<PAGE> 1
REGISTRATION STATEMENT NO. 33-53101
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FORD MOTOR CREDIT COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
38-1612444
(I.R.S. EMPLOYER IDENTIFICATION NO.)
THE AMERICAN ROAD, DEARBORN, MICHIGAN 48121 (313) 322-3000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
J. D. BRINGARD, ESQ.
FORD MOTOR CREDIT COMPANY
THE AMERICAN ROAD
DEARBORN, MICHIGAN 48121
(313) 322-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
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IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. / /
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX. /X/
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH PROPOSED PROPOSED
CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE AGGREGATE PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
<S> <C> <C> <C> <C>
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Debt Securities.............. $6,000,000,000 100%* $6,000,000,000* $2,068,966
</TABLE>
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* Estimated solely for the purpose of determining the amount of the registration
fee.
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<PAGE> 2
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL , 1994
U.S. $6,000,000,000
FORD MOTOR CREDIT COMPANY
MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
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Ford Credit may offer from time to time its Medium-Term Notes in an
aggregate principal amount of up to U.S. $6,000,000,000 or the equivalent in
foreign or composite currencies. The Notes will bear interest at either fixed or
floating rates and will have Stated Maturities from nine months to thirty years
from the date of issue. The currency of denomination, Stated Maturity and price
to public of a Note, together with the interest rate (if such Note is a Fixed
Rate Note), or the interest rate formula, as adjusted by any Spread or Spread
Multiplier (if such Note is a Floating Rate Note), will be established by Ford
Credit and set forth in the applicable Pricing Supplement.
Interest on each Fixed Rate Note will be payable on March 15 and September
15 of each year, unless otherwise specified in the applicable Pricing
Supplement, and at Maturity. Interest on each Floating Rate Note will be payable
on the dates set forth in the applicable Pricing Supplement and at Maturity. If
provided in the applicable Pricing Supplement, the Notes may be subject to
repayment or redemption prior to their Stated Maturity.
Each Note initially will be represented by a Global Note registered in the
name of the Depository's nominee unless the applicable Pricing Supplement
specifies that Notes initially will be issued in definitive registered form. An
interest in a Global Note will be shown on, and transfers thereof will be
effected only through, records maintained by the Depository and its
participants. A beneficial interest in a Global Note will be exchanged for Notes
in definitive form only under the limited circumstances described herein. See
"Description of Notes -- Book-Entry Notes".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF ANY PRICING SUPPLEMENT, THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PRICE TO AGENTS' DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(2) FORD CREDIT(2)(3)
-------------------- --------------------------- -----------------------------------
<S> <C> <C> <C>
Per Note................. 100% .050%-.600% 99.950%-99.400%
Total(4)................. U.S. $6,000,000,000 U.S. $3,000,000-36,000,000 U.S. $5,997,000,000-5,964,000,000
</TABLE>
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(1) Unless otherwise indicated in the applicable Pricing Supplement, Notes will
be issued at 100% of their principal amount.
(2) Ford Credit will pay Goldman, Sachs & Co., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Daiwa Securities America Inc. or
Nomura Securities International, Inc., each as Agent, a commission of from
.050% to .600% of the principal amount at maturity of any Note sold through
any of them as Agent, depending upon the maturity of such Note. Ford Credit
also may sell the Notes to an Agent or other person, as principal, for
resale or other distribution by such Agent or person at varying prices
related to prevailing market prices as will be determined by such Agent or
person at the time of such resale or other distribution. None of the
proceeds from such resale or distribution of such Notes will be received by
Ford Credit. Unless otherwise specified in the applicable Pricing
Supplement, any Note sold to an Agent or other person, as principal, will be
purchased by such Agent or other person at a price equal to 100% of the
principal amount thereof less applicable commissions. See "Plan of
Distribution". Ford Credit has agreed to indemnify each Agent against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended.
(3) Before deduction of estimated expenses of up to $2,544,000.
(4) Or the equivalent thereof in foreign currencies or currency units.
The Notes are being offered on a continuing basis by Ford Credit through
the Agents, who have agreed to use their best efforts to solicit purchases of
such Notes, and also may be sold to an Agent or other person, as principal, for
resale or other distribution. Ford Credit reserves the right to sell the Notes
directly to investors on its own behalf. The Notes may be sold at the price to
the public set forth above to dealers who later resell such Notes to investors.
Such dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. There can be no assurance that the Notes
offered hereby will be sold or that there will be a secondary market for the
Notes. Ford Credit reserves the right to withdraw, cancel or modify the offer
made hereby without notice. Ford Credit or any of the Agents may reject any
order in whole or in part.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
DAIWA SECURITIES AMERICA INC. NOMURA SECURITIES INTERNATIONAL, INC.
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The date of this Prospectus Supplement is April , 1994.
<PAGE> 3
DESCRIPTION OF NOTES
The following description of the particular terms of the Medium-Term Notes
Due from 9 Months to 30 Years from Date of Issue (the "Notes", which term shall
include the Foreign Currency Notes (as defined below) unless otherwise indicated
herein) offered hereby supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of Debt Securities
(as defined in the Prospectus) set forth in the Prospectus. The particular terms
of the Notes sold pursuant to any Pricing Supplement will be described therein.
Notes may be denominated in U.S. dollars or in foreign currencies or currency
units ("Foreign Currency Notes") designated by Ford Motor Credit Company ("Ford
Credit") from time to time. The Notes constitute one series of Debt Securities,
unlimited as to principal amount, established by Ford Credit pursuant to the
Indenture.
GENERAL
The Notes offered by this Prospectus Supplement will be limited to an
amount of up to U.S. $6,000,000,000 aggregate principal amount (or the
equivalent thereof, at the Market Exchange Rate (as defined in "Special
Provisions Relating to Foreign Currency Notes -- Payment Currency") on the
applicable trade date, in one or more foreign currencies or currency units) less
an amount equal to the aggregate principal amount of any other Debt Securities
covered by the Registration Statement of which this Prospectus Supplement is a
part and sold by Ford Credit. See "Plan of Distribution".
The Notes will be offered on a continuing basis and will mature from 9
months to 30 years from their dates of issue. Fixed Rate Notes (as defined
below) will mature on any day selected by the initial purchaser and agreed to by
Ford Credit. Floating Rate Notes (as defined below) will mature on an Interest
Payment Date (as defined below). Unless otherwise indicated in the applicable
Pricing Supplement, Notes will not be subject to repayment or redemption prior
to their Stated Maturity.
The Notes will be unsecured obligations of Ford Credit and will rank prior
to all subordinated indebtedness of Ford Motor Credit Company (parent company
only) and pari passu with all other unsecured and unsubordinated indebtedness of
Ford Motor Credit Company (parent company only). Notes will be issued in
registered form only.
Unless otherwise provided in the applicable Pricing Supplement, purchases
of Notes will be subject to a minimum order of $100,000. Notes will be issued in
registered form only.
Unless issuance in definitive registered form is previously approved by
Ford Credit and provision therefor is made in the applicable Pricing Supplement,
Notes will be initially represented by one or more global securities (each a
"Global Note") registered in the name of a nominee of The Depository Trust
Company (the "Depository"). All Notes issued on the same day and having the same
terms, including, but not limited to, the same currency, Interest Payment Dates,
rate of interest, Stated Maturity and redemption provisions may be represented
by a single Global Note. A beneficial interest in a Global Note will be shown
on, and transfers thereof will be effected only through, records maintained by
the Depository and its participants. Payments of principal and interest on Notes
represented by a Global Note will be made by the Trustee to the Depository. See
"Book-Entry Notes".
Unless otherwise provided in the applicable Pricing Supplement, and except
as otherwise specified herein, Notes in definitive registered form, other than
Foreign Currency Notes, will be issued in denominations of $25,000 or any amount
in excess thereof which is an integral multiple of $1,000. Notes in definitive
registered form may be presented for registration of transfer or exchange
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at the corporate trust office of the Trustee in The City of New York. Except as
provided below in "Special Provisions Relating to Foreign Currency Notes --
Payment of Principal and Interest", payments of the principal of and interest on
definitive registered Notes will be made in immediately available funds at the
corporate trust office of the Trustee in The City of New York, except that at
the option of Ford Credit interest may be paid by check mailed to the address of
the person entitled thereto.
Notes may be issued in the form of zero-coupon notes that will be offered
at a discount from the principal amount thereof due at the Stated Maturity of
such Notes. There will be no periodic payments of interest on zero-coupon notes.
An original issue discount note is a Note, including any zero-coupon note,
that is issued at an issue price lower than the principal amount thereof and
that provides that upon acceleration of the Maturity thereof an amount less than
the principal amount thereof shall become due and payable. In the event of an
acceleration of the Maturity of an original issue discount note, the amount
payable to the Holder of such Note upon such acceleration will be determined in
accordance with the terms of the Note, but will be an amount less than the
amount payable at the Stated Maturity of the principal of such Note. In
addition, a Note issued at a discount may, for federal income tax purposes, be
considered an original issue discount note, regardless of the amount payable
upon acceleration of Maturity of such Note.
For a description of the rights attaching to Debt Securities under the
Indenture, see "Description of Debt Securities" in the Prospectus. Unless
otherwise specified in the applicable Pricing Supplement, the Notes will have
the terms described below, except that references to interest payments and
interest related information do not apply to zero-coupon notes.
INTEREST AND INTEREST RATES
Each Note will bear interest at either (a) a fixed rate (the "Fixed Rate
Notes") or (b) a floating rate determined by reference to an interest rate
formula (the "Floating Rate Notes"), which may be adjusted by a Spread or Spread
Multiplier (each as defined below). Any Floating Rate Note may also have any or
all of the following: (i) a maximum numerical interest rate limitation, or
ceiling, on the rate of interest that may accrue during any Interest Period (as
defined below); (ii) a minimum numerical interest rate limitation, or floor, on
the rate of interest that may accrue during any Interest Period; and (iii) a
fixed rate applicable to one or more Interest Periods. The applicable Pricing
Supplement will designate a fixed rate per annum or one of the following
interest rate bases as applicable to each Note: the CD Rate, the Commercial
Paper Rate, the Federal Funds Rate, LIBOR, the Treasury Rate or another interest
rate base.
Each Note will bear interest from its date of issue at the annual rate, or
at a rate determined pursuant to an interest rate formula, stated therein and in
the applicable Pricing Supplement, until the principal thereof is paid or made
available for payment. Interest will be payable on each Interest Payment Date
and at Maturity. Interest will be payable to the person in whose name a Note (or
any Predecessor Note) is registered at the close of business on the Regular
Record Date next preceding the Interest Payment Date, subject to certain
exceptions; provided, however, that the first payment of interest on any Note
originally issued in certificated form between a Regular Record Date and an
Interest Payment Date will be made on such Interest Payment Date to the person
to whom the Note was originally issued. Interest rates and interest rate
formulas are subject to change by Ford Credit from time to time, but no such
change will affect any Note theretofore issued or that Ford Credit has agreed to
sell. Each date on which interest is payable on a Note is referred to herein as
an "Interest Payment Date". The Interest Payment Dates and the Regular Record
Dates for Fixed Rate Notes shall be as described below under "Fixed Rate Notes".
The Interest Payment Dates for Floating Rate Notes shall be as indicated in the
applicable Pricing Supplement, and unless otherwise
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specified in the applicable Pricing Supplement, each Regular Record Date for a
Floating Rate Note will be the fifteenth day (whether or not a Business Day)
next preceding each Interest Payment Date. If any Interest Payment Date for any
Floating Rate Note would otherwise be a day that is not a Business Day (as
defined below), the Interest Payment Date for such Floating Rate Note shall be
the next succeeding Business Day, except that in the case of a LIBOR-based Note
("LIBOR Note"), if such Business Day is in the next succeeding calendar month,
such Interest Payment Date shall be the immediately preceding Business Day.
Except as otherwise provided in the applicable Pricing Supplement, "Business
Day" means with respect to any Note, any day that is not a Saturday or Sunday
and that, in The City of New York (or, with respect to LIBOR Notes, The City of
New York or The City of London), is not a day on which banking institutions are
generally authorized or obligated by law to close, provided that, with respect
to Foreign Currency Notes only, such day also is not a day on which banking
institutions are generally authorized or obligated by law to close in the
capital city of the country of the Specified Currency (or, in the case of
Foreign Currency Notes denominated in European Currency Units, Brussels).
All percentages resulting from any calculation on Floating Rate Notes will
be rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward, (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all
dollar amounts used in or resulting from such calculation on Floating Rate Notes
will be rounded to the nearest cent (with one-half cent being rounded upward).
The interest rate on each Floating Rate Note will be equal to (i) in the
case of the period commencing on the issue date up to the first Interest Reset
Date, or other Interest Period as provided in the applicable Pricing Supplement,
a fixed rate of interest, and (ii) in the case of each period commencing on an
Interest Reset Date, (a) the interest rate determined by reference to the
specified interest rate base plus or minus the Spread, if any, or (b) the
interest rate calculated by reference to the specified interest rate base
multiplied by the Spread Multiplier, if any. The "Spread" is the number of basis
points specified in the applicable Pricing Supplement as being applicable to
such Floating Rate Note, and the "Spread Multiplier" is the percentage specified
in the applicable Pricing Supplement as being applicable to such Floating Rate
Note.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each an "Interest Reset
Date"), as specified in the applicable Pricing Supplement. If any Interest Reset
Date for any Floating Rate Note would otherwise be a day that is not a Business
Day for such Floating Rate Note, the Interest Reset Date for such Floating Rate
Note shall be the next succeeding Business Day, except that in the case of a
LIBOR Note, if such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day.
For purposes of determining the rate of interest payable on Floating Rate
Notes, Ford Credit will enter into an agreement with a reference agent (the
"Reference Agent"), which agent shall be specified in the applicable Pricing
Supplement. The Reference Agent shall advise Ford Credit and the Trustee of the
CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR, Treasury Rate or any
other interest rate base pertaining to any Floating Rate Note. The Trustee will,
upon the request of the Holder of any Floating Rate Note, provide the interest
rate then in effect and, if determined, the interest rate that will become
effective as a result of an interest determination made on the most recent
interest determination date ("Interest Determination Date") with respect to such
Note.
The Interest Determination Date pertaining to an Interest Reset Date for a
CD Rate Note (the "CD Interest Determination Date"), for a Commercial Paper Rate
Note (the "Commercial Paper Interest Determination Date") and for a Federal
Funds Rate Note (the "Federal Funds Interest Determination Date") will be the
second Business Day next preceding the Interest Reset Date. The
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Interest Determination Date pertaining to an Interest Reset Date for a LIBOR
Note (the "LIBOR Interest Determination Date") will be the second London
business day (as defined below) preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date for a Treasury Rate Note
(the "Treasury Interest Determination Date") will be the day of the week in
which such Interest Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are usually sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is usually held on
the following Tuesday, except that such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Treasury Interest Determination Date
pertaining to the Interest Reset Date occurring in the next succeeding week. If
an auction date shall fall on any Interest Reset Date for a Treasury Rate Note,
then such Interest Reset Date shall instead be the first Business Day
immediately following such auction date.
The calculation date, where applicable, pertaining to any Interest
Determination Date is the date on which the applicable interest rate is
calculated and is the tenth calendar day after such Interest Determination Date,
or if any such day is not a Business Day the next succeeding Business Day (the
"Calculation Date").
Interest on Floating Rate Notes will accrue from the date of issue or from
the last date to which interest has been paid up to but excluding the next
succeeding Interest Payment Date (each such time period an "Interest Period").
If the Maturity of any Floating Rate Note would fall on a day that is not a
Business Day, the payment of interest and principal (and premium, if any) may be
made on the next succeeding Business Day and no interest on such payment will
accrue for the period from and after the Maturity. With respect to a Floating
Rate Note, accrued interest shall be calculated by multiplying the principal
amount of such Floating Rate Note by an accrued interest factor. Such accrued
interest factor will be computed by adding the interest factors calculated for
each day in the Interest Period or from the last date from which accrued
interest is being calculated. The interest factor for each such day is computed
by dividing the interest rate in effect on such day by 360, in the case of CD
Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes and LIBOR
Notes, or by the actual number of days in the year, in the case of Treasury Rate
Notes.
The applicable Pricing Supplement will specify the particular terms of each
Floating Rate Note, including, but not limited to, the interest rate formula and
the Spread or Spread Multiplier, if any, the maximum or minimum interest rate
limitation, if any, the period to maturity of the instrument or obligation on
which the interest rate formula is based (the "Index Maturity"), the initial
interest rate, Interest Payment Dates, Regular Record Dates, Interest Reset
Dates and any other applicable terms with respect to such Note.
The interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law as the same may be modified by United States law
of general application. Under present New York law, the maximum rate of interest
is 25% per annum on a simple interest basis. This limit may not apply to Notes
in which $2,500,000 or more has been invested.
Fixed Rate Notes
Each Fixed Rate Note will bear interest from its date of issue at the
annual rate stated on the face thereof. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Payment Dates for Fixed Rate Notes
will be on March 15 and September 15 of each year and the Regular Record Dates
will be March 1 and September 1, respectively. Unless otherwise indicated in the
applicable Pricing Supplement, the first Interest Payment Date for a Fixed Rate
Note represented by a Global Note issued between an Interest Payment Date and
the Regular Record Date pertaining thereto shall be the Interest Payment Date
next following such Interest Payment Date. Any payment of principal or interest
required to be made on an Interest Payment Date or at Maturity of a Fixed Rate
Note that is not a Business Day need not be made on such day, but may be made on
the next succeeding Business Day with the same force and effect as if made on
such Interest Payment Date
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or at Maturity, as the case may be, and no interest shall accrue for the period
from and after such Interest Payment Date or Maturity. Interest on Fixed Rate
Notes will be computed and paid on the basis of a 360-day year of twelve 30-day
months.
CD Rate Notes
CD Rate Notes will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread or Spread Multiplier, if any) specified
on the face of the CD Rate Note and in the applicable Pricing Supplement, except
that the initial interest rate for each CD Rate Note will be the rate specified
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Interest Determination Date, the rate on such date
for negotiable certificates of deposit having the Index Maturity designated in
the applicable Pricing Supplement as published 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 caption "CDs
(Secondary Market)" or, if not yet published by 3:00 P.M., New York City time,
on the Calculation Date pertaining to such CD Interest Determination Date , the
CD Rate will be the rate on such CD Interest Determination Date for negotiable
certificates of deposit of the Index Maturity designated in the applicable
Pricing Supplement as published in the daily statistical release entitled
"Composite 3:30 P.M. Quotations for U.S. Government Securities", or any
successor publication, published by the Federal Reserve Bank of New York
("Composite Quotations") under the caption "Certificates of Deposit". If on the
Calculation Date pertaining to such CD Interest Determination Date such rate is
not yet published in either H.15(519) or Composite Quotations, then the CD Rate
on such CD Interest Determination Date will be calculated by the Reference Agent
and will be the arithmetic mean (rounded upward, if necessary, to the next
higher one hundred-thousandth of a percentage point) of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD 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 Reference Agent
for negotiable certificates of deposit of major United States money market banks
with a remaining maturity closest to the Index Maturity designated in the
applicable Pricing Supplement in a denomination of $5,000,000; provided,
however, that if the dealers selected as aforesaid by the Reference Agent are
not quoting as mentioned in this sentence, the interest rate for the period
commencing on the Interest Reset Date following such CD Interest Determination
Date will be the interest rate in effect on such CD Interest Determination Date.
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread or Spread
Multiplier, if any) specified in the Commercial Paper Rate Note and in the
applicable Pricing Supplement, except that the initial interest rate for each
Commercial Paper Rate Note will be the rate specified in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement,
"Commercial Paper Rate" means, with respect to any Commercial Paper Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on that date for commercial paper having the Index Maturity designated
in the applicable Pricing Supplement as such rate is published by the Board of
Governors of the Federal Reserve System in H.15(519) under the heading
"Commercial Paper". In the event that such rate is not published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Commercial Paper
Interest Determination Date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate on that Commercial Paper Interest Determination Date
for commercial paper having the Index Maturity designated in the applicable
Pricing Supplement as published in Composite Quotations under the heading
"Commercial Paper". If on the Calculation Date pertaining to such Commercial
Paper Interest Determination Date such rate is not yet
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published in either H.15(519) or Composite Quotations, the Commercial Paper Rate
for that Commercial Paper Interest Determination Date shall be calculated by the
Reference Agent and shall be the Money Market Yield of the arithmetic mean (each
as rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) of the offered rates of three leading dealers of commercial
paper in The City of New York selected by the Reference Agent as of 11:00 A.M.,
New York City time, on that Commercial Paper Interest Determination Date, for
commercial paper having the Index Maturity designated in the applicable Pricing
Supplement placed for an industrial issuer whose bond rating is "AA" or the
equivalent, from a nationally recognized securities rating agency; provided,
however, that if the dealers selected as aforesaid by the Reference Agent are
not quoting as mentioned in this sentence, the interest rate for the period
commencing on the Interest Reset Date following such Commercial Paper Interest
Determination Date will be the interest rate in effect on such Commercial Paper
Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) calculated in accordance with the following formula:
D X 360
Money Market Yield = -------------- X 100
360 - (D X M)
where "D" refers to the per annum rate for the 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.
Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread or Spread
Multiplier, if any) specified in the Federal Funds Rate Notes and in the
applicable Pricing Supplement, except that the initial interest rate for each
Federal Funds Rate Note will be the rate specified in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Interest Determination
Date, the rate on that day for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not so published by 3:00 P.M., New
York City time, on the Calculation Date pertaining to such Federal Funds
Interest Determination Date, the Federal Funds Rate will be the rate on such
Federal Funds Interest Determination Date as published in Composite Quotations
under the heading "Federal Funds/Effective Rate". If on the Calculation Date
pertaining to such Federal Funds Interest Determination Date, such rate is not
yet published in either H.15(519) or Composite Quotations, the Federal Funds
Rate for such Federal Funds Interest Determination Date will be calculated by
the Reference Agent and will be the arithmetic mean of the rates for the last
transaction in overnight Federal Funds arranged by three leading dealers of
Federal Funds transactions in The City of New York selected by the Reference
Agent as of 11:00 A.M., New York City time, on such Federal Funds Interest
Determination Date; provided, however, that if the dealers selected as aforesaid
by the Reference Agent are not quoting as mentioned in this sentence, the
interest rate for the period commencing on the Interest Reset Date following
such Federal Funds Interest Determination Date will be the interest rate in
effect on such Federal Funds Interest Determination Date.
LIBOR Notes
LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any) specified in the
LIBOR Notes and in the applicable Pricing Supplement, except that the initial
interest rate for each LIBOR Note will be the rate specified in the applicable
Pricing Supplement. The Interest Determination Date pertaining to an Interest
Reset Date for a LIBOR Note (the "LIBOR Interest Determination Date") will be
the second day on which
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dealings in deposits in U.S. dollars are transacted in the London interbank
market ("London business day") preceding such Interest Reset Date.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Reference Agent in accordance with the following
provisions:
(i) With respect to a LIBOR Interest Determination Date, LIBOR will be
determined on the basis of the offered rate for deposits in U.S. dollars
having the Index Maturity designated in the applicable Pricing Supplement,
which appears on Telerate Page 3750 as of 11:00 A.M., London time, on that
LIBOR Interest Determination Date. "Telerate Page 3750" means the display
page so designated on the Dow Jones Telerate Service (or such other page as
may replace that page on that service or such other service or services as
may be nominated by the British Bankers' Association for the purpose of
displaying London interbank offered rates for U.S. dollar deposits). If, on
that LIBOR Interest Determination Date, LIBOR does not appear on Telerate
Page 3750, LIBOR will be determined as described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
LIBOR does not appear on Telerate Page 3750 as specified in (i) above,
LIBOR will be determined on the basis of the rates at which deposits in
U.S. dollars are offered by four major banks in the London interbank market
selected by the Reference Agent (the "Reference Banks") at approximately
11:00 A.M., London time, on that LIBOR Interest Determination Date to prime
banks in the London interbank market having the Index Maturity designated
in the applicable Pricing Supplement and in a principal amount equal to an
amount of not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time. The Reference Agent will request
the principal London office of each of such Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, LIBOR
in respect of that LIBOR Interest Determination Date will be the arithmetic
mean of such quotations. If fewer than two quotations are provided, LIBOR
in respect of that LIBOR Interest Determination Date will be the arithmetic
mean of the rates quoted by three major banks in The City of New York
selected by the Reference Agent at approximately 11:00 A.M., New York City
time, on that LIBOR Interest Determination Date for loans in U.S. dollars
to leading European banks, having the Index Maturity designated in the
applicable Pricing Supplement and in a principal amount equal to an amount
of not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time; provided, however, that if the
banks in The City of New York selected as aforesaid by the Reference Agent
are not quoting as mentioned in this sentence, the interest rate for the
period commencing on the Interest Reset Date following such LIBOR Interest
Determination Date will be the interest rate in effect on such LIBOR
Interest Determination Date.
Treasury Rate Notes
Treasury Rate Notes will bear interest at the interest rates (calculated
with reference to the Treasury Rate and the Spread or Spread Multiplier, if any)
specified in the Treasury Rate Note and in the applicable Pricing Supplement,
except that the initial interest rate for each Treasury Rate Note will be the
rate specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519) under the heading "Treasury bills
- -- auction average (investment)" or, if not so published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Treasury Interest
Determination Date, the auction average rate (expressed as a bond equivalent,
rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of Treasury bills
having the Index Maturity designated in
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the applicable Pricing Supplement are not otherwise reported as provided above
by 3:00 P.M., New York City time, on such Calculation Date or no such auction is
held in a particular week, then the Treasury Rate shall be calculated by the
Reference Agent and shall be a yield to maturity (expressed as a bond
equivalent, rounded upwards, if necessary, to the next higher one hundred-
thousandth of a percentage point, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of 3:30 P.M., New York City time, on such
Treasury Interest Determination Date, of three leading primary United States
government securities dealers selected by the Reference Agent, for the issue of
Treasury bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if the
dealers selected as aforesaid by the Reference Agent are not quoting as
mentioned in this sentence, the interest rate for the period commencing on the
Interest Reset Date following such Treasury Rate Interest Determination Date
will be the interest rate in effect on such Treasury Rate Interest Determination
Date.
BOOK-ENTRY NOTES
Global Notes will be deposited with, or on behalf of, the Depository and
registered in the name of the Depository's nominee. Except as set forth below, a
Global Note may not be transferred except as a whole by the Depository to
another nominee of the Depository or to a successor of the Depository or a
nominee of such successor.
The Depository has advised as follows: It is a limited-purpose trust
company which holds securities for its participating organizations (the
"Participants") and facilitates the settlement among Participants of securities
transactions in such securities through electronic book-entry changes in its
Participants' accounts. Participants include securities brokers and dealers
(including certain of the Agents), banks (including the Trustee) and trust
companies, clearing corporations and certain other organizations. Access to the
Depository's 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 ("indirect participants"). Persons
who are not Participants may beneficially own securities held by the Depository
only through Participants or indirect participants.
The Depository advises that its established procedures provide that (i)
upon issuance of the Notes by Ford Credit the Depository will credit the
accounts of Participants designated by the Agent through which each Note was
sold (or by Ford Credit, if such Note was sold directly by Ford Credit) with the
principal amounts of the Notes; and (ii) ownership of interests in the Global
Notes will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the Depository, the Participants and the indirect
participants. The laws of some states require that certain persons take physical
delivery in definitive form of securities which they own. Consequently, the
ability to transfer beneficial interests in the Global Notes is limited to such
extent.
So long as a nominee of the Depository is the registered owner of the
Global Notes, such nominee for all purposes will be considered the sole owner or
holder of such Notes under the Indenture. Except as provided below, owners of
beneficial interests in the Global Notes will not be entitled to have Notes
registered in their names, will not receive or be entitled to receive physical
delivery of Notes in definitive form, and will not be considered the owners or
holders thereof under the Indenture (as defined in the Prospectus).
Neither Ford Credit, the Trustee, any Paying Agent nor the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Notes, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Principal and interest payments on the Notes registered in the name of the
Depository's nominee will be made by the Trustee to the Depository. Under the
terms of the Indenture, Ford Credit and the Trustee will treat the persons in
whose names the Notes are registered as the owners
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of such Notes for the purpose of receiving payment of principal and interest on
the Notes and for all other purposes whatsoever. Therefore, neither Ford Credit,
the Trustee nor any Paying Agent has any direct responsibility or liability for
the payment of principal or interest on the Notes to owners of beneficial
interests in the Global Notes. The Depository has advised Ford Credit and the
Trustee that its present practice is to credit the accounts of the Participants
on the appropriate payment date in accordance with their respective holdings in
principal amount of beneficial interests in the Global Notes as shown on the
records of the Depository, unless the Depository has reason to believe that it
will not receive payment on such payment date. Payments by Participants and
indirect participants to owners of beneficial interests in the Global Notes will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of the Participants or indirect
participants.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by Ford Credit within 90
days, Ford Credit will issue Notes in definitive form in exchange for the Global
Notes. In addition, Ford Credit may at any time determine not to have the Notes
represented by Global Notes and, in such event, will issue Notes in definitive
form in exchange for the Global Notes. In either instance, an owner of a
beneficial interest in the Global Notes will be entitled to have Notes equal in
principal amount to such beneficial interest registered in its name and will be
entitled to physical delivery of such Notes in definitive form. Notes so issued
in definitive form will be issued in denominations of $25,000 (or such other
denomination as shall be specified by Ford Credit) or any amount in excess
thereof which is an integral multiple of $1,000 and will be issued in registered
form only, without coupons.
GOVERNING LAW
The Indenture, the Notes and the coupons will be governed by, and construed
in accordance with, the laws of the State of New York. Courts in the United
States have not customarily rendered judgments for money damages denominated in
any currency other than the U.S. dollar. The Judiciary Law of the State of New
York provides, however, that an action based upon an obligation denominated in a
currency other than U.S. dollars will be rendered in the foreign currency of the
underlying obligation and converted into U.S. dollars at a rate of exchange
prevailing on the date of the entry of the judgment or decree.
SPECIAL PROVISIONS RELATING TO
FOREIGN CURRENCY NOTES
GENERAL
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars, payments of principal of and interest on
the Notes will be made in U.S. dollars and payment of the purchase price of the
Notes must be made in immediately available funds. If any of the Notes are to be
denominated in a currency or currency unit other than U.S. dollars (a "Specified
Currency"), the following provisions shall apply in addition to, and to the
extent inconsistent therewith shall replace, the description of general terms
and provisions of Notes set forth in the accompanying Prospectus and elsewhere
in this Prospectus Supplement.
A Pricing Supplement with respect to any Foreign Currency Note (which may
include information with respect to applicable current foreign exchange
controls) is a part of this Prospectus and Prospectus Supplement. Any
information concerning exchange rates is furnished as a matter of information
only and should not be regarded as indicative of the range of or trends in
fluctuations in currency exchange rates that may occur in the future.
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CURRENCIES
Ford Credit may offer Foreign Currency Notes denominated in Australian
dollars, Canadian dollars, Danish kroner, Dutch guilders, Italian lire, New
Zealand dollars, ECU or other Specified Currencies, including other composite
currencies. Unless otherwise indicated in the applicable Pricing Supplement,
purchasers are required to pay for Foreign Currency Notes in the Specified
Currency. At the present time there are limited facilities in the United States
for conversion of U.S. dollars into the Specified Currencies and vice versa, and
banks may elect not to offer non-U.S. dollar checking or savings account
facilities in the United States. However, if requested on or prior to the fifth
Business Day preceding the date of delivery of the Foreign Currency Notes, or by
such other day as determined by the Agent who presents such offer to purchase
Foreign Currency Notes to Ford Credit, such Agent is prepared to arrange for the
conversion of U.S. dollars into the Specified Currency set forth in the
applicable Pricing Supplement to enable the purchasers to pay for the Foreign
Currency Notes. Each such conversion will be made by the Agents on such terms
and subject to such conditions, limitations and charges as the Agents may from
time to time establish in accordance with their regular foreign exchange
practices. All costs of exchange will be borne by the purchasers of the Foreign
Currency Notes.
Specific information about the Specified Currency or currency units in
which a particular Foreign Currency Note is denominated, including historical
exchange rates and a description of the currency and any exchange controls, will
be set forth in the applicable Pricing Supplement and, in the case of a
composite currency, a description thereof and a description of provisions for
payment in the event such composite currency is no longer used for the purposes
for which it was established.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of and interest on Foreign Currency Notes is payable by Ford
Credit in the Specified Currency. Currently, banks do not generally offer
non-U.S. dollar denominated account facilities in their offices in the United
States, although they are permitted to do so. Accordingly, a Holder of Foreign
Currency Notes will be paid in U.S. dollars converted from the Specified
Currency unless such Holder elects to be paid in the Specified Currency, or as
otherwise specified in the applicable Pricing Supplement.
Any U.S. dollar amount to be received by a Holder of a Foreign Currency
Note will be based on the highest bid quotation in The City of New York received
by an agent for Ford Credit specified in the applicable Pricing Supplement (the
"Exchange Rate Agent") at approximately 11:00 A.M., New York City time, on the
second Business Day preceding the applicable payment date from three recognized
foreign exchange dealers (one of which may be the Exchange Rate Agent) for the
purchase by the quoting dealer of the Specified Currency for U.S. dollars for
settlement on such payment date in the aggregate amount of the Specified
Currency payable to all Holders of Foreign Currency Notes scheduled to receive
U.S. dollar payments and at which the applicable dealer commits to execute a
contract. If such bid quotations are not available, payments will be made in the
Specified Currency. All currency exchange costs will be borne by the Holder of
the Foreign Currency Note by deductions from such payments.
Unless otherwise indicated in the applicable Pricing Supplement, a Holder
of Foreign Currency Notes may elect to receive payment of the principal of and
interest on the Foreign Currency Notes in the Specified Currency by transmitting
a written request for such payment to the corporate trust office of the Trustee
in The City of New York on or prior to the Regular Record Date or at least
sixteen days prior to Maturity, as the case may be. Such request may be in
writing (mailed or hand delivered) or by cable, telex or other form of facsimile
transmission. A Holder of a Foreign Currency Note may elect to receive payment
in the Specified Currency for all principal and interest payments and need not
file a separate election for each payment. Such election will remain in effect
until revoked by written notice to the Trustee, but written notice of any such
revocation must be received by the Trustee on or prior to the Regular Record
Date or at least sixteen days prior to Maturity, as
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the case may be. Holders of Foreign Currency Notes whose Notes are to be held in
the name of a broker or nominee should contact such broker or nominee to
determine whether and how an election to receive payments in the Specified
Currency may be made.
Interest on Foreign Currency Notes paid in U.S. dollars will be paid in the
manner specified in the accompanying Prospectus and this Prospectus Supplement
for interest on Notes denominated in U.S. dollars. Interest on Foreign Currency
Notes paid in the Specified Currency will be paid by check mailed on the
relevant Interest Payment Date to the persons entitled thereto or, at the option
of Ford Credit, by wire transfer to a bank account maintained by the Holder in
the country of the Specified Currency. The principal of Foreign Currency Notes,
together with interest accrued and unpaid thereon, due at Maturity will be paid
by check upon surrender of such Notes at the corporate trust office of the
Trustee in The City of New York, or, at the option of Ford Credit, by wire
transfer to such bank account.
OUTSTANDING FOREIGN CURRENCY NOTES
Under the Indenture, the principal amount of any Foreign Currency Note at
any time Outstanding shall be deemed to be the U.S. dollar equivalent,
determined as of the date Ford Credit agreed to sell such Foreign Currency Note
(the "trade date"), of the principal amount of such Foreign Currency Note.
PAYMENT CURRENCY
If a Specified Currency is not available for the payment of principal or
interest with respect to a Foreign Currency Note due to the imposition of
exchange controls or other circumstances beyond the control of Ford Credit, Ford
Credit will be entitled to satisfy its obligations to Holders of Foreign
Currency Notes by making such payment in U.S. dollars on the basis of the noon
buying rate in The City of New York for cable transfers of the Specified
Currency as certified for customs purposes by the Federal Reserve Bank of New
York (the "Market Exchange Rate") on the basis of the most recently available
Market Exchange Rate or as otherwise indicated in an applicable Pricing
Supplement. Any payment made under such circumstances in U.S. dollars where the
required payment is in a Specified Currency will not constitute a default under
the Indenture.
FOREIGN CURRENCY RISKS
An investment in the Foreign Currency Notes entails significant risks (over
which Ford Credit has no control) that are not associated with a similar
investment in a security denominated in U.S. dollars. Such risks include,
without limitation, the possibility of significant changes in the rate of
exchange between the U.S. dollar and the Specified Currency and the possibility
of the imposition or modification of foreign exchange controls by either the
United States or foreign governments, which risks generally depend on economic
and political events. In recent years, rates of exchange between the U.S. dollar
and certain foreign currencies have been volatile and such volatility may occur
in the future. The exchange rate between the U.S. dollar and a foreign currency
or currency unit is at any moment a result of the supply and demand for such
currencies, and changes in the rate result over time from the interaction of
many factors, among which are rates of inflation, interest rate levels, balances
of payments and the extent of governmental surpluses or deficits in the
countries of such currencies. These factors are in turn sensitive to the
monetary, fiscal and trade policies pursued by such governments and those of
other countries important to international trade and finance. Fluctuations in
any particular exchange rate that have occurred in the past are not necessarily
indicative, however, of fluctuations in the rate that may occur during the term
of any Foreign Currency Note. Depreciation of the Specified Currency applicable
to a Foreign Currency Note against the U.S. dollar would result in a decrease in
the U.S. dollar-equivalent yield of such Note, in the U.S. dollar-equivalent
value of the principal repayable at Maturity of such Note and, generally, in the
U.S. dollar-equivalent market value of such Note.
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Foreign exchange rates can either float or be fixed by sovereign
governments. Exchange rates of most economically developed nations are permitted
to fluctuate in value relative to the U.S. dollar. Governments, however, rarely
voluntarily allow their currencies to float freely in response to economic
forces. Governments in fact use a variety of techniques, such as intervention by
a country's central bank or imposition of regulatory controls or taxes, to
affect the exchange rate of their currencies. Governments may also issue a new
currency to replace an existing currency or alter the exchange rate or relative
exchange characteristics by devaluation or revaluation of a currency. Thus, a
special risk in purchasing Notes that are denominated in a foreign currency or
currency unit is that their U.S. dollar-equivalent yields could be affected by
governmental actions that could change or interfere with theretofore freely
determined currency valuation, fluctuations in response to other market forces
and the movement of currencies across borders. There will be no adjustment or
change in the terms of the Foreign Currency Notes in the event that exchange
rates should become fixed, or in the event of any devaluation or revaluation or
imposition of exchange or other regulatory controls or taxes, or in the event of
other developments, affecting the U.S. dollar or any applicable currency or
currency unit.
Unless otherwise indicated in the applicable Pricing Supplement, Foreign
Currency Notes will not be sold in, or to residents of, the country of the
Specified Currency in which particular Foreign Currency Notes are denominated.
Ford Credit disclaims any responsibility to advise prospective purchasers who
are residents of countries other than the United States with respect to any
matters that may affect the purchase, holding or receipt of payments of
principal and interest on Foreign Currency Notes. Such persons should consult
their own legal advisors with regard to such matters.
THE PROSPECTUS, INCLUDING THIS PROSPECTUS SUPPLEMENT, DOES NOT DESCRIBE ALL
RISKS OF AN INVESTMENT IN FOREIGN CURRENCY NOTES THAT RESULT FROM SUCH NOTES
BEING DENOMINATED IN A FOREIGN CURRENCY OR CURRENCY UNIT EITHER AS SUCH RISKS
EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM
TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND
LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN FOREIGN CURRENCY
NOTES. FOREIGN CURRENCY NOTES MAY NOT BE AN APPROPRIATE INVESTMENT FOR
PROSPECTIVE PURCHASERS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY
TRANSACTIONS.
UNITED STATES TAXATION
The following summary of the principal United States federal income tax
consequences of the ownership of a Note is based on the advice of Sullivan &
Cromwell, special tax counsel to Ford Credit and Shearman & Sterling, special
tax counsel for the underwriters or Agents. Such advice is based on the United
States federal income tax laws as in effect on the date of this Prospectus
Supplement. It deals only with Notes held as capital assets and does not deal
with special classes of Holders, such as dealers in securities or currencies,
banks, tax-exempt organizations, life insurance companies, persons holding Notes
as a hedge or hedged against currency risk or as part of a straddle or
conversion transaction, or United States Holders whose functional currency is
other than United States dollars. It also does not deal with Holders other than
original purchasers. The tax consequences of holding a particular Note will
depend, in part, on the particular terms of such Note as set forth in the
applicable Pricing Supplement.
Prospective purchasers of Notes should consult their own tax advisors
concerning the consequences, in their particular circumstances, under the Code
and the laws of any other taxing jurisdiction of the ownership of Notes.
UNITED STATES PERSONS
For purposes of the following discussion, "United States person" means an
individual who is a citizen or resident of the United States for United States
federal income tax purposes, an estate or
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trust subject to United States federal income taxation without regard to the
source of its income, or a corporation, partnership or other entity created or
organized in or under the laws of the United States or any State. The following
discussion pertains only to a Holder of a Note who is a "United States person".
Payments of Interest on Notes Which Are Not Discount Notes
Interest on a Note (whether payable in United States dollars or in other
than United States dollars), other than original issue discount on a Discount
Note (as defined below under "Original Issue Discount -- General"), will be
taxable to a Holder as ordinary interest income at the time it is accrued or is
paid in accordance with the Holder's method of accounting for tax purposes. If
payment is made in other than United States dollars, the amount of income will
be the United States dollar value of the amount paid based on the exchange rate
in effect on the date of receipt or, in the case of an accrual basis Holder,
based on the average exchange rate in effect during the interest accrual period,
in either case, regardless of whether the payment is in fact converted into
United States dollars. Upon receipt of an interest payment, including a payment
attributable to accrued but unpaid interest upon the sale or retirement of a
Note, paid in other than United States dollars, exchange gain or loss (i) will
be recognized by an accrual basis Holder measured by the difference between the
interest accrued at the average exchange rate and that amount of interest
translated into United States dollars at the exchange rate in effect on the date
of receipt or on the date of disposition of the Note, as the case may be, and
(ii) will be treated as ordinary gain or loss. Accrual basis Holders may
determine the United States dollar value of any interest income accrued in other
than United States dollars under an alternative method as described below under
"Spot Rate Conversion Election."
ORIGINAL ISSUE DISCOUNT
General. A Note will be treated as issued at an original issue discount (a
"Discount Note") if the excess of the Note's "stated redemption price at
maturity" over its issue price equals or exceeds 1/4 of 1 percent of such Note's
stated redemption price at maturity multiplied by the number of complete years
to its maturity. Generally, the issue price of a Note will be the initial
offering price to the public at which a substantial amount of the Notes are
sold. The "stated redemption price at maturity" of a Note is the total of all
payments provided by the Note that are not payments of "qualified stated
interest". A "qualified stated interest" payment is generally any one of a
series of stated interest payments on a Note that are unconditionally payable at
least annually at a single fixed rate (with certain exceptions for lower rates
paid during some periods). Special rules for Variable Rate Notes (as defined
below under "Original Issue Discount -- Variable Rate Notes") are described
below under "Original Issue Discount -- Variable Rate Notes".
In general, if the excess, if any, of a Note's stated redemption price at
maturity over its issue price is not sufficient, under the rules described
above, to cause the Note to be a Discount Note, then such excess, if any,
constitutes "de minimis original issue discount". Unless the election described
below under "Election to Treat All Interest as Original Issue Discount" is made,
a United States Holder of a Note with de minimis original issue discount must
include such de minimis original issue discount in income as stated principal
payments on the Note are made. The includible amount with respect to each such
payment will equal the product of the total amount of the Note's de minimis
original issue discount and a fraction, the numerator of which is the amount of
the principal payment made and the denominator of which is the stated principal
amount of the Note.
United States Holders of Discount Notes having a maturity of more than one
year from their date of issue must include original issue discount in income
before the receipt of cash attributable to such income. The amount of original
issue discount includible in income by a United States Holder of a Discount Note
is the sum of the daily portions of original issue discount with respect to the
Discount Note for each day during the taxable year or portion of the taxable
year in which the United States Holder holds such Discount Note ("accrued
original issue discount"). The daily portion is
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determined by allocating to each day in any "accrual period" a pro rata portion
of the original issue discount allocable to that accrual period. Accrual periods
with respect to a Note may be of any length selected by the United States Holder
and may vary in length over the term of the Note as long as (i) no accrual
period is longer than one year and (ii) each scheduled payment of interest or
principal on the Note occurs either on the final or first day of an accrual
period. The amount of original issue discount allocable to an accrual period
equals the excess of (a) the product of the Discount Note's adjusted issue price
at the beginning of the accrual period and such Note's yield to maturity
(determined on the basis of compounding at the close of each accrual period and
properly adjusted for the length of the accrual period) over (b) the sum of the
payments of qualified stated interest on the Note allocable to the accrual
period. The "adjusted issue price" of a Discount Note at the beginning of any
accrual period is (x) the sum of the issue price of such Note and the accrued
original issue discount for each prior accrual period less (y) any prior
payments on the Note that were not qualified stated interest payments. For
purposes of determining the amount of original issue discount allocable to an
accrual period, if an interval between payments of qualified stated interest on
the Note contains more than one accrual period, then the amount of qualified
stated interest payable at the end of such interval (including any qualified
stated interest that is payable on the first day of the accrual period
immediately following the interval) is allocated pro rata on the basis of
relative lengths to each accrual period in the interval, and the adjusted issue
price at the beginning of each accrual period in the interval must be increased
by the amount of any qualified stated interest that has accrued prior to the
first day of the accrual period but that is not payable until the end of the
interval. The amount of OID allocable to an initial short accrual period may be
computed using any reasonable method if all other accrual periods other than a
final short accrual period are of equal length. The amount of OID allocable to
the final accrual period is the difference between (x) the amount payable at the
maturity of the Note (other than any payment of qualified stated interest) and
(y) the Note's adjusted issue price as of the beginning of the final accrual
period.
United States Holders generally will have to include in income increasingly
greater amounts of original issue discount over the life of the Note.
Acquisition Premium. A United States Holder that purchases a Note for an
amount less than or equal to the sum of all amounts payable on the Note after
the purchase date other than payments of qualified stated interest but in excess
of its adjusted issue price (any such excess being "acquisition premium") and
that does not make the election described below under "Election to Treat All
Interest as Original Issue Discount" is permitted to reduce the daily portions
of original issue discount by a fraction, the numerator of which is the excess
of the United States Holder's adjusted basis in the Note immediately after its
purchase over the adjusted issue price of the Note, and the denominator of which
is the excess of the sum of all amounts payable on the Note after the purchase
date, other than payments of qualified stated interest, over the Note's adjusted
issue price.
Market Discount. A Note, other than a Note that matures one year or less
from the date of its issuance (a "short-term Note"), will be treated as
purchased at a market discount (a "Market Discount Note") if (i) the amount for
which a United States Holder purchased the Note is less than the Note's issue
price (as determined above under "Original Issue Discount -- General") and (ii)
the Note's stated redemption price at maturity or, in the case of a Discount
Note, the Note's "revised issue price," exceeds the amount for which the United
States Holder purchased the Note by at least 1/4 of 1 percent of such Note's
stated redemption price at maturity or revised issue price, respectively,
multiplied by the number of complete years to the Note's maturity. If the
excess, if any, referred to in the preceding sentence is not sufficient to cause
the Note to be a Market Discount Note, then such excess constitutes "de minimis
market discount". For these purposes, the revised issue price of a Note
generally equals its issue price, increased by the amount of any original issue
discount that has accrued on the Note.
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Any gain recognized on the maturity or disposition of a Market Discount
Note will be treated as ordinary income to the extent that such gain does not
exceed the accrued market discount on such Note. Alternatively, a United States
Holder of a Market Discount Note may elect to include market discount in income
currently over the life of the Note. Such an election shall apply to all debt
instruments with market discount acquired by the electing United States Holder
on or after the first day of the first taxable year to which the election
applies. This election may not be revoked without the consent of the Service.
Market discount on a Market Discount Note will accrue on a straight-line
basis unless the United States Holder elects to accrue such market discount on a
constant yield to maturity basis. Such an election shall apply only to the Note
with respect to which it is made and may not be revoked without the consent of
the Service. A United States Holder of a Market Discount Note who does not elect
to include market discount in income currently generally will be required to
defer deductions for interest on borrowings allocable to such Note in an amount
not exceeding the accrued market discount on such Note until the maturity or
disposition of such Note.
Pre-Issuance Accrued Interest. If (i) a portion of the initial purchase
price of a Note is attributable to pre-issuance accrued interest, (ii) the first
stated interest payment on the Note is to be made within one year of the Note's
issue date and (iii) such payment will equal or exceed the amount of
pre-issuance accrued interest, then the United States Holder may elect to
decrease the issue price of the Note by the amount of pre-issuance accrued
interest, in which case a portion of the first stated interest payment will be
treated as a return of the excluded pre-issuance accrued interest and not as an
amount payable on the Note.
Notes Subject to Contingencies Including Optional Redemption. In general,
if a Note provides for an alternative payment schedule or schedules applicable
upon the occurrence of a contingency or contingencies and the timing and amounts
of the payments that comprise each payment schedule are known as of the issue
date, the yield and maturity of the Note are determined by assuming that the
payments will be made according to the Note's stated payment schedule. If,
however, based on all the facts and circumstances as of the issue date, it is
more likely than not that the Note's stated payment schedule will not occur,
then, in general, the yield and maturity of the Note are computed based on the
payment schedule most likely to occur.
Notwithstanding the general rules for determining yield and maturity in the
case of Notes subject to contingencies, if Ford Credit has an unconditional
option or options to redeem a Note, or the Holder has an unconditional option or
options to cause a Note to be repurchased, prior to the Note's stated maturity,
then (i) in the case of an option or options of Ford Credit, Ford Credit will be
deemed to exercise or not exercise an option or combination of options in the
manner that minimizes the yield on the Note and (ii) in the case of an option or
options of the Holder, the Holder will be deemed to exercise or not exercise an
option or combination of options in the manner that maximizes the yield on the
Note. For purposes of those calculations, the yield on the Note is determined by
using any date on which the Note may be redeemed or repurchased as the maturity
date and the amount payable on such date in accordance with the terms of the
Note as the principal amount payable at maturity.
If a contingency (including the exercise of an option) actually occurs or
does not occur contrary to an assumption made according to the above rules (a
"change in circumstances") then, except to the extent that a portion of the Note
is repaid as a result of a change in circumstances and solely for purposes of
the accrual of OID, the yield and maturity of the Note are redetermined by
treating the Note as reissued on the date of the change in circumstances for an
amount equal to the Note's adjusted issue price on that date.
Election to Treat All Interest as Original Issue Discount. A United States
Holder may elect to include in gross income all interest that accrues on a Note
using the constant yield method described above under the heading "Original
Issue Discount -- General," with the modifications described below. For purposes
of this election, interest includes stated interest, original issue
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<PAGE> 18
discount, de minimis original issue discount, market discount, de minimis market
discount and unstated interest, as adjusted by any amortizable bond premium
(described below under "Notes Purchased at a Premium") or acquisition premium.
In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
United States Holder's adjusted basis in the Note immediately after its
acquisition, the issue date of the Note will be the date of its acquisition by
the electing United States Holder, and no payments on the Note will be treated
as payments of qualified stated interest. This election will generally apply
only to the Note with respect to which it is made and may not be revoked without
the consent of the Service. If this election is made with respect to a Note with
amortizable bond premium, then the electing United States Holder will be deemed
to have elected to apply amortizable bond premium against interest with respect
to all debt instruments with amortizable bond premium (other than debt
instruments the interest on which is excludible from gross income) held by such
electing United States Holder as of the beginning of the taxable year in which
the Note with respect to which the election is made is acquired or thereafter
acquired. The deemed election with respect to amortizable bond premium may not
be revoked without the consent of the Service.
If the election to apply the constant yield method to all interest on a
Note is made with respect to a Market Discount Note, then the electing United
States Holder will be treated as having made the election discussed above under
"Original Issue Discount -- Market Discount" to include market discount in
income currently over the life of all debt instruments held or thereafter
acquired by such United States Holder.
Variable Rate Notes. A "Variable Rate Note" is a Note that: (i) has an
issue price that does not exceed the total noncontingent principal payments by
more than the lesser of (1) the product of (x) the total noncontingent principal
payments, (y) the number of complete years to maturity from the issue date and
(z) .015, or (2) 15 percent of the total noncontingent principal payments, and
(ii) provides for stated interest compounded or paid at least annually at (1)
one or more "qualified floating rates," (2) a single fixed rate and one or more
qualified floating rates, (3) a single "objective rate" or (4) a single fixed
rate and a single objective rate that is a "qualified inverse floating rate."
A qualified floating rate or objective rate in effect at any time during
the term of the instrument must be set at a "current value" of that rate. A
"current value" of a rate is the value of the rate on any day that is no earlier
than 3 months prior to the first day on which that value is in effect and no
later than 1 year following that first day.
A variable rate is a "qualified floating rate" if (i) variations in the
value of the rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the Note
is denominated or (ii) it is equal to the product of such a rate and either (a)
a fixed multiple that is greater than zero but not more than 1.35, or (b) a
fixed multiple greater than zero but not more than 1.35, increased or decreased
by a fixed rate. A rate is not a qualified floating rate, however, if the rate
is subject to certain restrictions (including caps, floors, governors, or other
similar restrictions) unless such restrictions are fixed throughout the term of
the Note or are not reasonably expected to significantly affect the yield on the
Note.
An "objective rate" is a rate, other than a qualified floating rate, that
is determined using a single, fixed formula and that is based on (i) one or more
qualified floating rates, (ii) one or more rates each of which would be a
qualified floating rate for a debt instrument denominated in a currency other
than the currency in which the debt instrument is denominated, (iii) the yield
or changes in the price of one or more actively traded items of personal
property other than stock or debt of the issuer or a related party, or (iv) a
combination of objective rates. A variable rate is not an objective rate,
however, 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. An objective rate is a "qualified inverse
S-17
<PAGE> 19
floating rate" if (i) the rate is equal to a fixed rate minus a qualified
floating rate, and (ii) the variations in the rate can reasonably be expected to
inversely reflect contemporaneous variations in the cost of newly borrowed
funds. Under these rules, Commercial Paper Rate Notes, LIBOR Notes, Treasury
Rate Notes, CD Rate Notes, and Federal Funds Rate Notes will generally be
treated as Variable Rate Notes.
In general, if a Variable Rate Note provides for stated interest at a
single qualified floating rate or objective rate, all stated interest on the
Note is qualified stated interest and the amount of OID, if any, is determined
by using, in the case of a qualified floating rate or qualified inverse floating
rate, the value as of the issue date of the qualified floating rate or qualified
inverse floating rate, or, in the case of any other objective rate, a fixed rate
that reflects the yield reasonably expected for the Note.
If a Variable Rate Note does not provide for stated interest at a single
qualified floating rate or objective rate, or at a single fixed rate (other than
at a single fixed rate for an initial period), the amount of interest and OID
accruals on the Note are generally determined by (i) determining a fixed rate
substitute for each variable rate provided under the Variable Rate Note
(generally, the value of each variable rate as of the issue date or, in the case
of an objective rate that is not a qualified inverse floating rate, a rate that
reflects the reasonably expected yield on the Note), (ii) constructing the
equivalent fixed rate debt instrument (using the fixed rate substitute described
above), (iii) determining the amount of qualified stated interest and OID with
respect to the equivalent fixed rate debt instrument, and (iv) making the
appropriate adjustments for actual variable rates during the applicable accrual
period.
If a Variable Rate Note provides for stated interest either at one or more
qualified floating rates or at a qualified inverse floating rate, and in
addition provides for stated interest at a single fixed rate (other than at a
single fixed rate for an initial period), the amount of interest and OID
accruals are determined as in the immediately preceding paragraph with the
modification that the Variable Rate Note is treated, for purposes of the first
three steps of the determination, as if it provided for a qualified floating
rate (or a qualified inverse floating rate, as the case may be) rather than the
fixed rate. The qualified floating rate (or qualified inverse floating rate)
replacing the fixed rate must be such that the fair market value of the Variable
Rate Note as of the issue date would be approximately the same as the fair
market value of an otherwise identical debt instrument that provides for the
qualified floating rate (or qualified inverse floating rate) rather than the
fixed rate.
Short-Term Notes. In general, an individual or other cash basis United
States Holder of a short-term Note is not required to accrue original issue
discount (as explained in the following paragraph) for United States federal
income tax purposes unless it elects to do so (but may be required to include
any stated interest in income as the income is received). Accrual basis United
States Holders and certain other United States Holders, including banks,
regulated investment companies, dealers in securities, common trust funds,
United States Holders who hold Notes as part of certain identified hedging
transactions, certain pass-through entities and cash basis United States Holders
who so elect, are required to accrue original issue discount on short-term Notes
on either a straight-line basis or under the constant yield method (based on
daily compounding), at the election of the United States Holder. In the case of
a United States Holder not required and not electing to include original issue
discount in income currently, any gain realized on the sale or retirement of the
short-term Note will be ordinary income to the extent of the original issue
discount accrued on a straight-line basis (unless an election is made to accrue
the original issue discount under the constant yield method) through the date of
sale or retirement. United States Holders who are not required and do not elect
to accrue original issue discount on short-term Notes will be required to defer
deductions for interest on borrowings allocable to short-term Notes in an amount
not exceeding the deferred income until the deferred income is realized.
For purposes of determining the amount of original issue discount subject
to these rules, all interest payments on a short-term Note, including stated
interest, are included in the short-term Note's stated redemption price at
maturity.
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<PAGE> 20
Foreign Currency Discount Notes. Original issue discount for any accrual
period on a Discount Note that is denominated in a Specified Currency will be
determined in the Specified Currency and then translated into U.S. dollars in
the same manner as stated interest accrued by an accrual basis United States
Holder, as described under "Payments of Interest". Upon receipt of an amount
attributable to original issue discount (whether in connection with a payment of
interest or the sale or retirement of a Note), a United States Holder may
recognize ordinary income or loss.
Purchase, Sale and Retirement of the Notes
A United States Holder's tax basis in a Note will generally be its U.S.
dollar cost (as defined below), increased by the amount of any original issue
discount or market discount included in the United States Holder's income with
respect to the Note and the amount, if any, of income attributable to de minimis
original issue discount and de minimus market discount included in the United
States Holder's income with respect to the Note, and reduced by (i) the amount
of any payments that are not qualified stated interest payments, and (ii) the
amount of any amortizable bond premium applied to reduce interest on the Note.
The U.S. dollar cost of a Note purchased with a Specified Currency will
generally be the U.S. dollar value of the purchase price on the date of purchase
or, in the case of Notes traded on an established securities market, as defined
in the applicable Treasury Regulations, that are purchased by a cash basis
United States Holder (or an accrual basis United States Holder that so elects),
on the settlement date for the purchase.
A United States Holder will generally recognize gain or loss on the sale or
retirement of a Note equal to the difference between the amount realized on the
sale or retirement and the tax basis of the Note. The amount realized on a sale
or retirement for an amount in a Specified Currency will be the U.S. dollar
value of such amount on the date of sale or retirement or, in the case of Notes
traded on an established securities market, as defined in the applicable
Treasury Regulations, sold by a cash basis United States Holder (or an accrual
basis United States Holder that so elects), on the settlement date for the sale.
Except to the extent described above under "Original Issue Discount --
Short-Term Notes" or "Original Issue Discount -- Market Discount" or described
in the next succeeding paragraph or attributable to accrued but unpaid interest,
gain or loss recognized on the sale or retirement of a Note will be capital gain
or loss and will be long-term capital gain or loss if the Note was held for more
than one year.
Gain or loss recognized by a United States Holder on the sale or retirement
of a Note that is attributable to changes in exchange rates will be treated as
ordinary income or loss. However, exchange gain or loss is taken into account
only to the extent of total gain or loss realized on the transaction.
Exchange of Specified Currency
The tax basis of a Specified Currency generally will be the United States
dollar value of the Specified Currency amount on the date such Specified
Currency is purchased. Specified Currency received as interest on a Foreign
Currency Note or on the sale or retirement of a Foreign Currency Note will have
a tax basis equal to its United States dollar value at the time such interest is
received or at the time payment is received in consideration of such sale or
retirement. The amount of gain or loss recognized on a sale or other disposition
of the Specified Currency will be equal to the difference between (i) the amount
of United States dollars, or the fair market value in United States dollars of
the other currency or property received in the sale or other disposition, and
(ii) the tax basis of the Specified Currency.
Accordingly, a Holder that converts United States dollars to a Specified
Currency and immediately uses such Specified Currency to purchase a Foreign
Currency Note ordinarily would not realize gain or loss in connection with such
conversion and purchase. However, a Holder that purchases a Foreign Currency
Note with a previously owned Specified Currency would recognize exchange gain or
loss in an amount equal to the difference, if any, between such Holder's tax
basis in the Specified
S-19
<PAGE> 21
Currency and the United States dollar fair market value on the date of purchase
of a Foreign Currency Note. Generally, any such gain or loss will be ordinary
gain or loss.
Spot Rate Conversion Election
A Holder may elect to translate original issue discount (and, in the case
of an accrual basis Holder, accrued interest) into United States dollars at the
exchange rate in effect on the last day of an accrual period for the original
issue discount or interest, or in the case of an accrual period that spans two
taxable years, at the exchange rate in effect on the last day of the partial
period within the taxable year. Additionally, if a payment of original issue
discount or interest is actually received within 5 business days of the last day
of the accrual period or taxable year, an electing Holder may instead translate
such original issue discount or accrued interest into United States dollars at
the exchange rate in effect on the day of actual receipt. Any such election will
apply to all debt instruments held by the Holder at the beginning of the first
taxable year to which the election applies or thereafter acquired by the Holder,
and will be irrevocable without the consent of the Internal Revenue Service.
Notes Purchased at a Premium
A Holder that purchases a Note for an amount in excess of its principal
amount may elect to treat such excess as "amortizable bond premium", in which
case the amount required to be included in the Holder's income each year with
respect to interest on the Note will be reduced by the amount of amortizable
bond premium allocable (based on the Note's yield to maturity) to such year.
Amortizable bond premium on a Foreign Currency Note will be calculated in the
Specified Currency and will offset the amount of interest received or accrued as
determined in the Specified Currency. Exchange gain or loss will be recognized
with respect to amortized bond premium based on the difference between the
exchange rate on the date the Holder acquired the Foreign Currency Note and the
exchange rate on the date such premium is treated as received, and will be
ordinary gain or loss. Any such election shall apply to all bonds (other than
bonds the interest on which is excludible from gross income) held by the Holder
at the beginning of the first taxable year to which the election applies or
thereafter acquired by the Holder, and is irrevocable without the consent of the
Internal Revenue Service. See also "Original Issue Discount -- Election to Treat
All Interest as Original Issue Discount".
NON-UNITED STATES PERSONS
Under the United States federal income tax laws as in effect on the date of
this Prospectus Supplement and subject to the discussion of backup withholding
below, payments of principal, premium, if any, and interest, including original
issue discount, by Ford Credit or its agent (in its capacity as such) to any
Holder of a Note who is not a United States person will not be subject to United
States federal withholding tax provided, in the case of premium, if any, and
interest, including original issue discount, that (i) such Holder does not
actually or constructively own 10% or more of the total combined voting power of
all classes of stock of Ford Credit entitled to vote, (ii) such non-United
States person is not a controlled foreign corporation for United States tax
purposes that is related to Ford Credit through stock ownership, and (iii)
either (A) the beneficial owner of the Note certifies to Ford Credit or its
agent, under penalties of perjury, that he is a non-United States person and
provides his name and address, or (B) a securities clearing organization, bank
or other financial institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution") and holds the Note
certifies to Ford Credit or its agent under penalties of perjury that such
statement has been received from the beneficial owner by it or by a financial
institution between it and the beneficial owner and furnishes the payor with a
copy thereof.
If a Holder of a Note who is not a United States person is engaged in a
trade or business in the United States and interest, including original issue
discount, or premium, if any, on the Note is effectively connected with the
conduct of such trade or business, such Holder, although exempt
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<PAGE> 22
from the withholding tax discussed in the preceding paragraph, may be subject to
United States income tax on such interest, and original issue discount, and
premium, if any, in the same manner as if it were a United States person.
Any capital gain realized upon retirement or disposition of a Note by a
Holder who is not a United States person will not be subject to United States
federal income or withholding taxes unless such gain is effectively connected
with a United States trade or business of the Holder, or in the case of an
individual, such Holder is present in the United States for 183 days or more in
the taxable year of the retirement or disposition and certain other conditions
apply.
Notes held by an individual who is neither a citizen nor a resident of the
United States for United States federal income tax purposes at the time of such
individual's death will not be subject to United States federal estate tax
provided that the individual does not actually or constructively own 10% or more
of the total combined voting power of all classes of stock of Ford Credit
entitled to vote and the income from the Notes was not or would not have been
effectively connected with a United States trade or business of such individual
at the time of death.
BACKUP WITHHOLDING
"Backup" withholding and information reporting requirements apply to
certain payments of principal, premium, if any, and interest (including original
issue discount) on an obligation, and to proceeds of the sale or redemption of a
Note to certain noncorporate United States persons and non-United States persons
that are subject to United States federal income tax on a net income basis. Ford
Credit, its agent, a broker, the Trustee or any paying agent, as the case may
be, will be required to withhold from any payment that is subject to backup
withholding a tax equal to 31% of such payment if the Holder fails to furnish
his taxpayer identification number (social security number or employer
identification number), to certify that such Holder is not subject to backup
withholding, or to otherwise comply with the applicable requirements of the
backup withholding rules. Certain Holders (including, among others, all
corporations and persons who are not United States persons) are not subject to
the backup withholding and reporting requirements.
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by Ford Credit or any agent thereof
(in its capacity as such) to a Holder of a Note with respect to which the Holder
has provided required certification under penalties of perjury that it is not a
United States person as set forth in clause (iii) in the first paragraph under
"Non-United States Persons" and that certain other conditions apply, or has
otherwise established an exemption (provided that neither Ford Credit nor such
agent has actual knowledge that the Holder is a United States person or the
conditions of any other exemption are not in fact satisfied).
Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a United States person, a controlled
foreign corporation for United States tax purposes or a foreign person 50% or
more of whose gross income from all sources for the three-year period ending
with the close of its taxable year preceding the payment was effectively
connected with a United States trade or business, information reporting may
apply to such payments. Payment of the proceeds from a sale of a Note to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner certifies as to its
non-United States status or otherwise establishes an exemption from information
reporting and backup withholding.
Any amounts withheld under the backup withholding rules from a payment to a
Holder would be allowed as a refund or a credit against such Holder's United
States federal income tax provided that the required information is furnished to
the United States Internal Revenue Service.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
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<PAGE> 23
THE TAX CONSEQUENCES TO THEM 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.
PLAN OF DISTRIBUTION
The Notes are offered on a continuing basis by Ford Credit through the
Agents, who have agreed to use their best efforts to solicit purchases of the
Notes. Ford Credit also may sell the Notes to an Agent or other person, as
principal, for resale or other distribution by such Agent or person at varying
prices related to prevailing market prices as will be determined by such Agent
or person at the time of such resale or other distribution, which prices may be
higher or lower than the price to the public set forth herein. Ford Credit
reserves the right to sell Notes directly to investors on its own behalf. Unless
otherwise agreed by Ford Credit and the Agents, Ford Credit will have the sole
right to accept offers to purchase Notes and may reject any proposed purchase of
such Notes in whole or in part. Each Agent will have the right, in its
discretion reasonably exercised, to reject any proposed purchase of Notes in
whole or in part. Ford Credit will pay each Agent a commission of from .050% to
.600% of the principal amount of Notes, depending on the Maturity of such Notes.
Unless otherwise specified in the applicable Pricing Supplement, any Note sold
to an Agent or other person, as principal, will be purchased by such Agent or
other person at a price equal to 100% of the principal amount thereof and Ford
Credit will pay to such Agent or other person an underwriting commission equal
to or less than the commission applicable to any agency sale of a Note of
identical maturity.
In addition, an Agent may resell any Note purchased by it as principal to
another broker-dealer at prices determined by the Agent at the time of resale
and, unless otherwise specified in the applicable Pricing Supplement, may pay
such broker-dealer a discount not in excess of 66 2/3% of the discount received
by the Agent from Ford Credit.
Payment of the purchase price of the Notes is required to be made in funds
immediately available in The City of New York.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. Ford Credit has agreed to indemnify the
Agents against certain liabilities, including liabilities under that Act.
Ford Credit has been advised by the Agents that they may from time to time
make a market in the Notes, but they are not obligated to do so and may
discontinue such market-making at any time without notice. Further, each of the
Agents may from time to time purchase and sell Notes in the secondary market,
but is not obligated to do so. No assurance can be given as to the liquidity of
the trading market for the Notes.
In addition to offering Notes as described herein, Debt Securities having
terms substantially similar to the terms of the Notes offered hereby (but
constituting a separate series of Debt Securities for purposes of the Indenture)
may be offered concurrently with the offering of the Notes, on a continuing
basis outside the United States by Ford Credit. Any sales of such Debt
Securities will reduce the principal amount of Notes which may be offered by
this Prospectus Supplement and the Prospectus.
S-22
<PAGE> 24
------------------------
The following information, which is being disclosed pursuant to Florida
law, is accurate as of the date of this Prospectus Supplement:
Autolatina-Comercio, Negocios e Participacoes Ltda., a Brazilian company
("Autolatina"), is a joint venture between Ford Motor Company ("Ford") and
Volkswagen AG in which Ford has a 49% ownership interest. Autolatina
occasionally sells vehicles to persons located in Cuba. Each such sale is made
pursuant to a specific license granted to Ford by the U.S. Department of
Treasury. The last such sale, which involved one medical supply vehicle, was
made to Cubanacan in April 1991. Current information concerning Autolatina's or
its Ford-related affiliates' business dealings with the government of Cuba or
with persons located in Cuba may be obtained from the State of Florida
Department of Banking and Finance at The Capitol Building, Suite 1401,
Tallahassee, Florida 32399-0350 (telephone number 940-488-0545).
S-23
<PAGE> 25
- ------------------------------------------------------
- ------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT
(INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) OR THE PROSPECTUS, AND IF GIVEN
OR MADE SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING
SUPPLEMENT) AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES OFFERED
BY THIS PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT)
AND THE PROSPECTUS OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF FORD CREDIT OR
FORD MOTOR COMPANY SINCE THE DATE HEREOF, OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SINCE ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS SUPPLEMENT
Description of Notes.................. S-2
Special Provisions Relating to Foreign
Currency Notes...................... S-10
Foreign Currency Risks................ S-12
United States Taxation................ S-13
Plan of Distribution.................. S-22
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Information Concerning Ford Credit.... 3
Ford Motor Credit Company and
Subsidiaries -- Selected Financial
Data................................ 4
Information Concerning Ford........... 6
Selected Financial Data and Other Data
of Ford............................. 7
Financial Review of Ford.............. 8
Industry Data and Market Share of
Ford................................ 13
Use of Proceeds....................... 13
Ratio of Earnings to Fixed Charges.... 13
Description of Debt Securities........ 14
Plan of Distribution.................. 20
Legal Opinions........................ 21
Experts............................... 21
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
U.S. $6,000,000,000
FORD MOTOR
CREDIT COMPANY
MEDIUM-TERM NOTES
------------------
[LOGO]
------------------
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
DAIWA SECURITIES AMERICA INC.
NOMURA SECURITIES INTERNATIONAL, INC.
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 26
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL , 1994.
U.S. $6,000,000,000
FORD MOTOR CREDIT COMPANY
EURO MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
------------------------
Ford Credit may offer from time to time its Euro Medium-Term Notes in an
aggregate principal amount of up to U.S. $6,000,000,000 or the equivalent in
foreign currencies or ECU. The Notes will bear interest at either fixed or
floating rates and will have Stated Maturities from nine months to thirty years
from the date of issue. The currency of denomination, Stated Maturity and price
to public of a Note, together with the interest rate (if such Note is a Fixed
Rate Note), or the interest rate formula, as adjusted by any Spread or Spread
Multiplier (if such Note is a Floating Rate Note), will be established by Ford
Credit and set forth in the applicable Pricing Supplement.
Interest on each Fixed Rate Note will be payable on September 15 of each
year, unless otherwise set forth in the applicable Pricing Supplement, and at
Maturity. Interest on each Floating Rate Note will be payable on the dates set
forth in the applicable Pricing Supplement and at Maturity.
The Notes will be issued only in bearer form and are therefore subject to
United States tax law requirements. Subject to certain exceptions, Notes may not
be offered, sold or delivered within the United States or to United States
persons. Notes will be represented initially by interests in Temporary Global
Notes to be delivered to a common depositary outside the United States for
Euroclear and CEDEL. Interests in such a Temporary Global Note will be
exchangeable for interests in a Permanent Global Note no earlier than the 40th
day after the date of issuance of such Temporary Global Note upon certification
in the form required by United States tax laws. Interests in a Permanent Global
Note will be exchangeable, upon 30 days' notice, for definitive Notes with
coupons attached. See "Description of Notes".
Payments on the Notes will be made without deduction for United States
withholding taxes to the extent described herein. The Notes may be redeemed at
par if, at any time, certain withholding taxes are payable. In addition, the
Notes may be or may be required to be redeemed at par if, at any time, certain
certification, identification or information reporting requirements are imposed.
See "Description of Notes".
Application has been made to list the Notes on the Luxembourg Stock
Exchange.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
<TABLE>
<CAPTION>
PRICE TO AGENTS' DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(2) FORD CREDIT(2)(3)
------------------ ------------------------- ----------------------------------
<S> <C> <C> <C>
Per Note.......................... 100% .050%-.600% 99.950%-99.400%
Total(4).......................... U.S. $6,000,000,000 U.S. $3,000,000-36,000,000 U.S. $5,997,000,000-5,964,000,000
</TABLE>
- ------------
(1) Unless otherwise indicated in the applicable Pricing Supplement, Notes
will be issued at 100% of their principal amount.
(2) Ford Credit will pay Goldman Sachs International, Merrill Lynch
International Limited or CS First Boston Limited, each as Agent, a
commission of from .050% to .600% of the principal amount of any Note
sold through any of them as Agent, depending upon the maturity of such
Note. Ford Credit also may sell the Notes to an Agent or other person,
as principal, for resale or other distribution by such Agent or person
at such prices as will be determined by such Agent or person at the time
of such resale or other distribution. None of the proceeds from such
resale or distribution of such Notes will be received by Ford Credit.
Notes sold to an Agent or other person, as principal, will be sold to
such Agent or person at prices to be determined at the time of sale and
set forth in the applicable Pricing Supplement. Ford Credit has agreed
to indemnify each Agent against certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
(3) Before deduction of estimated expenses of up to $2,544,000.
(4) Or the equivalent thereof in foreign currencies or ECU.
The Notes are being offered on a continuing basis by Ford Credit through
the Agents, who have agreed to use their best efforts to solicit purchases of
such Notes, and also may be sold to an Agent or other person, as principal, for
resale or other distribution. Ford Credit reserves the right to sell the Notes
directly to investors on its own behalf. The Notes may be sold at the price to
the public set forth above to dealers who later resell such Notes to investors.
Such dealers may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. There can be no assurance that the Notes
offered hereby will be sold or that there will be a secondary market for the
Notes. Ford Credit reserves the right to withdraw, cancel or modify the offer
made hereby without notice. Ford Credit or any of the Agents may reject any
order in whole or in part.
GOLDMAN SACHS INTERNATIONAL MERRILL LYNCH INTERNATIONAL LIMITED
CS FIRST BOSTON
------------------------
The date of this Prospectus Supplement is April , 1994.
<PAGE> 27
CAPITALIZATION OF FORD MOTOR CREDIT COMPANY
AND CONSOLIDATED SUBSIDIARIES
The capitalization of Ford Credit and its consolidated subsidiaries as of
December 31, 1993, and the additional long-term indebtedness represented by
estimated additional long-term indebtedness placed from January 1, 1994 through
March 31, 1994, are as follows (in millions):
<TABLE>
<CAPTION>
ADDITIONAL
OUTSTANDING LONG-TERM
DECEMBER 31, 1993 INDEBTEDNESS
------------------ ------------
<S> <C> <C>
SENIOR INDEBTEDNESS, UNSECURED
Short-term
Commercial paper................................ $ 24,506.1
Other short-term debt(1)........................ 1,001.0
----------
Net short-term senior indebtedness............ 25,507.1
Long-term debt payable within one year............... 7,882.6
Long-term notes and debentures....................... 25,480.0
Estimated additional long-term indebtedness placed from
January 1, 1994 through March 31, 1994(2)............... -- $3,186.0
----------
Total senior indebtedness, unsecured.......... 58,869.7
----------
SUBORDINATED LONG-TERM INDEBTEDNESS, UNSECURED
Convertible subordinated debentures.................. 0.5
----------
Total subordinated long-term indebtedness,
unsecured.................................. 0.5
----------
STOCKHOLDER'S EQUITY
Capital stock, par value $100 a share (250,000 shares
authorized, issued and outstanding)............. 25.0
Paid-in surplus (contributions by stockholder)....... 917.3
Unrealized gain on marketable equity securities, net
of taxes........................................... 17.8
Foreign currency translation adjustments............. (85.3)
Earnings retained for use in the business............ 4,899.9
----------
Total stockholder's equity.................... 5,774.7
----------
TOTAL CAPITALIZATION...................................... $ 64,644.9
----------
----------
</TABLE>
- ------------
(1) Includes $150 million with an affiliated company.
(2) Additional long-term indebtedness placed from January 1, 1994 through
March 31, 1994 includes U.S. $1,812 million (estimated) of continuously offered
Notes at rates of 4.30% to 7.20%, Cdn $26 million (estimated) of continuously
offered Guaranteed Notes at rates of 4.55% to 7.70%, $500 million of 5 5/8%
Notes due January 15, 1999, A $75 million of 6 3/4% Guaranteed Notes due
February 25, 1999, $300 million 6 1/2% Notes due February 15, 2006 and $500
million of 5 5/8% Notes due March 3, 1997.
S-2
<PAGE> 28
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS OF FORD CREDIT
M.E. Bannister,
Vice President
J.D. Bringard,
Vice President-General Counsel
J.G. Clissold,
Director and
Executive Vice President
K.J. Coates,
Director and
Executive Vice President
A.H. Fletcher,
Vice President
E.B. Ford II,
Director and
President
J.L. Heimlicher,
Vice President
T.N. Hynes,
Vice President
M.I. Auld,
Director and
Executive Vice President
R.E. Maise,
Vice President
D.N. McCammon,
Director
W.E. Odom,
Director and
Chairman of the Board
A.J. Salmon,
Vice President
W.O. Staehlin,
Vice President-Treasurer
R.D. Warner,
Director and
Executive Vice President
D.J. Wennerberg,
Vice President
K. Whipple,
Director
M.D. Young,
Vice President
All of the above-named persons are full-time employees of Ford or Ford Credit.
S-3
<PAGE> 29
DESCRIPTION OF NOTES
The following description of the particular terms of the Euro Medium-Term
Notes Due from 9 Months to 30 Years from Date of Issue (the "Notes", which term
shall include the Foreign Currency Notes (as defined below) unless otherwise
indicated herein) offered hereby supplements, and to the extent inconsistent
therewith replaces, the description of the general terms and provisions of Debt
Securities (as defined in the Prospectus) set forth in the Prospectus. The
particular terms of the Notes sold pursuant to any Pricing Supplement will be
described therein. Notes may be denominated in U.S. dollars or in foreign
currencies or in European Currency Units ("ECU") as designated by Ford Motor
Credit Company ("Ford Credit") from time to time. The Notes constitute one
series of Indenture Securities established by Ford Credit pursuant to the
Indenture. The principal amount of Indenture Securities in such series is
unlimited under the Indenture.
GENERAL
The Notes offered by this Prospectus Supplement will be limited to an
amount of up to U.S. $6,000,000,000 aggregate principal amount (or the
equivalent thereof, at the Market Exchange Rate (as defined in "Special
Provisions Relating to Foreign Currency Notes--Payment Currency") on the
applicable trade date, in one or more foreign currencies or ECU), less an amount
equal to the aggregate principal amount of any other Debt Securities covered by
the Registration Statement of which this Prospectus Supplement is a part and
sold by Ford Credit. See "Plan of Distribution".
The Notes will be offered on a continuing basis and will mature from 9
months to 30 years from their dates of issue. Fixed Rate Notes (as defined
below) will mature on any day selected by the initial purchaser and agreed to by
Ford Credit. Floating Rate Notes (as defined below) will mature on an Interest
Payment Date (as defined below). Unless otherwise indicated in the applicable
Pricing Supplement, the Notes will be redeemed at 100% of their principal amount
at Maturity.
Unless otherwise indicated in the applicable Pricing Supplement, Notes,
other than Notes denominated in one or more foreign currencies or ECU (the
"Foreign Currency Notes"), will be issued in the denominations of U.S. $5,000 or
integral multiples thereof, subject to a minimum order of U.S. $10,000. Foreign
Currency Notes will be issued in the denomination or denominations set forth in
the applicable Pricing Supplement. The Notes will be unsecured obligations of
Ford Credit and will rank prior to all subordinated indebtedness of Ford Motor
Credit Company (parent company only) and pari passu with all other unsecured and
unsubordinated indebtedness of Ford Motor Credit Company (parent company only).
Payments on the Notes will be made without deduction for United States
withholding taxes to the extent described under "Payment of Additional Amounts"
below. The Notes will be subject to redemption at any time, at their principal
amount in the event of certain changes involving United States taxes or the
imposition of certain information reporting requirements, but otherwise will not
be redeemable prior to Stated Maturity, unless such redemption is provided for
in the applicable Pricing Supplement. See "Redemption" and "Mandatory
Redemption" below.
For a description of the rights attaching to Debt Securities under the
Indenture, see "Description of Debt Securities" in the Prospectus. Unless
otherwise specified in the applicable Pricing Supplement, the Notes will have
the terms described below.
INTEREST AND INTEREST RATES
Each Note will bear interest at either (a) a fixed rate (the "Fixed Rate
Notes") or (b) a floating rate determined by reference to an interest rate
formula (the "Floating Rate Notes"), which may be adjusted by a Spread or Spread
Multiplier (each as defined below). Any Floating Rate Note may also have any or
all of the following: (i) a maximum numerical interest rate limitation, or
ceiling, on the rate of interest that may accrue during any Interest Period (as
defined below); (ii) a minimum numerical interest rate limitation, or floor, on
the rate of interest that may accrue during any Interest Period; and (iii) a
fixed rate applicable to one or more Interest Periods. The applicable Pricing
S-4
<PAGE> 30
Supplement will designate a fixed rate per annum, LIBOR or another interest rate
base as applicable to each Note. With respect to Floating Rate Notes, Ford
Credit will notify the Luxembourg Stock Exchange and Kredietbank S.A.
Luxembourgeoise, 43 Boulevard Royal, Luxembourg, of the rate and amount of
interest for each Interest Period, where such information shall be available
upon request.
Each Note will bear interest from its date of issue at the annual rate, or
at a rate determined pursuant to an interest rate formula, stated therein and in
the applicable Pricing Supplement, until the principal thereof is paid or made
available for payment. Interest will be payable on each Interest Payment Date
and at Maturity. Interest rates and interest rate formulas are subject to change
by Ford Credit from time to time, but no such change will affect any Note
theretofore issued or that Ford Credit has agreed to sell. Each date on which
interest is payable on a Note is referred to herein as an "Interest Payment
Date". The Interest Payment Dates for Fixed Rate Notes shall be as described
below under "Fixed Rate Notes". The Interest Payment Dates for Floating Rate
Notes shall be as indicated in the applicable Pricing Supplement. If any
Interest Payment Date for any Floating Rate Note would otherwise be a day that
is not a Business Day (as defined below), the Interest Payment Date for such
Floating Rate Note shall be the next succeeding Business Day, except that in the
case of a LIBOR-based Note ("LIBOR Note"), if such Business Day is in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. Except as otherwise provided in the applicable Pricing
Supplement, "Business Day" means with respect to any Note, any day that is not a
Saturday or Sunday and that, in The City of New York or the City of London, is
not a day on which banking institutions are generally authorized or obligated by
law to close, provided that, with respect to Foreign Currency Notes only, such
day also is not a day on which banking institutions are generally authorized or
obligated by law to close in the capital city of the country of the Specified
Currency (or, in the case of Foreign Currency Notes denominated in ECU,
Brussels).
The interest rate on each Floating Rate Note will be equal to (i) in the
case of the period commencing on the issue date up to the first Interest Reset
Date (as defined below), or other Interest Period as provided in the applicable
Pricing Supplement, a fixed rate of interest established by Ford Credit, and
(ii) in the case of each period commencing on an Interest Reset Date, (a) the
interest rate determined by reference to the specified interest rate base plus
or minus the Spread, if any, or (b) the interest rate calculated by reference to
the specified interest rate base multiplied by the Spread Multiplier, if any.
The "Spread" is the number of basis points specified in the applicable Pricing
Supplement as being applicable to such Floating Rate Note, and the "Spread
Multiplier" is the percentage specified in the applicable Pricing Supplement as
being applicable to such Floating Rate Note.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each an "Interest Reset
Date"), as specified in the applicable Pricing Supplement. If any Interest Reset
Date for any Floating Rate Note would otherwise be a day that is not a Business
Day for such Floating Rate Note, the Interest Reset Date for such Floating Rate
Note shall be the next succeeding Business Day, except that in the case of a
LIBOR Note, if such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day.
For purposes of determining the rate of interest payable on Floating Rate
Notes, Ford Credit will enter into an agreement with a reference agent (the
"Reference Agent"), which agent shall be specified in the applicable Pricing
Supplement. The Reference Agent shall advise Ford Credit and the Trustee of
LIBOR and any other interest rate base pertaining to any Floating Rate Note. The
Trustee or any paying agent will, upon the request of the Holder of any Floating
Rate Note, provide the interest rate then in effect and, if different, the
interest rate that will become effective as a result of an interest
determination made on the most recent interest determination date ("Interest
Determination Date") with respect to such Note.
S-5
<PAGE> 31
Interest on Floating Rate Notes will accrue from the date of issue or from
the last date to which interest has been paid up to but excluding the next
succeeding Interest Payment Date (each such time period an "Interest Period").
With respect to a Floating Rate Note, accrued interest shall be calculated by
multiplying the principal amount of such Floating Rate Note by an accrued
interest factor. Such accrued interest factor will be computed by adding the
interest factors calculated for each day in the Interest Period or from the last
date from which accrued interest is being calculated. For LIBOR Notes, the
interest factor for each such day is computed by dividing the interest rate in
effect on such day by 360.
The applicable Pricing Supplement will specify the particular terms for
each Floating Rate Note, including, but not limited to, the interest rate
formula and the Spread or Spread Multiplier, if any, the maximum or minimum
interest rate limitation, if any, the period to maturity of the instrument or
obligation on which the interest rate formula is based (the "Index Maturity"),
the initial interest rate, Interest Payment Dates, Interest Reset Dates and any
other applicable terms with respect to such Note.
The interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law as the same may be modified by United States law
of general application. Under present New York law, the maximum rate of interest
is 25% per annum on a simple interest basis. This limit may not apply to Notes
in which $2,500,000 or more has been invested.
Fixed Rate Notes
Each Fixed Rate Note will bear interest from its date of issue at the
annual rate stated on the face thereof. Unless otherwise specified in the
applicable Pricing Supplement, the Interest Payment Date for the Fixed Rate
Notes will be on September 15 of each year. Any payment of principal or interest
required to be made on an Interest Payment Date or at Maturity of a Fixed Rate
Note that is not a Business Day need not be made on such day, but may be made on
the next succeeding Business Day with the same force and effect as if made on
such Interest Payment Date or at Maturity, as the case may be, and no interest
shall accrue for the period from and after such Interest Payment Date or
Maturity. Interest on Fixed Rate Notes will be computed and paid on the basis of
a 360-day year of twelve 30-day months.
LIBOR Notes
Each LIBOR Note will bear interest from its date of issue at the interest
rate (calculated with reference to LIBOR and the Spread or Spread Multiplier, if
any) as provided in the LIBOR Note and in the applicable Pricing Supplement,
except that the initial interest rate for each LIBOR Note will be the rate
specified in the applicable Pricing Supplement. The Interest Determination Date
pertaining to an Interest Reset Date for a LIBOR Note (the "LIBOR Interest
Determination Date") will be the second day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market preceding such
Interest Reset Date.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Reference Agent in accordance with the following
provisions:
(i) With respect to a LIBOR Interest Determination Date, LIBOR will be
determined on the basis of the offered rate for deposits in U.S. dollars
having the Index Maturity designated in the applicable Pricing
Supplement, which appears on Telerate Page 3750 as of 11:00 A.M., London
time, on that LIBOR Interest Determination Date. "Telerate Page 3750"
means the display page so designated on the Dow Jones Telerate Service
(or such other page as may replace that page on that service or such
other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates
for U.S. dollar deposits). If, on that LIBOR Interest Determination
Date, LIBOR does not appear on Telerate Page 3750, LIBOR will be
determined as described in (ii) below.
S-6
<PAGE> 32
(ii) With respect to a LIBOR Interest Determination Date on which LIBOR
does not appear on Telerate Page 3750 as specified in (i) above, LIBOR
will be determined on the basis of the rates at which deposits in U.S.
dollars are offered by four major banks in the London interbank market
selected by the Reference Agent (the "Reference Banks") at approximately
11:00 A.M., London time, on that LIBOR Interest Determination Date to
prime banks in the London interbank market having the Index Maturity
designated in the applicable Pricing Supplement and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time. The
Reference Agent will request the principal London office of each of such
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR in respect of that LIBOR Interest
Determination Date will be the arithmetic mean (rounded upwards, if
necessary, to the nearest one hundred-thousandth of a percentage point,
with five one-millionths of a percentage point rounded upward) of such
quotations. If fewer than two quotations are provided, LIBOR in respect
of that LIBOR Interest Determination Date will be the arithmetic mean
(rounded upwards, if necessary, to the nearest one hundred-thousandth of
a percentage point, with five one-millionths of a percentage point
rounded upward) of the rates quoted by three major banks in The City of
New York selected by the Reference Agent at approximately 11:00 A.M.,
New York City time, on that LIBOR Interest Determination Date for loans
in U.S. dollars to leading European banks, having the Index Maturity
designated in the applicable Pricing Supplement and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time;
provided, however, that if the banks in The City of New York selected as
aforesaid by the Reference Agent are not quoting as mentioned in this
sentence, the interest rate for the period commencing on the Interest
Reset Date following such LIBOR Interest Determination Date will be the
interest rate in effect on such LIBOR Interest Determination Date.
FORM, DENOMINATION AND TRANSFER
The Notes will be offered only in bearer form. Unless otherwise specified
in the applicable Pricing Supplement, the Notes, other than Foreign Currency
Notes, will be issued in the denominations of U.S. $5,000 or integral multiples
thereof, subject to a minimum order of U.S. $10,000. Foreign Currency Notes will
be issued in the denomination or denominations set forth in the applicable
Pricing Supplement. All Notes originally issued on the same day, being
denominated in the same currency and having the same interest rate and Stated
Maturity will be represented initially by a temporary note in global form (a
"Temporary Global Note", or a "Global Note", which term shall also include a
Permanent Global Note (as defined below) unless otherwise indicated herein),
which will be deposited with a common depositary outside of the United States
for Morgan Guaranty Trust Company of New York, Brussels office, as operator of
the Euroclear System ("Euroclear"), and Cedel S.A. ("CEDEL"). Upon receipt of
the Temporary Global Note, the common depositary will credit the respective
principal amounts of the Notes represented by such Temporary Global Note to the
accounts of Euroclear and CEDEL. Ownership of beneficial interests in a Global
Note may be held only through Euroclear or CEDEL. Ownership of beneficial
interests in a Global Note will be shown on, and the transfer of that ownership
will be effected only through, records maintained by Euroclear and CEDEL.
Each beneficial interest in a Temporary Global Note will be exchangeable
for an equivalent beneficial interest in a permanent note in global form (a
"Permanent Global Note") no earlier than the 40th day after the date of issuance
of such Temporary Global Note (the "Exchange Date") upon written certification,
in the form set forth in the Indenture, by the person owning such beneficial
interest in such Temporary Global Note or, if interest is payable under a
Temporary Global Note on an Interest Payment Date occurring prior to the
Exchange Date, by the person owning such beneficial interest in such Temporary
Global Note on such Interest Payment Date, to the effect that the beneficial
interest in the Temporary Global Note to be exchanged for a beneficial interest
in such
S-7
<PAGE> 33
Permanent Global Note or upon which such interest is paid on such Interest
Payment Date is owned by (i) a person that is not a United States person, (ii) a
United States person that is (A) a foreign branch of a United States financial
institution (as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v)) purchasing for its own account or for resale or (B) a United
States person who acquired Notes through a foreign branch of a United States
financial institution and who holds the Notes through such financial institution
on the date of such certification (provided in either case that the financial
institution furnishes certification to Ford Credit or the Agent selling the
Notes to it that such financial institution agrees to comply with Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code and the
United States Treasury Regulations issued thereunder) or (iii) a financial
institution that acquired Notes for purposes of resale during the restricted
period (as defined below under "Limitations on Issuance of Notes"), and such
financial institution certifies that it has not acquired the Notes for purposes
of resale directly or indirectly within the United States or to a United States
person. A financial institution, whether or not described in (i) or (ii) above,
that purchases Notes for purposes of resale during the restricted period may
only give the certification described in (iii) above. Each Permanent Global Note
will be deposited with a common depositary outside the United States for
Euroclear and CEDEL for the accounts of Holders whose Notes are represented by
interests in such Permanent Global Note.
Interests in a Permanent Global Note will be exchangeable, on or after the
date such Permanent Global Note is issued, upon not less than 30 days' notice to
the Trustee, for definitive Notes in bearer form, with coupons attached
("Definitive Notes"). No Definitive Note will be delivered in the United States.
Title to Definitive Notes and coupons appertaining thereto will pass by
delivery.
LIMITATIONS ON ISSUANCE OF NOTES
In compliance with United States tax laws and regulations, Notes may not be
offered, sold or delivered within the United States or to a United States
person, except in certain transactions permitted by U.S. tax regulations. Each
Agent has agreed (i) that it will not, (x) at any time in connection with the
original issuance of any Note or (y) otherwise until 40 days after the date of
issue of any Note (the "restricted period"), offer or sell any Note to a person
who is within the United States or to a United States person except as permitted
by U.S. tax regulations and (ii) that it will not deliver any Note sold during
the restricted period in definitive form within the United States. No Note
(other than the Temporary Global Note) may be delivered, and no interest may be
paid until the person entitled to receive such Note or such interest furnishes
the written certification described under "Form, Denomination and Transfer"
above.
The following legend will appear on all Global Notes, Definitive Notes and
coupons appertaining thereto: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code." The sections referred to in such legend provide that,
with certain exceptions, a United States person will not be permitted to deduct
any loss, and will not be eligible for capital gain treatment with respect to
any gain, realized on the sale, exchange or redemption of such Note or coupon.
Each Agent has represented and agreed that (i) it has not offered or sold
and will not offer or sell in the United Kingdom, by means of any document, any
Notes, other than to persons whose ordinary business it is to buy or sell shares
or debentures (whether as principal or agent) (except in circumstances which do
not constitute an offer to the public within the meaning of the Companies Act
1985), (ii) it has complied and will comply with all applicable provisions of
the Financial Services Act of 1986 with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom and
(iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Notes to a person who is of a kind described in Article 9(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1988 (as
amended) or is a person to whom the document may otherwise lawfully be issued or
passed on.
S-8
<PAGE> 34
Ford Credit and each Agent have agreed that, without complying with
Japanese laws and regulations, that it will not offer, sell or deliver, directly
or indirectly, any Notes denominated in Japanese Yen in Japan or to residents of
Japan, including any corporation or other entity organized under the laws of
Japan, or to others for reoffering, resale or delivery of any Notes denominated
in Japanese Yen, directly or indirectly, in Japan or to any residents of Japan,
including any corporation or other entity organized under the laws of Japan.
PAYMENT AND PAYING AGENTS
A beneficial interest in a Temporary Global Note must be exchanged for a
beneficial interest in a Permanent Global Note before interest payments can be
received, except as provided in this paragraph. Interest payable in respect of a
beneficial interest in a Temporary Global Note on an Interest Payment Date
occurring prior to the Exchange Date will be paid only upon certification, in
the form set forth in the Indenture and to the effect set forth above under
"Form, Denomination and Transfer", by the person owing such beneficial interest
in such Temporary Global Note on such Interest Payment Date. A certification
pursuant to the preceding sentence shall be deemed a request to exchange a
beneficial interest in the Temporary Global Note for an equivalent beneficial
interest in a Permanent Global Note as of the Exchange Date and such exchange
shall be made without further certification by the person entitled to such
beneficial interest in such Permanent Global Note.
Payments of interest in respect of each Temporary Global Note, under the
circumstance set forth in the preceding paragraph and payments of principal and
interest in respect of each Permanent Global Note will be made to each of
Euroclear and CEDEL with respect to that portion of any such Temporary Global
Note and Permanent Global Note held for its account. Each of Euroclear and CEDEL
will undertake in such circumstances to credit the payments received by it to
the accounts of the holders whose Notes are represented by beneficial interests
in such Temporary Global Note or Permanent Global Note. None of Ford Credit, the
Trustee or any paying agent 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 in respect of Definitive Notes and coupons will be made only at
the offices of such paying agents located outside the United States as Ford
Credit may from time to time appoint, upon presentation and surrender of the
Notes or appropriate coupons, as the case may be. At the direction of the Holder
of any Definitive Note or coupon, and subject to applicable laws and
regulations, payment on such Note or coupon will be made by check drawn on a
bank in a city in the country issuing the currency in which a Note is
denominated (The City of New York for Notes denominated in U.S. dollars) or by
wire transfer to an account denominated in such currency maintained by such
Holder with a bank located outside the United States. If payment in U.S. dollars
at the offices of all such paying agents outside the United States becomes
illegal or is effectively precluded because of the imposition of exchange
controls or similar restrictions on the full payment or receipt of such amounts
in U.S. dollars, Ford Credit will appoint an office or agent in the United
States at which such payment may be made. Except as described in the preceding
sentence, no payment on the Notes will be made by mail to an address in the
United States or by transfer to an account maintained by the Holder in the
United States.
Ford Credit has initially appointed as paying agents for payments on the
Notes and coupons the principal offices of Chemical Bank in London and
Kredietbank S.A. Luxembourgeoise in Luxembourg. Ford Credit may vary or
terminate the appointment of any paying agent, but as long as any Note remains
outstanding, Ford Credit will maintain a paying agent in London and, so long as
the Notes are listed on the Luxembourg Stock Exchange and the Luxembourg Stock
Exchange so requires, a paying agent in Luxembourg.
All moneys paid by Ford Credit to the Trustee or a paying agent for the
payment of principal of or interest on any Note that remain unclaimed at the end
of two years after such principal or interest
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shall have become due and payable will be repaid to Ford Credit and the Holder
of such Note or any coupon appertaining thereto will thereafter look only to
Ford Credit for payment thereof.
REDEMPTION
Except as set forth hereunder and under "Mandatory Redemption", or in an
applicable Pricing Supplement, the Notes may not be redeemed prior to Stated
Maturity. If (a) as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States (or any
political subdivision or taxing authority thereof or therein), or any change in,
or amendments to, official position regarding the application or interpretation
of such laws, regulations or rulings, which change or amendment is announced or
becomes effective on or after April 1, 1994, Ford Credit becomes or will become
obligated to pay additional amounts as described herein under the heading
"Payment of Additional Amounts" or (b) any act is taken by a taxing authority of
the United States on or after April 1, 1994, whether or not such act is taken
with respect to Ford Credit or any affiliate, that results in a substantial
probability that Ford Credit will or may be required to pay such additional
amounts, then Ford Credit may, at its option, redeem, as a whole but not in
part, the Notes of the same type and issued on the same dates as to which Ford
Credit will or may be required to pay such additional amounts, upon not less
than 35 days' nor more than 60 days' published notice in accordance with
"Notices" below at 100% of their principal amount, together with interest
accrued thereon to the date fixed for redemption; provided that Ford Credit
determines, in its business judgment, that the obligation to pay such additional
amounts cannot be avoided by the use of reasonable measures available to it, not
including substitution of the obligor under the Notes. No redemption pursuant to
(b) above may be made unless Ford Credit shall have received an opinion of
independent counsel to the effect that an act taken by a taxing authority of the
United States results in a substantial probability that it will or may be
required to pay the additional amounts described herein under the heading
"Payment of Additional Amounts" and Ford Credit shall have delivered to the
Trustee a certificate, signed by a duly authorized officer, stating that based
on such opinion Ford Credit is entitled to redeem the Notes pursuant to their
terms.
MANDATORY REDEMPTION
Ford Credit shall redeem the Notes as a whole but not in part, upon not
less than 60 days' nor more than 90 days' published notice in accordance with
"Notices" below at 100% of their principal amount, together with interest
accrued to the date fixed for redemption, after determination by Ford Credit as
soon as practicable, based on a written opinion of independent counsel, and
prompt notice thereof to the Trustee, that any certification, identification or
information reporting requirements of United States law or regulation with
regard to the nationality, residence or identity of a beneficial owner of a Note
or a coupon appertaining thereto would be applicable to a payment of principal
of or interest on a Note or a coupon appertaining thereto made outside the
United States by Ford Credit or a paying agent as agent for Ford Credit and not
as agent for the beneficial owner (other than a requirement that would not be
applicable to a payment made to a custodian, nominee or other agent of the
beneficial owner, or which could be satisfied by the holder, custodian, nominee
or other agent certifying that the beneficial owner is not a United States
person; provided, however, in each case that payment by a custodian, nominee or
agent (who is not under law in effect as of the date of issuance of the Notes
subject to information reporting requirements) to the beneficial owner is not
otherwise subject to any certification, identification or information reporting
requirement referred to in this sentence). The Trustee shall, as soon as
practicable after receipt of notice of such determination by Ford Credit, give
prompt notice thereof in accordance with "Notices" below, stating in the notice
the effective date of such certification, identification or information
reporting requirements and the dates within which the redemption shall occur.
The mandatory redemption of the Notes must take place on such date, not later
than one year after the publication of notice by the Trustee of Ford Credit's
determination as provided in the next preceding sentence, as Ford Credit shall
determine by notice to the Trustee at least 75 days before the redemption date,
unless notice
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within a shorter period is acceptable to the Trustee. Ford Credit shall not so
redeem the Notes, however, if Ford Credit shall, based on a subsequent event,
determine based on a written opinion of independent counsel, not less than 30
days prior to the date fixed for redemption, that no payment would be subject to
any requirement described above, in which case the Trustee shall give prompt
notice of that determination in accordance with "Notices" below and any earlier
redemption notice shall be deemed revoked and of no further effect.
Notwithstanding the preceding paragraph, if and so long as the
certification, identification or information reporting requirements referred to
in the preceding paragraph would be fully satisfied by payment of United States
withholding, backup withholding or a similar tax, Ford Credit may elect, prior
to publication of the notice of redemption, to have the provisions of this
paragraph apply in lieu of the provisions of the next preceding paragraph. In
that event, Ford Credit will pay as additional interest such additional amounts
as are necessary in order that, following the effective date of such
requirements, every net payment made outside the United States by Ford Credit or
a paying agent of the principal of and interest on a Note or a coupon
appertaining thereto to a holder who is not a United States person as defined
under "Payment of Additional Amounts" (but without any requirement that the
nationality, residence or identity of such holder be disclosed to Ford Credit, a
paying agent acting as agent of Ford Credit or any governmental authority),
after deduction for United States withholding, backup withholding or a similar
tax (other than a withholding, backup withholding or similar tax which (i) would
not be applicable in the circumstances referred to in the parenthetical clause
of the first sentence of the preceding paragraph, (ii) is imposed as a result of
the fact that Ford Credit, or a paying agent acting as agent of Ford Credit has
actual knowledge that the beneficial owner of the Note or coupon is within the
category of persons described in clause 1 of "Payment of Additional Amounts", or
(iii) is imposed as a result of presentation of the Note or coupon for payment
more than 15 days after the date on which such payment becomes due and payable
or on which payment thereof is duly provided for, whichever occurs later), will
not be less than the amount provided in the Note or the coupon to be then due
and payable.
REPLACEMENT OF NOTES AND COUPONS
In case any Note or coupon shall become mutilated or defaced or be
apparently destroyed, lost or stolen, Ford Credit shall execute and the Trustee
shall authenticate and deliver outside the United States a new Note with
appropriate coupons attached, in exchange and substitution for the mutilated or
defaced Note or the Note to which the mutilated or defaced coupon was attached,
or in lieu of and in substitution for the apparently destroyed, lost or stolen
Note or the Note to which the apparently destroyed, lost or stolen coupon was
attached. In every case the applicant for a substitute Note shall furnish to
Ford Credit and to the Trustee or its designated agent such security or
indemnity as may be required by them to indemnify and defend and to save each of
them and any agent of theirs harmless and, in every case of destruction, loss or
theft, evidence to their satisfaction of the apparent destruction, loss or theft
of such Notes or coupons and of the ownership thereof. Upon the issuance of any
substitute Note, Ford Credit may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
and its designated agents) connected therewith.
PAYMENT OF ADDITIONAL AMOUNTS
Ford Credit will, subject to the exceptions and limitations set forth
below, pay as additional interest on the Notes, such additional amounts as are
necessary in order that the net payment by Ford Credit or a paying agent of the
principal of and interest on the Notes or the coupons appertaining thereto to a
holder who is not a United States person (as defined below), after deduction for
any present or future tax, assessment or governmental charge of the United
States or a political subdivision or taxing authority thereof or therein,
imposed by withholding with respect to the payment, will not be less than the
amount provided in the Notes or any coupons to be then due
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and payable; provided, however, that the foregoing obligation to pay additional
amounts shall not apply:
(1) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of the holder, or a fiduciary, settlor,
beneficiary, member or shareholder of the holder if the holder is an
estate, trust, partnership or corporation, or a person holding a power over
an estate or trust administered by a fiduciary holder, being considered as:
(a) being or having been present or engaged in trade or business in
the United States or having or having had a permanent establishment in
the United States;
(b) having a current or former relationship with the United States,
including a relationship as a citizen or resident thereof;
(c) being or having been a foreign or domestic personal holding
company, a passive foreign investment company or a controlled foreign
corporation with respect to the United States or a corporation that has
accumulated earnings to avoid United States federal income tax; or
(d) being or having been a "10-percent shareholder" of Ford Credit
as defined in section 871(h)(3) of the United States Internal Revenue
Code or any successor provision;
(2) to any holder that is not the sole beneficial owner of the Note or
any coupon appertaining thereto, or a portion of either, or that is a
fiduciary or partnership, but only to the extent that a beneficiary or
settlor with respect to the fiduciary, a beneficial owner or member of the
partnership would not have been entitled to the payment of an additional
amount had the beneficiary, settlor, beneficial owner or member received
directly its beneficial or distributive share of the payment;
(3) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of the failure to comply with certification,
identification or information reporting requirements concerning the
nationality, residence, identity or connection with the United States of
the holder or beneficial owner of such Note or any coupon appertaining
thereto, if compliance is required by statute or by regulation of the
United States Treasury Department as a precondition to exemption from such
tax, assessment or other governmental charge;
(4) to a tax, assessment or governmental charge that is imposed
otherwise than by withholding by Ford Credit or a paying agent from the
payment;
(5) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of a change in law, regulation, or administrative
or judicial interpretation that becomes effective more than 15 days after
the payment becomes due or is duly provided for, whichever occurs later;
(6) to an estate, inheritance, gift, sales, excise, transfer, wealth
or personal property tax or a similar tax, assessment or governmental
charge;
(7) to any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or interest
on any Note, if such payment can be made without such withholding by any
other paying agent; or
(8) in the case of any combination of items (1), (2), (3), (4), (5),
(6) and (7).
The Notes and any coupons appertaining thereto are subject in all cases to any
tax, fiscal or other law or regulation or administrative or judicial
interpretation applicable thereto. Except as specifically provided under this
heading "Payment of Additional Amounts" and under the heading "Description of
Notes -- Mandatory Redemption", Ford Credit shall not be required to make any
payment with respect to any tax, assessment or governmental charge imposed by
any government or a political subdivision or taxing authority thereof or
therein.
As used under this heading "Payment of Additional Amounts" and under the
heading "United States Taxation", the term "United States" means the United
States of America (including the
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States and the District of Columbia) and its territories, its possessions and
other areas subject to its jurisdiction and "United States person" means any
individual who is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any estate or trust the income of which is subject to United
States federal income taxation regardless of its source; provided, however, that
elsewhere in this Prospectus Supplement such terms shall have the meanings given
to them by the United States Internal Revenue Code or Regulation S under the
United States Securities Act of 1933, as amended (the "Securities Act"), as
applicable.
NOTICES
Notices to holders of the Notes will be given only by publication in
Authorized Newspapers in The City of New York, in London, and, so long as the
Notes are listed on the Luxembourg Stock Exchange, in Luxembourg. It is expected
that publication will be made in The City of New York in The Wall Street
Journal, in London in the Financial Times and in Luxembourg in the Luxemburger
Wort. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication.
GOVERNING LAW
The Indenture, the Notes and the coupons will be governed by, and construed
in accordance with, the laws of the State of New York. Courts in the United
States have not customarily rendered judgments for money damages denominated in
any currency other than the U.S. dollar. The Judiciary Law of the State of New
York provides, however, that an action based upon an obligation denominated in a
currency other than U.S. dollars will be rendered in the foreign currency of the
underlying obligation and converted into U.S. dollars at a rate of exchange
prevailing on the date of the entry of the judgment or decree.
SPECIAL PROVISIONS RELATING TO
FOREIGN CURRENCY NOTES
GENERAL
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars, payments of principal of and interest on
the Notes will be made in U.S. dollars and payment of the purchase price of the
Notes must be made in immediately available funds. If any of the Notes are to be
denominated in a currency or currencies other than U.S. dollars (a "Specified
Currency"), the following provisions shall apply in addition to, and to the
extent inconsistent therewith shall replace, the description of general terms
and provisions of Notes set forth in the accompanying Prospectus and elsewhere
in this Prospectus Supplement.
A Pricing Supplement with respect to any Foreign Currency Note (which may
include information with respect to applicable current foreign exchange
controls) is a part of this Prospectus and Prospectus Supplement. Any
information concerning exchange rates is furnished as a matter of information
only and should not be regarded as indicative of the range of or trends in
fluctuations in currency exchange rates that may occur in the future.
CURRENCIES
Ford Credit may offer Foreign Currency Notes denominated in Australian
dollars, Canadian dollars, Danish kroner, Deutsche Marks, Dutch guilders,
Italian lire, Japanese yen, New Zealand dollars, ECU or other Specified
Currencies. Unless otherwise indicated in the applicable Pricing Supplement,
purchasers are required to pay for Foreign Currency Notes in the Specified
Currency. Specific information about the Specified Currency in which a
particular Foreign Currency Note is denominated, including historical exchange
rates and a description of the currency and any
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exchange controls, will be set forth in the applicable Pricing Supplement to the
extent not set forth herein. Deutsche Mark Notes will have a maturity of not
less than 2 years. At the date of this Prospectus Supplement, the Deutsche
Bundesbank does not approve the issue of commodity-linked Deutsche Mark Notes.
Each Foreign Currency Note will provide that the obligation to pay the
principal thereof and interest thereon in the currency in which such Foreign
Currency Note is denominated is of the essence. The obligation of Ford Credit to
make payments in the currency in which a Foreign Currency Note is denominated
shall, notwithstanding any payment in any other currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
currency in which such Foreign Currency Note is denominated that the Holder of
such Foreign Currency Note may purchase with the amount paid in such other
currency. If the amount in the currency in which such Foreign Currency Note is
denominated that may be so purchased is for any reason less than the amount
originally due, Ford Credit shall pay such additional amounts in the currency in
which such Foreign Currency Note is denominated as may be necessary to
compensate for any such shortfall.
INFORMATION CONCERNING ECU DENOMINATED NOTES
Value of the ECU. Subject to the provisions under "Payment in a Component
Currency" below, the value of the ECU with respect to any Notes denominated in
ECU ("ECU Notes"), will be equal to the value of the ECU that is from time to
time used in the European Monetary System and which is at the date hereof valued
on the basis of specified amounts of the currencies of twelve of the member
countries of the European Communities ("EC") as shown below.
Pursuant to Council Regulation (EEC) No. 1971/89 of June 19, 1989, the ECU
is at the date hereof defined as the sum of the following amounts of the
following components:
<TABLE>
<S> <C> <C> <C>
0.6242 German mark 0.130 Luxembourg franc
0.08784 Pound sterling 0.1976 Danish krone
1.332 French francs 0.008552 Irish pound
151.8 Italian lire 1.440 Greek drachmas
0.2198 Dutch guilder 6.885 Spanish pesetas
3.301 Belgian francs 1.393 Portuguese escudos
</TABLE>
Such amounts and/or components may be changed by the EC, in which event the
basis of valuation of the ECU will change accordingly.
Payment in a Component Currency. With respect to each due date for the
payment of principal of, or interest on, any ECU Notes on or prior to which the
ECU is not used in the European Monetary System or on or prior to which banks in
all member countries of the EC shall have ceased to provide ECU accounts, the
Trustee shall, without liability on its part but after consultation with Ford
Credit and having regard to the availability to Ford Credit of the relevant
currency, choose a component currency (the "Chosen Currency") of the ECU in
which all payments due on that due date with respect to any ECU Notes and
coupons shall be made. Notice of the Chosen Currency selected by the Trustee
shall, where practicable, be published in the manner described in "Notices"
above. The amount of each payment in such Chosen Currency shall be computed on
the basis of the equivalent of the ECU in that currency, determined as described
below, net of any cost of conversion, as of the fourth business day in
Luxembourg prior to the date on which such payment is due.
On the first business day in Luxembourg on which the ECU is not used in the
European Monetary System or on which banks in all member countries of the EC
shall have ceased to provide ECU accounts, the Trustee shall, without liability
on its part but after consultation with Ford Credit and having regard to the
availability to Ford Credit of the relevant currency, choose a Chosen Currency
in which all payments with respect to any ECU Notes and coupons having a due
date prior thereto but not yet presented for payment are to be made. The amount
of each payment in such
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Chosen Currency shall be computed on the basis of the equivalent of the ECU in
that currency, determined as described below, net of any cost of conversion, as
of such first business day.
The equivalent of the ECU in the relevant Chosen Currency as of any date
(the "Day of Valuation") shall be determined by, or on behalf of, the Luxembourg
Stock Exchange on the following basis. The amounts and components composing the
ECU for this purpose (the "Components") shall be the amounts and components
which composed the ECU (i) as of the last date on which the ECU was used in the
European Monetary System (or, if after such last date the ECU was used for the
settlement of transactions by public institutions of or within the EC, as of the
most recent date when the ECU was so used) or (ii) where the selection of a
Chosen Currency shall have been required only because banks in all member
countries of the EC shall have ceased to provide ECU accounts, as of the Day of
Valuation. The equivalent of the ECU in the Chosen Currency shall be calculated
by, first, aggregating the U.S. dollar equivalents of the Components; and then,
using the rate used for determining the U.S. dollar equivalent of the Components
in the Chosen Currency as set forth below, calculating the equivalent in the
Chosen Currency of such aggregate amount in U.S. dollars.
The U.S. dollar equivalent of each of the Components, shall be determined
by, or on behalf of, the Luxembourg Stock Exchange on the basis of the middle
spot delivery quotations prevailing at 2:30 p.m. Luxembourg time on the Day of
Valuation, as obtained by, or on behalf of, the Luxembourg Stock Exchange from
one or more major banks, as selected by the Trustee, in the country of issue of
the component currency in question.
If for any reason no direct quotations are available for a Component as of
a Day of Valuation from any of the banks selected by the Trustee for this
purpose, in computing the dollar equivalent of such Component, the Luxembourg
Stock Exchange shall (except as provided below) use the most recent direct
quotations for such Component obtained by it or on its behalf, provided that
such quotations were prevailing in the country of issue not more than two
business days before such Day of Valuation. If such most recent quotations were
so prevailing more than two business days in the country of issue before such
Day of Valuation, the Luxembourg Stock Exchange shall determine the U.S. dollar
equivalent of such Component on the basis of cross rates derived from the middle
spot delivery quotations for such component currency and for the U.S. dollar
prevailing at 2:30 p.m. Luxembourg time on such Day of Valuation, as obtained
by, or on behalf of, the Luxembourg Stock Exchange from one or more major banks,
as selected by the Trustee, in a country other than the country of issue of such
component currency. Notwithstanding the foregoing, the Luxembourg Stock Exchange
shall determine the U.S. dollar equivalent of such Component on the basis of
such cross rates if the Trustee judges that the equivalent so calculated is more
representative than the U.S. dollar equivalent calculated as provided in the
first sentence of this paragraph. Unless otherwise specified by the Trustee, if
there is more than one market for dealing in any component currency by reason of
foreign exchange regulations or for any other reason, the market to be referred
to in respect of such currency shall be that upon which a non-resident issuer of
securities denominated in such currency would purchase such currency in order to
make payments in respect of such securities.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall be equal to the
amount of the former component currency divided by the number of currencies into
which that currency was divided.
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Payments in a component currency will be made in the Chosen Currency at the
specified office of a paying agent in the country of the Chosen Currency, or, if
none or at the option of the holder, at the specified office of any paying agent
either by a check drawn on, or by transfer to an account maintained by the
holder with, a bank in the principal financial center of the country of the
Chosen Currency.
All determinations made by the Trustee or by, or on behalf of, the
Luxembourg Stock Exchange shall be at its sole discretion and shall, in the
absence of manifest error, be conclusive for all purposes and binding on Ford
Credit and all holders of any ECU Notes and coupons.
OUTSTANDING FOREIGN CURRENCY NOTES
Under the Indenture, the principal amount of any Foreign Currency Note at
any time Outstanding shall be deemed to be the U.S. dollar equivalent,
determined as of the date Ford Credit agreed to sell such Foreign Currency Note
(the "trade date"), of the principal amount of such Foreign Currency Note.
PAYMENT CURRENCY
If a Specified Currency is not available for the payment of principal or
interest with respect to a Foreign Currency Note due to the imposition of
exchange controls or other circumstances beyond the control of Ford Credit, Ford
Credit will be entitled to satisfy its obligations to Holders of Foreign
Currency Notes by making such payment in U.S. dollars on the basis of the noon
buying rate in The City of New York for cable transfers of the Specified
Currency as certified for customs purposes by the Federal Reserve Bank of New
York (the "Market Exchange Rate") on the basis of the most recently available
Market Exchange Rate or as otherwise indicated in an applicable Pricing
Supplement. Any payment made under such circumstances in U.S. dollars where the
required payment is in a Specified Currency will not constitute a default under
the Indenture.
CURRENCY RISKS
An investment in Notes not denominated in the currency of the country in
which a purchaser is resident or the currency in which a purchaser conducts its
business ("home currency") entails significant risks (over which Ford Credit has
no control) that are not associated with a similar investment in a security
denominated in the home currency. Such risks include, without limitation, the
possibility of significant changes in the rate of exchange between the home
currency and the currency in which the Notes are denominated and the possibility
of the imposition or modification of foreign exchange controls by either the
United States or foreign governments, which risks generally depend on economic
and political events. In recent years, certain rates of exchange have been
volatile and such volatility may occur in the future. The exchange rate between
two currencies is at any moment a result of the supply and demand for such
currencies, and changes in the rate result over time from the interaction of
many factors, among which are rates of inflation, interest rate levels, balances
of payments and the extent of governmental surpluses or deficits in the
countries of such currencies. These factors are in turn sensitive to the
monetary, fiscal and trade policies pursued by such governments and those of
other countries important to international trade and finance. Fluctuations in
any particular exchange rate that have occurred in the past are not necessarily
indicative, however, of fluctuations in the rate that may occur during the term
of any Note. Depreciation of the currency applicable to a Note against a home
currency would result in a decrease in the effective yield of such Note below
its coupon rate, and in certain circumstances could result in a loss to the
investor on a home currency basis.
Foreign exchange rates can either float or be fixed by sovereign
governments. Exchange rates of most economically developed nations are permitted
to fluctuate in value relative to the U.S. dollar. Governments, however, rarely
voluntarily allow their currencies to float freely in response to economic
forces. Governments in fact use a variety of techniques, such as intervention by
a country's central bank or imposition of regulatory controls or taxes, to
affect the exchange rate of
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<PAGE> 42
their currencies. Governments may also issue a new currency to replace an
existing currency or alter the exchange rate or relative exchange
characteristics by devaluation or revaluation of a currency. Thus, a special
risk in purchasing Notes is that their home currency-equivalent yields could be
affected by governmental actions that change or interfere with theretofore
freely determined currency valuation, fluctuations in response to other market
forces and the movement of currencies across borders. There will be no
adjustment or change in the terms of the Notes in the event that exchange rates
should become fixed, or in the event of any devaluation or revaluation or
imposition of exchange or other regulatory controls or taxes, or in the event of
other developments, affecting any applicable currency or currency unit.
THE PROSPECTUS, INCLUDING THIS PROSPECTUS SUPPLEMENT, DOES NOT DESCRIBE ALL
RISKS THAT RESULT FROM THE NOTES BEING DENOMINATED IN A CURRENCY OTHER THAN THE
PURCHASER'S HOME CURRENCY EITHER AS SUCH RISKS EXIST AT THE DATE OF THIS
PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE
PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS
ENTAILED BY AN INVESTMENT IN THE NOTES. NOTES MAY NOT BE AN APPROPRIATE
INVESTMENT FOR PROSPECTIVE PURCHASERS WHO ARE UNSOPHISTI-CATED WITH RESPECT TO
CURRENCY TRANSACTIONS.
UNITED STATES TAXATION
In the opinion of Sullivan & Cromwell, special tax counsel for Ford Credit
and Shearman & Sterling, counsel for the Agents, provided the Notes and coupons
appertaining thereto are offered, sold and delivered, and interest and principal
are paid, in accordance with the terms of the Indenture and the Euro Sales
Agency Agreements between Ford Credit and each of the Agents, under present
United States federal tax law:
(1) The principal (including original issue discount, if any) of and
interest on a Note or a coupon appertaining thereto paid by Ford Credit or
a paying agent to, and proceeds or gain from a sale or redemption of a Note
or a coupon appertaining thereto by, a holder who is not a United States
person will not be subject to United States federal income or withholding
tax, provided that:
(a) neither the holder, nor a partner, fiduciary, settlor or
beneficiary of the holder, if the holder is a partnership or an estate
or trust, or a person holding a power over an estate or trust
administered by a fiduciary holder, is considered as:
(i) being or having been present or engaged in trade or business
in the United States or having or having had a permanent
establishment therein;
(ii) having a current or former relationship with the United
States, including a relationship as a citizen or resident thereof;
(iii) being or having been a foreign or domestic personal
holding company, a passive foreign investment company or a controlled
foreign corporation with respect to the United States or a
corporation that has accumulated earnings to avoid United States
federal income tax; or
(iv) being or having been a "10-percent shareholder" of Ford
Credit as defined in section 871(h)(3) of the United States Internal
Revenue Code; and
(b) if required, it has been established that the holder is not a
United States person or is not, as discussed below, subject to United
States backup withholding.
(2) A Note or a coupon appertaining thereto held at the time of death
by an individual who is not a citizen or resident of the United States
would not be subject to United States federal estate tax, provided that the
individual would have been entitled to the payment of additional
S-17
<PAGE> 43
amounts under "Description of Notes -- Payment of Additional Amounts" if
interest that was subject to United States federal income or withholding
tax had been received by him on such Note or coupon at the time of his
death.
Such counsel have advised that, under present United States federal tax
law, unless Ford Credit or a paying agent has actual knowledge that the holder
of a Note or a coupon appertaining thereto is a United States person, a payment
on a Note by Ford Credit or a paying agent made outside the United States will
not be subject to United States certification, identification or information
reporting requirements or backup withholding tax.
In addition, if payments are collected outside the United States by a
foreign office of a custodian, nominee or other agent acting on behalf of a
beneficial owner of a Note or a coupon appertaining thereto, such custodian,
nominee or other agent will not be required to apply backup withholding to
payments made to such owner. However, if the custodian, nominee or other agent
is a United States person, a controlled foreign corporation for United States
tax purposes or a foreign person 50% or more of whose gross income is
effectively connected with the conduct of a trade or business within the United
States for a specified three-year period, information reporting will be required
with respect to payments made to such owner, unless such custodian, nominee or
other agent has documentary evidence in its files of the owner's foreign status
and has no actual knowledge to the contrary, or the owner otherwise establishes
an exemption.
Payments of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to certification, identification or
information reporting requirements or backup withholding, except that if the
broker is a United States person, a controlled foreign corporation for United
States tax purposes or a foreign person 50% or more of whose gross income is
effectively connected with the conduct of a trade or business within the United
States for a specified three-year period, information reporting will apply to
such payments unless such broker has documentary evidence in its files of the
holder's foreign status and has no actual knowledge to the contrary, or the
holder otherwise establishes an exemption. Payment of the proceeds from a sale
of a Note to or through the United States office of a broker is subject to
information reporting and backup withholding unless the holder or beneficial
owner certifies as to its non-United States status or otherwise establishes an
exemption from information reporting and backup withholding.
In the event of a change in United States law which results in the
applicability of United States certification, identification or information
reporting requirements as described under "Description of Notes -- Mandatory
Redemption", Ford Credit would be required to redeem the Notes, as a whole but
not in part, or, under the circumstances described under "Description of Notes
- -- Mandatory Redemption", to withhold any applicable United States tax and to
pay additional amounts with respect thereto as described under such caption. If
Ford Credit shall so redeem the Notes, Ford Credit would not be obligated to pay
additional amounts with respect to any United States tax withheld from the
redemption proceeds.
Such counsel have advised that, under provisions of present United States
federal tax law relating to the ownership of bearer form debt obligations, a
holder of a Note who is a United States person will be subject to the following
special rules unless an exception applies: If a Note is paid, sold or otherwise
disposed of in a transaction that results in a taxable gain or a loss for United
States federal income tax purposes, the gain will be treated as ordinary income
and not as capital gain, and no deduction will be allowable in respect of the
loss.
PLAN OF DISTRIBUTION
The Notes are offered on a continuing basis by Ford Credit through the
Agents, who have agreed to use their best efforts to solicit purchases of the
Notes. Ford Credit also may sell the Notes to an Agent or other person, as
principal, for resale or other distribution by such Agent or person at such
prices as will be determined by such Agent or person at the time of such resale
or other
S-18
<PAGE> 44
distribution, which prices may be higher or lower than the price to the public
set forth herein. Ford Credit reserves the right to sell the Notes directly to
investors on its own behalf. Unless otherwise agreed by Ford Credit and the
Agents, Ford Credit will have the sole right to accept offers to purchase Notes
and may reject any proposed purchase of such Notes in whole or in part. Each
Agent will have the right, in its discretion reasonably exercised, to reject any
proposed purchase of Notes in whole or in part. Ford Credit will pay each Agent
a commission of from .050% to .600% of the principal amount of Notes, depending
on the maturity of such Notes. Notes sold to an Agent or other person, as
principal, will be sold to such Agent or person at prices to be determined at
the time of sale and set forth in a Pricing Supplement.
Payment of the purchase price of the Notes is required to be made in
immediately available funds.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. Ford Credit has agreed to indemnify the
Agents against certain liabilities, including liabilities under that Act.
Under the laws of some countries, certain limitations exist on the issuance
of the Notes. See "Description of Notes -- Limitations on Issuance of Notes".
Ford Credit has been advised by the Agents that they may from time to time
make a market in the Notes, but they are not obligated to do so and may
discontinue such market-making at any time without notice. Further, each of the
Agents may from time to time purchase and sell Notes in the secondary market,
but is not obligated to do so. No assurance can be given as to the liquidity of
the trading market for the Notes.
Notes which are not listed on any German stock exchange shall only be
offered in accordance with provisions of the German Securities Prospectus Act in
the Federal Republic of Germany.
In addition to offering Notes as described herein, Debt Securities having
terms substantially similar to the terms of the Notes offered hereby (but
constituting a separate series of Indenture Securities for purposes of the
Indenture) are being offered concurrently with the offering of the Notes, on a
continuing basis in the United States by Ford Credit. Any sales of such other
series of Debt Securities will reduce the principal amount of Notes offered
hereby.
GENERAL INFORMATION
Application has been made to list the Notes on the Luxembourg Stock
Exchange. In connection with the listing application, the Certificate of
Incorporation and the By-Laws of Ford Credit and a legal notice relating to the
issuance of the Notes have been deposited prior to listing with Greffier en Chef
du Tribunal d'Arrondissement de et a Luxembourg, where copies thereof may be
obtained upon request. Copies of the above documents together with this
Prospectus Supplement, the accompanying Prospectus, any Pricing Supplement, the
Indenture and Ford Credit's current Annual and Quarterly Reports, as well as all
future Annual Reports and Quarterly Reports, will be made available for
inspection at the main office of Kredietbank S.A. Luxembourgeoise in Luxembourg.
In addition, copies of the Annual Reports and Quarterly Reports of Ford Credit
may be obtained at such office.
Other than as disclosed or contemplated herein or in the documents
incorporated herein by reference, there has been no material adverse change in
the financial position of Ford Credit since December 31, 1993.
Neither Ford Credit nor any of its subsidiaries is involved in litigation,
arbitration, or administrative proceedings relating to claims or amounts that
are material in the context of the issue of the Notes and Ford Credit is not
aware of any such litigation, arbitration, or administrative proceedings pending
or threatened.
In respect of Notes denominated in Deutsche Marks, Ford Credit has
appointed an arranger for such Notes who is duly qualified to act as such in
accordance with the Deutsche Bundesbank requirements. The German arranger, the
dealers for Deutsche Mark Notes and Ford Credit will
S-19
<PAGE> 45
comply with the Deutsche Bundesbank statements from time to time relating to the
issue of Deutsche Mark denominated Notes.
Resolutions relating to the issue and sale of the Notes were adopted by the
Board of Directors of Ford Credit on February 26, 1986, March 2, 1988, March 10,
1993 and September 29, 1993.
The Notes have been accepted for clearance through CEDEL and Euroclear.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Ford Credit's Annual Report on Form 10-K for the year ended December 31,
1993 and Ford Credit's Current Reports on Form 8-K dated January 11, 1994,
February 14, 1994, February 25, 1994 and March 18, 1994 are incorporated in this
Prospectus Supplement and accompanying Prospectus by reference. All documents
filed by Ford Credit pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 after the date of this Prospectus Supplement and
prior to the termination of the offering of the Notes shall be deemed to be
incorporated by reference into this Prospectus Supplement and accompanying
Prospectus and to be a part hereof from the date of filing such documents. Such
reports include, and such documents may include, information concerning Ford
Motor Company, as well as Ford Credit.
The Notes to be issued under this Prospectus Supplement and the
accompanying Prospectus, and the offer, sale and listing thereof, are limited to
an aggregate principal amount of up to U.S. $6,000,000,000 or the equivalent in
foreign currencies or ECU determined using the rate of exchange in effect on the
date of issuance. Pursuant to the Euro Sales Agency Agreements, Ford Credit has
represented to the Agents that as of the issue date of any Note, the Prospectus
and Prospectus Supplement as then amended or supplemented, including any
documents incorporated by reference therein, will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading. Ford Credit has given an
undertaking in connection with the listing of the Notes to the effect that, so
long as any Notes remain outstanding and listed on the Luxembourg Stock
Exchange, in the event of any material adverse change in the business or
financial condition of Ford Credit and its subsidiaries considered as a whole
that is not in the ordinary course of such business and that it is not reflected
in the Prospectus and Prospectus Supplement as then amended or supplemented,
including any documents incorporated by reference therein, Ford Credit will
amend this Prospectus Supplement and the accompanying Prospectus or issue a new
Prospectus and Prospectus Supplement for use in connection with any subsequent
offering and listing by Ford Credit of the Notes.
Any Prospectus Supplement and accompanying Prospectus, together with the
documents incorporated by reference therein specified in the accompanying
Prospectus will be available free of charge at the office of Kredietbank S.A.
Luxembourgeoise, 43 Boulevard Royal, Luxembourg.
S-20
<PAGE> 46
- ------------------------------------------------------
- ------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT
(INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) OR THE PROSPECTUS, AND IF GIVEN
OR MADE SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING
SUPPLEMENT) AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES OFFERED
BY THIS PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT)
AND THE PROSPECTUS OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF FORD CREDIT OR
FORD MOTOR COMPANY SINCE THE DATE HEREOF, OR THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SINCE ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS SUPPLEMENT
Capitalization of Ford Motor
Credit Company and
Consolidated Subsidiaries................ S-2
Directors and Principal Executive Officers
of Ford Credit........................... S-3
Description of Notes....................... S-4
Special Provisions Relating to Foreign
Currency Notes........................... S-13
Currency Risks............................. S-16
United States Taxation..................... S-17
Plan of Distribution....................... S-18
General Information........................ S-19
Incorporation of Certain Documents by
Reference................................ S-20
PROSPECTUS
Available Information...................... 2
Incorporation of Certain Documents by
Reference................................ 2
Information Concerning Ford Credit......... 3
Ford Motor Credit Company and Subsidiaries
-- Selected Financial Data............... 4
Information Concerning Ford................ 6
Selected Financial Data and Other Data of
Ford..................................... 7
Financial Review of Ford................... 8
Industry Data and Market Share of Ford..... 13
Use of Proceeds............................ 13
Ratio of Earnings to Fixed Charges......... 13
Description of Debt Securities............. 14
Plan of Distribution....................... 20
Legal Opinions............................. 21
Experts.................................... 21
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
U.S. $6,000,000,000
FORD MOTOR
CREDIT COMPANY
EURO MEDIUM-TERM NOTES
------------------
[LOGO]
------------------
GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL LIMITED
CS FIRST BOSTON
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 47
FORD MOTOR CREDIT COMPANY
DEBT SECURITIES
Ford Credit, in April 1994, registered with the Securities and Exchange
Commission $6,000,000,000 aggregate principal amount of its Debt Securities
consisting of notes and/or debentures denominated in United States dollars or
any other currency or currencies, to be offered from time to time in one or more
series, on terms to be determined at or prior to the time of sale. The
Prospectus Supplement and any Pricing Supplement accompanying this Prospectus
sets forth, with respect to the particular series of Debt Securities for which
this Prospectus and the Prospectus Supplement and any Pricing Supplement are
being delivered, the specific title, the aggregate principal amount, the
authorized denominations, the currencies of issue and payment, the initial
public offering price, the maturity, the interest rate or rates (which may be
either fixed or variable), if any, and/or method of determination thereof, the
time of payment of any interest, any redemption, extension or early repayment
terms, any provision for sinking fund payments, the net proceeds to Ford Credit,
the form of Debt Securities (which may be in registered form, bearer form or
global form) and other specific terms relating to such series of Debt
Securities.
Ford Credit may sell the Debt Securities to or through underwriters, and
also may sell the Debt Securities directly to other purchasers or through
agents. See "Plan of Distribution". In addition, the Debt Securities may be sold
to dealers at the applicable price to the public set forth in the Prospectus
Supplement relating to a particular series of Debt Securities who later resell
to investors. Such dealers may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"). If any agents
of Ford Credit, or any underwriters, are involved in the sale of any Debt
Securities, the names of such agents or underwriters and any applicable
commissions or discounts are set forth in the accompanying Prospectus
Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPEC-
TUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is April , 1994.
<PAGE> 48
AVAILABLE INFORMATION
FORD MOTOR CREDIT COMPANY ("FORD CREDIT") AND FORD MOTOR COMPANY ARE
SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934
AND IN ACCORDANCE THEREWITH FILE REPORTS AND OTHER INFORMATION WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"). AS USED HEREIN OR IN THE
PROSPECTUS SUPPLEMENT OR ANY PRICING SUPPLEMENT, "FORD" REFERS TO FORD MOTOR
COMPANY AND ITS SUBSIDIARIES UNLESS THE CONTEXT OTHERWISE REQUIRES. SUCH REPORTS
AND OTHER INFORMATION CAN BE INSPECTED AND COPIED AT THE PUBLIC REFERENCE
FACILITIES MAINTAINED BY THE COMMISSION AT 450 FIFTH STREET, N.W., WASHINGTON,
D.C. 20549 AND AT THE FOLLOWING REGIONAL OFFICES OF THE COMMISSION: 7 WORLD
TRADE CENTER, 13TH FLOOR, NEW YORK, NEW YORK 10048 AND NORTHWEST ATRIUM CENTER,
500 WEST MADISON STREET, SUITE 1400, CHICAGO, ILLINOIS 60661. COPIES OF SUCH
MATERIAL CAN BE OBTAINED FROM THE PUBLIC REFERENCE SECTION OF THE COMMISSION AT
450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549 AT PRESCRIBED RATES. SUCH REPORTS
AND OTHER INFORMATION CONCERNING FORD CREDIT AND FORD CAN ALSO BE INSPECTED AT
THE OFFICES OF THE NEW YORK STOCK EXCHANGE, INC., 20 BROAD STREET, NEW YORK, NEW
YORK 10005, ON WHICH CERTAIN OF FORD CREDIT'S DEBT SECURITIES ARE LISTED.
Ford Credit has filed with the Commission a Registration Statement under
the Securities Act with respect to the Debt Securities offered hereby. This
Prospectus, the Prospectus Supplement and any Pricing Supplement do not contain
all the information set forth in the Registration Statement and the exhibits and
schedules thereto, certain portions of which have been omitted pursuant to the
rules and regulations of the Commission. The information so omitted may be
obtained from the Commission's principal office in Washington, D.C. upon payment
of the fees prescribed by the Commission.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Ford Credit's Annual Report on Form 10-K for the year ended December 31,
1993 (the "1993 10-K Report") and Ford Credit's Current Reports on Form 8-K
dated January 11, 1994, February 11, 1994, February 25, 1994, March 18, 1994 and
April 14, 1994 are incorporated in this Prospectus by reference. All documents
filed by Ford Credit pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 after the date of this Prospectus and prior to
the termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing such documents. Such reports include, and such documents may
include, information concerning Ford, as well as Ford Credit.
FORD CREDIT UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A
COPY OF THIS PROSPECTUS, THE PROSPECTUS SUPPLEMENT AND ANY PRICING SUPPLEMENT
HAVE BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY
OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, THE PROSPECTUS SUPPLEMENT AND ANY
PRICING SUPPLEMENT, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. WRITTEN OR TELEPHONIC
REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO FORD MOTOR CREDIT COMPANY, THE
AMERICAN ROAD, DEARBORN, MICHIGAN 48121, ATTENTION: PUBLIC AFFAIRS DEPARTMENT
(TELEPHONE 313-594-1096).
2
<PAGE> 49
INFORMATION CONCERNING FORD CREDIT
Ford Credit was incorporated in Delaware in 1959 and is a wholly-owned
subsidiary of Ford. As used herein "Ford Credit" refers to Ford Motor Credit
Company and its subsidiaries unless the context otherwise requires.
Ford Credit provides wholesale financing and capital loans to franchised
Ford Motor Company vehicle dealers and other dealers associated with such
dealers and purchases retail installment sale contracts and retail leases from
them. Ford Credit also makes loans to vehicle leasing companies, the majority of
which are affiliated with such dealers. In addition, a wholly-owned subsidiary
of Ford Credit provides these financing services in the U.S. to other vehicle
dealers. More than 85% of all new vehicles financed by Ford Credit are
manufactured by Ford or its affiliates. In addition to vehicle financing, Ford
Credit makes loans to affiliates of Ford, finances certain receivables of Ford
and its subsidiaries, and offers diversified financing services which are
managed by USL Capital Corporation ("USL Capital"), a wholly-owned subsidiary of
Ford Holdings, Inc. ("Ford Holdings"). Ford Credit also manages the insurance
business of The American Road Insurance Company ("American Road"), a
wholly-owned subsidiary of Ford Holdings. Ford Credit also is a significant
equity participant in Ford Holdings whose primary activities are consumer and
commercial financing operations, insurance underwriting and equipment leasing.
The mailing address of Ford Credit's executive offices is The American
Road, Dearborn, Michigan 48121. The telephone number of such offices is (313)
322-3000.
------------------------
THIS PROSPECTUS CONTAINS BRIEF SUMMARIES OF CERTAIN MORE DETAILED
INFORMATION CONTAINED IN DOCUMENTS INCORPORATED HEREIN BY REFERENCE. SUCH
SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY THE DETAILED INFORMATION CONTAINED
IN THE INCORPORATED DOCUMENTS.
------------------------
3
<PAGE> 50
FORD MOTOR CREDIT COMPANY AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(DOLLAR AMOUNTS IN MILLIONS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
INCOME STATEMENT DATA
Total revenue......................................... $ 8,338.4 $ 7,073.3 $ 7,002.3
Interest expense...................................... 2,919.3 3,076.5 3,791.8
Provision for credit losses........................... 270.2 418.0 577.9
Income before income taxes and cumulative effects of
changes in accounting
principles......................................... 1,875.0 1,323.2 1,075.1
Cumulative effects of changes in accounting
principles......................................... -- 146.5 --
Net income............................................ 1,193.8 1,038.7 748.8
Dividends
Cash............................................... (250.0) (600.0) (650.0)
Stock of Ford Holdings............................. -- (200.0) (316.0)
Memo:
Net credit losses amount.............................. $ 228.4 $ 342.6 $ 528.9
As percentage of average total finance receivables
outstanding*....................................... 0.35% 0.60% 0.92%
BALANCE SHEET DATA
Net investment, operating leases...................... $12,600.9 $ 7,747.2 $ 4,345.5
--------- --------- ---------
--------- --------- ---------
Finance receivables, net.............................. $51,162.7 $46,611.1 $46,490.6
--------- --------- ---------
--------- --------- ---------
Capital
Short-term debt.................................... $25,507.1 $22,995.7 $19,873.7
Long-term debt (including current portion)......... 33,363.1 26,913.7 28,160.2
Stockholder's equity............................... 5,774.7 4,882.9 4,689.9
--------- --------- ---------
Total capital.................................... $64,644.9 $54,792.3 $52,723.8
--------- --------- ---------
--------- --------- ---------
</TABLE>
- ---------------
* Includes net investment in operating leases.
1993 RESULTS OF OPERATIONS
Ford Credit's consolidated net income in 1993 was $1,194 million, up $155
million or 15% from 1992. Excluding a one-time gain resulting from the net
effect of the adoption of new accounting standards for income taxes and
postretirement benefits in 1992, net income was up $302 million or 34% from a
year ago. The following comparison of 1993 results with 1992 results excludes
the one-time net gain associated with the accounting changes.
Net income from financing operations was $996 million, up $259 million or
35% from the prior year. The increase in financing profits was more than
accounted for by higher financing volumes, lower credit losses and higher net
income from gains on sales of retail automotive receivables, partially offset by
the increase in U.S. income taxes and lower net interest margins.
Lower credit losses reflect lower losses per repossession and fewer
repossessions. Actual credit losses were $228 million (0.35% of average finance
receivables including net investment in operating leases) compared with $343
million (0.60%) last year. Ford Credit released a portion of the loss reserves
reflecting the continued improvement in actual credit loss experience. The
credit loss coverage ratio for 1993 was 4.0 compared with 2.7 in the prior year.
The decline in net interest margins, including depreciation on operating leases,
reflects primarily the decline in net U.S. borrowing rates from 6.3% in 1992 to
5.3% in 1993, more than offset by lower yields on finance receivables and net
investment in operating leases.
4
<PAGE> 51
For 1993, equity in net income of affiliated companies (primarily Ford
Holdings) was $198 million, up $43 million from 1992. The increase reflected
higher Ford Holdings net income available to common shareholders, partially
offset by a reduction in Ford Credit's ownership of Ford Holdings common stock
in 1992 as discussed below. At December 31, 1993, Ford Credit owned about 45% of
Ford Holdings common stock, representing about 34% of the voting power.
Total gross finance receivables and net investment in operating leases at
December 31, 1993 were $69.6 billion, up $9.4 billion (16%) from a year earlier.
The higher financing volume reflects primarily an increase in short-term
operating leases and higher wholesale receivables. Depreciation expense on
operating leases in 1993 was $2,676 million, up $1,023 million or 62% from 1992.
The increase reflected the higher levels of operating leases and was more than
offset by higher revenue earned on the lease contracts.
For 1993, Ford Credit financed 38.5% of all new cars and trucks sold by
Ford Motor Company dealers in the U.S. compared with 37.7% in 1992. Ford Credit
provided retail financing for 2,246,000 new and used vehicles in the United
States. Ford Credit provided wholesale financing for 81.4% of Ford Motor Company
U.S. factory sales in 1993 compared with 77.6% in 1992.
1992 RESULTS OF OPERATIONS
Ford Credit's consolidated net income in 1992 was $1,039 million. Included
in net income was a one-time net gain of $147 million that resulted from the
adoption of new accounting standards for income taxes and postretirement
benefits (principally retiree health care). Net income increased by $239 million
for the tax accounting standard partially offset by a decrease in net income of
$92 million for retiree health care. Excluding this one-time gain, Ford Credit
earned net income of $892 million, up $143 million or 19% from $749 million
earned in 1991. The following comparison of 1992 results with 1991 results
excludes the one-time net gain associated with the accounting changes.
Net income from financing operations in 1992 was $737 million, up $179
million or 32% from 1991. The increase was more than accounted for by lower
credit losses and higher net interest margins. Lower gains on sales of
receivables were a partial offset.
The improvement in credit losses reflected fewer retail repossessions, a
decline in loss per repossessed unit and reduced wholesale losses. Actual credit
losses were $343 million (0.60% of average finance receivables including net
investment in operating leases) compared with $529 million (0.92%) a year
earlier. The credit loss coverage ratio for 1992 was 2.7 compared with 1.6 in
1991. The higher net interest margins reflected primarily a decline in Ford
Credit's net average U.S. borrowing rate from 7.9% in 1991 to 6.3% in 1992,
partially offset by lower prime-based revenue.
For 1992, equity in net income of affiliated companies (primarily Ford
Holdings) was $155 million compared with $191 million in 1991. The decline
reflected lower Ford Holdings net income available to common shareholders and a
reduction in Ford Credit's ownership of Ford Holdings common stock. The
reduction in ownership was the result of a dividend paid in 1992 to Ford in the
form of Ford Holdings common stock. At December 31, 1992, Ford Credit owned
about 45% of Ford Holdings common stock, representing about 34% of the voting
power.
Total gross finance receivables and net investment in operating leases at
December 31, 1992 were $60.2 billion, up $3.6 billion or 6% from a year earlier.
The increase reflected primarily higher levels of shorter-term operating leases.
Depreciation expense on operating leases in 1992 was $1,653 million, up $622
million or 60% from 1991. The increase reflected the higher levels of operating
leases and was more than offset by higher revenue earned on the lease contracts.
For 1992, Ford Credit financed 37.7% of all new cars and trucks sold by
Ford Motor Company dealers in the U.S. compared with 35.2% in 1991. Ford Credit
provided retail customers with financing for 1,871,000 new and used vehicles in
the United States in 1992. Ford Credit provided
5
<PAGE> 52
wholesale financing for 77.6% of Ford Motor Company U.S. factory sales in 1992
compared with 74.9% in 1991.
LIQUIDITY AND CAPITAL RESOURCES
Ford Credit relies heavily on its ability to raise substantial amounts of
funds. These funds are obtained primarily by sales of commercial paper and
issuance of term debt. Funds also are provided by retained earnings and sales of
receivables. The level of funds can be affected by certain transactions with
Ford, such as capital contributions, interest supplements and other support
costs from Ford for vehicles financed and leased by Ford Credit under Ford
sponsored special financing and leasing programs, and dividend payments, and the
timing of payments for the financing of dealers' wholesale inventories and for
income taxes. Ford Credit's ability to obtain funds is affected by its debt
ratings, which are closely related to the outlook for, and financial condition
of, Ford, and the nature and availability of support facilities, such as
revolving credit and receivables sales agreements. In addition, Ford Credit from
time to time sells its receivables in public offerings or private placements.
For additional information regarding liquidity and capital resources, see Item
1--Business--"Business of Ford Credit--Borrowings and Other Sources of Funds" in
the 1993 10-K Report. For additional information regarding Ford Credit's
association with Ford, see Item 1--Business--"Certain Transactions with Ford and
Affiliates" in the 1993 10-K Report.
INFORMATION CONCERNING FORD
Ford is the second-largest producer of cars and trucks in the world, and
ranks among the largest providers of financial services in the United States.
Ford's two principal business segments are Automotive and Financial
Services. The activities of the Automotive segment consist of the manufacture,
assembly and sale of cars and trucks and related parts and accessories. The
Financial Services segment is comprised of the following subsidiaries: Ford
Credit, Ford Credit Europe plc, Ford Holdings, Associates First Capital
Corporation ("The Associates"), American Road, First Nationwide Financial
Corporation ("First Nationwide"), the Hertz Corporation and USL Capital. The
activities of these subsidiaries include financing, insurance operations,
savings and loan operations and vehicle and equipment leasing.
6
<PAGE> 53
SELECTED FINANCIAL DATA AND OTHER DATA OF FORD
The following table sets forth selected financial data and other data
concerning Ford:
<TABLE>
<CAPTION>
YEARS ENDED OR AT DECEMBER 31
------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- --------- -------- ---------
(IN MILLIONS EXCEPT PER SHARE AND UNIT SALES AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME INFORMATION
Automotive
Sales......................................................... $ 91,568 $ 84,407 $ 72,051 $ 81,844 $ 82,879
Operating income/(loss)....................................... 1,432 (1,775) (3,769) 316 4,252
Income/(loss) before cumulative effects of changes in
accounting principles....................................... 940 (1,534) (3,186) 99 3,175
Financial Services
Revenues...................................................... 16,953 15,725 16,235 15,806 13,267
Income before income taxes and cumulative effects of
changes in accounting principles............................ 2,712 1,825 1,465 1,221 874
Income before cumulative effects of changes in accounting
principles.................................................. 1,589 1,032 928 761 660
Total Ford
Income/(loss) before cumulative effects of changes in
accounting principles....................................... 2,529 (502) (2,258) 860 3,835
Cumulative effects of changes in accounting principles........ -- (6,883) -- -- --
Net income/(loss)............................................. 2,529 (7,385) (2,258) 860 3,835
Amounts Per Share of Common Stock and Class B Stock After
Preferred Stock Dividends Income/(loss) before cumulative
effects of changes in accounting principles................... 4.55 (1.46) (4.79) 1.86 8.22
Cumulative effects of changes in accounting principles........ -- (14.15) -- -- --
-------- -------- --------- -------- ---------
Income/(loss) assuming no dilution............................ 4.55 (15.61) (4.79) 1.86 8.22
Income/(loss) assuming full dilution.......................... 4.20 (15.61) (4.79) 1.84 8.12
Cash dividends................................................ 1.60 1.60 1.95 3.00 3.00
CONSOLIDATED BALANCE SHEET INFORMATION
Automotive
Total assets.................................................. 61,737 57,170 52,397 50,823 45,819
Debt payable within one year.................................. 932 1,249 2,580 2,849 2,537
Long-term debt--noncurrent portion............................ 7,084 7,068 6,539 4,553 1,137
Financial Services
Total assets.................................................. 137,201 123,375 122,032 122,839 115,074
Debt.......................................................... 103,960 90,188 88,295 88,117 81,734
Deposit accounts*............................................. 10,549 14,030 16,882 17,893 17,642
Total Ford
Total assets.................................................. 198,938 180,545 174,429 173,663 160,893
Debt (incl. deposit accounts)................................. 122,525 112,535 114,295 113,412 103,050
Stockholders' equity**........................................ 15,574 14,753 22,690 23,238 22,728
Cash dividends................................................ 1,086 977 927 1,389 1,404
OTHER DATA
Total Ford
Capital expenditures.......................................... 6,814 5,790 5,847 7,258 6,767
Depreciation and amortization of special tools................ 7,468 6,756 5,778 4,880 4,229
Worldwide factory unit sales of cars, trucks and tractors
(in thousands).............................................. 5,964 5,764 5,359 5,872 6,408
</TABLE>
- ------------
* Deposit accounts relate to First Nationwide.
** The cumulative effects of changes in accounting principles reduced equity by
$6,883 million in 1992.
7
<PAGE> 54
FINANCIAL REVIEW OF FORD
OVERVIEW
Ford's worldwide net income in 1993 was $2,529 million, or $4.55 per share
of Common and Class B Stock, compared with a loss of $7,385 million, or $15.61
per share in 1992. Sales and revenues totaled $108.5 billion in 1993, up 8% from
1992. Factory unit sales of cars and trucks were 5,964,000, up 200,000 or 3%.
In 1992, Ford adopted new accounting standards for postretirement benefits
(principally retiree health care) and income taxes that resulted in a one-time
charge to net income in 1992 for prior years of $6,883 million. Excluding the
one-time effects of these accounting changes, Ford incurred a net loss of $502
million or $1.46 per share in 1992.
Ford's financial results in 1993 showed substantial improvement compared
with 1992. Improvements in U.S. Automotive operations included the favorable
effects of higher industry volume, higher share, and improved margins.
Automotive operations outside the U.S. also improved, despite lower industry
volumes in Europe. Earnings from Financial Services operations were a record and
increased 54% compared with 1992.
Ford continued its product development and cost reduction programs to
strengthen its competitive position. In 1993, capital spending for new products
and facilities was $6.8 billion, up $1 billion from 1992. Automotive debt at the
end of 1993 was $8,016 million, down $301 million from year-end 1992. Cash and
marketable securities for Ford's Automotive segment totaled $9,752 million, up
$717 million from year-end 1992.
In 1994, Ford expects continued improvements in operating results from cost
reduction efforts, new product introductions, and a moderate rate of economic
growth in the United States. Ford expects sales for the U.S. car and truck
industry to reach about 15 million units in 1994. Several new products will be
introduced in 1994, including the Ford Windstar, Ford Aspire, Ford Contour and
Mercury Mystique. Per-unit U.S. marketing costs for Ford, which declined in
1993, should decline further in 1994 as industry sales increase and new products
are introduced.
Ford expects industry sales in Europe to be up slightly in 1994, compared
with 1993. As a result of an expected continuation of the gradual economic
recovery in Great Britain and the restructuring actions undertaken in Europe
during 1993, the operating results of European Automotive operations are
projected to improve in 1994, compared with 1993. In Latin America, the
near-term business outlook is favorable, but business conditions have
historically been volatile and subject to rapid change.
Fourth Quarter of 1993
In the fourth quarter of 1993, Ford's worldwide net income was $719 million
or $1.30 per share of Common and Class B Stock, compared with a loss of $840
million, or $1.85 per share in the fourth quarter of 1992.
Worldwide Automotive operations earned $297 million in the fourth quarter
of 1993, compared with a loss of $1,037 million a year ago. U.S. Automotive
operations earned $669 million in the fourth quarter of 1993, compared with a
loss of $128 million a year ago, while Automotive operations outside the U.S.
incurred a loss of $372 million, compared with a loss of $909 million a year
ago. Financial Services earned $422 million in the fourth quarter of 1993,
compared with $197 million a year ago.
Net income for Automotive operations outside the U.S. were adversely
affected in the fourth quarter of 1993 by restructuring actions at Jaguar ($109
million) and Ford of Australia ($57 million), offset partially by the favorable
one-time effects of a reduction in German tax rates ($59 million). Automotive
operations in the U.S. were favorably affected by the gain on the sale of
8
<PAGE> 55
Ford's North American automotive seating and seat trim business ($73 million).
The loss a year ago included one-time European restructuring charges of $334
million for Automotive operations and $85 million for Financial Services
operations.
The following discussion of the results of operations excludes the one-time
effects associated with accounting changes in 1992 as discussed above.
1993 RESULTS OF OPERATIONS
Automotive Operations
Net income from Ford's worldwide Automotive operations was $940 million in
1993 on sales of $91.6 billion. In 1992, worldwide Automotive operations
incurred a loss of $1,534 million (excluding the accounting changes) on sales of
$84.4 billion.
In the U.S., Ford's Automotive operations earned $1,482 million on sales of
$61.6 billion, compared with a loss of $405 million in 1992 on sales of $51.9
billion. Higher vehicle production, reflecting higher industry sales and a
higher Ford market share, accounted for most of the improvement. Improved
margins, reflecting mainly favorable material costs, manufacturing efficiencies,
and lower marketing costs, were offset partially by higher costs for new
products and related facilities. Results in 1993 included the one-time favorable
effect of tax legislation ($171 million) for the restatement of U.S. deferred
tax balances for the Federal income tax rate increase from 34% to 35% and the
gain on the sale of Ford's North American automotive seating and seat trim
business ($73 million). On an ongoing basis, the effect of the tax rate change
on future tax expense will be unfavorable.
In 1993, the U.S. economy continued to grow at a modest rate. In the eleven
quarters since the recovery began in the Spring of 1991, the rate of growth in
the gross domestic product (GDP) has averaged 2.7%, 60% of the rate over the
comparable period during the last six recoveries. Slow growth has helped reduce
interest rates and inflation to low levels. Industry sales of cars and trucks in
the United States have gradually increased from 12.5 million units in 1991 to
14.2 million units in 1993. Over this period, Ford's combined U.S. car and truck
market share has improved -- from 23.2% in 1991 to 25.5% in 1993 -- to the
highest level since 1978. Ford also has benefited from reduced marketing
incentives, lower supplier cost increases, and other cost efficiencies.
Full year U.S. car and truck industry volumes increased from 13.1 million
units in 1992 to 14.2 million units in 1993. Over 70% of the increase in
industry sales was attributable to trucks (including minivans, compact utility
vehicles, and compact pickups). Ford's share of the U.S. car market (including
Jaguar) was 22.3%, up 5/10 of a point from 1992. Ford's U.S. truck share was
30.5%, up 8/10 of a point from 1992. The improved market share for cars and
trucks reflected strong product acceptance.
Outside the U.S., Ford's Automotive operations lost $542 million in 1993 on
sales of $30.0 billion, compared with a loss of $1,129 million in 1992 on sales
of $32.5 billion. Results improved despite a weak economy in Europe that
resulted in the lowest level of industry sales in eight years. Savings from cost
reduction actions in Europe and improved results in Latin America, reflecting
primarily higher industry volume in Brazil, more than offset the effects of
lower volume in Europe. The loss in 1993 included restructuring charges at
Jaguar ($174 million), primarily for resourcing stamping and restructuring other
operations to improve efficiency, and at Ford of Australia ($57 million),
related to discontinuing production of the Capri and Laser model, offset
partially by the favorable one-time effect of a reduction in German tax rates
($59 million). Losses in 1992 included restructuring charges of $334 million.
Ford's European Automotive operations (excluding Jaguar) lost $407 million,
compared with a loss of $647 million in 1992. The improvement reflected
nonrecurrence of the one-time restructuring charge ($334 million) in the fourth
quarter of 1992, primarily for planned reductions in employment levels. Lower
vehicle production, reflecting lower industry sales (down 16%), higher costs for
new
9
<PAGE> 56
products, and the unfavorable effect of fluctuations in foreign currency
exchange rates were partially offset by manufacturing efficiencies and other
cost improvements.
Car and truck industry sales in Europe were 12.5 million units in 1993,
compared with 15 million units in 1992. Ford's European car market share
(including Jaguar) was 11.8% in 1993, up 3/10 of a point from 1992. Ford's
European truck share improved 9/10 of a point to 12.6%.
Financial Services Operations
Ford's Financial Services operations earned a record $1,589 million in
1993, up $557 million from 1992. Higher volume, reduced interest rates and
operating costs, and lower credit losses contributed to record earnings at
Financial Services operations, including Ford Credit, The Associates, and USL
Capital. Results in 1993 included an unfavorable one-time effect of $31 million
from tax legislation in the U.S. Results in 1992 of $1,032 million excluded a
favorable effect of $211 million associated with one-time accounting changes,
mainly for income taxes, but include organizational restructuring charges
relating to European Financial Services operations ($85 million).
For a discussion of Ford Credit's 1993 results of operations, see "Ford
Motor Credit Company and Subsidiaries -- Selected Financial Data -- 1993 Results
of Operations". In addition, international operations managed by Ford Credit
earned $199 million in 1993, up $11 million from 1992, primarily reflecting
improved net interest margins and lower credit losses offset partially by the
unfavorable effect of exchange rates.
The Associates earned a record $470 million in the U.S. in 1993, up $77
million from 1992. The improvement was more than explained by improved credit
loss performance and higher levels of earning assets. In addition, international
operations managed by The Associates earned $38 million in 1993, the same as in
1992.
First Nationwide incurred a loss of $55 million in 1993, compared with a
loss of $81 million in 1992. The improvement resulted primarily from reduced
borrowing costs, continued improvements in operating costs, a lower adjustment
in 1993 to the carrying value of derivative securities and the gain on sale of
certain branches. These factors were partially offset by lower levels of earning
assets, lower yields from the reinvestment of FDIC proceeds, and a reduction in
income tax benefits.
First Nationwide's 1993 revenues included $72 million from the Federal
Savings and Loan Insurance Corporation Resolution Fund (FSLIC/RF), compared with
$221 million in 1992. These revenues represented reimbursements for losses or
guaranteed yields on covered assets paid pursuant to First Nationwide's
agreements with FSLIC/RF to acquire certain savings and loan institutions.
USL Capital earned a record $77 million in 1993, up $17 million from 1992.
The improvement resulted primarily from higher earning assets and continued
operating cost reductions. American Road earned $79 million in 1993, compared
with $47 million in 1992. The increase resulted primarily from improved
underwriting experience in extended service plan and floor plan products,
partially offset by lower investment income.
LIQUIDITY AND CAPITAL RESOURCES
Automotive Operations
Cash and marketable securities of Ford's Automotive operations were $9,752
million at December 31, 1993, up $717 million from December 31, 1992. Ford paid
$1,086 million in cash dividends on its capital stock during 1993. In 1993, Ford
contributed $1 billion to its pension funds.
Automotive capital expenditures were $6.7 billion in 1993, up $1 billion
from 1992. Over the last five years (1989 through 1993), Ford's worldwide
capital spending totaled $32 billion. During
10
<PAGE> 57
the next several years, the pace of spending for product change at Ford will
continue at similar or higher levels.
At December 31, 1993, Automotive debt totaled $8,016 million, which was 34%
of total capitalization (stockholders' equity and Automotive debt), compared
with $8,317 million, or 36% of total capitalization, at year-end 1992.
At December 31, 1993, Ford (parent company only) had long-term
contractually committed credit agreements for use in the U.S. under which $4.8
billion is available from various banks at least through June 30, 1998. The
entire $4.8 billion may be used, at Ford's option, by either Ford or Ford
Credit. As of December 31, 1993, these facilities were unused.
Outside the U.S., Ford has additional long-term contractually committed
credit-line facilities of approximately $2.4 billion. These facilities are
available in varying amounts from 1994 through 1998; none had been utilized at
December 31, 1993.
Financial Services Operations
The Financial Services operations rely heavily on their ability to raise
substantial amounts of funds in capital markets in addition to collections on
loans and retained earnings. The levels of funds for certain Financial Services
operations are affected by certain transactions with Ford, such as capital
contributions, dividend payments and the timing of payments for income taxes.
Their ability to obtain funds also is affected by their debt ratings which, for
certain operations, are closely related to the financial condition and outlook
for Ford and the nature and availability of support facilities, such as
revolving credit and receivables sales agreements.
For information relating to Ford Credit's liquidity and capital resources,
see "Ford Motor Credit Company and Subsidiaries -- Selected Financial Data --
Liquidity and Capital Resources". In addition, at December 31, 1993,
international subsidiaries and other credit operations managed by Ford Credit
had $14.2 billion of support facilities available outside the U.S.,
approximately 44% of which were contractually committed. At December 31, 1993,
approximately 42% of these support facilities outside the U.S. were in use.
First Nationwide's principal sources of funds include borrowings,
collections on loans, proceeds from the sale of loans, and customers' deposits.
In addition, the Federal Home Loan Bank System provides both short-and long-term
alternative sources of funds. Other sources include the sale of mortgage
pass-through securities and reverse repurchase agreements. Federal regulations
require that an insured institution maintain certain regulatory capital
requirements. New minimum regulatory capital standards were established in 1989
and will be phased in through 1994. First Nationwide Bank met all of the minimum
capital requirements in effect at December 31, 1993.
At December 31, 1993, The Associates had contractually committed lines of
credit with banks of $3.1 billion, with various maturities ranging from January
30, 1994 to December 31, 1994, none of which was utilized at December 31, 1993.
Also, at December 31, 1993, The Associates had $4.1 billion of contractually
committed revolving credit facilities with banks, with maturity dates ranging
from February 1, 1994 through October 1, 1997, and $1 billion of contractually
committed receivables sale facilities, $500 million of which are available
through April 15, 1994 and $500 million of which are available through April 30,
1995; none of these facilities was in use at December 31, 1993. At December 31,
1993, foreign operations managed by The Associates had $195 million of support
facilities available outside the U.S., approximately 64% of which were
contractually committed. At December 31, 1993, about 15% of these support
facilities outside the U.S. were in use.
At December 31, 1993, Ford Holdings had outstanding debt of $1.9 billion,
all of which was long-term. All of the Ford Holdings debt held by nonaffiliated
persons is guaranteed by Ford. Ford Holdings had no contractually committed
lines of credit at December 31, 1993. In 1993, Ford Holdings sold 1,728 shares
of its Series B Cumulative Preferred Stock having an aggregate
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<PAGE> 58
liquidation preference of $173 million and 2,000 shares of its Series C
Cumulative Preferred Stock having an aggregate liquidation preference of $200
million.
American Road's principal sources of funds are insurance premiums, annuity
deposits and investment income. American Road had no debt or credit lines at
December 31, 1993.
At December 31, 1993, USL Capital had $1.4 billion of contractually
committed credit facilities, 70% of which are available through September 1998.
These facilities included $200 million of contractually committed receivables
sale facilities, of which about 86% were in use at December 31, 1993. At
December 31, 1993, foreign operations managed by USL Capital had approximately
$90 million of contractually committed support facilities available outside the
U.S., of which about 75% were in use at December 31, 1993.
NEW ACCOUNTING STANDARDS
In November 1992, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 112, "Employers'
Accounting for Postemployment Benefits", which requires companies to account for
employee benefits on an accrual basis for periods when employees are no longer
actively employed but have not yet reached retirement. The effect on Ford's
financial statements was not material.
In May 1993, the FASB issued SFAS 114, "Accounting by Creditors for
Impairment of a Loan". The standard requires that impaired loans be measured
based on the present value of expected future cash flows discounted at the
loan's effective interest rate. Ford does not plan to adopt this standard until
January 1, 1995, and the effect is not expected to be material.
In May 1993, the FASB issued SFAS 115, "Accounting for Certain Investments
in Debt and Equity Securities". The standard establishes financial accounting
and reporting requirements for investments in equity securities (excluding those
accounted for under the equity method and investments in consolidated
subsidiaries) that have readily determinable fair values and for all investments
in debt securities. Ford has adopted this standard effective January 1, 1994,
and the effect is not expected to be material.
------------------------
For a discussion of factors that affected Ford's results in the years
1989-1993, as well as a discussion of Ford's results of operations, liquidity,
capital resources and working capital in 1993, see the information concerning
Ford in the 1993 10-K Report.
12
<PAGE> 59
INDUSTRY DATA AND MARKET SHARE OF FORD
The following table shows the U.S. industry retail deliveries of cars and
trucks for the periods indicated:
<TABLE>
<CAPTION>
U.S. INDUSTRY RETAIL DELIVERIES
(MILLIONS OF UNITS)
----------------------------------------------------------
THREE MONTHS
ENDED MARCH
31* YEARS ENDED DECEMBER 31
------------- ----------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Cars....................................... 9.4 8.1 8.5 8.2 8.2 9.3 9.8
Trucks..................................... 6.4 5.3 5.7 4.9 4.3 4.8 5.1
</TABLE>
- ------------
* Seasonally adjusted annual rates.
The following table shows Ford's U.S. car and truck market shares for the
periods indicated:
<TABLE>
<CAPTION>
FORD U.S. CAR AND TRUCK MARKET SHARES
----------------------------------------------------------
THREE MONTHS
ENDED MARCH
31 YEARS ENDED DECEMBER 31
------------- ----------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Cars*................................... 21.6% 23.5% 22.3% 21.8% 20.1% 21.1% 22.3%
Trucks.................................. 29.4 29.1 30.4 29.7 28.9 29.3 28.8
</TABLE>
- ------------
* Includes Jaguar sales in 1994, 1993, 1992, 1991 and 1990.
For additional information regarding Ford, see the 1993 10-K Report.
USE OF PROCEEDS
Except as otherwise provided in the Prospectus Supplement, the net proceeds
from the sale of the Debt Securities will be added to the general funds of Ford
Credit and will be available for the purchase of receivables, for loans and for
use in connection with the retirement of debt. Such proceeds initially may be
used to reduce short-term borrowings (commercial paper, borrowings under bank
lines of credit and borrowings under agreements with bank trust departments) or
may be invested temporarily in short-term securities.
Ford Credit expects to issue additional long-term and short-term debt from
time to time. The nature and amount of Ford Credit's long-term and short-term
debt and the proportionate amount of each can be expected to vary from time to
time, as a result of business requirements, market conditions and other factors.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of "earnings" to "fixed charges" for Ford Credit and Ford were as
follows for each of the years 1989-1993:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ford Motor Credit Company............................. 1.56 1.37 1.23 1.14 1.13
Ford Motor Company.................................... 1.5 * ** 1.2 1.7
</TABLE>
- ------------
* Earnings were inadequate to cover fixed charges by $237 million.
** Earnings were inadequate to cover fixed charges by $2,664 million.
For purposes of the Ford Credit ratio, "earnings" consist of income before
income taxes and cumulative effects of changes in accounting principles and
fixed charges. Income before income taxes and cumulative effects of changes in
accounting principles of Ford Credit excludes the equity in net income of all
unconsolidated affiliates and minority interest in net income of subsidiaries.
"Fixed charges" consist of interest on borrowed funds, amortization of debt
discount, premium, and issuance expense and one-third of all rental expense (the
proportion deemed representative of the interest factor).
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<PAGE> 60
For purposes of the Ford ratio, "earnings" include the profit/(loss) before
income taxes and cumulative effects of changes in accounting principles of Ford
and its majority-owned subsidiaries, whether or not consolidated, its
proportionate share of any fifty-percent-owned companies, and any income
received from less-than-fifty-percent-owned companies. "Fixed charges" consist
of interest on borrowed funds, preferred stock dividend requirements of
majority-owned subsidiaries, amortization of debt discount, premium, and
issuance expense, and one-third of all rental expense (the proportion deemed
representative of the interest factor).
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued in one or more series under an
Indenture dated as of February 1, 1985, as supplemented from time to time (the
"Indenture"), between Ford Credit and Chemical Bank as successor to
Manufacturers Hanover Trust Company, Trustee, 450 West 33rd Street, New York,
New York 10001. The term "Trustee", as used herein, shall mean Chemical Bank
and, if at any time there is more than one Trustee acting under the Indenture,
the term "Trustee" as used herein with respect to Indenture Securities (as
defined below) of any particular series shall mean the Trustee with respect to
the Indenture Securities of such series. The following statements with respect
to the Debt Securities are subject to the detailed provisions of the Indenture,
the form of which is filed as an exhibit to the Registration Statement.
Parenthetical references below are to the Indenture or the respective Forms of
Security contained therein and, whenever any particular provision of the
Indenture or any term used therein is referred to, such provision or term is
incorporated by reference as a part of the statement in connection with which
such reference is made, and the statement in connection with which such
reference is made is qualified in its entirety by such reference.
The particular terms of each series of Debt Securities, as well as any
modification or addition to the general terms of the Debt Securities as herein
described, which may be applicable to a particular series of Debt Securities,
are described in the Prospectus Supplement and any Pricing Supplement relating
to such series of Debt Securities and will be set forth in a filing with the
Commission. Accordingly, for a description of the terms of a particular series
of Debt Securities, reference must be made to both the Prospectus Supplement and
any Pricing Supplement relating to such series and to the description of Debt
Securities set forth in this Prospectus.
GENERAL
The Debt Securities offered hereby will be limited to $6,000,000,000
aggregate principal amount or the equivalent thereof in any currency, although
the Indenture provides that additional debt securities may be issued thereunder
up to the aggregate principal amount, which is not limited by the Indenture,
authorized from time to time by Ford Credit's Board of Directors. So long as a
single Trustee is acting for the benefit of the holders of all the Debt
Securities offered hereby and any such additional debt securities issued under
the Indenture, the Debt Securities and any such additional debt securities are
herein collectively referred to as the "Indenture Securities". The Indenture
also provides that there may be more than one Trustee under the Indenture, each
with respect to one or more different series of Indenture Securities. See also
"Trustee" herein. At any time when two or more Trustees are acting, each with
respect to only certain series, the term "Indenture Securities" as used herein
shall mean the one or more series with respect to which each respective Trustee
is acting and the powers and trust obligations of each such Trustee as described
herein shall extend only to the one or more series of Indenture Securities for
which it is acting as Trustee. The effect of the provisions contemplating that
there might be more than one Trustee acting for different series of Indenture
Securities is that, in that event, those Indenture Securities (whether of one or
more than one series) for which each Trustee is acting would be treated as if
issued under a separate indenture.
14
<PAGE> 61
The Prospectus Supplement and any Pricing Supplement which accompany this
Prospectus sets forth a description of the particular series of Debt Securities
being offered thereby, including: (1) the designation or title of such Debt
Securities; (2) the aggregate principal amount of such Debt Securities; (3) the
percentage of their principal amount at which such Debt Securities will be
offered; (4) the date or dates on which the principal of such Debt Securities
will be payable; (5) the rate or rates (which may be either fixed or variable)
and/or the method of determination of such rate or rates at which such Debt
Securities shall bear interest, if any; (6) the date or dates from which any
such interest shall accrue, or the method of determination of such date or
dates, and the date or dates on which any such interest shall be payable; (7)
the terms for redemption, extension or early repayment of such Debt Securities,
if any; (8) the denominations in which such Debt Securities are authorized to be
issued; (9) the currencies or currency units in which such Debt Securities are
issued or payable; (10) the provisions for a sinking fund, if any; (11) any
additional restrictive covenants included for the benefit of the holders of such
Debt Securities; (12) any additional Event of Default with respect to such Debt
Securities; (13) whether such Debt Securities are to be issuable as Registered
Securities or Bearer Securities or both, 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; and (14) any other term
or provision relating to such Debt Securities which is not inconsistent with the
provisions of the Indenture.
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Federal income tax consequences and special
considerations applicable thereto will be described in the Prospectus Supplement
or Pricing Supplement relating to any such Debt Securities.
The Debt Securities will be unsecured obligations of Ford Credit and will
rank prior to all subordinated indebtedness of Ford Motor Credit Company (parent
company only) and pari passu with all other unsecured and unsubordinated
indebtedness of Ford Motor Credit Company (parent company only).
DENOMINATIONS, REGISTRATION AND TRANSFER
Indenture Securities of a series may be issuable solely as Registered
Securities, solely as Bearer Securities or as both Registered Securities and
Bearer Securities. The Indenture also provides that Indenture Securities of a
series may be issuable in global form. Unless otherwise indicated in the
Prospectus Supplement or any Pricing Supplement, Bearer Securities will have
interest coupons attached. (Section 2.01).
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. If (but only if)
provided in the Prospectus Supplement or any Pricing Supplement, Bearer
Securities (with all unmatured coupons, except as provided below, and all
matured coupons in default) of such series may be converted into Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. In such event, Bearer Securities
surrendered in a permitted exchange for Registered Securities between a Regular
Record Date or a Special Record Date and the relevant date for payment of
interest shall be surrendered without the coupon relating to such date for
payment of interest, and interest will not be payable in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the holder of such coupon when due in accordance with the terms
of the Indenture. Bearer Securities will not be issued in exchange for
Registered Securities (Section 3.05).
Debt Securities may be presented for exchange or conversion as provided
above, and Registered Securities may be presented for registration of transfer
(with the form of transfer endorsed thereon duly executed), at the corporate
trust office of the Trustee or at the office of any transfer agent designated by
Ford Credit for such purpose with respect to any series of Debt Securities and
referred to in the Prospectus Supplement or any Pricing Supplement. No service
charge will be made for any transfer, conversion or exchange of the Debt
Securities, but Ford Credit may require payment of a sum to cover any tax or
other governmental charge payable in connection therewith. (Section 3.05). Such
transfer, conversion or exchange will be effected upon the Trustee
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or such transfer agent, as the case may be, being satisfied with the documents
of title and identity of the person making the request. If a Prospectus
Supplement refers to any transfer agents (in addition to the Trustee) initially
designated by Ford Credit with respect to any series of Debt Securities, Ford
Credit may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent acts,
except that, if Debt Securities of a series are issuable solely as Registered
Securities, Ford Credit will be required to maintain a transfer agent in each
Place of Payment for such series and, if Debt Securities of a series may be
issuable as both Registered Securities and as Bearer Securities, Ford Credit
will be required to maintain (in addition to the Trustee) a transfer agent in a
Place of Payment for such series located outside the United States. Ford Credit
may at any time designate additional transfer agents with respect to any series
of Debt Securities. (Section 10.02).
In the event of any redemption in part, Ford Credit shall not be required
to (i) issue, register the transfer of, exchange or convert Debt Securities of
any series during a period beginning at the opening of business 15 days before
any selection of Debt Securities of that series to be redeemed and ending at the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities, the
day of the first publication of the relevant notice of redemption or, if Debt
Securities of the series are also issuable as Registered Securities and there is
no publication, the mailing of the relevant notice of redemption; (ii) register
the transfer of or exchange any Registered Security, or portion thereof, called
for redemption, except the unredeemed portion of any Registered Security being
redeemed in part; or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of that series
and like tenor which is immediately surrendered for redemption. (Section 3.05).
PAYMENT AND PAYING AGENTS
Unless otherwise provided in the Prospectus Supplement or any Pricing
Supplement, principal, premium, if any, and interest, if any, on Bearer
Securities will be payable, subject to any applicable laws and regulations, at
the offices of such Paying Agents outside the United States as Ford Credit may
designate from time to time. (Section 10.02). At the option of the Holder, such
payment on Bearer Securities also may be made by check or by wire transfer to an
account maintained by the payee with a bank located outside the United States.
(Form of Bearer Security). Unless otherwise provided in the Prospectus
Supplement or Pricing Supplement, payment of interest on Bearer Securities on
any Interest Payment Date will be made only against surrender of the coupon
relating to such Interest Payment Date. (Section 10.01). No payment with respect
to any Bearer Security will be made at any office or agency of Ford Credit in
the United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States.
Notwithstanding the foregoing, payments of principal, premium, if any, and
interest, if any, on Bearer Securities payable in U.S. dollars will be made at
the office of Ford Credit's Paying Agent in The City of New York if (but only
if) payment of the full amount thereof in U.S. dollars at all offices or
agencies outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions. (Section 10.02).
Unless otherwise provided in the Prospectus Supplement or any Pricing
Supplement, principal, premium, if any, and interest, if any, on Registered
Securities will be payable at any office or agency to be maintained by Ford
Credit in The City of New York, except that at the option of Ford Credit
interest may be paid (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or (ii) by wire
transfer to an account maintained by the Person entitled thereto as specified in
the Security Register. (Sections 3.07, 10.01, 10.02). Unless otherwise provided
in the Prospectus Supplement or any Pricing Supplement, payment of any
installment of interest on Registered Securities will be made to the Person in
whose name such
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Registered Security is registered at the close of business on the Regular Record
Date for such interest. (Section 3.07).
Unless otherwise provided in the Prospectus Supplement or any Pricing
Supplement, the corporate trust office of the Trustee in The City of New York
will be designated as Ford Credit's sole Paying Agent for payments with respect
to Debt Securities which are issuable as Registered Securities and as Ford
Credit's Paying Agent in The City of New York for payments with respect to Debt
Securities which are issuable (in the limited circumstances described above, but
not otherwise) solely as Bearer Securities. Any Paying Agents outside the United
States and any other Paying Agents in the United States initially designated by
Ford Credit for the Debt Securities will be named in the Prospectus Supplement
or any Pricing Supplement. Ford Credit may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent or approve a change
in the office through which any Paying Agent acts, except that, if Indenture
Securities of a series are issuable only as Registered Securities, Ford Credit
will be required to maintain a Paying Agent in each Place of Payment for such
series and, if Indenture Securities of a series are also issuable as Bearer
Securities, Ford Credit will be required to maintain (i) a Paying Agent in The
City of New York for payments with respect to any Registered Securities of such
series (and for payments with respect to Bearer Securities of such series in the
circumstances described above, but not otherwise), and (ii) a Paying Agent in a
Place of Payment located outside the United States where Debt Securities of such
series and any coupons appertaining thereto may be presented and surrendered for
payment; provided that if the Debt Securities of such series are listed on the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, Ford Credit will maintain a
Paying Agent in Luxembourg or any other required city located outside the United
States, as the case may be, for the Indenture Securities of such series.
(Section 10.02).
All moneys paid by Ford Credit to the Trustee or a Paying Agent for the
payment of principal, premium, if any, or interest, if any, on any Indenture
Security which remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable will be repaid to Ford
Credit, and the Holder of such Indenture Security or any coupon will thereafter
look only to Ford Credit for payment thereof. (Section 4.04).
SUBSIDIARIES
The term "subsidiary of the Company" is defined in the Indenture as a
corporation a majority of the outstanding voting stock of which is owned,
directly or indirectly, by Ford Credit or by one or more subsidiaries of Ford
Credit, or by Ford Credit and one or more subsidiaries of Ford Credit. The term
"Restricted Subsidiary" is defined in the Indenture as a subsidiary of the
Company, incorporated in or conducting the major part of its business in the
United States, any of the activities of which includes insurance underwriting or
which had, at the end of its last quarterly accounting period preceding the date
of computation, assets with a value in excess of $1 million representing
accounts or notes receivable resulting from the financing of new cars, trucks,
tractors and farm and industrial equipment manufactured or sold by Ford or from
the financing of used cars, trucks, tractors and farm and industrial equipment
of the same types, whether manufactured by Ford or others. (Section 1.01). Ford
Holdings, which owns American Road Insurance and the other insurance businesses
formerly owned by Ford Credit, is not a subsidiary of the Company and therefore
not a Restricted Subsidiary, as such terms are defined in the Indenture. So long
as stock of Ford Holdings is directly owned by Ford Credit or by a Restricted
Subsidiary, such stock will be subject to the "Limitation on Liens" provision
described below. Ford Credit currently owns its stock in Ford Holdings directly
but is under no obligation to continue to do so.
LIMITATION ON LIENS
If Ford Credit or any Restricted Subsidiary shall pledge or otherwise
subject to any lien (such a pledge or lien is defined in the Indenture as a
"Mortgage") any of its property or assets, Ford Credit
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will secure or cause such Restricted Subsidiary to secure the Indenture
Securities equally and ratably with (or prior to) the indebtedness secured by
such Mortgage. This restriction does not apply to Mortgages securing such
indebtedness which shall not exceed $5 million in the aggregate at any one time
outstanding and does not apply to (a) certain Mortgages created or incurred to
secure financing of the export or marketing of goods outside the United States,
(b) Mortgages on accounts receivable payable in foreign currencies securing
indebtedness incurred and payable outside the United States, (c) Mortgages in
favor of Ford Credit or any Restricted Subsidiary, (d) Mortgages in favor of
governmental bodies to secure progress, advance or other payments, or deposits
with any governmental body required in connection with the business of Ford
Credit or a Restricted Subsidiary, (e) deposits made in connection with pending
litigation, (f) Mortgages existing at the time of acquisition of the assets
secured thereby (including acquisition through merger or consolidation) and
certain purchase money Mortgages, and (g) any extension, renewal or replacement
of any Mortgage or Mortgages referred to in the foregoing clauses (a) through
(f), inclusive. (Section 10.04).
MERGER AND CONSOLIDATION
The Indenture provides that no consolidation or merger of Ford Credit with
or into any other corporation shall be permitted, and no sale or conveyance of
its property as an entirety, or substantially as an entirety, may be made to
another corporation, if, as a result thereof, any asset of Ford Credit or a
Restricted Subsidiary would become subject to a Mortgage, unless the Indenture
Securities shall be equally and ratably secured with (or prior to) the
indebtedness secured by such Mortgage, or unless such Mortgage could be created
pursuant to Section 10.04 (see "Limitation on Liens" above) without equally and
ratably securing the Indenture Securities. (Section 8.03).
EVENTS OF DEFAULT AND NOTICE THEREOF
Except as may otherwise be provided in an indenture supplemental to the
Indenture, the following events in respect of a particular series of Indenture
Securities are defined in the Indenture as "Events of Default": (a) failure to
pay interest for 30 days after becoming due; (b) failure to pay the principal or
premium, if any, for five business days after becoming due at maturity, on
redemption or otherwise; (c) failure to make a sinking fund payment for five
days after becoming due; (d) failure to perform any other covenants for 90 days
after notice; and (e) certain events of bankruptcy, insolvency or
reorganization. (Section 5.01).
If an Event of Default in respect of a particular series of Indenture
Securities outstanding occurs and is continuing, either the Trustee or the
holders of at least 25% in aggregate principal amount of the Indenture
Securities outstanding of such series may declare the principal amount (or, if
the Indenture Securities of such series are Original Issue Discount Securities
(as defined in the indenture), such portion of the principal amount as may be
specified in the terms of such series) of all of the Indenture Securities of
such series to be due and payable immediately. At any time after such a
declaration of acceleration in respect of a particular series of Indenture
Securities has been made, but before a judgment or decree for the payment of
money due upon acceleration has been obtained by the Trustee, the holders of a
majority in aggregate principal amount of the Indenture Securities outstanding
of such series may, under certain circumstances, waive all defaults and rescind
and annul such declaration and its consequences if all Events of Default in
respect of the Indenture Securities of such series, other than the non-payment
of principal due solely by such declaration of acceleration, have been cured or
waived as provided in the Indenture. (Section 5.02).
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default in respect of a particular series of Indenture
Securities, give the holders of such series notice of all uncured defaults known
to it (the term "default" to include the events specified above without grace
periods); provided that, except in the case of default in the payment of the
principal of, or premium, if any, on, or interest on any of the Indenture
Securities of such series, the Trustee shall be
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<PAGE> 65
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the holders of such series.
(Section 6.02).
Pursuant to the terms of the Indenture, Ford Credit is required to furnish
to the Trustee annually a statement of certain officers of Ford Credit stating
whether or not to the best of their knowledge Ford Credit is in default in
respect of any series of Indenture Securities in the performance and observance
of the terms of the Indenture and, if Ford Credit is in default, specifying such
default and that or those series affected thereby. (Section 10.05).
The Indenture provides that the holders of a majority in aggregate
principal amount of all Indenture Securities of a particular series then
outstanding will have the right to waive certain defaults in respect of such
series and, subject to certain limitations, to direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee. (Sections 5.12 and
5.13). The Indenture provides that, in case an Event of Default in respect of a
particular series of Indenture Securities shall occur (which shall not have been
cured or waived), the Trustee will be required to exercise such of its rights
and powers under the Indenture, and to use the degree of care and skill in their
exercise, that a prudent man would exercise or use in the conduct of his own
affairs, but otherwise need only perform such duties as are specifically set
forth in the Indenture. (Section 6.01). Subject to such provisions, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request of any of the holders of such series unless they shall
have offered to the Trustee reasonable security or indemnity. (Section 6.03).
MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture, the rights and obligations of Ford
Credit and the rights of the holders of a particular series may be modified by
Ford Credit with the consent of the holders of not less than 66 2/3% in
aggregate principal amount of the Indenture Securities of such series then
outstanding; but no such modification may be made which would (i) extend the
fixed maturity of any Indenture Security of such series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, without the consent of the holder of each Indenture Security of such
series so affected; or (ii) reduce the above-stated percentage of Indenture
Securities of such series, the consent of the holders of which is required to
modify or alter the Indenture, without the consent of the holders of all
Indenture Securities of such series then outstanding. (Section 9.02).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of Indenture Securities of a series then outstanding
have given any request, demand, authorization, direction, notice, consent or
waiver thereunder or whether a quorum is present at a meeting of Holders of
Indenture Securities, (i) the principal amount of an Original Issue Discount
Security that shall be deemed to be outstanding shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof, and (ii) the principal
amount of an Indenture Security denominated in a foreign currency or currencies
shall be the U.S. dollar equivalent, determined on the date of original issuance
of such Indenture Security, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent on the date of
original issuance of such Indenture Security of the amount determined as
provided in (i) above). (Section 1.01).
The Indenture contains provisions for convening meetings of the Holders of
Indenture Securities of a series if Indenture Securities of that series are
issuable as Bearer Securities. (Section 15.01). A meeting may be called at any
time by the Trustee, and also, upon request, by Ford Credit or the Holders of at
least 10% in principal amount of the Indenture Securities of such series
Outstanding, in any such case upon notice given as provided in the Indenture.
(Section 15.02). Except for any consent which must be given by the Holder of
each Indenture Security affected thereby, as described above, any resolution
presented at a meeting or adjourned meeting at which a
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quorum is present may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Indenture Securities of that series;
provided, however, that, any resolution with respect to any consent or waiver
which may be given by the Holders of not less than 66 2/3% in principal amount
of the Indenture Securities of a series may be adopted at a meeting or adjourned
meeting at which a quorum is present only by the affirmative vote of 66 2/3% in
principal amount of the Indenture Securities of that series; and provided,
further, that, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of Indenture Securities of a series may be
adopted at a meeting or adjourned meeting duly reconvened at which a quorum is
present by the affirmative vote of the Holders of such specified percentage in
principal amount of the Indenture Securities of that series. Any resolution
passed or decision taken at any meeting of Holders of Indenture Securities of
any series duly held in accordance with the Indenture will be binding on all
Holders of Indenture Securities of that series and the related coupons. The
quorum at any meeting called to adopt a resolution, and at any reconvened
meeting, will be persons holding or representing a majority in principal amount
of the Indenture Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which may be
given by the Holders of not less than 66 2/3% in principal amount of the
Indenture Securities of a series, the persons holding or representing 66 2/3% in
principal amount of the Indenture Securities of such series will constitute a
quorum. (Section 15.04).
TRUSTEE
The Trustee may resign or be removed with respect to one or more series of
Indenture Securities and a successor Trustee may be appointed to act with
respect to such one or more series. (Section 6.10). In the event that there
shall be two or more persons acting as Trustee with respect to different series
of Indenture Securities, each such Trustee shall be a trustee of a trust or
trusts under the Indenture separate and apart from the trust or trusts
administered by any other such Trustee, and any action described herein to be
taken by the "Trustee" may then be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Indenture Securities for
which it is acting as Trustee. (Section 6.11).
CONCERNING CHEMICAL BANK
Chemical Bank, Trustee under the Indenture, is also the trustee under
indentures covering a number of outstanding issues of notes and debentures of
Ford Credit, is a depositary of Ford Credit and Ford, has from time to time made
loans to Ford Credit, Ford and its subsidiaries and has performed other services
for such companies in the normal course of its business.
REPORTS
Ford Credit publishes annual reports, containing certified financial
statements, and quarterly reports, containing interim unaudited financial
statements. Copies of such reports will be available upon request.
PLAN OF DISTRIBUTION
Ford Credit may sell the Debt Securities to or through underwriters, and
also may sell the Debt Securities directly to one or more other purchasers or
through agents.
The Prospectus Supplement and Pricing Supplement, if any, set forth the
terms of the offering of the particular series of Debt Securities to which such
Prospectus Supplement and any such Pricing Supplement relate, including (i) the
name or names of any underwriters or agents with whom Ford Credit has entered
into arrangements with respect to the sale of such series of Debt Securities,
(ii) the initial public offering or purchase price of such series of Debt
Securities, (iii) any
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underwriting discounts, commissions and other items constituting underwriters'
compensation from Ford Credit and any other discounts, concessions or
commissions allowed or reallowed or paid by any underwriters to other dealers,
(iv) any commissions paid to any agents, (v) the net proceeds to Ford Credit,
and (vi) the securities exchanges, if any, on which such series of Debt
Securities will be listed.
Unless otherwise set forth in the Prospectus Supplement and Pricing
Supplement, if any, relating to a particular series of Debt Securities, the
obligations of the underwriters to purchase such series of Debt Securities will
be subject to certain conditions precedent and each of the underwriters with
respect to such series of Debt Securities will be obligated to purchase all of
the Debt Securities of such series allocated to it if any such Debt Securities
are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
The Debt Securities may be offered and sold by Ford Credit directly or
through agents designated by Ford Credit from time to time. Unless otherwise
indicated in the Prospectus Supplement, any such agent or agents will be acting
on a best efforts basis for the period of its or their appointment. Any agent
participating in the distribution of the Debt Securities may be deemed to be an
"underwriter", as that term is defined in the Securities Act of the Debt
Securities so offered and sold. The Debt Securities also may be sold to dealers
at the applicable price to the public set forth in the Prospectus Supplement
relating to a particular series of Debt Securities who later resell to
investors. Such dealers may be deemed to be "underwriters" within the meaning of
the Securities Act.
If so indicated in the Prospectus Supplement relating to a particular
series of Debt Securities, Ford Credit will authorize underwriters or agents to
solicit offers by certain institutions to purchase Debt Securities of such
series from Ford Credit pursuant to delayed delivery contracts providing for
payment and delivery at a future date. Such contracts will be subject only to
those conditions set forth in the Prospectus Supplement and the Prospectus
Supplement will set forth the commission payable for solicitation of such
contracts.
Underwriters and agents may be entitled, under agreements entered into with
Ford Credit, to indemnification by Ford Credit against certain civil
liabilities, including liabilities under the Securities Act.
LEGAL OPINIONS
The legality of the Debt Securities offered hereby will be passed on for
Ford Credit by J. D. Bringard, Esq., Vice President -- General Counsel of Ford
Credit, or other counsel satisfactory to any underwriters or agents, and for any
underwriters or agents by Shearman & Sterling, 599 Lexington Avenue, New York,
N.Y. Mr. Bringard is a full-time employee of Ford Credit and owns and holds
options to purchase shares of Common Stock of Ford. Shearman & Sterling act as
counsel to the Compensation and Option Committee and the Audit Committee of the
Board of Directors of Ford and occasionally act as counsel to Ford and Ford
Credit in connection with certain transactions.
EXPERTS
The financial statements which are incorporated in this Prospectus by
reference to the 1993 10-K Report have been audited by Coopers & Lybrand, 400
Renaissance Center, Detroit, Michigan 48243, independent certified public
accountants, to the extent indicated in their reports therein, and have been so
incorporated in reliance upon the reports of that firm, which include an
explanatory paragraph indicating Ford Credit changed its methods of accounting
for postretirement health care benefits and income taxes in 1992, and upon their
authority as experts in accounting and auditing.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the offering described in this Registration Statement:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee..... $ 2,068,966
Printing and engraving.................................. 100,000
Accountants' fees....................................... 50,000
Blue Sky fees and expenses.............................. 15,000
Fees and expenses of Trustee............................ 200,000
Rating Agency fees...................................... 90,000
Miscellaneous expenses.................................. 20,000
-----------
Total.................................. $ 2,543,966
-----------
-----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware provides as follows:
145. Indemnification of officers, directors, employes and agents; insurance--
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employe or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employe or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employe
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employe or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless and
only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
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(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employe or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (2)
if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the stockholders.
(e) Expenses incurred by an officer or director in defending a civil
or criminal action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to
repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employe or agent
of the corporation, or is or was serving at the request of the corporation
as a director, officer, employe or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising
out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employes or agents, so that any person who is or was a director,
officer, employe or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employe or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee, or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
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<PAGE> 70
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Section 5 of Article Ninth of the Certificate of Incorporation of Ford
Credit provides as follows:
LIMITATION ON LIABILITY OF DIRECTORS;
INDEMNIFICATION AND INSURANCE.
5.1. LIMITATION ON LIABILITY OF DIRECTORS. A director of the corporation
shall not be personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability
(i) for any breach of the director's duty of loyalty to the
corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law or
(iv) for any transaction from which the director derived an improper
personal benefit.
If the Delaware General Corporation Law is amended after approval by the
stockholders of this subsection 5.1 of Article NINTH to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as so
amended.
5.2. EFFECT OF ANY REPEAL OR MODIFICATION OF SUBSECTION 5.1. Any repeal or
modification of subsection 5.1 of this Article NINTH by the stockholders of the
corporation shall not adversely affect any right or protection of a director of
the corporation existing at the time of such repeal or modification.
5.3. INDEMNIFICATION AND INSURANCE.
5.3A. RIGHT TO INDEMNIFICATION. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative, investigative or otherwise
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director, officer or
employee of the corporation or is or was serving at the request of the
corporation as a director, officer or employee of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer or employee or in
any other capacity while serving as a director, officer or employee, shall be
indemnified and held harmless by the corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the corporation to provide broader indemnification
rights than said law permitted the corporation to provide prior to such
amendment), against all expense, liability and loss (including penalties, fines,
judgments, attorneys' fees, amounts paid or to be paid in settlement and excise
taxes imposed on fiduciaries with respect to (i) employee benefit plans, (ii)
charitable organizations or (iii) similar matters) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer or employee and
shall inure to the benefit of his or her heirs, executors and administrators;
provided, however, that the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person (other than pursuant to
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<PAGE> 71
subsection 5.3b of this Article NINTH) only if such proceeding (or part thereof)
was authorized by the Board of Directors of the corporation. The right to
indemnification conferred in this subsection 5.3a of Article NINTH shall be a
contract right and shall include the right to be paid by the corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Delaware General Corporation Law
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding shall be made only upon delivery to the
corporation of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this subsection 5.3a
of Article NINTH or otherwise.
5.3B. RIGHT OF CLAIMANT TO BRING SUIT. If a claim which the corporation is
obligated to pay under subsection 5.3a of this Article NINTH is not paid in full
by the corporation within 60 days after a written claim has been received by the
corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the corporation (including its Board of
Directors, independent legal counsel or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
5.3C. MISCELLANEOUS. The provisions of this Section 5.3 of Article NINTH
shall cover claims, actions, suits and proceedings, civil or criminal, whether
now pending or hereafter commenced, and shall be retroactive to cover acts or
omissions or alleged acts or omissions which heretofore have taken place. If any
part of this Section 5.3 of Article NINTH should be found to be invalid or
ineffective in any proceeding, the validity and effect of the remaining
provisions shall not be affected.
5.3D. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section 5.3 of Article NINTH shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation, by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
5.3E. INSURANCE. The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
5.3F. INDEMNIFICATION OF AGENTS OF THE CORPORATION. The corporation may, to
the extent authorized from time to time by the Board of Directors, grant rights
to indemnification, and rights to be paid by the corporation the expenses
incurred in defending any proceeding in advance of its final disposition, to any
agent of the corporation to the fullest extent of the provisions of this Section
5.3
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<PAGE> 72
of Article NINTH with respect to the indemnification and advancement of expenses
of directors, officers and employees of the corporation.
Similar indemnification provisions in Section 5 of Article NINTH of the
Certificate of Incorporation of Ford are applicable to directors, officers and
employees of Ford Credit who serve as such at the request of Ford.
Paragraph XXVI (formerly Paragraph XXIV) of Ford's Savings and Stock
Investment Plan provides as follows with respect to the members of the Savings
and Stock Investment Plan Committee:
No member of the Committee or alternate for a member or director,
officer or employe of any Participating Company shall be liable for any
action or failure to act under or in connection with the Plan, except for
his own bad faith; provided, however, that nothing herein shall be deemed
to relieve any such person from responsibility or liability for any
obligation or duty under ERISA. Each director, officer, or employe of the
Company who is or shall have been designated to act on behalf of the
Company and each person who is or shall have been a member of the Committee
or an alternate for a member or a director, officer or employe of any
Participating Company, as such, shall be indemnified and held harmless by
the Company against and from any and all loss, cost, liability or expense
that may be imposed upon or reasonably incurred by him in connection with
or resulting from any claim, action, suit or proceeding to which he may be
a party or in which he may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid
by him in settlement thereof (with the Company's written approval) or paid
by him in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment in favor of the Company based upon a finding
of his bad faith; subject, however, to the condition that, upon the
assertion or institution of any such claim, action, suit or proceeding
against him, he shall in writing give the Company an opportunity, at its
own expense, to handle and defend the same before he undertakes to handle
and defend it on his own behalf. The foregoing right of indemnification
shall not be exclusive of any other right to which such person may be
entitled as a matter of law or otherwise, or any power that a Participating
Company may have to indemnify him or hold him harmless.
Pursuant to the Underwriting Agreements relating to its underwritten
offerings of securities, the underwriters have agreed to indemnify Ford Credit,
each officer and director of Ford Credit and each person, if any, who controls
Ford Credit within the meaning of the Securities Act of 1933, against certain
liabilities, including liabilities under said Act. The Sales Agency Agreements
and the Purchase Agreements filed as Exhibits to, or incorporated by reference
in, Ford Credit's Registration Statements relating to its offerings of
medium-term notes, floating rate notes, capital notes, variable rate notes,
original issue discount notes and notes provide for similar indemnification by
the Agents named therein.
Ford Credit is insured for liabilities it may incur pursuant to Article
NINTH of its Certificate of Incorporation relating to the indemnification of its
directors, officers and employes. In addition, directors, officers and certain
key employes are insured against certain losses which may arise out of their
employment and which are not recoverable under the indemnification provisions of
Ford Credit's Certificate of Incorporation. The premium for both insurance
coverages is paid by Ford.
Pursuant to Paragraph X of the Ford Money Market Account Program (the
"Program") each member and alternate or a member of the Program Committee and
each officer and director of each Participating Company is indemnified against
all loss, cost, liability or expense reasonably incurred in connection with or
resulting from any claim, action, suit or proceeding in which such person is
involved or may be involved by reason of any action or failure to act under the
Program.
Pursuant to Paragraph VIII of the Ford Money Market Account Plan (the
"Plan") each member and alternate member of the Plan Committee and each officer,
director and employe of Ford Credit
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<PAGE> 73
is indemnified against all loss, cost, liability or expense reasonably incurred
in connection with or resulting from any claim, action, suit or proceeding in
which such person is involved or may be involved by reason of any action or
failure to act under the Plan.
ITEM 16. EXHIBITS.
Exhibit 1-A -- Form of Sales Agency Agreement relating to the Debt
Securities offered in the United States.*
Exhibit 1-B -- Form of Sales Agency Agreement relating to Debt Securities
offered outside the United States.*
Exhibit 4-A -- Indenture dated as of February 1, 1985 between Ford Credit
and Chemical Bank as successor to Manufacturers Hanover Trust Company,
Trustee, relating to the Debt Securities, filed as Exhibit 4-A to
Registration Statement No. 2-95568 and incorporated herein by
reference.*
Exhibit 4-B -- Form of registered fixed rate Medium-Term Note filed as
Exhibit 4-B to Registration Statement No. 33-41060 and incorporated
herein by reference. Other Forms of Debt Security are included in
Exhibit 4-F. Any additional form or forms of Debt Security will be filed
with the Commission.*
Exhibit 4-C -- First Supplemental Indenture dated as of April 1, 1986
between Ford Credit and Chemical Bank as successor to Manufacturers
Hanover Trust Company, Trustee, relating to the Debt Securities, filed
as Exhibit 4-B to Ford Credit's Current Report on Form 8-K dated April
29, 1986 and incorporated herein by reference.*
Exhibit 4-D -- Second Supplemental Indenture dated as of September 1, 1986
between Ford Credit and Chemical Bank as successor to Manufacturers
Hanover Trust Company, relating to Debt Securities, filed as Exhibit 4-B
to Ford Credit's Current Report on Form 8-K dated August 28, 1986 and
incorporated herein by reference.*
Exhibit 4-E -- Third Supplemental Indenture dated as of March 15, 1987
between Ford Credit and Chemical Bank as successor to Manufacturers
Hanover Trust Company, relating to the Debt Securities, filed as Exhibit
4-E to Registration Statement No. 33-12928 and incorporated herein by
reference.*
Exhibit 4-F -- Fourth Supplemental Indenture dated as of April 15, 1988
between Ford Credit and Chemical Bank as successor to Manufacturers
Hanover Trust Company relating to the Debt Securities filed as Exhibit
4-F to Post-Effective Amendment No. 1 to Registration Statement No.
33-20081 and incorporated herein by reference.*
Exhibit 4-G -- Fifth Supplemental Indenture dated as of September 1, 1990
between Ford Credit and Chemical Bank as successor to Manufacturers
Hanover Trust Company relating to the Debt Securities filed as Exhibit
4-G to Registration Statement No. 33-41060 and incorporated herein by
reference.*
Exhibit 5 -- Opinion of H.D. Smith, Secretary and Corporate Counsel of Ford
Credit, as to the legality of the Debt Securities registered hereunder.*
Exhibit 8-A -- Opinion of Shearman & Sterling, counsel for the Agents, as
to certain tax matters.*
Exhibit 8-B -- Opinion of Sullivan & Cromwell, special tax counsel for Ford
Credit, as to certain tax matters.*
Exhibit 12-A -- Calculation of Ratio of Earnings to Fixed Charges of Ford
Credit.*
Exhibit 12-B -- Calculation of Ratio of Earnings to Fixed Charges of Ford.*
Exhibit 23-A -- Consent of Coopers & Lybrand.*
Exhibit 23-B -- Consent of H.D. Smith is contained in his opinion filed as
Exhibit 5 to this Registration Statement.*
Exhibit 23-C -- Consent of Shearman & Sterling is contained in their
opinion filed as Exhibit 8-A to this Registration Statement.*
Exhibit 23-D -- Consent of Sullivan & Cromwell is contained in their
opinion filed as Exhibit 8-B to this Registration Statement.*
Exhibit 24 -- Powers of Attorney.*
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<PAGE> 74
Exhibit 25 -- Statement of Eligibility and Qualification on Form T-1 of
Chemical Bank, Trustee.*
- -------------------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs 1(i) and (ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of Ford
Credit pursuant to the provisions described under Item 15 above, or otherwise,
Ford Credit has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Ford Credit or Ford of
expenses incurred or paid by a director, officer or controlling person of Ford
Credit in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, Ford Credit, or Ford, as the case may be, will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<PAGE> 75
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3, THAT THE SECURITY RATING REQUIREMENT OF
TRANSACTION REQUIREMENT B.2. OF FORM S-3 WILL BE MET BY THE TIME OF THE
EFFECTIVENESS OF THE REGISTRATION STATEMENT, AND HAS DULY CAUSED THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF DEARBORN, STATE OF
MICHIGAN, ON THE 18TH DAY OF APRIL, 1994.
FORD MOTOR CREDIT COMPANY
WILLIAM E. ODOM*
By
(WILLIAM E. ODOM, CHAIRMAN OF
THE BOARD
OF DIRECTORS)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ------------------------------- --------------------
<S> <C> <C>
Chairman of the Board of
Directors and
Director (principal
WILLIAM E. ODOM* executive officer)
....................................
(WILLIAM E. ODOM)
Director and Executive Vice
President--Finance (principal
KENNETH J. COATES* financial officer)
....................................
(KENNETH J. COATES)
Controller (principal
PAUL W. LEWIS* accounting officer)
....................................
(PAUL W. LEWIS)
JOHN G. CLISSOLD* Director
....................................
(JOHN G. CLISSOLD)
April 18, 1994
EDSEL B. FORD II* Director
....................................
(EDSEL B. FORD II)
MICHAEL I. AULD Director
....................................
(MICHAEL I. AULD)
DAVID N. MCCAMMON* Director
....................................
(DAVID N. MCCAMMON)
ROBERT D. WARNER* Director
....................................
(ROBERT D. WARNER)
KENNETH WHIPPLE* Director
....................................
(KENNETH WHIPPLE)
* By RICHARD P.
CONRAD
(RICHARD P. CONRAD,
ATTORNEY-IN-FACT)
</TABLE>
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