Note through the Trustee to the
depositary or its nominee, as the registered owner of a Global Note. Neither we,
the Trustee, any paying agent or any other of our agents will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Note or
for maintaining, supervising or reviewing any records relating to beneficial
ownership interests. We expect that the depositary, upon receipt of any
payments, will immediately credit the accounts of the related participants with
payments in amounts proportionate to their beneficial interest in the Global
Note. We also expect that payments by participants to owners of beneficial
interests in a Global Note will be governed by standing customer instructions
and customary practices and will be the responsibility of the participants.
Certificated Notes
If DTC or any other designated replacement depositary is at any time
unwilling or unable to continue as depositary or ceases to be a clearing agency
registered under the Exchange Act and a successor depositary registered as a
clearing agency under the Exchange Act is not appointed by us within 90 calendar
days, we will issue certificated notes in exchange for all the Global Notes.
Also, we may at any time and in our sole discretion determine not to have the
notes represented by the Global Note and, in that event, will issue certificated
notes in exchange for all the Global Notes. In either instance, you, as an owner
of a beneficial interest in a Global Note, will be entitled to have certificated
notes equal in principal amount to the beneficial interest registered in your
name and will be entitled to physical delivery of the certificated notes. The
certificated notes will be registered in the name or names as the depositary
shall instruct the Trustee. These instructions may be based upon directions
received by the depositary from participants with respect to beneficial
interests in the Global Notes. The certificated notes will be issued in
denominations of $100,000 or any amount in excess of $100,000 which is an
integral multiple of $1,000 and will be issued in registered form only, without
coupons. No service charge will be made for any transfer or exchange of
certificated notes, but we may require payment of a sum sufficient to cover any
tax or other governmental charges that may be imposed in connection with that
transaction.
Year 2000
DTC has advised us that the management of DTC is aware that some computer
applications and systems for processing data ("Systems") that are dependent upon
calendar dates, including dates before, on, or after January 1, 2000, may
encounter "Year 2000 problems." DTC has informed its participants and other
members of the financial community (the "Industry") that it has developed and is
implementing a program so that those Systems relating to the timely payment of
distributions to security holders, book-entry deliveries, and settlement of
trades within DTC, continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete. Also,
DTC's plan includes a testing phase, which, DTC has advised the Industry, is
expected to be completed within appropriate time frames.
DTC's ability to properly perform its services is also dependent upon other
parties, including issuers and their agents, as well as DTC's participants and
indirect participants and third party vendors from which DTC licenses software
and hardware, on which DTC relies for information services, including
telecommunication and electrical utility service providers. DTC has informed the
Industry that it is contacting, and will continue to contact, third party
vendors from which it acquires services to impress upon them the importance of
being "Year 2000" compliant, and determine the extent of their efforts for "Year
2000" remediation and, as appropriate, testing of their services. In addition,
DTC is developing contingency plans as it deems appropriate. According to DTC,
this information with respect to DTC has been provided to the Industry for
informational purposes only and is not intended to serve as a representation,
warranty, or contract modification of any kind.
S-7
<PAGE> 10
The preceding information concerning DTC and DTC's book-entry system has
been obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy of the information.
Paying Agent
Until we repay the notes or provide for their repayment, we will, at all
times, maintain a paying agent in The City of New York capable of performing the
duties described in this prospectus supplement and the accompanying prospectus.
We have initially appointed The Chase Manhattan Bank as paying agent under the
Indenture. We will notify you of any change in the paying agent or its address.
Same-Day Settlement and Payment
Settlement for the notes will be made by the underwriters in immediately
available funds. All payments of principal and interest on Global Notes will be
made by us in immediately available funds or the equivalent. The notes will
trade in DTC's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in the notes will therefore be required by DTC to settle
in immediately available funds. The effect, if any, of settlement in immediately
available funds on trading activity in the notes has not been determined.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank is the Trustee under the Indenture and is a party
to existing credit agreements with us and certain of our subsidiaries.
S-8
<PAGE> 11
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
among GATX Capital and the underwriters named below, we have agreed to sell to
each of the underwriters, and each of the underwriters has severally agreed to
purchase from us, the principal amount of notes set forth opposite its name
below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------- ----------------
<S> <C>
Salomon Smith Barney Inc.................................... $
Chase Securities Inc........................................
------------
Total............................................... $300,000,000
============
</TABLE>
The underwriting agreement provides that the obligations of the several
underwriters to purchase the notes included in this offering are subject to
approval of certain legal matters by counsel and to certain other conditions.
The underwriters are obligated to purchase all the notes if they purchase any of
the notes.
The underwriters propose to offer some of the notes directly to the public
at the public offering price stated on the cover page of this prospectus
supplement and some of the notes to certain dealers at the public offering price
less a concession not in excess of % of the aggregate principal amount of
the notes. The underwriters may allow, and these dealers may reallow, a
concession not in excess of % of the aggregate principal amount of the
notes on sales to certain other dealers. After the initial offering of the notes
to the public, the public offering price and these concessions may be changed by
the underwriters.
The following table shows the underwriting discounts and commissions we
will pay to the underwriters in connection with this offering, expressed as a
percentage of the aggregate principal amount of the notes.
<TABLE>
<CAPTION>
PAID BY GATX CAPITAL
--------------------
<S> <C>
Per note.................................................... %
---
</TABLE>
In connection with the offering, Salomon Smith Barney Inc. and Chase
Securities Inc. may purchase and sell notes in the open market. These
transactions may include over-allotment, syndicate covering transactions and
stabilizing transactions. Over-allotment involves syndicate sales of notes in
excess of the principal amount of notes to be purchased by the underwriters in
the offering, which creates a syndicate short position. Syndicate covering
transactions involve purchases of the notes in the open market after the
distribution has been completed in order to cover syndicate short positions.
Stabilizing transactions consist of certain bids or purchases of notes made for
the purpose of preventing or retarding a decline in the market price of the
notes while the offering is in progress.
The underwriters may also impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when
Salomon Smith Barney Inc., in covering syndicate short positions or making
stabilizing purchases, repurchases notes originally sold by that syndicate
member.
Any of these activities may cause the price of the notes to be higher than
the price that otherwise would exist in the open market in the absence of those
transactions. These transactions may be effected in the over-the-counter market
or otherwise and, if commenced, may be discontinued at any time.
We estimate that the total expenses of this offering will be $ .
In the ordinary course of their respective businesses, the underwriters and
certain of their respective affiliates have engaged in and may in the future
engage in commercial and/or investment banking transactions with us and our
affiliates. The Chase Manhattan Bank, an affiliate of Chase Securities Inc.,
from time to time conducts banking transactions with us and our affiliates in
the ordinary course of business and The Chase Manhattan Bank is a party to some
of our existing credit agreements. We intend to use a portion of the proceeds of
this offering to repay certain short-term borrowings. See "Use of
S-9
<PAGE> 12
Proceeds." Accordingly, The Chase Manhattan Bank may receive more than 10% of
the net proceeds from the sale of the notes, and this offering is being
conducted in conformity with Rule 2710(c)(8) of the Conduct Rules of the
National Association of Securities Dealers, Inc. The Chase Manhattan Bank is
also the Trustee under the Indenture.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make in respect of any of those
liabilities.
The notes will not have an established trading market when issued. The
notes will not be listed on any securities exchange. The underwriters may make a
market in the notes, but the underwriters are not obligated to do so and may
discontinue any market-making at any time without notice. There can be no
assurance as to the liquidity of the trading market for the notes.
LEGAL OPINIONS
The validity of the notes offered in this prospectus supplement will be
passed upon for GATX Capital by Thomas C. Nord, Esq., Vice President and General
Counsel of GATX Capital. Certain legal matters relating to the notes will be
passed upon for the underwriters by Cleary, Gottlieb, Steen & Hamilton, New
York, New York.
S-10
<PAGE> 13
PROSPECTUS
------------------
U.S. $500,000,000
------------------
GATX CAPITAL CORPORATION
FOUR EMBARCADERO CENTER
SAN FRANCISCO, CA 94111
(415) 955-3200
DEBT SECURITIES
We may offer to sell up to U.S. $500,000,000 of our debt securities in one
or more offerings. In this prospectus, we describe generally the terms of these
debt securities, which will consist of senior securities and subordinated
securities. We will describe the specific terms of the debt securities that we
offer in a supplement or supplements to this prospectus at the time of each
offering. If any offering involves underwriters, dealers or agents, we will
describe our arrangements with them in the prospectus supplement and if
applicable, pricing supplements, that relate to that offering.
------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is September 23, 1999
<PAGE> 14
You should rely only on the information incorporated by reference or
contained in this prospectus and any applicable prospectus supplement and
pricing supplement, if any. We have not authorized anyone to provide you with
information different from that contained in this prospectus. We are offering to
sell, and seeking offers to buy, our debt securities only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus or
the applicable prospectus supplement and pricing supplement, if any, is accurate
only as of the date on the front of those documents, regardless of the time of
delivery of this prospectus or the applicable prospectus supplement and pricing
supplement, if any, or of any sale of our debt securities.
In this prospectus, "GATX Capital," "we," "us," "our" and the "Company"
each refers to GATX Capital Corporation and its consolidated subsidiaries.
ABOUT THIS PROSPECTUS
The prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission using a "shelf" registration process.
Under this shelf registration, we may sell the securities described in this
prospectus in one or more offerings up to a total dollar amount of $500,000,000.
We provide information to you about these securities in three documents that
progressively provide more detail:
1. This prospectus which contains general information that may or may not
apply to each offering of securities.
2. The applicable prospectus supplement, which will contain more specific
information than this prospectus and may also add, update or change
information contained in this prospectus. To the extent information
differs from this prospectus, you should rely on the different
information in the applicable prospectus supplement.
3. The pricing supplement, if applicable, will provide final details about
a specific offering and the terms of the offered securities, including
their price. To the extent information differs from this prospectus or
the prospectus supplement, you should rely on the different information
in the pricing supplement.
You should read both this prospectus and any prospectus supplement or
pricing supplement together with any additional information described under the
heading "Where You Can Find More Information" below to learn more about the
Company and the securities offered.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933, as amended, with respect to the debt securities that we
are offering by this prospectus. This prospectus does not contain all of the
information set forth in the registration statement and its exhibits and
schedules. Certain items are omitted in accordance with the rules and
regulations of the SEC. For further information with respect to the Company and
the securities offered hereby, reference is made to the registration statement
of which this prospectus forms a part and the exhibits and any schedules filed
with the registration statement of which this prospectus forms a part.
Statements contained in this prospectus as to the contents of any contract or
other document referred to are not necessarily complete and in each instance, if
such contract or document is filed as an exhibit, reference is made to the copy
of such contract or other document filed as an exhibit to the registration
statement, each statement being qualified in all respects by such reference.
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file, including
the registration statement, at the SEC's Public Reference Room at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048 and at
Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, IL 60661. For
further information on the
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<PAGE> 15
operation of the Public Reference Room, you may call the SEC at 1-800-SEC-0330.
Our SEC filings are also available to the public over the Internet at the SEC's
website at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information in
documents that we file with them. This means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus, and
information in documents that we file after the date of this prospectus and
before the termination of the offering contemplated by this prospectus will
automatically update and supersede information in this prospectus.
The following documents, which are on file with Commission, are
incorporated by reference in and made a part of this prospectus:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 1998; and
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999 and June 30, 1999.
We also incorporate by reference any future filings made with the SEC under
sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, until we sell all of the securities or otherwise terminate the offering
of securities offered by this prospectus.
We will provide without charge, upon written or oral request, to each
person to whom this prospectus is delivered, a copy of any or all of the
documents described above which have been or may be incorporated by reference in
this prospectus but not delivered with this prospectus. Such request should be
directed to:
Thomas C. Nord, Esq.
Vice President and General Counsel
GATX Capital Corporation
Four Embarcadero Center
San Francisco, California 94111
Telephone Number: (415) 955-3200
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference forward-looking
statements that have been made pursuant to the provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
not historical facts, but rather are based on our current expectations,
estimates and projections about GATX Capital's industry, our beliefs and
assumptions. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates" and similar expressions are intended to
identify forward-looking statements. These statements are not guarantees of
future performance and are subject to certain risks, uncertainties and other
factors, some of which are beyond our control, are difficult to predict and
could cause actual results to differ materially from those expressed or
forecasted in the forward-looking statements. Many of these risks and
uncertainties will be described with particularity in the applicable prospectus
supplement. We caution you not to place undue reliance on these forward-looking
statements, which reflect our management's view only as of the date of this
prospectus or the prospectus supplement containing such forward-looking
statements. We are not obligated to update these statements or publicly release
the result of any revisions to them to reflect events or circumstances after the
date of this prospectus or the applicable prospectus supplement, or to reflect
the occurrence of unanticipated events.
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<PAGE> 16
THE COMPANY
We are a diversified global financial services company which provides
asset-based financing for transportation, information technology and industrial
equipment. Our strategy is to invest in and manage assets by combining our asset
knowledge, transaction-structuring capabilities and portfolio management
expertise to control assets with significant upside potential. We and our
subsidiaries actively invest in a wide variety of assets. These investments are
made through a variety of financing instruments, primarily leases and loans,
either for our own account or through partnerships and joint ventures. We
actively manage existing portfolio of investments as well as those of
institutional investors, and several joint ventures and partnerships in which we
participate. Key strategic partners include a cross section of domestic and
international commercial banks, insurance companies and large industrial
companies and manufacturers. Additionally, we arrange secured financing for
others.
GATX Corporation (GATX) owns all of our common and preferred stock through
a wholly owned subsidiary. GATX founded the Company as GATX Leasing Corporation,
a Delaware corporation, in 1968 to own, sell and finance equipment independent
of GATX's own specialized equipment activities. Since that time, we have
developed a portfolio of earning assets diversified across industries and
equipment classifications. At June 30, 1999, GATX Capital's investment portfolio
of approximately $2.3 billion, before reserves, consists of commercial jet
aircraft (31%), railroad equipment (14%), information technology equipment
(23%), marine equipment (6%), warehouse and production equipment (4%), golf
courses and equipment (2%) and other equipment (20%).
We have a financial and management interest in 125 aircraft as of June 30,
1999, and orders and options for an additional 14 aircraft. 99.9% of the
aircraft portfolio (in investment dollars) is compliant with Stage 3 noise
regulations. GATX Capital also has a financial and management interest in 946
locomotives and 53,947 railcars as of June 30, 1999. The utilization rate on the
operating lease fleet for our locomotives and railcars as of that date is
approximately 97.5% and 98%, respectively.
We regularly purchase assets from manufacturers, including those of
commercial aircraft, or others to acquire, directly or through joint ventures
and partnerships in which we participate, additional equipment to complement our
investment portfolio. Such purchases may be material in amount and have an
effect on our financial condition, results of operations and debt service
capability.
RECENT DEVELOPMENTS
In 1998, we entered into a joint venture with Flightlease AG, a subsidiary
of the SAirGroup, to form GATX Flightlease Management GmbH ("GFM"). SAirGroup is
the parent company of Swissair and other businesses. GFM is an aircraft
operating lease management company with approximately 300 aircraft in its
management portfolio. This management portfolio includes aircraft wholly owned
by either joint venture partner, aircraft on order and non wholly owned aircraft
under management and aircraft under management for third parties.
In 1999, GATX Third Aircraft Corporation (a wholly owned subsidiary of GATX
Capital) entered into a joint venture with Flightlease Holdings (Guernsey)
Limited (a wholly owned subsidiary of Flightlease AG), to form GATX Flightlease
Aircraft Company Ltd. ("GFAC"). GFAC was formed as an aircraft ownership entity.
On September 21, 1999, we announced that GFAC had entered into an agreement to
purchase 38 Airbus Industrie aircraft with a list price in excess of $2 billion.
The aircraft order includes 32 new A320 family aircraft (including 12 A318
aircraft) and six A330 family aircraft, with deliveries beginning in 2001 and
continuing through 2006. The aircraft will be managed by GFM. GATX Capital has
guaranteed 50% of the obligations of GFAC, on a several basis, under the
purchase agreement with Airbus Industries.
4
<PAGE> 17
RISK FACTORS
You should carefully consider the specific risks set forth under the
heading "Risk Factors" in the applicable prospectus supplement before making an
investment decision. The risks and uncertainties described in the applicable
prospectus supplement are not the only ones facing our Company. Additional risks
and uncertainties not currently known to us or that we currently think are
immaterial may also impact our business operations.
USE OF PROCEEDS
Unless otherwise indicated in the applicable prospectus supplement and
pricing supplement, if any, we will use the net proceeds from the sale of the
debt securities offered by this prospectus for general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
We compute the ratio of earnings to fixed charges by dividing earnings from
continuing operations before fixed charges and income taxes by the fixed
charges. This ratio includes our earnings and fixed charges as well as those of
all of our consolidated subsidiaries. Fixed charges consist of interest and debt
expense and the portion of rentals for real and personal properties in an amount
we deem to be representative of the interest factor.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
-------------- ------------------------------------
1999 1998 1998 1997 1996 1995 1994
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges....... 2.08x 2.40x 2.01x 2.17x 1.83x 1.88x 1.85x
</TABLE>
DESCRIPTION OF DEBT SECURITIES
We describe in this section the general terms that will apply to any debt
securities that the Company may offer in the future, to which a future
prospectus supplement and pricing supplement, if any, may relate. At the time
that we offer debt securities, we will describe in the prospectus supplement and
pricing supplement, if any, that relates to that offering (i) the specific terms
of the debt securities and (ii) the extent to which the general terms described
in this section apply to those debt securities.
We expect to issue debt securities consisting of senior securities and
subordinated securities. The senior securities are to be issued under an
Indenture dated as of July 31, 1989, as supplemented and amended by a
Supplemental Indenture dated as of December 18, 1991, by a Second Supplemental
Indenture dated as of January 2, 1996 and by a Third Supplemental Indenture
dated as of October 14, 1997 between the Company and The Chase Manhattan Bank,
as Trustee. This indenture is included as an exhibit to the registration
statement of which this prospectus forms a part. The subordinated securities are
to be issued under a separate indenture. The Trustee for the indenture for the
subordinated securities will be identified in the relevant prospectus
supplement. In the discussion that follows, we summarize particular provisions
of the indentures. Our discussion of indenture provisions is not complete. You
should read the indentures for a more complete understanding of the provisions
we describe.
The aggregate principal amount of debt securities that the Company may
issue under each of the indentures is unlimited. (Section 3.1)
GENERAL
Debt securities offered by this prospectus will be limited to an aggregate
initial public offering price of $500,000,000 or the equivalent amount in one or
more foreign currencies or composite currencies. The indentures provide that
debt securities in an unlimited amount may be issued thereunder from time to
time in one or more series. The senior securities will rank equally and ratably
with other senior
5
<PAGE> 18
indebtedness of the Company. The subordinated securities will be subordinated
and junior in right of payment to certain indebtedness of the Company to the
extent set forth in the applicable prospectus supplement.
Each prospectus supplement and pricing supplement, if any, relating to a
particular offering of debt securities will describe the specific terms of debt
securities. Those specific terms will include the following:
- the title of the debt securities;
- any limit on the aggregate principal amount of the debt securities;
- whether any of the debt securities are to be issuable initially in
temporary global form and whether any of the debt securities are to be
issuable in permanent global form;
- the date or dates on which the debt securities will mature;
- the rate or rates at which the debt securities will bear interest, if
any, or the formula pursuant to which such rate or rates shall be
determined, and the date or dates from which any such interest will
accrue;
- the payment dates on which interest, if any, on the debt securities will
be payable, and the extent to which, or the manner in which, any interest
payable on a temporary global debt security on an Interest Payment Date
will be paid;
- any mandatory or optional sinking fund or analogous provisions;
- each office or agency where, subject to the terms of the indenture, the
principal of and any premium and interest on the debt securities will be
payable and each office or agency where, subject to the terms of the
indenture, the debt securities may be presented for registration of
transfer or exchange;
- the date, if any, after which and the price or prices at which the debt
securities may be redeemed, in whole or in part at the option of the
Company or the holder of debt securities, or according to mandatory
redemption provisions, and the other detailed terms and provisions of any
such optional or mandatory redemption provisions;
- the denominations in which any debt securities will be issuable, if other
than denominations of $100,000;
- any index used to determine the amount of payments of principal of and
any premium and interest on the debt securities;
- the portion of the principal amount of the debt securities, if other than
the principal amount, payable upon acceleration of maturity;
- the application, if any, of either or both of the defeasance or covenant
defeasance sections of the indentures to the debt securities;
- the person who shall be the security registrar for the debt securities,
if other than the trustee, the person who shall be the initial paying
agent and the person who shall be the depositary;
- the terms of subordination applicable to any series of subordinated
securities; and
- any other terms of the debt securities not inconsistent with the
provisions of the indentures.
Any such prospectus supplement and pricing supplement, if any, will also
describe any special provisions for the payment of additional amounts with
respect to the debt securities of such series.
Except where we describe in the applicable prospectus supplement and
pricing supplement, if any, the indentures do not contain any covenants
specifically designed to protect holders of the debt securities against a
reduction in the creditworthiness of the Company in the event of a highly
leveraged transaction or to prohibit other transactions which may adversely
affect holders of the debt securities.
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<PAGE> 19
We may issue debt securities as original issue discount securities to be
sold at a substantial discount below their stated principal amounts. We will
describe in the relevant prospectus supplement and pricing supplement, if any,
any special United States federal income tax considerations that may apply to
debt securities issued at such an original issue discount. Special United States
tax considerations applicable to any debt securities that are denominated in a
currency other than United States dollars or that use an index to determine the
amount of payments of principal of and any premium and interest on the debt
securities will also be set forth in a prospectus supplement and pricing
supplement, if any.
GLOBAL SECURITIES
According to the indentures, so long as the depository's nominee is the
registered owner of a global security, that nominee will be considered the sole
owner of the debt securities represented by the global security for all
purposes. Except as provided in the relevant prospectus supplement and pricing
supplement, if any, owners of beneficial interests in a global security will not
be entitled to have debt securities of the series represented by the global
security registered in their names, will not receive or be entitled to receive
physical delivery of debt securities of such series in definitive form and will
not be considered the owners or holders of the debt securities under the
indentures. Principal of, premium, if any, and interest on a global security
will be payable in the manner described in the relevant prospectus supplement
and pricing supplement, if any.
SUBORDINATION
We may issue subordinated securities from time to time in one or more
series under the subordinated indenture. Our subordinated securities will be
subordinated and junior in right of payment to certain other indebtedness of the
Company to the extent set forth in the applicable prospectus supplement and
pricing supplement, if any.
CERTAIN COVENANTS OF THE COMPANY WITH RESPECT TO SENIOR SECURITIES
In this section we describe the principal covenants that will apply to the
senior securities unless otherwise indicated in the applicable prospectus
supplement and pricing supplement, if any.
LIMITATION ON LIENS. The senior securities are not secured by mortgage,
pledge or other lien. We have covenanted that neither we nor any Restricted
Subsidiary (which the indenture relating to the senior securities defines as any
subsidiary which is a consolidated subsidiary, in accordance with generally
accepted accounting principles, in the consolidated financial statements of the
Company) will subject any of our property, tangible or intangible, real or
personal, to any lien unless the senior securities are secured equally and
ratably with other indebtedness thereby secured. The exceptions from this
covenant include any liens existing on the date of the indenture relating to the
senior securities, as well as certain other liens, and the extension, renewal or
replacement of those liens including without limitation:
(a) Liens on any property provided that the creditor has no recourse
against the Company or any Restricted Subsidiary except recourse to such
property or proceeds of any sale or lease therefrom;
(b) Liens on property existing at the time of acquisition (including
acquisition through merger or consolidation) or given in connection with
financing the purchase price or cost of construction or improvement of
property;
(c) Other liens not permitted by clauses (a) and (b) on property then
owned or thereafter acquired, provided no such lien shall be incurred
pursuant to clause (c) if the aggregate amount of indebtedness secured by
liens incurred pursuant to clauses (b) and (c), including the lien proposed
to be incurred, would exceed 30% of Net Tangible Assets (which the
indenture relating to the senior securities defined as the total assets of
the Company less (x) current liabilities and (y) intangible assets);
(d) Liens securing certain intercompany indebtedness;
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<PAGE> 20
(e) A banker's lien or right of offset;
(f) Liens arising under the Employee Retirement Income Security Act of
1974, as amended, to secure any contingent liability of the Company;
(g) Liens on sublease interests held by the Company if those liens are
in favor of the person granting the lease to the Company;
(h) Various specified governmental liens and deposits; and
(i) Various other liens not incurred in connection with the borrowing
of money (including purchase money indebtedness) or the obtaining of
advances or credit.
LIMITATION ON DIVIDENDS. In addition, we have covenanted that neither we
nor any Restricted Subsidiary will pay any dividends upon any of our stock of
any class or make any distribution of cash or property among our stockholders by
reduction of capital or otherwise (other than in stock of the Company) or
purchase or redeem any stock of any class of the Company unless the aggregate
amounts of all such payments and distributions after December 31, 1988 will not
exceed the sum of (i) the total of the accumulated consolidated net income of
the Company and its Restricted Subsidiaries during the period after December 31,
1988, (ii) any net consideration received from the sale of stock of any class of
the Company after December 31, 1988, (iii) the aggregate principal amount of any
indebtedness of the Company which shall have been converted into the stock of
any class of the Company and (iv) $250,000,000. This restriction does not apply
to:
- The payment of dividends on preferred stock or any payment to purchase
shares of preferred stock subject to a mandatory sinking fund, provided
that such payments are included in the foregoing calculations,
- The redemption or retirement of any shares of our capital stock by
exchange for, or out of the proceeds of a substantially concurrent sale
of, other shares of capital stock,
- The purchase of any shares of our capital stock pursuant to or in
connection with any retirement, bonus, profit sharing, thrift, savings,
stock option or compensation plan for our officers or employees, or
- The conversion of shares of any of our stock into shares of any other of
our stock.
MERGER AND CONSOLIDATION
Each indenture provides that the we may consolidate or merge with or into
any other corporation and we may sell, lease or convey all or substantially all
of our assets to any corporation, organized and existing under the laws of the
United States of America or any U.S. state, provided that the corporation (if
other than GATX Capital) formed by or resulting from any such consolidation or
merger or which shall have received such assets shall assume payments of the
principal of (and premium, if any) and interest on the debt securities and the
performance and observance of all of the covenants and conditions of such
indenture to be performed or observed by the Company.
MODIFICATION AND WAIVER
The indentures provide that we and the trustee may modify and amend the
indentures with the consent of the holders of 66 2/3% in principal amount of the
outstanding debt securities of each series affected by the modification or
amendment, provided that no such modification or amendment may, without the
consent of the holder of each outstanding debt security affected by the
modification or amendment:
- Change the stated maturity of any installment of principal of, or
interest on, any debt security or change the redemption price;
8
<PAGE> 21
- Reduce the principal amount of, or interest on, any debt security or
reduce the amount of principal which could be declared due and payable
prior to the stated maturity;
- Change the place or currency of any payment of principal or interest on
any debt security;
- Impair the right to institute suit for the enforcement of any payment on
or with respect to any debt security;
- Reduce the percentage in principal amount of the outstanding debt
securities of any series, the consent of whose holders is required to
modify or amend each indenture; or
- Modify the foregoing requirements or reduce the percentage of outstanding
debt securities necessary to waive any past default to less than a
majority.
Except with respect to certain fundamental provisions, the holders of at least a
majority in principal amount of outstanding debt securities of any series may,
with respect to such series, waive past defaults under each indenture and waive
our compliance with certain provisions of each indenture.
EVENTS OF DEFAULT, WAIVER AND NOTICE
An event of default with respect to any debt security of any series is
defined in each indenture as being:
- Default for 30 days in payment of any interest on or any additional
amounts payable in respect of any debt security of that series;
- Default in payment of principal (and premium, if any) on the debt
securities of that series when due either at maturity, upon optional or
mandatory redemption, as a sinking fund installment, by declaration or
otherwise;
- Default in the performance or breach of any other covenant or warranty of
the Company in respect of the debt securities of such series in each
indenture which shall not have been remedied for a period of 90 days
after notice;
- Certain events of bankruptcy, insolvency and reorganization of the
Company; and any other event of default established for the debt
securities of such series set forth in the applicable prospectus
supplement and pricing supplement, if any.
Each indenture provides that the trustee may withhold notice to the holders of
the debt securities of any default with respect to any series of debt securities
(except in payment of principal of, or interest on, the debt securities) if the
trustee considers it in the interest of the holders of the debt securities of
such series to do so.
Each indenture provides also that:
- If an event of default due to the default in payment of principal of, or
interest on, any series of debt securities, or because of our default in
the performance or breach of any other covenant or warranty applicable to
the debt securities of such series but not applicable to all outstanding
debt securities, shall have occurred and be continuing, either the
trustee or the holders of 25% in principal amount of the outstanding debt
securities of such series then may declare the principal of all debt
securities of such series, or such lesser amount as may be provided for
in the debt securities of that series, and interest accrued thereon, to
be due and payable immediately; and
- If the event of default resulting from default in the performance of any
other of the covenants or agreements in each indenture applicable to all
outstanding debt securities under such indenture and certain events of
bankruptcy, insolvency and reorganization of the Company shall have
occurred and be continuing, either the trustee or the holders of 25% in
principal amount of all outstanding debt securities (treated as one
class) may declare the principal of all debt securities, or such lesser
amount as may be provided for in such securities, and interest accrued
thereon, to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past
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defaults may be waived (except a continuing default in payment of
principal of, or premium or interest on, the debt securities) by the
holders of a majority in principal amount of the outstanding debt
securities of such series (or of all series, as the case may be).
The holders of a majority in principal amount of the outstanding debt
securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the trustee or
exercising any trust or power conferred on the trustee with respect to debt
securities of such series provided that such direction shall not be in conflict
with any rule of law or the applicable indenture or shall not be unduly
prejudicial to the holders not taking part in such direction. The Company is
required to furnish to the trustee under each indenture annually a statement as
to performance or fulfillment of certain of its obligations under the applicable
indenture and as to any default in such performance of fulfillment.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank is the senior indenture trustee under the senior
indenture. Certain affiliates of the trustee under the indenture relating to the
senior securities has substantial banking relationships with the Company, GATX
and certain other affiliates of the Company and is the trustee under the
indenture relating to the senior securities with respect to other series of debt
securities, under another indenture with the Company and under certain equipment
trust agreements with an affiliate.
The trustee under the indenture relating to the senior securities and the
trustee under the indenture relating to the subordinated securities may from
time to time make loans to the Company and perform other services for the
Company in the normal course of business. Under the provisions of the Trust
Indenture Act of 1939, as amended, upon the occurrence of a default under an
indenture, if a trustee has a conflicting interest (as defined in the Trust
Indenture Act), the trustee must, within 90 days, either eliminate such
conflicting interest or resign. Under the provisions of the Trust Indenture Act,
an indenture trustee shall be deemed to have a conflicting interest, among other
things, if the trustee is a creditor of the obligor. If the trustee fails either
to eliminate the conflicting interest or to resign within 10 days after the
expiration of such 90-day period, the trustee is required to notify security
holders to this effect and any security holder who has been a bona fide holder
for at least six months may petition a court to remove the trustee and to
appoint a successor trustee.
PLAN OF DISTRIBUTION
We may sell the debt securities to one or more underwriters or dealers for
public offering and sale by them and to investors directly or through agents.
The distribution of the debt securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each prospectus
supplement and pricing supplement, if any, will describe the method of
distribution of the debt securities offered by that prospectus supplement and
pricing supplement, if any.
In connection with the sale of the debt securities, underwriters, dealers
or agents may receive compensation from the Company or from purchasers of the
debt securities for whom they may act as agents, in the form of discounts,
concessions or commissions. The underwriters, dealers or agents that participate
in the distribution of the debt securities may be deemed to be underwriters
under the Securities Act of 1933 and any discounts or commissions received by
them and any profit on the resale of the debt securities received by them may be
deemed to be underwriting discounts and commissions thereunder. Any such
underwriter, dealer or agent will be identified and any such compensation
received from the Company will be described in the prospectus supplement and
pricing supplement, if any. Any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers may be changed from time
to time.
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Under agreements that may be entered into with the Company, underwriters,
dealers and agents may be entitled to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act of
1933, or to contribution with respect to payments which the underwriters,
dealers or agents may be required to make in respect thereof.
Each underwriter, dealer and agent participating in the distribution of any
debt securities that are issuable in bearer form will agree that it will not
offer, sell, resell or deliver, directly or indirectly, debt securities in
bearer form to persons located in the United States or to United States persons
(other than qualifying financial institutions), in connection with the original
issuance of the debt securities.
Some of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for us in the ordinary
course of business.
LEGAL OPINIONS
Our Vice-President and General Counsel, Thomas C. Nord, Esq., will pass on
the validity of the debt securities offered by this prospectus. If we offer the
debt securities through underwriters, dealers or agents, then Pillsbury Madison
& Sutro LLP will pass on certain legal matters for the debt securities for the
underwriters, dealers and agents.
EXPERTS
The consolidated financial statements of GATX Capital Corporation appearing
in GATX Capital Corporation's Annual Report (Form 10-K) for the year ended
December 31, 1998 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
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$300,000,000
GATX CAPITAL CORPORATION
____% NOTES DUE 200_
[GATX LOGO]
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PROSPECTUS SUPPLEMENT
NOVEMBER __, 1999
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SALOMON SMITH BARNEY CHASE SECURITIES INC.
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