<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-11358
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS
IS NOT COMPLETE AND MAY BE CHANGED. A REGISTRATION STATEMENT RELATING TO
THESE SECURITIES HAS BEEN DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE
COMMISSION. WE ARE NOT USING THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED
PROSPECTUS TO OFFER TO SELL THESE SECURITIES OR TO SOLICIT OFFERS TO BUY
THESE SECURITIES IN ANY PLACE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 17, 2000
PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED FEBRUARY 2, 2000)
$350,000,000
GATX CAPITAL CORPORATION [GATX LOGO]
% NOTES DUE 2003
MATURITY
- The Notes will mature on , 2003.
INTEREST
- Interest on the Notes is payable on and of each year,
beginning , 2001.
- Interest will accrue from , 2000.
REDEMPTION
- We cannot redeem the Notes prior to maturity.
- There is no sinking fund.
RANKING
- The Notes are unsecured. The Notes rank equally with all of our existing and
future senior debt.
LISTING
- We do not intend to list the Notes on any securities exchange
--------------------------------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NOTES OR DETERMINED THAT THIS
PROSPECTUS SUPPLEMENT OR THE ATTACHED PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
PER NOTE TOTAL
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
Initial Price to Public % $
Underwriting Discount % $
Proceeds to Us (Before Expenses) % $
-------------------------------------------------------------------------------------------------------
</TABLE>
Your purchase price will also include any interest that has accrued on the Notes
since , 2000.
--------------------------------------------------------------------------------
- The Notes will be delivered to you in global form through the book-entry
delivery system of The Depository Trust Company on , 2000.
- The Underwriters listed below will purchase the Notes from us on a firm
commitment basis and offer them to you, subject to certain conditions.
CHASE SECURITIES INC.
SALOMON SMITH BARNEY
UBS WARBURG LLC
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
--------------------------------------------------------------------------------
The date of this Prospectus Supplement is , 2000.
<PAGE> 2
In making your investment decision, you should rely only on the information
contained or incorporated by reference in this Prospectus Supplement and the
attached Prospectus. We have not authorized anyone to provide you with any other
information. If you receive any unauthorized information, you must not rely on
it.
We are offering to sell the Notes only in places where sales are permitted.
You should not assume that the information contained or incorporated by
reference in this Prospectus Supplement or the attached Prospectus is accurate
as of any date other than its respective date.
-------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
GATX Capital......................... S-1
Use of Proceeds...................... S-1
Capitalization....................... S-2
Selected Financial Data.............. S-3
Description of Notes................. S-4
Concerning the Trustee............... S-9
Underwriting......................... S-10
Legal Opinions....................... S-11
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
About This Prospectus................. 2
Where You Can Find More Information... 2
Information Incorporated By
Reference........................... 3
Disclosure Regarding Forward-Looking
Statements.......................... 3
GATX Capital.......................... 4
Risk Factors.......................... 4
Use of Proceeds....................... 4
Ratio of Earnings to Fixed Charges.... 4
Description of Debt Securities........ 5
Concerning the Trustee................ 10
Plan of Distribution.................. 10
Legal Opinions........................ 11
Experts............................... 11
</TABLE>
Unless the context indicates otherwise, the words "GATX Capital," "we,"
"our," "ours" and "us" refer to GATX Capital Corporation and its consolidated
subsidiaries.
(ii)
<PAGE> 3
GATX CAPITAL
We are a diversified global financial services company which provides
asset-based financing for transportation, information technology and industrial
equipment. Our strategy is to invest in and manage assets by combining our asset
knowledge, transaction-structuring capabilities and portfolio management
expertise to control assets with significant upside potential. We 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. Our commercial
aircraft and rail investment activities are focused on operating leasing and
maximizing the value of owned and managed operating lease fleets. Marine, oil
and steel production, and other industrial and transportation investments are
typically individual transactions that are longer term in nature. Investments in
personal computers, client servers and other technology-related investments are
typically shorter term due to the rapid pace of technological advancements.
Venture finance investments typically provide customers with financing for
technology, telecommunications, biotechnology and other similar productivity
enhancing capital expenditures.
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. Those purchases may be material in amount and have an
effect on our financial condition, results of operations and debt service
capability.
USE OF PROCEEDS
The net proceeds to us from the sale of the Notes offered under this
Prospectus Supplement are estimated to be $ million. We intend to use
the proceeds to repay short-term debt and for general corporate purposes.
Short-term debt had been issued to finance investments in the ordinary course of
business and to refinance existing indebtedness. Such short-term borrowings bore
interest at a blended rate of approximately 6.84% per annum as of June 30, 2000.
S-1
<PAGE> 4
CAPITALIZATION
The following table sets forth the capitalization of GATX Capital (i) at
June 30, 2000 and (ii) as adjusted to give effect to the issuance of the Notes.
<TABLE>
<CAPTION>
JUNE 30, 2000
-------------------------
ACTUAL ADJUSTED(1)
---------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
DEBT FINANCING:
Commercial paper and bankers' acceptances................. $ 251,309 $ 0
Notes payable............................................. 103,192 6,501
Obligations under capital leases.......................... 7,133 7,133
Senior term notes......................................... 1,726,000 2,076,000
---------- ----------
Total debt financing................................... $2,087,634 $2,089,634
========== ==========
STOCKHOLDER'S EQUITY:
Convertible preferred stock, par value $1, and additional
paid-in capital........................................ $ 125,000 $ 125,000
Common stock, par value $1, and additional paid-in
capital................................................ 63,960 63,960
Accumulated other comprehensive income.................... 37,252 37,252
Reinvested earnings....................................... 300,045 300,045
---------- ----------
Total stockholder's equity............................. $ 526,257 $ 526,257
========== ==========
</TABLE>
---------------
(1) Assumes net proceeds to us (after expenses) of $348.0 million.
S-2
<PAGE> 5
SELECTED FINANCIAL DATA
The following selected financial data of GATX Capital should be read in
conjunction with the detailed information and consolidated financial statements
and notes thereto included in the documents described under "Information
Incorporated by Reference" in the accompanying Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------
2000 1999 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Lease income................. $ 213,525 $ 147,926 $ 330,471 $ 267,966 $ 245,523 $ 195,745 $ 139,712
Gain on sale of assets....... 41,034 48,900 60,062 69,423 68,899 35,533 33,123
Equity earnings from
investment in joint
ventures................... 44,203 27,441 60,663 45,850 27,909 22,411 18,594
Fees......................... 9,806 13,886 31,873 38,832 29,371 31,840 19,026
Interest..................... 24,420 17,150 40,789 34,110 23,271 28,374 23,179
Other........................ 4,715 3,356 21,004 10,271 10,895 6,510 2,875
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total earned income........ 337,703 258,659 544,862 466,452 405,868 320,413 236,509
Expenses:
Operating leases............... 123,689 80,255 185,171 139,160 118,096 77,289 50,424
Selling, general and
administrative............... 57,030 49,885 108,117 77,439 83,657 62,500 43,517
Interest....................... 79,649 55,229 115,031 110,187 94,305 85,836 68,396
Provision for losses on
investments.................. 4,000 5,499 11,001 11,029 11,033 12,744 18,000
Other.......................... 2,528 2,342 4,794 5,479 8,487 4,444 828
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total expenses................. 266,896 293,210 424,114 343,294 315,578 242,813 181,165
Income from continuing
operations before income
taxes........................ 70,807 65,449 120,748 123,158 90,290 77,600 55,344
Provision for income taxes..... 27,969 26,262 49,139 51,267 36,366 32,286 22,740
Income from continuing
operations................... 42,838 39,187 71,609 71,891 53,924 45,314 32,604
Discontinued operations:
(Loss) income from discontinued
operations, net of income
taxes........................ -- (4,642) (5,112) (12,574) (360) 541 --
Gain on sale of discontinued
operations, net of income tax
benefits of $1,853........... -- 2,137 1,094 -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income................. 42,838 36,682 67,591 59,317 53,564 45,855 32,604
Reinvested earnings at
beginning of year............ 276,150 242,409 242,409 212,750 185,686 162,400 146,036
Dividends paid to
stockholder.................. (18,943) (15,372) (33,850) (29,658) (26,500) (22,569) (16,240)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Reinvested earnings at end of
period....................... $ 300,045 $ 263,719 $ 276,150 $ 242,409 $ 212,750 $ 185,686 $ 162,400
========== ========== ========== ========== ========== ========== ==========
BALANCE SHEET DATA
(END OF PERIOD)
Total investment (net of
allowance for losses on
investments)................. $3,233,741 $2,205,978 $2,772,433 $2,030,890 $2,057,734 $1,665,472 $1,424,797
Total assets................... 3,416,559 2,382,745 2,941,691 2,275,682 2,317,143 1,848,629 1,518,383
Total debt financing........... 2,087,634 1,323,887 1,766,634 1,239,557 1,367,347 1,024,915 880,885
Nonrecourse obligations........ 452,707 363,290 397,849 381,390 329,820 268,044 193,446
Total liabilities.............. 2,890,302 1,954,203 2,483,920 1,878,541 1,950,218 1,504,952 1,201,383
Stockholder's equity........... 526,257 428,542 457,771 397,141 366,925 343,677 317,000
SELECTED FINANCIAL RATIOS:
Ratio of earnings to fixed
charges (1).................. 1.44x 1.64x 1.58x 1.79x 2.14x 1.84x 1.88x
</TABLE>
---------------
* annualized
(1) This ratio is computed by dividing earnings from continuing operations
before fixed charges and income taxes by the fixed charges and includes our
earnings and fixed charges as well as those of all of our consolidated
subsidiaries. Fixed charges consist of interest and debt expense and the
portion of rentals for real and personal properties in an amount we deem to
be representative of the interest factor.
S-3
<PAGE> 6
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered by
this Prospectus Supplement augments, and to the extent inconsistent replaces,
the description of the general terms and provisions of the debt securities under
"Description of Debt Securities" in the accompanying Prospectus.
GENERAL TERMS OF THE NOTES
Indenture
The Notes will be senior securities as described in the accompanying
Prospectus. We will issue the Notes under an indenture dated as of July 31,
1989, as supplemented and amended by supplemental indentures dated as of
December 18, 1991, January 2, 1996 and October 14, 1997 (together, the
"Indenture") between us and The Chase Manhattan Bank, as Trustee. The Indenture
does not limit the amount of additional unsecured indebtedness ranking equally
and ratably with the Notes that we may incur. We may, from time to time, without
the consent of the holders of the Notes, issue notes under the Indenture in
addition, and with identical terms, to the $350.0 million aggregate principal
amount of the Notes offered by this Prospectus Supplement. The statements in
this Prospectus Supplement concerning the Notes and the Indenture are not
complete and you should refer to the provisions in the Indenture which are
controlling. Whenever we refer to provisions of the Indenture, those provisions
are incorporated in this Prospectus Supplement by reference as a part of the
statements we are making, and the statements are qualified in their entirety by
these references.
Maturity
The Notes will mature on , 2003.
Interest
The Notes will bear interest at the rate of % per annum. Interest will
accrue from , 2000 or from the most recent date to which interest
has been paid or provided for. We will pay interest on and
of each year to the person in whose name the Note is registered
at the close of business on the date fifteen days prior to the date we pay
interest, except that the interest payable on the maturity date, or, if
applicable, upon redemption, will be payable to the person to whom the principal
on the Note is payable. We will make the first payment on , 2001.
Interest on the Notes will be computed on the basis of a 360-day year of
twelve 30-day months. Payments of interest and principal will be made in United
States Dollars.
Ranking
The Notes will be senior securities and will rank equally and ratably with
our other senior indebtedness.
Book Entry, Delivery and Form of the Notes
We will issue each Note in fully registered form without coupons and each
Note will be represented by a global note (a "Global Note") registered in the
name of a nominee of the depositary. Except as set forth in this Prospectus
Supplement, Notes will be issuable only in global form. See "Description of
Notes -- Book-Entry; Delivery and Form." Your beneficial interest in a Note will
be shown on, and transfers of beneficial interests will be effected only
through, records maintained by the depositary or its participants. Payments of
principal of, premium, if any, and interest, if any, on, Notes represented by a
Global Note will be made by us or our paying agent to the depositary or its
nominee. The Depository Trust Company ("DTC") will be the initial depositary.
S-4
<PAGE> 7
Investors may elect to hold their interests in the Notes represented by the
Global Note directly through Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system ("Euroclear") or Clearstream
Banking, societe anonyme (formerly Cedelbank) ("Clearstream Banking"), if they
are participants in these systems, or indirectly through organizations that are
participants in these systems. Euroclear and/or Clearstream Banking will hold
interests in the Global Note on behalf of their participants through their
respective depositaries, which in turn will hold the interests in the Global
Note in customers' securities accounts in the depositaries' names on the books
of DTC. Citibank, N.A., is acting initially as depositary for Clearstream
Banking, and The Chase Manhattan Bank is acting initially as depositary for
Euroclear. See "-- Book-Entry; Delivery and Form."
Denominations
The authorized denominations of the Notes will be $100,000 or any amount in
excess of $100,000 which is an integral multiple of $1,000. No service charge
will be made for any registration of transfer or exchange of the Notes, but we
may require payment of a sum sufficient to cover any tax or other governmental
charges that may be imposed in connection with the transaction.
Redemption
The Notes are not subject to a call for redemption prior to maturity and
are not subject to any sinking fund.
Discharge, Defeasance and Covenant Defeasance
The Notes are not subject to defeasance or covenant defeasance.
Registration, Transfer and Exchange
We appointed the Trustee as securities registrar for the purpose of
registering the Notes and transfers and exchanges of the Notes and, subject to
the terms of the Indenture, the Notes may be presented for registration of
transfer and exchange at the offices of the Trustee.
Glossary
You should refer to the Indenture and the form of Notes filed as exhibits
to the registration statement to which the accompanying Prospectus relates for
the full definition of terms used in this Prospectus Supplement.
BOOK-ENTRY; DELIVERY AND FORM
Global Notes
Upon issuance, all Notes will be represented by one or more fully
registered Global Notes. Each Global Note will be deposited with, or on behalf
of, the depositary and registered in the name of the depositary or its nominee.
The Depositary
DTC will be the initial depositary with respect to the Notes. DTC has
advised us and the Underwriters that it is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"). DTC was created to
hold securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants in those securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates.
S-5
<PAGE> 8
DTC's participants include securities brokers and dealers (including the
Underwriters), 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 Securities and Exchange Commission.
Clearstream Banking advises that it is incorporated under the laws of
Luxembourg and licensed as a bank and a professional depositary. Clearstream
Banking is the successor to Cedelbank, a subsidiary of Cedel International,
societe anonyme ("Cedel"), which merged its clearing settlement and custody
businesses with that of Deutsche Borse AG on January 10, 2000. The merger
involved the transfer by Cedel of substantially all its assets and liabilities
(including its shares in Cedelbank), and the transfer by Deutsche Borse AG of
its shares in Deutsche Borse Clearing, to a new Luxembourg company, Clearstream
International, societe anonyme. Following the merger, Cedelbank was renamed
"Clearstream Banking, societe anonyme." Clearstream Banking holds securities for
its participating organizations ("Clearstream Banking Customers") and
facilitates the clearance and settlement of securities transactions among
Clearstream Banking Customers through electronic book-entry changes in accounts
of Clearstream Banking Customers, thereby eliminating the need for physical
movement of certificates. Clearstream Banking provides to Clearstream Banking
Customers, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Clearstream Banking interfaces with domestic markets in
several countries. As a professional depositary, Clearstream Banking is subject
to regulation by the Commission de Surveillance du Secteur Financier.
Clearstream Banking Customers are recognized financial institutions around the
world, including underwriters, securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations and may include
the underwriters. Indirect access to Clearstream Banking is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Clearstream Banking Customer either
directly or indirectly.
Distributions with respect to Notes held beneficially through Clearstream
Banking will be credited to cash accounts of Clearstream Banking Customers in
accordance with its rules and procedures, to the extent received by the U.S.
Depositary for Clearstream Banking.
Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions among Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including,
securities lending and borrowing, and interfaces with domestic markets in
several countries. Euroclear is operated by the Brussels, Belgium office of
Morgan Guaranty Trust Company of New York (the "Euroclear Operator"), under
contract with Euroclear Clearance Systems S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policies for Euroclear on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the underwriters. Indirect access to Euroclear is also available
to other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
S-6
<PAGE> 9
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfer of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
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 the participants. The accounts to be credited will be
designated by the Underwriters of those Notes. Ownership of beneficial interests
in a Global Note will be limited to participants or persons that hold interests
through participants. Ownership of beneficial interests in Notes represented by
a Global Note or Global Notes will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the depositary,
or by participants in the depositary or persons that may hold interests through
participants. The laws of some states require that purchasers of securities take
physical delivery of securities in definitive form. These limits and laws may
impair your ability to transfer beneficial interests in a Global Note.
So long as the depositary for a Global Note, or its nominee, is the
registered owner of the Global Note, the depositary or its nominee will be
considered the sole owner or holder of the Notes represented by a Global Note
for all purposes under the Indenture. Except as provided below, you, as the
owner of beneficial interests in Notes represented by a Global Note or Global
Notes (a) will not be entitled to register the Notes represented by a Global
Note in your name, (b) will not receive or be entitled to receive physical
delivery of Notes in definitive form and (c) will not be considered the owner or
holder of the Notes under the Indenture.
Accordingly, you must rely on the procedures of the depositary or on the
procedures of the participant through which you own your interest, to exercise
any rights of a holder under the Indenture or a Global Note. We understand that
under existing policy of the depositary and industry practices, if (a) we
request any action of holders, or (b) you desire to give notice or take action
which a holder is entitled to under the Indenture or a Global Note, the
depositary would authorize the participants holding the beneficial interests to
give the notice or take the action.
If you are a beneficial owner that is not a participant, you must rely on
the contractual arrangements you have directly, or indirectly through your
financial intermediary, with a participant to give notice or take action.
To facilitate subsequent transfers, all Global Notes deposited by
participants with DTC are registered in the name of the DTC's partnership
nominee, Cede & Co. The deposit of Global Notes with DTC and their registration
in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual beneficial owners of the book-entry Notes; DTC's records
reflect only the identity of the direct participants to whose accounts the
book-entry Notes are credited, which may or may not be the beneficial owners.
The participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Neither DTC nor Cede & Co. will consent or vote with respect to book-entry
Notes. Under its usual procedures, DTC will mail an "Omnibus Proxy" to us as
soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
book-entry Notes are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
S-7
<PAGE> 10
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.
Payments
We will make payments of principal of, premium, if any, and interest, if
any, on, the Notes represented by a Global Note through the Trustee to the
depositary or its nominee, as the registered owner of a Global Note. Neither we,
the Trustee, any paying agent or any other of our agents will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Note or
for maintaining, supervising or reviewing any records relating to beneficial
ownership interests. We expect that the depositary, upon receipt of any
payments, will immediately credit the accounts of the related participants with
payments in amounts proportionate to their beneficial interest in the Global
Note. We also expect that payments by participants to owners of beneficial
interests in a Global Note will be governed by standing customer instructions
and customary practices and will be the responsibility of the participants.
Certificated Notes
If DTC or any other designated replacement depositary is at any time
unwilling or unable to continue as depositary or ceases to be a clearing agency
registered under the Exchange Act and a successor depositary registered as a
clearing agency under the Exchange Act is not appointed by us within 90 calendar
days, we will issue certificated Notes in exchange for all the Global Notes.
Also, we may at any time and in our sole discretion determine not to have the
Notes represented by the Global Note and, in that event, will issue certificated
Notes in exchange for all the Global Notes. In either instance, you, as an owner
of a beneficial interest in a Global Note, will be entitled to have certificated
Notes equal in principal amount to the beneficial interest registered in your
name and will be entitled to physical delivery of the certificated Notes. The
certificated Notes will be registered in the name or names as the depositary
shall instruct the Trustee. These instructions may be based upon directions
received by the depositary from participants with respect to beneficial
interests in the Global Notes. The certificated Notes will be issued in
denominations of $100,000 or any amount in excess of $100,000 which is an
integral multiple of $1,000 and will be issued in registered form only, without
coupons. No service charge will be made for any transfer or exchange of
certificated Notes, but we may require payment of a sum sufficient to cover any
tax or other governmental charge.
Paying Agent
Until we repay the Notes or provide for their repayment, we will, at all
times, maintain a paying agent in San Francisco, California 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.
Global Clearance and Settlement Procedures
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest on Global Notes will be
made by us in immediately available funds or the equivalent. The Notes will
trade in DTC's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in the Notes will therefore be required by DTC to settle
in
S-8
<PAGE> 11
immediately available funds. The effect, if any, of settlement in immediately
available funds on trading activity in the Notes has not been determined.
Secondary market trading between Clearstream Banking Customers and/or Euroclear
Participants will occur in the ordinary way in accordance with the applicable
rules and operating procedures of Clearstream Banking and Euroclear and will be
settled using the procedures applicable to conventional Eurobonds in immediately
available funds.
Cross-market transfers between persons holding directly or indirectly
through DTC on the one hand, and directly or indirectly through Clearstream
Banking Customers or Euroclear Participants, on the other, will be effected in
DTC in accordance with DTC's rules on behalf of the relevant European
international clearing system by its U.S. Depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such systems in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its U.S.
Depositary to take action to effect final settlement in its behalf by delivering
or receiving Notes in DTC, and making or receiving payment in accordance with
normal procedures for same-day funds settlement applicable to DTC. Clearstream
Banking Customers and Euroclear Participants may not deliver instructions
directly to the U.S. Depositaries.
Because of time-zone differences, credits of Notes received in Clearstream
Banking or Euroclear as a result of a transaction with a DTC Participant will be
made during subsequent securities settlement processing and dated the business
day following the DTC settlement date. Such credits or any transactions in such
Notes settled during such processing will be reported to the relevant Euroclear
or Clearstream Banking Customers on such business day. Cash received in
Clearstream Banking or Euroclear as a result of sales of Notes by or through a
Clearstream Banking Customer or a Euroclear Participant to a DTC Participant
will be received with value on the DTC settlement date but will be available in
the relevant Clearstream Banking or Euroclear cash amount only as of the
business day following settlement in DTC.
Although DTC, Clearstream Banking and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of Notes among
participants of DTC, Clearstream Banking and Euroclear, they are under no
obligation to perform or continue to perform such procedures and such procedures
may be discontinued at any time.
CONCERNING THE TRUSTEE
The Chase Manhattan Bank is the Trustee under the Indenture and is a party
to existing credit agreements with us.
S-9
<PAGE> 12
UNDERWRITING
We and the Underwriters have entered into an underwriting agreement
relating to the offering and sale of the Notes (the "Underwriting Agreement").
In the Underwriting Agreement, we have agreed to sell to each Underwriter, and
each Underwriter has agreed to purchase from us, the principal amount of Notes
that appears opposite its name in the table below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITERS AMOUNT
------------ -----------
<S> <C>
Chase Securities Inc. $
Salomon Smith Barney Inc.
UBS Warburg LLC
Banc of America Securities LLC
Banc One Capital Markets, Inc.
-----------
Total $
===========
</TABLE>
The obligations of the Underwriters under the Underwriting Agreement,
including their agreement to purchase Notes from us, are several and not joint.
Those obligations are also subject to certain conditions in the Underwriting
Agreement being satisfied. The Underwriters have agreed to purchase all of the
Notes if any of them are purchased.
The Underwriters have advised us that they propose to offer the Notes to
the public at the public offering price that appears on the cover page of this
Prospectus. The Underwriters may offer the Notes to selected dealers at the
public offering price minus a selling concession of up to % of the
principal amount. In addition, the Underwriters may allow, and those selected
dealers may reallow, a selling concession of up to % of the principal
amount to certain other dealers. After the initial public offering, the
Underwriters may change the public offering price and any other selling terms.
In the Underwriting Agreement, we have agreed that:
- we will pay our expenses related to the Offering, which we estimate will
be $ ; and
- we will indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act.
The Notes are a new issue of securities, and there is currently no
established trading market for the Notes. In addition, we do not intend to apply
for the Notes to be listed on any securities exchange or to arrange for the
Notes to be quoted on any quotation system. The Underwriters have advised us
that they intend to make a market in the Notes, but they are not obligated to do
so. The Underwriters may discontinue any market making in the Notes at any time
in their sole discretion. Accordingly, we cannot assure you that a liquid
trading market will develop for the Notes, that you will be able to sell your
Notes at a particular time or that the prices that you receive when you sell
will be favorable.
In connection with the offering of the Notes, the Underwriters may engage
in overallotment, stabilizing transactions and syndicate covering transactions
in accordance with Regulation M under the Securities Exchange Act of 1934, as
amended. Overallotment involves sales in excess of the offering size, which
creates a short position for the Underwriters. Stabilizing transactions involve
bids to purchase the Notes in the open market for the purpose of pegging, fixing
or maintaining the price of the Notes. Syndicate covering transactions involve
purchases of the Notes in the open market after the distribution has been
completed in order to cover short positions. Stabilizing transactions and
syndicate covering transactions may cause the price of the Notes to be higher
than it would otherwise be in the absence of those transactions. If the
Underwriters engage in stabilizing or syndicate covering transactions, they may
discontinue them at any time.
S-10
<PAGE> 13
In the ordinary course of their respective businesses, certain of the
Underwriters and their respective affiliates have engaged in and may in the
future engage in commercial and/or investment banking transactions with us and
our affiliates. The Chase Manhattan Bank, an affiliate of Chase Securities Inc.,
from time to time conducts banking transactions with us and our affiliates in
the ordinary course of business and The Chase Manhattan Bank is a party to some
of our existing credit agreements. We intend to use a portion of the proceeds of
this offering to repay certain short-term borrowings. See "Use of Proceeds."
Accordingly, The Chase Manhattan Bank may receive more than 10% of the net
proceeds from the sale of the Notes, and this offering is being conducted in
conformity with Rule 2710(c)(8) of the Conduct Rules of the National Association
of Securities Dealers, Inc. The Chase Manhattan Bank is also the Trustee under
the Indenture.
In addition, John W. Rogers Jr., a member of the board of directors of Banc
One Capital Markets, Inc., is also a member of our board of directors.
LEGAL OPINIONS
The validity of the Notes offered in this Prospectus Supplement will be
passed upon for GATX Capital by Thomas C. Nord, Esq., Vice President and General
Counsel of GATX Capital. Certain legal matters relating to the Notes will be
passed upon for the Underwriters by Cleary, Gottlieb, Steen & Hamilton, New
York, New York.
S-11
<PAGE> 14
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
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.
<PAGE> 15
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
2
<PAGE> 16
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.
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.
3
<PAGE> 17
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
4
<PAGE> 18
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>
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;
5
<PAGE> 19
- the rate or rates at which the debt securities will bear interest, if
any, or the formula pursuant to which such rate or rates shall be
determined, and the date or dates from which any such interest will
accrue;
- the payment dates on which interest, if any, on the debt securities will
be payable, and the extent to which, or the manner in which, any interest
payable on a temporary global debt security on an interest payment date
will be paid;
- any mandatory or optional sinking fund or analogous provisions;
- each office or agency where, subject to the terms of the indenture, the
principal of and any premium and interest on the debt securities will be
payable and each office or agency where, subject to the terms of the
indenture, the debt securities may be presented for registration of
transfer or exchange;
- the date, if any, after which and the price or prices at which the debt
securities may be redeemed, in whole or in part at the option of 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
6
<PAGE> 20
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.
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
7
<PAGE> 21
(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,
- 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;
8
<PAGE> 22
- Reduce the percentage in principal amount of the outstanding debt
securities of any series, the consent of whose holders is required to
modify or amend each indenture; or
- Modify the foregoing requirements or reduce the percentage of outstanding
debt securities necessary to waive any past default to less than a
majority.
Except with respect to certain fundamental provisions, the holders of at least a
majority in principal amount of outstanding debt securities of any series may,
with respect to such series, waive past defaults under each indenture and waive
our compliance with certain provisions of each indenture.
EVENTS OF DEFAULT, WAIVER AND NOTICE
An event of default with respect to any debt security of any series is
defined in each indenture as being:
- Default for 30 days in payment of any interest on or any additional
amounts payable in respect of any debt security of that series;
- Default in payment of principal (and premium, if any) on the debt
securities of that series when due either at maturity, upon optional or
mandatory redemption, as a sinking fund installment, by declaration or
otherwise;
- Default in the performance or breach of any other covenant or warranty of
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).
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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.
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.
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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.
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