<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-11358
PROSPECTUS SUPPLEMENT
(To Prospectus Dated February 2, 2000) [GATX LOGO]
$515,000,000
GATX Capital Corporation
MEDIUM-TERM NOTES, SERIES G
------------------------
GATX CAPITAL CORPORATION MAY OFFER FROM TIME TO TIME UP TO $515,000,000 OF ITS
MEDIUM-TERM NOTES, SUBJECT TO REDUCTION AS A RESULT OF THE SALE OF OTHER DEBT
SECURITIES COVERED BY THE ACCOMPANYING PROSPECTUS. THE SPECIFIC TERMS OF ANY
NOTES OFFERED WILL BE INCLUDED IN A PRICING SUPPLEMENT. UNLESS THE PRICING
SUPPLEMENT PROVIDES OTHERWISE, THE NOTES OFFERED WILL HAVE THE FOLLOWING GENERAL
TERMS:
-- THE NOTES WILL MATURE IN 9 MONTHS TO 30 YEARS FROM THE DATE OF ISSUE.
-- THE NOTES WILL BEAR INTEREST AT EITHER A FIXED OR FLOATING RATE. FLOATING
RATE INTEREST MAY BE BASED ON:
-- CD RATE
-- CMT RATE
-- COMMERCIAL PAPER RATE
-- EURIBOR
-- FEDERAL FUNDS RATE
-- LIBOR
-- PRIME RATE
-- TREASURY RATE
-- A BASIS OR FORMULA SPECIFIED IN THE APPLICABLE PRICING SUPPLEMENT
-- FIXED RATE INTEREST WILL BE PAID ON APRIL 1 AND OCTOBER 1 OF EACH YEAR, OR
AS OTHERWISE SPECIFIED IN THE APPLICABLE PRICING SUPPLEMENT.
-- FLOATING RATE INTEREST WILL BE PAID ON THE DATES SPECIFIED IN THE
APPLICABLE PRICING SUPPLEMENT.
-- THE NOTES MAY BE SUBJECT TO REDEMPTION OR REPAYMENT AT OUR OPTION OR THE
OPTION OF THE HOLDER.
-- THE NOTES WILL BE DENOMINATED IN U.S. DOLLARS AND WILL HAVE MINIMUM
DENOMINATIONS OF $1,000 INCREASED IN MULTIPLES OF $1,000 OR OTHER
SPECIFIED DENOMINATIONS AND MULTIPLES AS SPECIFIED IN THE APPLICABLE
PRICING SUPPLEMENT.
-- THE NOTES WILL BE DENOMINATED IN U.S. DOLLARS AND WILL HAVE MINIMUM
DENOMINATIONS OF $1,000 INCREASED IN MULTIPLES OF $1,000 OR OTHER
SPECIFIED DENOMINATIONS AND MULTIPLES AS SPECIFIED IN THE APPLICABLE
PRICING SUPPLEMENT.
------------------------
<TABLE>
<CAPTION>
PRICE TO PUBLIC AGENT'S COMMISSIONS PROCEEDS TO COMPANY
--------------- ------------------- -------------------
<S> <C> <C> <C>
Per Note............................ 100% 0.125% - 0.75% 99.875% - 99.250%
Total............................... $515,000,000 $643,750 - $3,862,500 $514,356,250 - $511,137,500
</TABLE>
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc., Chase Securities
Inc. and UBS Warburg LLC will solicit offers to purchase the notes as agents for
GATX Capital Corporation. The agents have agreed to use their reasonable efforts
to sell the notes. In addition, the Company may sell notes to the agents as
principal for resale by them at varying prices or, if specified in the
applicable pricing supplement, at a fixed public offer price.
------------------------
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
CHASE SECURITIES INC.
UBS WARBURG LLC
<PAGE> 2
You should rely only on the information contained in or incorporated by
reference in this prospectus supplement, the accompanying prospectus or any
accompanying pricing supplement. 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.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company................................................. S-1
Use of Proceeds............................................. S-1
Ratio of Earnings to Fixed Charges.......................... S-1
Description of Notes........................................ S-2
United States Federal Taxation.............................. S-20
Concerning The Trustee...................................... S-24
Plan of Distribution........................................ S-24
Legal Opinions.............................................. S-25
PROSPECTUS
About This Prospectus....................................... 1
Where You Can Find More Information......................... 1
Information Incorporated By Reference....................... 2
Disclosure Regarding Forward-Looking Statements............. 2
GATX Capital................................................ 3
Risk Factors................................................ 3
Use of Proceeds............................................. 3
Ratio of Earnings to Fixed Charges.......................... 3
Description of Debt Securities.............................. 4
Plan of Distribution........................................ 9
Legal Opinions.............................................. 9
Experts..................................................... 9
</TABLE>
------------------------
This prospectus supplement 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. 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 supplement or the
accompanying prospectus, or to reflect the occurrence of unanticipated events.
<PAGE> 3
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 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 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 March 31, 2000, GATX Capital's investment
portfolio of approximately $3.1 billion, before reserves, consists of commercial
jet aircraft (28%), railroad equipment (12%), information technology equipment
(26%), marine equipment (5%), warehouse and production equipment (8%), golf
courses and equipment (1%) and other equipment (20%).
We have a financial and management interest in 143 aircraft as of March 31,
2000, and orders and options for an additional 53 aircraft. All of the aircraft
portfolio (in investment dollars) is compliant with Stage 3 noise regulations.
GATX Capital also has a financial and management interest in 955 locomotives and
56,193 railcars as of March 31, 2000. The utilization rate on the operating
lease fleet for our locomotives and railcars as of that date is approximately
99.0% and 92.4%, 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.
USE OF PROCEEDS
Except as otherwise set forth in the applicable pricing supplement, we will
add the net proceeds from the sale of the notes to our general funds, and they
will be available for general corporate purposes, including the repayment of
indebtedness.
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>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
-------------- -----------------------------------------
2000 1999 1999 1998 1997 1996 1995
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges......................... 1.51x 1.80x 1.58x 1.79x 2.14x 1.84x 1.88x
</TABLE>
S-1
<PAGE> 4
DESCRIPTION OF NOTES
The terms and conditions in this prospectus supplement will apply to each
note unless otherwise specified in the applicable pricing supplement and in the
note. It is important for you to consider the information contained in this
prospectus supplement and the pricing supplement in making your investment
decision.
This section describes some technical concepts, and we occasionally use
defined terms. You will find an alphabetized glossary beginning on page S-4 of
this prospectus supplement that defines all of the capitalized terms used in
this section that are not defined in this section.
GENERAL TERMS OF THE NOTES
INDENTURE
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
GATX Capital 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 and we may, from time to time, without
the consent of the holders of the notes, provide for the issuance of notes under
the Indenture in addition to the $515,000,000 aggregate initial offering price
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 or defined terms in the
Indenture, these provisions and defined terms are incorporated in this
prospectus supplement by reference as a part of the statements we are making,
and these statements are qualified in their entirety by these references.
RANKING
The notes will constitute unsecured and unsubordinated indebtedness of GATX
Capital and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of GATX Capital (other than obligations preferred by
mandatory provisions of law).
MATURITY
We will offer notes from time to time and they will mature on any day nine
months to thirty years from the Issue Date (as defined below), as selected by
you and agreed to by us.
INTEREST
Each note will bear interest from the Issue Date at either:
-- a fixed rate ("Fixed Rate Notes"), which may be zero in the case of a
note issued at an Issue Price (as defined below) representing a
substantial discount from the principal amount payable upon the
Maturity Date (as defined in the "Glossary") (a "Zero-Coupon Note"),
or
-- a floating rate or rates determined by reference to one or more Base
Rates (as defined below), which may be adjusted by a Spread (as
defined below) ("Floating Rate Notes").
Interest rates offered by us with respect to the notes may differ depending
upon, among other things, the aggregate principal amount of the notes purchased
in any single transaction. Start inserting tabs again after this paragraph
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 or in a
pricing supplement, notes will be issuable only in global form. See "Description
of
S-2
<PAGE> 5
Notes--Book-Entry; Delivery and Form." All notes issued on the same day and
having the same terms, including, but not limited to, the same:
-- designation,
-- Interest Payment Dates,
-- rate of interest,
-- Maturity Date, and
-- redemption or repayment provisions,
may be represented by a single note. Your beneficial interest in a note will be
shown on, and transfers of the note 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. Unless
otherwise specified in the applicable pricing supplement, DTC will be the
depositary. See "Description of Notes--Book-Entry; Delivery and Form."
DENOMINATIONS
Unless otherwise specified in the applicable pricing supplement, the
authorized denominations of the notes will be $1,000 or any amount in excess of
$1,000 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 such transaction.
REDEMPTION
The notes may be redeemed by us, or repaid at your option, prior to their
Maturity Date at the price or prices and on or after the date or dates specified
in the applicable pricing supplement. Unless otherwise specified in the
applicable pricing supplement, the notes will not be subject to any sinking
fund. See "Description of Notes--Redemption and Repayment."
PRICING SUPPLEMENT
Unless otherwise specified in this prospectus supplement or the
accompanying prospectus, the pricing supplement relating to each note or notes
will describe the following terms:
-- whether the note is a Fixed Rate Note, a Floating Rate Note or a
Zero-Coupon Note or other Original Issue Discount Note (as such term
is defined in "Description of Notes--Original Issue Discount Notes");
-- the price at which the note will be issued to the public (the "Issue
Price");
-- the date on which the note will be issued to the public (the "Issue
Date");
-- the Maturity Date of the note;
-- if the note is a Fixed Rate Note, the rate per annum at which the
note will bear interest, if any (the "Interest Rate");
-- if the note is a Floating Rate Note, the Base Rate or Rates, the
Initial Interest Rate or formula for determining the Initial Interest
Rate, the Interest Reset Period, the Interest Reset Dates, the
Interest Payment Period, the Interest Payment Dates, the Index
Maturity, the Maximum Interest Rate and the Minimum Interest Rate, if
any, and the Spread, if any (all as defined in this prospectus
supplement or in a pricing supplement), and any other terms relating
to the method of calculating the Interest Rate for the note;
-- whether the interest rate on such note may be reset upon the
occurrence of certain events or at our option;
S-3
<PAGE> 6
-- whether the note may be redeemed at our option, or repaid at your
option, prior to its Maturity Date, and if so, the terms of the
redemption or repayment;
-- special United States federal income tax consequences of the
purchase, ownership and disposition of the notes, if any; and
-- any other terms of the note that do not conflict with the provisions
of the Indenture.
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, and those
capitalized terms which are undefined in this prospectus supplement. We have set
forth below a number of definitions of terms used in this prospectus supplement
with respect to the notes.
"Business Day" with respect to any note means, unless otherwise specified
in the applicable pricing supplement, any day, other than a Saturday or Sunday,
that meets each of the following applicable requirements:
such day is:
-- not a day on which banking institutions are authorized or required by
law, regulation or executive order to be closed in The City of New
York,
-- with respect to London Inter Bank Offer Rate Notes ("LIBOR Notes"),
also a London Banking Day.
"Interest Payment Date" with respect to any note means a date, other than
at Maturity, on which, under the terms of such Note, regularly scheduled
interest shall be payable.
"London Banking Day" means any day on which dealings in deposits in the
Indexed Currency are transacted in the London interbank market.
"Maturity Date" with respect to any note means the date on which the note
will mature, as specified on the note, and "Maturity" means the date on which
the principal of a note becomes due and payable in full in accordance with its
terms and the terms of the Indenture, whether at its Maturity Date or by
declaration of acceleration, call for redemption at our option, repayment at
your option, or otherwise.
"Regular Record Date" with respect to:
-- any Interest Payment Date for Fixed Rate Notes means, unless
otherwise specified in the applicable pricing supplement, whether or
not a Business Day, the 15th day of the calendar month preceding the
Interest Payment Date; and
-- any Interest Payment Date for notes other than Fixed Rate Notes
means, unless otherwise specified in the applicable pricing
supplement, the date, whether or not a Business Day, 15 calendar days
prior to the Interest Payment Date.
BOOK-ENTRY; DELIVERY AND FORM
GLOBAL NOTES
Upon issue, all Fixed Rate Notes having the same Issue Date, interest rate,
if any, Maturity Date and other terms, if any, will be represented by one or
more fully registered global notes (the "Global Notes") and all Floating Rate
Notes having the same Issue Date, Initial Interest Rate, Base Rate, Interest
Period, Interest Payment Dates, Index Maturity, Spread, if any, Minimum Interest
Rate, if any, Maximum Interest Rate, if any, Maturity Date and other terms, if
any, will be represented by one or more 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.
S-4
<PAGE> 7
THE DEPOSITARY
The Depository Trust Company ("DTC") will be the initial depositary with
respect to the notes. DTC has advised us and the agents 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 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
agents), banks, trust companies, clearing corporations and certain other
organizations, some of whom, 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 SEC.
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 such participants. The accounts to be credited will be
designated by the agents of those notes, or by us, if the notes are offered and
sold directly by us. 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 registered 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
owners or holders 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 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 the depositary are registered in the name of the depositary's
partnership nominee, Cede & Co. The deposit of Global Notes with the depositary
and their registration in the name of Cede & Co. effect no change in beneficial
ownership. The depositary has no knowledge of the actual beneficial owners of
the book-entry notes; the depositary's records reflect only the identity of the
direct participants to whose accounts such 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.
S-5
<PAGE> 8
Redemption notices shall be sent to Cede & Co. If less than all of the
book-entry notes within an issue are being redeemed, the depositary's current
practice is to determine by lot the amount of the interest of each direct
participant in such issue to be redeemed.
Neither the depositary nor Cede & Co. will consent or vote with respect to
book-entry notes. Under its usual procedures, the depositary 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 such 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 such
beneficial ownership interests.
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 such 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 such 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 such 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 such Global Notes. These certificated notes will be issued in
denominations of $1,000 or any amount in excess of $1,000 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 charge.
The preceding information concerning the depositary and the depositary's
book-entry system has been obtained from sources that we believe to be reliable,
but we take no responsibility for the accuracy of such information.
S-6
<PAGE> 9
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.
INTEREST AND PAYMENTS OF PRINCIPAL AND INTEREST
GENERAL
The Interest Payment Dates for Fixed Rate Notes are described below under
"Fixed Rate Notes," and the Interest Payment Dates for Floating Rate Notes are
indicated in the applicable pricing supplement.
FIXED RATE NOTES
INTEREST PERIODS
Each Fixed Rate Note will bear interest, if any, from and including its
Issue Date at the rate per annum set forth on the note and in the applicable
pricing supplement until we pay or make available for payment the principal
amount of the note in full, except as described below under "Description of
Notes--Subsequent Interest Periods" and "Description of Notes--Extension of
Maturity."
When we pay interest on a Fixed Rate Note, we will include accrued interest
from and including the Issue Date or from and including the last day for which
interest has been paid (or provided for), to, but excluding, the Interest
Payment Date or Maturity Date.
PAYMENT DATES
Unless otherwise specified in the applicable pricing supplement, we will
pay interest on each Fixed Rate Note (other than a Zero-Coupon Note)
semiannually each April 1 and October 1 and at Maturity (or on the date of
redemption, if a Fixed Rate Note is redeemed at our option or the option of a
holder). The "Record Date" with respect to any Interest Payment Date for a Fixed
Rate Note shall be the March 15 or September 15 preceding such Interest Payment
Date, unless otherwise specified in the applicable pricing supplement.
Any payment of principal or interest required to be made on a Fixed Rate
Note on a day which is not a Business Day does not have to be made on that day,
but may be made on the next succeeding Business Day, and no additional interest
will accrue as a result of the delayed payment. Unless otherwise specified in
the applicable pricing supplement, any interest on Fixed Rate Notes will be
computed on the basis of a 360-day year of twelve 30-day months.
INTEREST RATES
We may change the interest rates that we offer on Fixed Rate Notes without
notice from time to time, but no change will affect any Fixed Rate Notes already
issued or for which we have accepted an offer to purchase.
PAYMENT OF INTEREST
The interest payable on the Maturity Date or, if applicable, upon
redemption, will be payable to the person to whom the principal shall be payable
and provided, further, however, that if such Interest Payment Date would fall on
a day that is not a Business Day, such Interest Payment Date shall be the
following day that is a Business Day. Any such interest which is payable, but is
not punctually paid or duly provided for on any Interest Payment Date, shall
forthwith cease to be payable to the registered holder on such Regular Record
Date, and may be paid to the person in whose name the Fixed Rate Note (or one or
more predecessor securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice of which shall be given to the holder of the Note not less than
ten
S-7
<PAGE> 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Fixed Rate Notes may be listed and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
FLOATING RATE NOTES
Each Floating Rate Note will mature on the date specified in the applicable
pricing supplement.
Each Floating Rate Note will bear interest at a floating rate determined by
reference to an interest rate or interest rate formula, which we refer to as the
"base rate." The base rate may be one or more of the following:
-- the CD rate,
-- the commercial paper rate,
-- EURIBOR,
-- the federal funds rate,
-- LIBOR,
-- the prime rate,
-- the Treasury rate,
-- the CMT rate, or
-- any other rate or interest rate formula specified in the applicable
pricing supplement and in the Floating Rate Note.
PAYMENT OF INTEREST
Subject to certain exceptions provided in the Indenture, the interest so
payable on any Interest Payment Date shall be paid to the person in whose name
the security is registered at the close of business on the Regular Record Date
(whether or not a Business Day) next preceding such Interest Payment Date, and
interest payable upon the Maturity (whether or not such date of Maturity is an
Interest Payment Date) shall be paid to the person to whom principal is payable;
provided, however, that the first payment of interest on a security originally
issued and dated between a Regular Record Date specified above and an Interest
Payment Date shall be due and payable on the Interest Payment Date following the
next succeeding Regular Record Date to the registered owner on such next
succeeding Regular Record Date.
FORMULA FOR INTEREST RATES
The interest rate on each Floating Rate Note will be calculated by
reference to:
-- the specified base rate based on the index maturity,
-- plus or minus the spread, if any, and/or
-- multiplied by the spread multiplier, if any.
For any Floating Rate Note, "index maturity" means the period of maturity
of the instrument or obligation from which the base rate is calculated and will
be specified in the applicable pricing supplement. The "spread" is the number of
basis points (one one-hundredth of a percentage point) specified in the
applicable pricing supplement to be added to or subtracted from the base rate
for a Floating Rate Note. The "spread multiplier" is the percentage specified in
the applicable pricing supplement to be applied to the base rate for a Floating
Rate Note.
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LIMITATIONS ON INTEREST RATE
A Floating Rate Note may also have either or both of the following
limitations on the interest rate:
-- a maximum limitation, or ceiling, on the rate of interest which may
accrue during any interest period, which we refer to as the "maximum
interest rate";
-- a minimum limitation, or floor, on the rate of interest that may
accrue during any interest period, which we refer to as the "minimum
interest rate."
Any applicable maximum interest rate or minimum interest rate will be set forth
in the pricing supplement.
In addition, the interest rate on a Floating Rate Note may not be higher
than the maximum rate permitted by New York law, as that rate may be modified by
United States law of general application. Under current New York law, the
maximum rate of interest, subject to some exceptions, for any loan in an amount
less than $250,000 is 16% and for any loan in the amount of $250,000 or more but
less than $2,500,000 is 25% per annum on a simple interest basis. These limits
do not apply to loans of $2,500,000 or more.
HOW FLOATING INTEREST RATES ARE RESET
The interest rate in effect from the date of issue to the first Interest
Reset Date for a Floating Rate Note will be the initial interest rate specified
in the applicable pricing supplement. We refer to this rate as the "initial
interest rate." The interest rate on each Floating Rate Note may be reset daily,
weekly, monthly, quarterly, semiannually or annually. This period is the
"interest reset period" and the first day of each interest reset period is the
"Interest Reset Date." The "interest determination date" for any Interest Reset
Date is the day the calculation agent will refer to when determining the new
interest rate at which a floating rate will reset, and is applicable as follows:
-- for CD rate notes, commercial paper rate notes, federal funds rate
notes, prime rate notes and CMT rate notes, the interest
determination date will be the second Business Day prior to the
Interest Reset Date;
-- for EURIBOR notes or Euro LIBOR notes, the interest determination
date will be the second TARGET Settlement Day, defined as the day on
which the Trans-European Automated Real-time Gross Settlement Express
Transfer System is open, prior to the Interest Reset Date;
-- for LIBOR notes (other than Euro LIBOR notes), the interest
determination date will be the second London banking day prior to the
Interest Reset Date, except that the interest determination date
pertaining to an Interest Reset Date for a LIBOR note for which the
index currency is pounds sterling will be the Interest Reset Date;
and
-- for Treasury rate notes, the interest determination date will be the
day of the week in which the Interest Reset Date falls on which
Treasury bills would normally be auctioned.
Treasury bills are normally sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is normally held on the
following Tuesday, but the auction may be held on the preceding Friday. If, as
the result of a legal holiday, the auction is held on the preceding Friday, that
Friday will be the interest determination date pertaining to the Interest Reset
Date occurring in the next succeeding week. If an auction falls on a day that is
an Interest Reset Date, that Interest Reset Date will be the next following
Business Day.
The Interest Reset Dates will be specified in the applicable pricing
supplement. If an Interest Reset Date for any Floating Rate Note falls on a day
that is not a Business Day, it will be postponed to the following Business Day,
except that, in the case of a EURIBOR note or a LIBOR note, if that Business Day
is in the next calendar month, the Interest Reset Date will be the immediately
preceding Business Day.
The interest rate in effect for the ten calendar days immediately prior to
Maturity, redemption or repayment will be the one in effect on the tenth
calendar day preceding the Maturity, redemption or repayment date.
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In the detailed descriptions of the various base rates which follow, the
"calculation date" pertaining to an interest determination date means the
earlier of (1) the tenth calendar day after that interest determination date,
or, if that day is not a Business Day, the next succeeding Business Day, and (2)
the Business Day preceding the applicable Interest Payment Date or maturity date
or, for any principal amount to be redeemed or repaid, any redemption or
repayment date.
HOW INTEREST IS CALCULATED
Interest on Floating Rate Notes will accrue from and including the most
recent Interest Payment Date to which interest has been paid or duly provided
for, or, if no interest has been paid or duly provided for, from and including
the issue date or any other date specified in a pricing supplement on which
interest begins to accrue. Interest will accrue to but excluding the next
Interest Payment Date or, if earlier, the date on which the principal has been
paid or duly made available for payment, except as described below under "If a
Payment Date is Not a Business Day."
The applicable pricing supplement will specify a calculation agent for any
issue of Floating Rate Notes. Upon the request of the holder of any Floating
Rate Note, the calculation agent will provide the interest rate then in effect
and, if determined, the interest rate that will become effective on the next
Interest Reset Date for that Floating Rate Note.
For a Floating Rate Note, accrued interest will be calculated by
multiplying the principal amount of the Floating Rate Note by an accrued
interest factor. This accrued interest factor will be computed by adding the
interest factors calculated for each day in the period for which interest is
being paid. The interest factor for each day is computed by dividing the
interest rate applicable to that day:
-- by 360, in the case of CD rate notes, commercial paper rate notes,
EURIBOR notes, federal funds rate notes, LIBOR notes, except for
LIBOR notes denominated in pounds sterling, and prime rate notes;
-- by 365, in the case of LIBOR notes denominated in pounds sterling; or
-- by the actual number of days in the year, in the case of Treasury
rate notes and CMT rate notes.
For these calculations, the interest rate in effect on any Interest Reset
Date will be the applicable rate as reset on that date. The interest rate
applicable to any other day is the interest rate from the immediately preceding
Interest Reset Date or, if none, the initial interest rate.
All percentages used in or resulting from any calculation of the rate of
interest on a Floating Rate Note will be rounded, if necessary, to the nearest
one hundred-thousandth of a percentage point (.0000001), with five
one-millionths of a percentage point rounded upward, and all U.S. dollar amounts
used in or resulting from these calculations on Floating Rate Notes will be
rounded to the nearest cent, with one-half cent rounded upward.
WHEN INTEREST IS PAID
GATX Capital will pay interest on Floating Rate Notes on the Interest
Payment Dates specified in the applicable pricing supplement. However, if the
first Interest Payment Date is less than 15 days after the date of issuance,
interest will not be paid on the first Interest Payment Date, but will be paid
on the second Interest Payment Date.
IF A PAYMENT DATE IS NOT A BUSINESS DAY
If any scheduled Interest Payment Date, other than the maturity date or any
earlier redemption or repayment date, for any Floating Rate Note falls on a day
that is not a Business Day, it will be postponed to the following Business Day,
except that, in the case of a EURIBOR note or a LIBOR note, if that Business Day
would fall in the next calendar month, the Interest Payment Date will be the
immediately preceding Business Day. If the scheduled maturity date or any
earlier redemption or repayment date of a Floating Rate Note falls on a day that
is not a Business Day, the payment of principal, premium, if any, and interest,
if any,
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will be made on the next succeeding Business Day, but interest on that payment
will not accrue during the period from and after the maturity, redemption or
repayment date.
BASE RATES
CD RATE NOTES
CD rate notes will bear interest at the interest rates specified in the CD
rate notes and in the applicable pricing supplement. Those interest rates will
be based on the CD rate and any spread and/or spread multiplier and will be
subject to the minimum interest rate and the maximum interest rate, if any.
"CD rate" means, for any interest determination date, the rate on that date
for negotiable certificates of deposit having the index maturity specified in
the applicable pricing supplement as published by the Board of Governors of the
Federal Reserve System in "Statistical Release H.15(519), Selected Interest
Rates," or any successor publication of the Board of Governors of the Federal
Reserve System ("H.15 (519)") under the heading "CDs (Secondary Market)."
The following procedures will be followed if the CD rate cannot be
determined as described above:
-- If the above rate is not published in H.15 (519) by 9:00 a.m., New
York City time, on the calculation date, the CD rate will be the rate
on that interest determination date set forth in the daily update of
H.15(519), available through the world wide website of the Board of
Governors of the Federal Reserve System at
http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication, which is commonly referred to as the "H. 15 Daily
Update," for the interest determination date for certificates of
deposit having the index maturity specified in the applicable pricing
supplement, under the caption "CDs (Secondary Market)."
-- If the above rate is not yet published in either H.15(519) or the
H.15 Daily Update by 3:00 p.m., New York City time, on the
calculation date, the calculation agent will determine the CD rate to
be the arithmetic mean of the secondary market offered rates as of
10:00 a.m., New York City time, on that interest determination date
of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the
calculation agent, after consultation with us, for negotiable
certificates of deposit of major United States money center banks of
the highest credit standing in the market for negotiable certificates
of deposit with a remaining maturity closest to the index maturity
specified in the applicable pricing supplement in an amount that is
representative for a single transaction in that market at that time.
-- If the dealers selected by the calculation agent are not quoting as
set forth above, the CD rate will remain the CD rate for the
immediately preceding interest reset period, or, if there was no
interest reset period, the rate of interest payable will be the
initial interest rate.
COMMERCIAL PAPER RATE NOTES
Commercial paper rate notes will bear interest at the interest rates
specified in the commercial paper rate notes and in the applicable pricing
supplement. Those interest rates will be based on the commercial paper rate and
any spread and/or spread multiplier and will be subject to the minimum interest
rate and the maximum interest rate, if any.
The "commercial paper rate" means, for any interest determination date, the
money market yield, calculated as described below, of the rate on that date for
commercial paper having the index maturity specified in the applicable pricing
supplement, as that rate is published in H.15(519), under the heading
"Commercial Paper--Nonfinancial."
The following procedures will be followed if the commercial paper rate
cannot be determined as described above:
-- If the above rate is not published by 9:00 a.m., New York City time,
on the calculation date, then the commercial paper rate will be the
money market yield of the rate on that interest determination date
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for commercial paper of the index maturity specified in the applicable pricing
supplement as published in the H.15 Daily Update under the heading "Commercial
Paper--Nonfinancial."
-- If by 3:00 p.m., New York City time, on that calculation date the
rate is not yet published in either H.15(519) or the H.15 Daily
Update, then the calculation agent will determine the commercial
paper rate to be the money market yield of the arithmetic mean of the
offered rates as of 11:00 a.m., New York City time, on that interest
determination date of three leading dealers of commercial paper in
The City of New York selected by the calculation agent, after
consultation with us, for commercial paper of the index maturity
specified in the applicable pricing supplement, placed for an
industrial issuer whose bond rating is "AA," or the equivalent, from
a nationally recognized statistical rating agency.
-- If the dealers selected by the calculation agent are not quoting as
mentioned above, the commercial paper rate for that interest
determination date will remain the commercial paper rate for the
immediately preceding interest reset period, or, if there was no
interest reset period, the rate of interest payable will be the
initial interest rate.
The "money market yield" will be a yield calculated in accordance with the
following formula:
Money Market Yield = D x 360 x 100
---------
360 - (D x M)
where "D" refers to the applicable per year rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
EURIBOR NOTES
EURIBOR notes will bear interest at the interest rates specified in the
EURIBOR notes and in the applicable pricing supplement. That interest rate will
be based on EURIBOR and any spread and/or spread multiplier and will be subject
to the minimum interest rate and the maximum interest rate, if any.
"EURIBOR" means, for any interest determination date, the rate for deposits
in euros as sponsored, calculated and published jointly by the European Banking
Federation and ACI--The Financial Market Association, or any company established
by the joint sponsors for purposes of compiling and publishing those rates, for
the index maturity specified in the applicable pricing supplement as that rate
appears on the display on Bridge Telerate, Inc., or any successor service, on
page 248 or any other page as may replace page 248 on that service, which is
commonly referred to as "Telerate Page 248," as of 11:00 a.m. (Brussels time).
The following procedures will be followed if the rate cannot be determined
as described above:
-- If the above rate does not appear, the calculation agent will request
the principal Euro-zone office of each of four major banks in the
Euro-zone interbank market, as selected by the calculation agent,
after consultation with us, to provide the calculation agent with its
offered rate for deposits in euros, at approximately 11:00 a.m.
(Brussels time) on the interest determination date, to prime banks in
the Euro-zone interbank market for the index maturity specified in
the applicable pricing supplement commencing on the applicable
Interest Reset Date, and in a principal amount not less than the
equivalent of U.S.$l million in euro that is representative of a
single transaction in euro, in that market at that time. If at least
two quotations are provided, EURIBOR will be the arithmetic mean of
those quotations.
-- If fewer than two quotations are provided, EURIBOR will be the
arithmetic mean of the rates quoted by four major banks in the
Euro-zone, as selected by the calculation agent, after consultation
with us, at approximately 11:00 a.m. (Brussels time), on the
applicable Interest Reset Date for loans in euro to leading European
banks for a period of time equivalent to the index maturity specified
in the applicable pricing supplement commencing on that Interest
Reset Date in a principal amount not less than the equivalent of
U.S.$1 million in euro.
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-- If the banks so selected by the calculation agent are not quoting as
mentioned in the previous bullet point, the EURIBOR rate in effect
for the applicable period will be the same as EURIBOR for the
immediately preceding interest reset period, or, if there was no
interest reset period, the rate of interest will be the initial
interest rate.
"Euro-zone" means the region comprised of member states of the
European Union that adopt the single currency in accordance with the
treaty establishing the European Community, as amended by the treaty
on European Union.
FEDERAL FUNDS RATE NOTES
Federal funds rate notes will bear interest at the interest rates specified
in the federal funds rate notes and in the applicable pricing supplement. Those
interest rates will be based on the federal funds rate and any spread and/or
spread multiplier and will be subject to the minimum interest rate and the
maximum interest rate, if any.
The "federal funds rate" means, for any interest determination date, the
rate on that date for federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Bridge Telerate, Inc., or any
successor service, on page 120 or any other page as may replace the applicable
page on that service, which is commonly referred to as "Telerate Page 120."
The following procedures will be followed if the federal funds rate cannot
be determined as described above:
-- If the above rate is not published by 9:00 a.m., New York City time,
on the calculation date, the federal funds rate will be the rate on
that interest determination date as published in the H.15 Daily
Update under the heading "Federal Funds/Effective Rate."
-- If that rate is not yet published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the calculation
date, the calculation agent will determine the federal funds rate to
be the arithmetic mean of the rates for the last transaction in
overnight federal funds by each of three leading brokers of federal
funds transactions in The City of New York selected by the
calculation agent, after consultation with us, prior to 9:00 a.m.,
New York City time, on that interest determination date.
-- If the brokers selected by the calculation agent are not quoting as
mentioned above, the federal funds rate relating to that interest
determination date will remain the federal funds rate for the
immediately preceding interest reset period, or, if there was no
interest reset period, the rate of interest payable will be the
initial interest rate.
LIBOR NOTES
LIBOR notes will bear interest at the interest rates specified in the LIBOR
notes and in the applicable pricing supplement. That interest rate will be based
on London interbank offered rate, which is commonly referred to as "LIBOR," and
any spread and/or spread multiplier and will be subject to the minimum interest
rate and the maximum interest rate, if any.
The calculation agent will determine "LIBOR" for each interest
determination date as follows:
-- As of the interest determination date, LIBOR will be either:
-- if "LIBOR Reuters" is specified in the applicable pricing
supplement, the arithmetic mean of the offered rates for deposits
in the index currency having the index maturity designated in the
applicable pricing supplement, commencing on the second London
banking day immediately following that interest determination
date, that appear on the Designated LIBOR Page, as defined below,
as of 11:00 a.m., London time, on that interest determination
date, if at least two offered rates appear on the Designated LIBOR
Page; except that if the specified Designated LIBOR Page, by its
terms provides only for a single rate, that single rate will be
used; or
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-- if "LIBOR Telerate" is specified in the applicable pricing
supplement, the rate for deposits in the index currency having the
index maturity designated in the applicable pricing supplement,
commencing on the second London banking day immediately following
that interest determination date or, if pounds sterling is the
index currency, commencing on that interest determination date,
that appears on the Designated LIBOR Page at approximately 11:00
a.m., London time, on that interest determination date.
-- If (1) fewer than two offered rates appear and "LIBOR Reuters" is
specified in the applicable pricing supplement, or (2) no rate
appears and the applicable pricing supplement specifies either (x)
"LIBOR Telerate" or (y) "LIBOR Reuters" and the Designated LIBOR Page
by its terms provides only for a single rate, then the calculation
agent will request the principal London offices of each of four major
reference banks in the London interbank market, as selected by the
calculation agent after consultation with us, to provide the
calculation agent with its offered quotation for deposits in the
index currency for the period of the index maturity specified in the
applicable pricing supplement commencing on the second London banking
day immediately following the interest determination date or, if
pounds sterling is the index currency, commencing on that interest
determination date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on that interest determination
date and in a principal amount that is representative of a single
transaction in that index currency in that market at that time.
-- If at least two quotations are provided, LIBOR determined on that
interest determination date will be the arithmetic mean of those
quotations. If fewer than two quotations are provided, LIBOR will be
determined for the applicable Interest Reset Date as the arithmetic
mean of the rates quoted at approximately 11:00 a.m., London time, or
some other time specified in the applicable pricing supplement, in
the applicable principal financial center for the country of the
index currency on that Interest Reset Date, by three major banks in
that principal financial center selected by the calculation agent,
after consultation with us, for loans in the index currency to
leading European banks, having the index maturity specified in the
applicable pricing supplement and in a principal amount that is
representative of a single transaction in that index currency in that
market at that time.
-- If the banks so selected by the calculation agent are not quoting as
mentioned in the previous bullet point, LIBOR in effect for the
applicable period will be the same as LIBOR for the immediately
preceding interest reset period, or, if there was no interest reset
period, the rate of interest payable will be the initial interest
rate.
The "index currency" means the currency specified in the applicable pricing
supplement as the currency for which LIBOR will be calculated, or, if the euro
is substituted for that currency, the index currency will be the euro. If that
currency is not specified in the applicable pricing supplement, the index
currency will be U.S. dollars.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated
in the applicable pricing supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for the applicable index currency or its designated successor, or (b) if
"LIBOR Telerate" is designated in the applicable pricing supplement, the display
on Bridge Telerate Inc., or any successor service, on the page specified in the
applicable pricing supplement, or any other page as may replace that page on
that service, for the purpose of displaying the London interbank rates of major
banks for the applicable index currency.
If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable
pricing supplement, LIBOR for the applicable index currency will be determined
as if LIBOR Telerate were specified, and, if the U.S. dollar is the index
currency, as if Page 3750, had been specified.
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PRIME RATE NOTES
Prime rate notes will bear interest at the interest rates specified in the
prime rate notes and in the applicable pricing supplement. That interest rate
will be based on the prime rate and any spread and/or spread multiplier, and
will be subject to the minimum interest rate and the maximum interest rate, if
any.
The "prime rate" means, for any interest determination date, the rate on
that date as published in H.15(519) under the heading "Bank Prime Loan."
The following procedures will be followed if the prime rate cannot be
determined as described above:
-- If the rate is not published prior to 9:00 a.m., New York City time,
on the calculation date, then the prime rate will be the rate on that
interest determination date as published in H.15 Daily Update under
the heading "Bank Prime Loan."
-- If the rate is not published prior to 3:00 p.m., New York City time,
on the calculation date in either H.15(519) or the H.15 Daily Update,
then the calculation agent will determine the prime rate to be the
arithmetic mean of the rates of interest publicly announced by each
bank that appears on the Reuters Screen USPRIME 1 Page, as defined
below, as that bank's prime rate or base lending rate as in effect
for that interest determination date.
-- If fewer than four rates appear on the Reuters Screen USPRIME 1 Page
for that interest determination date, the calculation agent will
determine the prime rate to be the arithmetic mean of the prime rates
quoted on the basis of the actual number of days in the year divided
by 360 as of the close of business on that interest determination
date by at least three major banks in The City of New York selected
by the calculation agent, after consultation with us.
-- If the banks selected are not quoting as mentioned above, the prime
rate will remain the prime rate for the immediately preceding
interest reset period, or, if there was no interest reset period, the
rate of interest payable will be the initial interest rate.
"Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Monitor Money Rates Service, or any successor
service, or any other page as may replace the USPRIME 1 Page on that service for
the purpose of displaying prime rates or base lending rates of major United
States banks.
TREASURY RATE NOTES
Treasury rate notes will bear interest at the interest rates specified in
the Treasury rate notes and in the applicable pricing supplement. That interest
rate will be based on the Treasury rate and any spread and/or spread multiplier
and will be subject to the minimum interest rate and the maximum interest rate,
if any.
"Treasury rate" means:
-- the rate from the auction held on the applicable interest
determination date, which we refer to as the "auction," of direct
obligations of the United States, which are commonly referred to as
"Treasury Bills," having the index maturity specified in the
applicable pricing supplement as that rate appears under the caption
"INVESTMENT RATE" on the display on Bridge Telerate, Inc., or any
successor service, on page 56 or any other page as may replace page
56 on that service, which we refer to as "Telerate Page 56," or page
57 or any other page as may replace page 57 on that service, which we
refer to as "Telerate Page 57," or
-- if the rate described in the first bullet point is not published by
3:00 p.m., New York City time, on the calculation date, the bond
equivalent yield of the rate for the applicable Treasury Bills as
published in the H.15 Daily Update, or other recognized electronic
source used for the purpose of displaying the applicable rate, under
the caption "U.S. Government Securities/Treasury Bills/Auction High,"
or
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-- if the rate described in the second bullet point is not published by
3:00 p.m., New York City time, on the related calculation date, the
bond equivalent yield of the auction rate of the applicable Treasury
Bills, announced by the United States Department of the Treasury, or
-- in the event that the rate referred to in the third bullet point is
not announced by the United States Department of the Treasury, or if
the auction is not held, the bond equivalent yield of the rate on the
applicable interest determination date of Treasury Bills having the
index maturity specified in the applicable pricing supplement
published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market," or
-- if the rate referred to in the fourth bullet point is not so
published by 3:00 p.m., New York City time, on the related
calculation date, the rate on the applicable interest determination
date of the applicable Treasury Bills as published in H.15 Daily
Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "U.S. Government
Securities /Treasury Bills/Secondary Market," or
-- if the rate referred to in the fifth bullet point is not so published
by 3:00 p.m., New York City time, on the related calculation date,
the rate on the applicable interest determination date calculated by
the calculation agent as the bond equivalent yield of the arithmetic
mean of the secondary market bid rates, as of approximately 3:30
p.m., New York City time, on the applicable interest determination
date, of three primary United States government securities dealers,
which may include the agent or its affiliates, selected by the
calculation agent, for the issue of Treasury Bills with a remaining
maturity closest to the index maturity specified in the applicable
pricing supplement, or
-- if the dealers selected by the calculation agent are not quoting as
mentioned in the sixth bullet point, the Treasury rate for the
immediately preceding interest reset period, or, if there was no
interest reset period, the rate of interest payable will be the
initial interest rate.
The "bond equivalent yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
Bond Equivalent Yield = D x N x 100
----------
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest is
being calculated.
CMT RATE NOTES
CMT rate notes will bear interest at the interest rates specified in the
CMT rate notes and in the applicable pricing supplement. That interest rate will
be based on the CMT rate and any spread and/or spread multiplier and will be
subject to the minimum interest rate and the maximum interest rate, if any.
The "CMT rate" means, for any interest determination date, the rate
displayed on the Designated CMT Telerate Page, as defined below, under the
caption "--Treasury Constant Maturities--Federal Reserve Board Release
H.15--Mondays Approximately 3:45 p.m.," under the column for the Designated CMT
Maturity Index, as defined below, for:
(1) the rate on that interest determination date, if the Designated
CMT Telerate Page is 7051; and
(2) the week or the month, as applicable, ended immediately preceding
the week in which the related interest determination date occurs, if the
Designated CMT Telerate Page is 7052.
The following procedures will be followed if the CMT rate cannot be
determined as described above:
-- If that rate is no longer displayed on the relevant page, or if not
displayed by 3:00 p.m., New York City time, on the related
calculation date, then the CMT rate will be the Treasury Constant
Maturity rate for the Designated CMT Maturity Index as published in
the relevant H.15(519).
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-- If the rate described in the immediately preceding sentence is no
longer published, or if not published by 3:00 p.m., New York City
time, on the related calculation date, then the CMT rate will be the
Treasury Constant Maturity rate for the Designated CMT Maturity Index
or other United States Treasury rate for the Designated CMT Maturity
Index on the interest determination date as may then be published by
either the Board of Governors of the Federal Reserve System or the
United States Department of the Treasury that the calculation agent
determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in the relevant H.15(519).
-- If the information described in the immediately preceding sentence is
not provided by 3:00 p.m., New York City time, on the related
calculation date, then the calculation agent will determine the CMT
rate to be a yield to maturity, based on the arithmetic mean of the
secondary market closing offer side prices as of approximately 3:30
p.m., New York City time, on the interest determination date,
reported, according to their written records, by three leading
primary United States government securities dealers, which we refer
to as a "reference dealer," in The City of New York, which may
include an agent or other affiliates of ours, selected by the
calculation agent as described in the following sentence. The
calculation agent will select five reference dealers, after
consultation with us, and will eliminate the highest quotation or, in
the event of equality, one of the highest, and the lowest quotation
or, in the event of equality, one of the lowest, for the most
recently issued direct noncallable fixed rate obligations of the
United States, which are commonly referred to as "Treasury notes,"
with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than that
Designated CMT Maturity Index and a remaining term to maturity of not
less than that Designated CMT Maturity Index minus one year. If two
Treasury notes with an original maturity as described above have
remaining terms to maturity equally close to the Designated CMT
Maturity Index, the quotes for the Treasury note with the shorter
remaining term to maturity will be used.
-- If the calculation agent cannot obtain three Treasury notes
quotations as described in the immediately preceding bullet, the
calculation agent will determine the CMT rate to be a yield to
maturity based on the arithmetic mean of the secondary market offer
side prices as of approximately 3:30 p.m., New York City time, on the
interest determination date of three reference dealers in The City of
New York, selected using the same method described in the immediately
preceding bullet, for Treasury notes with an original maturity equal
to the number of years closest to but not less than the Designated
CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least
$100,000,000.
-- If three or four (and not five) of the reference dealers are quoting
as described above, then the CMT rate will be based on the arithmetic
mean of the offer prices obtained and neither the highest nor the
lowest of those quotes will be eliminated.
-- If fewer than three reference dealers selected by the calculation
agent are quoting as described above, the CMT rate will be the CMT
rate for the immediately preceding interest reset period, or, if
there was no interest reset period, the rate of interest payable will
be the initial interest rate.
"Designated CMT Telerate Page" means the display on Bridge Telerate, Inc.,
or any successor service, on the page designated in the applicable pricing
supplement or any other page as may replace that page on that service for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no page is specified in the applicable pricing supplement, the Designated CMT
Telerate Page will be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified in an applicable pricing supplement for which the CMT rate will be
calculated. If no maturity is specified in the applicable pricing supplement,
the Designated CMT Maturity Index will be two years.
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ZERO COUPON NOTES
Zero Coupon Notes will be offered at a substantial discount from their
principal amount at maturity. There will be no periodic payments of interest.
The calculation of the accrual of original issue discount (as defined below), in
the period during which a Zero Coupon Note remains outstanding, will be on a
semi-annual bond equivalent basis using a year composed of twelve 30-day months.
Upon maturity, original issue discount will cease to accrue on a Zero Coupon
Note. See "Certain United States Federal Income Tax Consequences."
Limitation of Claims in Bankruptcy. If a bankruptcy case is commenced in
respect of us, the claim of the holder of a Zero Coupon Note may, under Section
502(b)(2) of Title 11 of the United States Code, be limited to the issue price
of the Zero Coupon Note plus that portion of the original issue discount that is
amortized from the date of issue to the commencement of the case.
REDEMPTION AND REPAYMENT
Unless otherwise provided in the applicable pricing supplement, the notes
will not have a sinking fund. Redemption dates, if any, and whether such
redemption is at our option or the option of a holder, will be fixed at the time
of sale and set forth in the applicable pricing supplement and the applicable
note. If no Redemption Date is indicated with respect to a note, such note will
not be subject to a call for redemption.
If applicable, the pricing supplement relating to each note will indicate
that:
(a) unless otherwise specified in the pricing supplement, the note
will be redeemable at our option or repayable at your option at a price
equal to 100% of the principal amount of the note, together with accrued
interest to the date of redemption or repayment, unless the note was issued
with original issue discount, in which case the pricing supplement will
specify the amount payable upon redemption or repayment, and
(b) the note will be redeemable at our option or repayable at your
option on a date or dates specified prior to its Maturity Date.
We may redeem any of the notes that are redeemable and remain outstanding
either in whole or, from time to time, in part in increments of $1,000 (provided
that any remaining principal amount of such note shall be at least $1,000), upon
30 to 60 days' notice to the Trustee (or, in the case of a redemption at the
option of a holder, at least 60 days' notice to us and the Trustee). Unless
otherwise specified in the applicable pricing supplement, if less than all of
the notes with like tenor and terms are to be redeemed, the Trustee will select
the notes to be redeemed by the method the Trustee deems fair and appropriate.
Unless otherwise specified in the applicable pricing supplement, in order
for a note to be repaid at your option, we must receive the Global Note from the
depositary with the form entitled "Option to Elect Repayment" duly completed at
least 60 days prior to the repayment date. Exercise of your repayment option is
irrevocable, except as otherwise provided under "Description of
Notes--Subsequent Interest Periods" and "Description of Notes--Extension of
Maturity."
With respect to the notes, the depositary's nominee is the holder of the
notes and therefore will be the only entity that can exercise a right to
repayment. See "Description of Notes--Book-Entry; Delivery and Form." In order
to ensure that the depositary's nominee will timely exercise a right to
repayment with respect to your beneficial interest in a note, you, as the
beneficial owner of the interest, must instruct the broker or other direct or
indirect participant through which you hold a beneficial interest in the note to
notify the depositary of your desire to exercise a right to repayment. Different
firms have different cut-off times for accepting instructions from their
customers and, accordingly, you should consult the broker or other direct or
indirect participant through which you hold an interest in a note in order to
ascertain the cut-off time by which you must give an instruction in order for
timely notice to be delivered to the depositary. Conveyance of notices and other
communications by the depositary to participants, by participants to indirect
participants and by participants and indirect participants to you, as a
beneficial owner of the notes will be governed by agreements among you and them,
subject to any statutory or regulated requirements as may be in effect from time
to time.
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If applicable, we will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws or regulations in connection with any
repurchase.
We may at any time purchase notes at any price or prices in the open market
or otherwise. Notes purchased by us may, at our discretion, be held or resold or
surrendered to the Trustee for cancellation.
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UNITED STATES FEDERAL TAXATION
GENERAL
In the opinion of our tax counsel, the following general summary describes
the principal United States federal income tax consequences that are likely to
be relevant to the purchase, ownership and disposition of the notes. This
summary provides general information only. It is directed solely to you, as an
original holder purchasing notes at the "issue price" (as defined below), and
assumes you will hold the notes as capital assets within the meaning of section
1221 of the Internal Revenue Code of 1986, as amended (the "Code"). It does not
discuss all United States federal income tax consequences that may be applicable
to you. If you are a bank, insurance company, dealer in securities, a person
holding notes as part of a "straddle," conversion transaction, hedging or other
integrated transaction or a person who has ceased to be a United States citizen
or to be taxed as a resident alien, you may be subject to special rules. In
addition, the United States federal income tax consequences of a particular note
will depend, in part, on the terms of the note.
We advise you to consult your own tax advisors with regard to the
application of the United States federal income tax laws to your particular
situation and any tax consequences arising under the laws of any state, local or
foreign tax jurisdiction.
This summary is based on the Code, United States Treasury Regulations
(including proposed and temporary regulations) promulgated under the Code,
rulings, official pronouncements and judicial decisions as of the date of this
prospectus supplement. You should know that the authorities on which this
summary is based are subject to change or differing interpretations, which could
apply retroactively, and could result in United States federal income tax
consequences for you which are different from those discussed below.
For purposes of the following discussion, "holder" means a beneficial owner
of a note that is a citizen or resident of the United States, a domestic
corporation or otherwise subject to United States federal income taxation on a
net income basis.
PAYMENTS OF INTEREST
Payments of "qualified stated interest" will generally be taxable to a
holder as ordinary interest income at the time it is accrued or is received in
accordance with the holder's method of accounting for tax purposes.
All payments of interest on a note that matures one year or less from its
date of issuance will be included in the stated redemption price at the maturity
of the note and will be taxed in the manner described below under "Original
Issue Discount Notes".
Special rules govern the treatment of interest paid with respect to
Original Issue Discount Notes, including certain Floating Rate Notes, as
described under "Original Issue Discount Notes" below.
ORIGINAL ISSUE DISCOUNT NOTES
The following summary is generally based upon the Treasury Regulations
concerning the treatment of debt instruments issued with original issue discount
(the "OID Regulations"). Under the OID Regulations, a note that is issued for an
amount less than its stated redemption price at maturity will generally be
considered to have been issued at an original issue discount. The "issue price"
of a note is generally equal to the first price to the public, not including
bond houses, brokers or similar persons or organizations acting in the capacity
of underwriters, placement agents or wholesalers, at which a substantial amount
of the notes is sold for money. The stated redemption price at maturity of a
note is generally equal to the sum of all payments to be made on the note other
than "qualified stated interest" payments. With respect to a note, "qualified
stated interest" is stated interest unconditionally payable as a series of
payments in cash or property, other than our debt instruments, at least annually
during the entire term of the note and equal to the outstanding principal
balance of the note multiplied by a single fixed rate of interest.
In addition, stated interest on Floating Rate Notes providing for one or
more qualified floating rates of interest, a single fixed rate and one or more
qualified floating rates, a single objective rate, or a single fixed rate
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and a single objective rate that is a qualified inverse floating rate, will
generally constitute qualified stated interest if the stated interest is
unconditionally payable at least annually during the term of the note at a rate
that is considered to be a single qualified floating rate or a single objective
rate as described below.
Subject to certain exceptions, a variable rate of interest is a "qualified
floating rate" if variations in the value of the rate can reasonably be expected
to measure contemporaneous fluctuations in the cost of newly borrowed funds in
the currency in which the note is denominated. A variable rate will be
considered a qualified floating rate if the variable rate equals:
-- the product of an otherwise qualified floating rate and a fixed
multiple (i.e., a Spread Multiplier) that is greater than .65 but not
more than 1.35, or
-- an otherwise qualified floating rate (or the product described above)
plus or minus a fixed rate (i.e., a Spread).
If the variable rate equals the product of an otherwise qualified floating rate
and a single fixed multiplier less than 0.65 or greater than 1.35, however, the
rate generally constitutes an "objective rate" and therefore will constitute
qualified stated interest, as described more fully below.
A variable rate may not be considered a qualified floating rate if the
variable rate is subject to a Maximum Interest Rate, Minimum Interest Rate or
similar restriction that is reasonably expected as of the issue date to cause
the yield on the note to be significantly more or less than the expected yield
determined without the restriction, unless the restriction is fixed throughout
the term of the note.
Subject to certain exceptions, an "objective rate" is defined as a rate,
other than a qualified floating rate, that is determined using a single fixed
formula and that is based on objective financial or economic information. An
objective rate does not include a rate based on information that is within our
control (or the control of a related party) or that is unique to our
circumstances (or a related party), such as dividends, profits, or the value of
our stock. In addition, a variable rate of interest on a note will not be
considered an objective rate if it is reasonably expected that the average value
of the rate during the first half of the note's term will be either
significantly less than or significantly greater than the average value of the
rate during the final half of the note's term.
If interest on a note is stated at a fixed rate for an initial period of
one year or less (e.g., an Initial Interest Rate) followed by a variable rate
that is either a qualified floating rate or an objective rate for a subsequent
period, and the value of the variable rate on the issue date is intended to
approximate the fixed rate, the fixed rate and the variable rate together
constitute a single qualified floating rate or objective rate. If a Floating
Rate Note provides for two or more qualified floating rates that can reasonably
be expected to have approximately the same values throughout the term of the
note, the qualified floating rates together constitute a single qualified
floating rate. Two or more rates will be conclusively presumed to meet the
requirements of the preceding sentences if the values of the applicable rates on
the issue date are within 0.25% of one another. In addition, in order to be
treated as qualified stated interest (rather than contingent payments, as
discussed below), the qualified floating rate or objective rate in effect at a
given time for a note must be set at a value of that rate on any day that is no
earlier than three months prior to the first day on which that value is in
effect and no later than one year following that first day.
Floating Rate Notes generally will be treated as "variable rate debt
instruments" under the OID Regulations, and stated interest on such notes
generally will be qualified stated interest. Special tax considerations
(including possible original issue discount) may arise with respect to Floating
Rate Notes providing for:
-- one Base Rate followed by one or more Base Rates,
-- a single fixed rate followed by a qualified floating rate, or
-- a Spread Multiplier.
Prospective holders of Floating Rate Notes with any of these features should
carefully examine the applicable pricing supplement and should consult a tax
advisor with respect to these features since the tax consequences
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will depend, in part, on the terms of the note. If a Floating Rate Note does not
qualify as a "variable rate debt instrument," such note (a "Contingent Payment
Debt Instrument") will be subject to special rules that govern the tax treatment
of debt obligations that provide for contingent payments. In such cases, a
description of the tax considerations relevant to holders of any such notes will
be provided in the applicable pricing supplement.
Notwithstanding the general definition of original issue discount above, a
note will not be considered to have been issued with an original issue discount
if the amount of such original issue discount is less than a de minimis amount
equal to 0.25% of the stated redemption price at maturity multiplied by the
number of complete years to maturity (or, in the case of a note providing for
payments prior to maturity of amounts other than qualified stated interest, the
weighted average maturity). Holders of notes with a de minimis amount of
original issue discount will include the original issue discount in income, as
capital gain, on a pro rata basis as principal payments are made on the note.
A holder of an Original Issue Discount Note (other than certain holders of
Short-Term Original Issue Discount Notes, as defined below) will be required to
include qualified stated interest in income at the time it is received or
accrued in accordance with such holder's method of accounting.
A holder of an Original Issue Discount Note that matures more than one year
from its date of issuance will be required to include original issue discount in
income as it accrues, in accordance with a constant yield method based on a
compounding of interest, before the receipt of cash payments attributable to
such income. The amount of original issue discount includible in income is equal
to the sum of the "daily portions" of the original issue discount for each day
during the taxable year on which the holder held such note. The "daily portion"
is the original issue discount for the "accrual period" that is allocated to
each day in the accrual period on a ratable basis. Generally, the original issue
discount for an accrual period is equal to the excess, if any, of the product of
the "adjusted issue price" of an Original Issue Discount Note at the beginning
of such accrual period and its "yield to maturity" over the amount of any
qualified stated interest allocable to the accrual period. The "accrual period"
is the interval (not to exceed one year) that ends no later than the date of any
scheduled payment of principal or interest.
We will specify the accrual period we intend to use in the applicable
pricing supplement but a holder is not required to use the same accrual period
for purposes of determining the amount of original issue discount includible in
its income for a taxable year. The adjusted issue price of a note at the
beginning of an accrual period generally is equal to the issue price of the
note, increased by the aggregate amount of original issue discount with respect
to the note that accrued in prior accrual periods and was previously includible
in the income of a holder, and reduced by the amount of any payment on the note
in prior accrual periods of amounts other than a payment of qualified stated
interest. Under these rules, holders generally will have to include in income
increasingly greater amounts of original issue discount in successive accrual
periods.
Under the OID Regulations, a holder may make an election (the "Constant
Yield Election") to include in gross income all interest that accrues on a note
in accordance with a constant yield method based on the compounding of interest.
Special rules apply to such elections and holders considering such an election
should consult their own tax advisor.
The OID Regulations contain aggregation rules stating that, in certain
circumstances, if more than one type of note is issued as part of the same
issuance of securities to a single holder, some or all of such notes may be
treated together as a single debt instrument with a single issue price, maturity
date, yield to maturity and stated redemption price at maturity for purposes of
calculating and accruing any original issue discount. Unless otherwise provided
in the applicable pricing supplement, we do not expect to treat any of the notes
as being subject to the aggregation rules for purposes of computing original
issue discount.
In general, a cash method holder of an Original Issue Discount Note that
matures one year or less from its date of issuance (a "Short-Term Original Issue
Discount Note") is not required to accrue original issue discount on such note
for United States federal income tax purposes unless it elects to do so. Holders
who make this election, holders who report income for United States federal
income tax purposes on the accrual method and other holders, including banks and
dealers in securities, are required to include original issue
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discount (including stated interest, if any) in income on such Short-Term
Original Issue Discount Notes as it accrues on a straight-line basis, unless an
election is made to use the constant yield method (based on a daily
compounding). In the case of a holder who is not required and does not elect to
include original issue discount in income currently, any gain realized on the
sale, exchange or redemption of the Short-Term Original Issue Discount Note will
be ordinary income to the extent of the original issue discount accrued on a
straight-line basis (or, if elected, according to a constant yield method based
on daily compounding), reduced by any interest received through the date of
sale, exchange or redemption. In addition, the holder will be required to defer
deductions for any interest paid on indebtedness incurred to purchase or carry
Short-Term Original Issue Discount Notes in an amount not exceeding the deferred
interest income, until such deferred interest income is recognized.
We may redeem notes at our option prior to the maturity date, or we may
repay notes at the option of the holder prior to the maturity date. Notes
containing these features may be subject to rules that differ from the general
rules discussed above. Holders intending to purchase notes with any of these
features should carefully examine the applicable pricing supplement.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a note, a holder will recognize
taxable gain or loss equal to the difference between the amount realized on the
sale, exchange or redemption (excluding any amounts attributable to interest not
previously included in income) and the holder's adjusted tax basis in the note.
A holder's adjusted tax basis in a note will generally be the cost of the note
to the holder, increased by the amount of any original issue discount previously
includible in income by the holder with respect to the note and reduced by any
principal payments received by the holder and, in the case of an Original Issue
Discount Note, by the amounts of any other payments that do not constitute
qualified stated interest.
In general, gain or loss realized on the sale, exchange or redemption of a
note that is not a Contingent Payment Debt Instrument will be capital gain or
loss (except in the case of a Short-Term Original Issue Discount Note, to the
extent of any original issue discount not previously included in the holder's
taxable income). Prospective holders should consult their tax advisors regarding
the treatment of capital gains (which may be taxed at lower rates than ordinary
income for taxpayers who are individuals, trusts or estates) and losses (the
deductibility of which is subject to limitations).
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal and interest (including original issue discount)
on a note, and to payments of proceeds of the sale or redemption of a note, to
non-corporate holders. GATX Capital, its agent, a broker, the relevant Trustee
or any paying agent, will be required to withhold from any payment a tax equal
to 31 percent of such payment if the holder fails to furnish or certify its
correct taxpayer identification number to the payor in the manner required,
fails to certify that the holder is not subject to backup withholding, or
otherwise fails to comply with applicable backup withholding rules. Any amounts
withheld under the backup withholding rules from a payment to a holder may be
credited against the holder's United States federal income tax and may entitle
such holder to a refund, provided that the required information is furnished to
the United States Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR YOUR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE TO YOUR PARTICULAR
SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO YOU OF THE OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE
TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
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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. Certain
affiliates of the Trustee maintain other banking arrangements with us and our
affiliates in the ordinary course of business.
PLAN OF DISTRIBUTION
We are offering the notes on a continuous basis through the agents
expressly identified by name herein, each of which has agreed to use its best
efforts to solicit orders. We may appoint additional agents to solicit sales of
the notes. Any solicitation and sale of the notes will be on the same terms and
conditions to which the agents have agreed. In addition, we may arrange for the
notes to be sold through other agents, dealers or underwriters or we may sell
notes directly to investors.
Unless otherwise specified in the applicable pricing supplement, we will
pay each agent a commission ranging from 0.125% to 0.750% of the initial
offering price of each note sold through that agent, depending upon the Maturity
Date of the note. If we sell notes directly to investors, no commission or
discount will be paid unless otherwise specified in the applicable pricing
supplement. We will have the right to accept orders or reject any proposed
purchase in whole or in part. Each agent will have the right, in its reasonable
discretion, to reject any proposed purchase in whole or in part. We can
withdraw, cancel or modify the offer without notice.
We may also sell notes to any agent as principal for its own account at a
discount equal to the commission the agent would receive if it purchased the
notes as agent, unless otherwise specified in the applicable pricing supplement.
The agent may resell notes to investors and other purchasers at prevailing
market prices as determined by the agent or, if so specified in an applicable
pricing supplement, at a fixed public offering price. In addition, the agents
may offer the notes they have purchased as principal to other dealers. The
agents may sell notes to any dealer at a discount which will not exceed the
discount we paid the agent, unless otherwise specified in the applicable pricing
supplement. After the initial public offering of notes, we may change the public
offering price (for those notes to be resold at a fixed public offering price),
the concession and the discount.
Each agent may be deemed to be an "underwriter" within the meaning of the
Securities Act. We have agreed to indemnify the agents against or to make
contributions relating to certain civil liabilities, including liabilities under
the Securities Act. We have also agreed to reimburse the agents for certain
expenses, including but not limited to, the fees and expenses of counsel to the
agents.
The notes will not have an established trading market when issued. We do
not intend to apply for the listing of the notes on any securities exchange. The
agents may make a market in the notes but are not obligated to do so and may
discontinue any market-making at any time without notice. We cannot assure you
that a secondary market for the notes will develop or that any notes will be
sold.
In connection with an offering of notes, the agents may engage in
transactions that stabilize the price of the notes. These transactions may
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the notes. If an agent creates a short position in the notes, i.e.,
if the agent sells notes in an aggregate principal amount exceeding the amount
set forth in the applicable pricing supplement, the agent may reduce that short
position by purchasing notes in the open market. In general, purchases of notes
for the purpose of stabilization or to reduce a short position could cause the
price of the notes to be higher than it might be in the absence of the
purchases.
NEITHER WE NOR ANY OF THE AGENTS MAKES ANY REPRESENTATION OR PREDICTION AS
TO THE DIRECTION OR MAGNITUDE OF ANY EFFECT THAT THE TRANSACTIONS DESCRIBED IN
THE IMMEDIATELY PRECEDING PARAGRAPH MAY HAVE ON THE PRICE OF THE NOTES. IN
ADDITION, NEITHER WE NOR ANY OF THE AGENTS MAKES ANY REPRESENTATION THAT THE
AGENTS WILL ENGAGE IN ANY TRANSACTIONS OR THAT TRANSACTIONS, ONCE COMMENCED,
WILL NOT BE DISCONTINUED WITHOUT NOTICE.
In the ordinary course of their respective businesses, certain of the
agents and their respective affiliates have engaged in and may in the future
engage in commercial and investment banking transactions with us and
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<PAGE> 27
our affiliates. In particular, affiliates of Chase Securities Inc. participate
in certain of our credit facilities and, accordingly, if any proceeds from the
sale of notes are applied by us to repay amounts borrowed under such facilities,
such affiliates will receive a proportionate share of repaid amounts. If the
amounts to be repaid to affiliates of any member of the National Association of
Securities Dealers, Inc. (the "NASD") exceed 10% of the proceeds of any offering
of notes, such offering will be conducted in conformity with Rule 2710(c)(8) of
the Conduct Rules of the NASD. The Chase Manhattan Bank, an affiliate of Chase
Securities Inc., is also the Trustee under the Indenture.
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 agents by Cleary, Gottlieb, Steen & Hamilton.
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THE INFORMATION CONTAINED 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
WE ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE
WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
U.S. $1,015,000,000
GATX Capital Corporation
Four Embarcadero Center
San Francisco, CA 94111
(415) 955-3200
DEBT SECURITIES
WE MAY OFFER TO SELL UP TO U.S. $1,015,000,000 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 February 2, 2000
<PAGE> 29
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
different information. 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.
Unless the context indicates otherwise, the words "GATX Capital," "we,"
"us," "our" and "ours" refer 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
$1,015,000,000. 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 us 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 about us and the securities
offered by this prospectus, 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 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.
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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 the SEC, are incorporated
by reference in and made a part of this prospectus:
(a) our Annual Report on Form 10-K for the year ended December 31,
1999; and
(b) our Quarterly Reports on Form 10-Q for the quarter ended March 31,
2000.
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 may be described with particularity in the applicable prospectus
supplement or the documents incorporated by reference in this prospectus. 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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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 52 aircraft. 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.
RISK FACTORS
If the applicable prospectus supplement has a section called "Risk
Factors," you should carefully consider the specific risks set forth in that
section before making an investment decision. The risks and uncertainties
described in the applicable prospectus supplement are not the only ones facing
GATX Capital. 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>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- -------------------------------------
1994 1999 1998 1998 1997 1996 1995
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges...... 1.75x 1.85x 2.01x 2.17x 1.83x 1.88x 1.85x
</TABLE>
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<PAGE> 32
DESCRIPTION OF DEBT SECURITIES
We describe in this section the general terms that will apply to any debt
securities that we 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 GATX Capital 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. A form of the indenture for the
subordinated securities is included as an exhibit to the registration statement
to which this prospectus forms a part. 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 GATX Capital 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 $1,015,000,000 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 indebtedness of GATX Capital. The subordinated securities will
be subordinated and junior in right of payment to certain indebtedness of GATX
Capital 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;
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-- 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
GATX Capital 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 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 GATX Capital in the event of a highly
leveraged transaction or to prohibit other transactions which may adversely
affect holders of the debt securities.
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 depositary'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
GATX Capital to the extent set forth in the applicable prospectus supplement and
pricing supplement, if any.
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<PAGE> 34
CERTAIN COVENANTS OF GATX CAPITAL 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 GATX
Capital 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 GATX Capital 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 defines as the total assets of
GATX Capital less (x) current liabilities and (y) intangible assets);
(d) Liens securing certain intercompany indebtedness;
(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 GATX Capital;
(g) Liens on sublease interests held by GATX Capital if those liens
are in favor of the person granting the lease to GATX Capital;
(h) Various specified governmental liens and deposits;
(i) Various other liens not incurred in connection with the borrowing
of money (including purchase money indebtedness) or the obtaining of
advances or credit; and
(j) Liens incurred in connection with securing performance of letters
of credit, bids, tenders, appeal and performance bonds.
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 GATX Capital) or
purchase or redeem any stock of any class of GATX Capital unless the aggregate
amounts of all such payments and distributions after December 31, 1988 to the
close of a calendar month ended within 60 days next preceding the date of such
payment will not exceed the sum of (i) the total of the accumulated consolidated
net income of GATX Capital 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 GATX Capital after December 31, 1988, (iii) the aggregate
principal amount of any indebtedness of GATX Capital which shall have been
converted into the stock of any class of GATX Capital and (iv) $25,000,000. 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,
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-- 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 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), any interest on and any additional amounts
payable with respect to the debt securities and the performance and observance
of all of the covenants and conditions of such indenture to be performed or
observed by GATX Capital.
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 the principal of, or any installment of
interest on or any additional amounts payable with respect to, any
debt security or change the redemption price;
-- 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;
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<PAGE> 36
-- Default in the performance or breach of any other covenant or
warranty of GATX Capital 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 GATX
Capital; 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 GATX Capital 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 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. GATX Capital 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 trustee under the senior securities
indenture, as well as certain equipment trust agreements with an affiliate of
GATX Capital. The Chase Manhattan Bank has, and certain of its affiliates may
from time to time have, substantial banking relationships with GATX Capital and
certain of its affiliates, including GATX.
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 GATX Capital and perform other services for GATX
Capital 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.
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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.
If we sell the debt securities through agents, unless otherwise indicated
in the related prospectus supplement, each agent will be acting on a reasonable
best efforts basis for the period of its appointment. If we sell the debt
securities to underwriters, unless otherwise indicated in the related prospectus
supplement, the obligations of the underwriters to purchase the debt securities
will be subject to customary conditions and the underwriters will be obligated
to purchase all the debt securities of the series offered if any of the debt
securities of that series are purchased.
In connection with the sale of the debt securities, underwriters, dealers
or agents may receive compensation from GATX Capital 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 GATX Capital 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.
Under agreements that may be entered into with GATX Capital, underwriters,
dealers and agents may be entitled to indemnification by GATX Capital 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.
Some of the underwriters, dealers or agents and their respective affiliates
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 Cleary, Gottlieb,
Steen & Hamilton will pass on certain legal matters 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.
9
