<PAGE> 1
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 10, 1995.
U.S. $4,000,000,000
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. $4,000,000,000 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 covered by this Prospectus
Supplement on the Luxembourg Stock Exchange. However, Ford Credit may from time
to time elect to issue Notes described in a Pricing Supplement which will not be
listed on the Luxembourg Stock Exchange or any other 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%
U.S. U.S.
Total(4).......................... $4,000,000,000 $2,000,000-24,000,000 U.S. $3,998,000,000-3,976,000,000
</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 $1,275,000.
(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 October 10, 1995.
<PAGE> 2
CAPITALIZATION OF FORD MOTOR CREDIT COMPANY
AND SUBSIDIARIES
The capitalization of Ford Credit and its consolidated subsidiaries as of
June 30, 1995, and the additional long-term indebtedness represented by (i)
estimated additional long-term indebtedness placed from July 1, 1995 through
August 31, 1995 and (ii) the Notes offered hereby, are as follows (in millions
of U.S. dollars):
<TABLE>
<CAPTION>
ADDITIONAL
OUTSTANDING LONG-TERM
JUNE 30, 1995 INDEBTEDNESS
------------- ------------
<S> <C> <C>
SENIOR INDEBTEDNESS, UNSECURED
Short-term
Commercial paper........................................ $35,379.8
Other short-term debt................................... 1,299.5
---------
Net short-term senior indebtedness.................... 36,679.3
Long-term debt payable within one year....................... 5,435.6
Long-term notes and debentures............................... 34,100.1
Estimated additional long-term indebtedness placed from
July 1, 1995 through August 31, 1995(1)......................... -- $1,289.2
Notes offered hereby.............................................. -- 4,000
---------
Total senior indebtedness, unsecured.................. 76,215.0
---------
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............................................... 29.7
Foreign currency translation adjustments..................... (56.8)
Earnings retained for use in the business.................... 6,478.3
---------
Total stockholder's equity............................ 7,393.5
---------
TOTAL CAPITALIZATION.............................................. $83,608.5
=========
</TABLE>
- ------------
(1) Additional long-term indebtedness placed from July 1, 1995 through
August 31, 1995 includes U.S. $165.0 million (estimated) of continuously offered
Notes at rates of 6.1% to 7.1%, Cdn $143.4 million of continuously offered
guaranteed Notes at rates of 8.09% to 8.53%, A $97.2 million of floating rate
guaranteed Notes, A $100 million of 8 3/8% Guaranteed Notes Due August 22, 2000,
NLG 200 million of 6 3/8% Notes due July 12, 2000, U.S. $250 million of Floating
Rate Notes due August 4, 2000, and U.S. $500 million of 6.85% Notes due August
15, 2000.
S-2
<PAGE> 3
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS OF FORD CREDIT
J.D. Bringard,
Vice President-General Counsel
J.F. Buley,
Vice President
J.P. Burkhard,
Vice President-Treasurer
J.G. Clissold,
Director and
Executive Vice President
K.J. Coates,
Director and
Executive Vice President
D.C. Flanigan,
Vice President
E.B. Ford II,
Director and
President
J.L. Heimlicher,
Vice President
T.N. Hynes,
Vice President
R.A. Kniebes,
Vice President
T.F. Marrs,
Vice President
D.N. McCammon,
Director
G.D. McKay,
Vice President
W.E. Odom,
Director and
Chairman of the Board
M.R. O'Rear,
Vice President
D.E. Ross,
Vice President
A.J. Salmon,
Vice President
G.C. Smith,
Director and
Executive Vice President
J.M. Walsh,
Vice President
R.D. Warner,
Director and
Executive Vice President
D.J. Wennerberg,
Vice President
K. Whipple,
Director
All of the above-named persons are full-time employees of Ford or Ford Credit.
S-3
<PAGE> 4
FORD MOTOR CREDIT COMPANY AND CONSOLIDATED SUBSIDIARIES
SELECTED FINANCIAL DATA
(DOLLAR AMOUNTS IN MILLIONS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30 YEARS ENDED DECEMBER 31
---------------------- -----------------------------------
1995 1994 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Total revenue................. $ 6,313.1 $ 4,850.6 $10,389.3 $ 8,338.4 $ 7,073.3
Interest expense.............. 2,401.7 1,605.6 3,540.8 2,919.3 3,076.5
Provision for credit losses... 156.5 132.3 246.5 270.2 418.0
Income before income taxes and
cumulative effects of
changes in accounting
principles................. 951.2 1,029.7 1,999.1 1,875.0 1,323.2
Cumulative effects of changes
in accounting principles... -- -- -- -- 146.5
Net income.................... 629.1 667.4 1,312.7 1,193.8 1,038.7
Dividends
Cash....................... -- -- (364.0) (250.0) (600.0)
Stock of Ford Holdings..... -- -- -- -- (200.0)
Memo:
Net credit losses amount...... $ 148.6 $ 88.8 $ 228.7 $ 228.4 $ 342.6
As percentage of average total
finance receivables
outstanding
(annualized)*.............. 0.34% 0.24% 0.30% 0.35% 0.60%
BALANCE SHEET DATA
Net investment, operating
leases..................... $22,637.5 $16,567.9 $19,993.9 $12,600.9 $ 7,747.2
========= ========= ========= ========= =========
Finance receivables, net...... $61,193.2 $55,260.8 $56,946.5 $50,759.2 $46,100.0
========= ========= ========= ========= =========
Capital
Short-term debt............ $36,679.3 $30,053.5 $34,364.9 $25,507.1 $22,995.7
Long-term debt (including
current portion)......... 39,535.7 35,603.2 36,075.5 33,291.6 26,960.7
Stockholder's equity....... 7,393.5 6,364.0 6,662.6 5,774.7 4,882.9
--------- --------- --------- --------- ---------
Total capital............ $83,608.5 $72,020.7 $77,103.0 $64,573.4 $54,839.3
========= ========= ========= ========= =========
</TABLE>
- ---------------
* Includes net investment in operating leases.
SECOND QUARTER 1995 RESULTS OF OPERATIONS
Ford Credit's consolidated net income for the second quarter of 1995 was
$341 million, down $27 million or 7% compared with $368 million in the second
quarter of 1994. Income from financing operations was $293 million, down $24
million or 8% from the same period a year ago. Equity in net income of
affiliated companies, primarily Ford Holdings, was $48 million compared with $51
million in the same period a year ago.
Compared with results from a year ago, the decrease in financing profits in
the second quarter of 1995 primarily reflected lower net interest margins,
non-recurrence of 1994's one-time gain from the sale of Ford Credit's minority
interest in Manheim Auto Auctions Inc., higher credit losses, and lower gains
from sale of receivables. Higher financing volumes were a partial offset. The
lower net interest margins reflected an increase in U.S. portfolio borrowing
rates from 5.1% to 6.7% offset partially by higher portfolio yields on finance
receivables and operating leases. Interest margins were adversely affected
because interest rates earned on finance receivables, including operating leases
net of depreciation, were limited by competitive pressure in automotive
financing. Credit loss performance remains strong but losses have increased in
the second quarter of 1995 compared
S-4
<PAGE> 5
with a year earlier. The increase reflected higher losses per repossessed unit
and an increase in repossession rates. The higher level of earning assets
reflected increases in operating leases, wholesale financing, and retail
installment sale receivables.
Total gross finance receivables and net investment in operating leases at
June 30, 1995 were $90.3 billion, up $12.7 billion or 16% from a year earlier.
The increase primarily reflected higher levels of operating leases, wholesale
receivables, and retail installment sale receivables. Depreciation expense on
operating leases in the second quarter of 1995 was $1,256 million, up $321
million or 34% compared with the second quarter of 1994. The increase reflected
the higher levels of operating leases and was more than offset by higher revenue
earned from the increased volume of lease contracts.
During the second quarter of 1995, Ford Credit financed 36.1% of all new
cars and trucks sold by Ford Motor Company dealers in the United States,
compared with 35.8% in the second quarter of 1994. The increase primarily
reflected higher levels of operating lease and daily rental car financing. Ford
Credit provided retail financing for 663,000 new and used vehicles in the United
States, up 6% from a year ago. Ford Credit also provided wholesale financing for
80.6% of Ford Motor Company factory sales to U.S. car and truck dealers during
the quarter, compared with 81.5% in the same period a year ago.
FIRST SIX MONTHS 1995 RESULTS OF OPERATIONS
For the first half of 1995, Ford Credit's consolidated net income was $629
million, down $38 million or 6% from $667 million in the first half of 1994.
Income from financing operations was $522 million, down $40 million or 7% from
the same period a year ago. Equity in net income of affiliated companies was
$107 million compared with $105 million in 1994. The factors affecting financing
profits during the first half of 1995 were the same as those affecting second
quarter results discussed above. Depreciation expense in the first half of 1995
was $2,440 million, up $696 million or 40% compared with the first half of 1994.
The increase reflected the higher levels of operating leases and was more than
offset by higher revenue earned from the increased volume of lease contracts.
During the first half of 1995, Ford Credit provided retail financing for
36.3% of all new cars and trucks sold by Ford Motor Company dealers in the
United States, compared with 37.1% in the same period a year ago. The decrease
primarily resulted from lower levels of retail installment sale financing,
offset partially by higher levels of operating lease financing. Ford Credit
provided U.S. retail financing for 1,235,000 new and used vehicles compared with
1,210,000 vehicles in the first half of 1994. Ford Credit also provided
wholesale financing for 79.2% of Ford Motor Company factory sales to U.S. car
and truck dealers during the first half of 1995, compared with 80.1% in the same
period last year.
1994 RESULTS OF OPERATIONS
Ford Credit's consolidated net income in 1994 was $1,313 million, up $119
million or 10% from 1993. Net income from financing operations in 1994 was
$1,080 million, up $84 million or 8% from 1993. The increase in financing
profits was more than accounted for by higher financing volumes, a one-time gain
from the sale of Ford Credit's investment in Manheim Auctions, the
non-recurrence of the effect of the 1993 U.S. tax rate increase, gains on used
service vehicles and repurchased fleet-account vehicles sold at auction,
improved credit losses and improved operating costs. Lower net interest margins
and lower gains from sales of receivables were a partial offset.
Continuing the trend of favorable credit loss experience, credit losses as
a percent of average finance receivables including net investment in operating
leases were 0.30% in 1994 ($229 million) compared with 0.35% in 1993 ($228
million). The credit loss coverage ratio for 1994 was 4.0, the same as the prior
year. The decline in net interest margins reflects the lower portfolio yields on
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<PAGE> 6
finance receivables and net investment in operating leases, and an increase in
net U.S. portfolio borrowing rates from 5.3% in 1993 to 5.4% in 1994.
For 1994, equity in net income of affiliated companies (primarily Ford
Holdings) was $233 million compared with $198 million in 1993. The increase
reflected higher Ford Holdings net income available to common shareholders. At
December 31, 1994, 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, 1994 were $82.8 billion, up $13.6 billion or 20% from a year
earlier. The higher financing volume reflects primarily an increase in operating
leases and higher wholesale receivables. Depreciation expense in 1994 was $3,910
million, up $1,234 million or 46% from 1993. The increase reflected the higher
levels of operating leases and was more than offset by higher revenue earned on
the lease contracts.
For 1994, Ford Credit financed 36.6% of all new cars and trucks sold by
Ford Motor Company dealers in the U.S. compared with 38.5% in 1993. The decrease
primarily resulted from lower levels of daily rental car financing. Ford Credit
provided retail customers with financing for 2,347,000 new and used vehicles in
the United States. Ford Credit provided wholesale financing for a record 81.5%
of Ford Motor Company U.S. factory sales in 1994 compared with 81.4% in 1993.
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 Ford Credit's Annual Report on Form 10-K for the year ended December
31, 1994 (the "1994 10-K Report") and see Ford Credit's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1995 (the "First Quarter 10-Q
Report") and June 30, 1995 (the "Second Quarter 10-Q Report"). For additional
information regarding Ford Credit's association with Ford, see Item 1 --
Business -- "Certain Transactions with Ford and Affiliates" in the 1994 10-K
Report.
S-6
<PAGE> 7
SELECTED FINANCIAL DATA AND OTHER DATA OF FORD
The following table sets forth selected financial data and other data
concerning Ford:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30 YEARS ENDED OR AT DECEMBER 31
---------------------- ------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- --------- -------- ---------
(IN MILLIONS EXCEPT PER SHARE AND UNIT SALES AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME
INFORMATION
Automotive
Sales................................ $ 58,462 $ 54,445 $107,137 $ 91,568 $ 84,407 $ 72,051 $ 81,844
Operating income/(loss).............. 3,556 3,525 5,826 1,432 (1,775) (3,769) 316
Income/(loss) before cumulative
effects of changes in accounting
principles......................... 2,241 2,175 3,824 940 (1,534) (3,186) 99
Financial Services
Revenues............................. 12,710 9,729 21,302 16,953 15,725 16,235 15,806
Income before income taxes and
cumulative effects of changes in
accounting principles.............. 1,644 1,107 2,792 2,712 1,825 1,465 1,221
Income/(loss) before cumulative
effects of changes in accounting
principles......................... 881 440 1,484 1,589 1,032 928 761
Total Ford
Income/(loss) before cumulative
effects of changes in accounting
principles......................... 3,122 2,615 5,308 2,529 (502) (2,258) 860
Cumulative effects of changes in
accounting principles.............. -- -- -- -- (6,883) -- --
Net income/(loss).................... 3,122 2,615 5,308 2,529 (7,385) (2,258) 860
Amounts Per Share of Common Stock and
Class B Stock After Preferred Stock
Dividends*
Income/(loss) before cumulative
effects of changes in accounting
principles......................... 2.89 2.47 4.97 2.27 (0.73) (2.40) 0.93
Cumulative effects of changes in
accounting principles.............. -- -- -- -- (7.08) -- --
-------- -------- -------- -------- --------- -------- ---------
Income/(loss) assuming no dilution... 2.89 2.47 4.97 2.27 (7.81) (2.40) 0.93
Income/(loss) assuming full
dilution........................... 2.59 2.20 4.44 2.10 (7.81) (2.40) 0.92
Cash dividends....................... 0.57 0.425 0.91 0.80 0.80 0.98 1.50
CONSOLIDATED BALANCE SHEET INFORMATION
Automotive
Total assets......................... 72,982 68,048 68,371 61,737 57,170 52,397 50,824
Debt payable within one year......... 796 156 155 932 1,249 2,579 2,849
Long-term debt--noncurrent portion... 6,070 7,107 7,103 7,084 7,068 6,539 4,553
Financial Services
Total assets......................... 166,826 142,031 150,983 137,201 123,375 122,032 122,839
Debt................................. 136,496 116,312 123,713 103,960 90,188 88,295 88,117
Deposit accounts**................... -- -- -- 10,549 14,030 16,882 17,893
Total Ford
Total assets......................... 239,808 210,079 219,354 198,938 180,545 174,429 173,663
Debt (incl. deposit accounts)........ 143,362 123,575 130,971 122,525 112,535 114,295 113,412
Stockholders' equity***.............. 25,240 18,422 21,659 15,574 14,753 22,690 23,238
Cash dividends....................... 729 569 1,205 1,086 977 927 1,389
OTHER DATA
Total Ford
Capital expenditures................. 4,097 3,601 8,546 6,814 5,790 5,847 7,258
Depreciation and amortization of
special tools...................... 5,656 4,369 9,336 7,468 6,755 5,778 4,880
Worldwide vehicle unit sales
of cars, trucks and tractors
(in thousands)****................. 3,581 3,570 6,639 5,965 5,767 5,368 5,864
</TABLE>
- ------------
* Share data have been restated to reflect the 2-for-1 stock split that
became effective June 6, 1994.
** Deposit accounts relate to First Nationwide.
*** The cumulative effects of changes in accounting principles reduced equity
by $6,883 million in 1992.
**** Effective with the six months ended June 30, 1995, vehicle unit sales are
reported worldwide on a "where sold" basis and include sales of all
Ford-badged units, as well as units manufactured by Ford and sold by other
manufacturers. Unit sales for the six months ended June 30, 1994 have been
restated to reflect the country where sold and to include sales of all
Ford-badged units. Ford-badged unit sales of certain unconsolidated
subsidiaries (primarily Autolatina in Brazil and Argentina), included in
unit sales for the six months ended June 30, 1995 and 1994, are not
included in totals for the years ended December 31, 1990-1994. Unit sales
for the years ended December 31, 1990-1994, are reported for North America
on a "where sold" basis and overseas on a "where produced" basis.
S-7
<PAGE> 8
FINANCIAL REVIEW OF FORD
SECOND QUARTER 1995 RESULTS OF OPERATIONS
Overview
Ford earned $1,572 million, or $1.45 per share of Common and Class B Stock,
in the second quarter of 1995. This compares with $1,711 million, or $1.63 per
share, in the second quarter of 1994. Fully diluted earnings per share were
$1.30 in the second quarter of 1995, compared with $1.44 a year ago. Ford's
worldwide sales and revenues were $36.4 billion, up $2.6 billion from a year
ago. Vehicle unit sales of cars and trucks were 1,811,000, down 39,000 units, or
2%. Stockholders' equity was $25.2 billion at June 30, 1995.
On June 6, 1994, a 2-for-1 stock split in the form of a 100% stock dividend
on Ford's outstanding Common and Class B Stock became effective.
Automotive Operations
Net income from Ford's worldwide Automotive operations was $1,100 million
in the second quarter of 1995 on sales of $29.9 billion, compared with $1,202
million in the second quarter of 1994 on sales of $28.4 billion.
In the U.S., Ford's Automotive operations earned $663 million in the second
quarter of 1995 on sales of $19.4 billion, compared with $888 million a year ago
on sales of $19.1 billion. The decline in earnings was more than explained by
lower unit volume, reflecting lower industry volume and unfavorable dealer
inventory changes that more than offset improved market share. Changes in
exchange rates (primarily the German Mark and Japanese Yen) also reduced
earnings compared with a year ago. U.S. Automotive after-tax return on sales was
3.4% in the second quarter of 1995, down 1.2 points from a year ago. The decline
also reflected primarily the effects of lower unit volume and unfavorable
exchange rate changes.
In the second quarter of 1995, the seasonally-adjusted annual selling rate
for the U.S. car and truck industry was 14.7 million units, compared with 15.3
million units in the second quarter of 1994. Ford's car market share was 21.3%
in the second quarter of 1995, down 2/10 of a point from a year ago. Ford's
truck share was 32.8%, up 2.8 points from a year ago. Ford's combined car and
truck share was 26.2%, up 1.2 points from a year ago. The improvement in share
reflected primarily strong sales of the Explorer, Windstar, F-Series trucks and
Contour/Mystique.
Outside the U.S., Automotive operations earned $437 million in the second
quarter of 1995 on sales of $10.5 billion, compared with $314 million a year ago
on sales of $9.3 billion. The improvement reflected primarily improved margins
in Europe and higher unit volume in the Asia-Pacific region. In Europe,
Automotive operations earned $319 million, compared with $167 million a year
ago.
In the second quarter of 1995, the seasonally-adjusted annual selling rate
for the European car and truck industry was 13.7 million units, up 480,000 units
from year ago levels. Ford's car share was 11.9% in the second quarter of 1995,
up 4/10 of a point from a year ago. Ford's truck share was 14.5%, down 5/10 of a
point from a year ago, reflecting primarily lower fleet sales. Ford's combined
car and truck share was 12.2%, up 3/10 of a point from a year ago.
It is expected that after-tax returns for the remainder of 1995 will be
lower than the year ago period. Production volume in the second half of 1995 is
expected to be down compared with a year ago as a result of the uncertain
outlook for U.S. industry sales. This factor, combined with the timing and cost
of major new product introductions in 1995 and early 1996 and the continued
unfavorable effect of exchange rate changes, are expected to dampen results in
the upcoming quarters.
Ford and Volkswagen AG have agreed on a separation process leading toward
dissolution of their Autolatina joint venture in Brazil and Argentina by
year-end 1995. Historically, earnings in Brazil
S-8
<PAGE> 9
and Argentina have represented a significant portion of Ford's Automotive
earnings outside the U.S. and Europe. It is believed the effect, if any, of the
dissolution of Autolatina on Ford's future earnings is not likely to be
material. Business conditions in these markets, however, have been and are
expected to continue to be volatile and subject to rapid change, which can
affect future earnings.
Financial Services Operations
Ford's Financial Services operations earned $472 million in the second
quarter of 1995, compared with $509 million in the second quarter of 1994. The
decrease resulted primarily from the nonrecurrence of a gain on sale in 1994 of
Ford Credit's interest in Manheim Auctions ($31 million).
For a discussion of Ford Credit's operations in the second quarter of 1995,
see "Ford Motor Credit Company and Consolidated Subsidiaries -- Selected
Financial Data -- Ford Credit Second Quarter 1995 Results of Operations." In
addition, international operations managed by Ford Credit, but not included in
its consolidated results, earned $66 million in the second quarter of 1995,
compared with $50 million a year ago.
The Associates earned a record $141 million in the U.S. in the second
quarter of 1995, compared with $121 million a year ago. The increase reflected
higher levels of earning assets and improved net interest margins. The
international operations managed by The Associates, but not included in its
consolidated results, earned $27 million in the second quarter of 1995, compared
with $21 million a year ago.
USL Capital earned a record $30 million in the second quarter of 1995,
compared with $27 million a year ago. The increase reflected higher levels of
earning assets and higher gains on asset sales. Hertz earned $19 million in the
second quarter of 1995, compared with $26 million in the second quarter of 1994.
The decrease reflected primarily increased depreciation and borrowing costs,
partially offset by higher volume in construction equipment rentals and sales.
American Road incurred a loss of $9 million in the second quarter of 1995,
compared with a net income of $13 million a year ago. The decrease reflected
lower underwriting results in floor plan products and the dissolution of an
operating subsidiary.
FIRST SIX MONTHS 1995 RESULTS OF OPERATIONS
Overview
Ford earned $3,122 million, or $2.89 per share of Common and Class B Stock,
in the first half of 1995. This compares with $2,615 million, or $2.47 per
share, in the first half of 1994. Ford's results a year ago included a charge of
$440 million related to the disposition of First Nationwide Bank. Fully diluted
earnings per share were $2.59 in the first half of 1995, compared with $2.20 a
year ago. Ford's worldwide sales and revenues were $71.2 billion, up $7 billion
from a year ago. Vehicle unit sales of cars and trucks were 3,581,000, up 11,000
units.
Automotive Operations
Net income from Ford's worldwide Automotive operations was $2,241 million
in the first half of 1995 on sales of $58.5 billion, compared with $2,175
million in the first half of 1994 on sales of $54.4 billion.
In the U.S., Ford's Automotive operations earned $1,488 million in the
first half of 1995 on sales of $38.9 billion, compared with $1,704 million a
year ago on sales of $37.1 billion. U.S. Automotive after-tax return on sales
was 3.8%, down 8/10 of a point from a year ago. The decline in earnings
reflected primarily the same factors as those described in the discussion of
second quarter results of operations.
In the first half of 1995, the seasonally-adjusted annual selling rate for
the U.S. car and truck industry was 14.9 million units, compared with 15.5
million units a year ago. Ford expects U.S. car
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<PAGE> 10
and truck industry sales to total 15.1 million units for the full year, compared
with 15.4 million units in 1994. Ford's car share was 21.6% in the first half of
1995, up 3/10 of a point from a year ago. Ford's truck share was 32.6%, up 2.9
points from a year ago. Ford's combined car and truck share was 26.3%, up 1.4
points from a year ago.
Outside the U.S., Automotive operations earned $753 million in the first
half of 1995 on sales of $19.6 billion, compared with $471 million a year ago on
sales of $17.3 billion. The improvement reflected primarily higher unit volume
and improved margins in Europe. Ford's European Automotive operations earned
$484 million in the first half of 1995, compared with $220 million a year ago.
In the first half of 1995, the seasonally-adjusted annual selling rate for
the European car and truck industry was 13.6 million units, compared with 13.2
million units a year ago. Ford expects European car and truck industry sales to
total 13.4 million units for the full year, compared with 13.3 million units in
1994. Ford's car share was 12% in the first half of 1995, up 2/10 of a point
from a year ago. Ford's truck share was 15.1%, up 4/10 of a point from a year
ago. Ford's combined car and truck share was 12.3%, up 2/10 of a point from the
first half of 1994.
Financial Services Operations
Ford's Financial Services operations earned $881 million in the first half
of 1995, compared with $440 million in the first half of 1994. The improvement
was explained by the nonrecurrence of the $440 million charge to net income in
the first quarter of 1994 for disposition of First Nationwide Bank.
For a discussion of Ford Credit's results of operations in the six months
of 1995, see Ford Motor Credit Company and Consolidated Subsidiaries -- Selected
Financial Data -- Ford Credit First Six Months 1995 Results of Operations." In
addition, international operations managed by Ford Credit, but not included in
its consolidated results, earned $131 million in the first half of 1995,
compared with $113 million a year ago.
The Associates earned a record $293 million in the U.S. in the first half
of 1995, compared with $249 million a year ago. The increase reflected higher
levels of earning assets and improved net interest margins. The international
operations managed by The Associates, but not included in its consolidated
results, earned $49 million in the first half of 1995, compared with $39 million
a year ago.
USL Capital earned a record $56 million in the first half of 1995, compared
with $48 million a year ago. Hertz earned $19 million in the first half of 1995,
compared with $25 million a year ago. American Road incurred a loss of $4
million in the first half of 1995, compared with earnings of $30 million in the
same period in 1994. These changes reflected primarily the same factors as those
described in the discussion of second quarter results of operations.
LIQUIDITY AND CAPITAL RESOURCES
Automotive Operations
Cash, cash equivalents and marketable securities of Ford's Automotive
operations were $14 billion at June 30, 1995, up $1.9 billion from December 31,
1994. The amount of cash, cash equivalents and marketable securities is expected
to decline during the second half of the year because of lower production volume
and higher capital spending. Ford paid $729 million in cash dividends on its
Common Stock, Class B Stock and Preferred Stock during the first six months of
1995.
Automotive capital expenditures were $4 billion in the first six months of
1995, up $470 million from the same period a year ago. Automotive capital
spending is projected to increase further during the second half of the year as
a result of increases in both product and nonproduct spending. The higher
product spending reflects a record pace of new-model introductions and increased
capacity
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<PAGE> 11
for selected components and vehicles, while the higher nonproduct spending
reflects continuing efforts to improve efficiency and quality.
Automotive debt at June 30, 1995 totaled $6.9 billion, which was 21% of
total capitalization (stockholders' equity and Automotive debt), compared with
$7.3 billion, or 25% of total capitalization, at December 31, 1994.
At June 30, 1995, Ford (parent company only) had long-term contractually
committed credit agreements in the U.S. under which $5.9 billion were available
from various banks. These facilities were unused at June 30, 1995. Outside the
U.S., Ford had additional long-term contractually committed credit-line
agreements of $2.6 billion at June 30, 1995; none of these were in use.
Effective July 1, 1995, most of the credit facilities discussed above were
replaced with long-term contractually committed global credit agreements under
which $8.4 billion is available from various banks at least through June 30,
2000. The entire $8.4 billion may be used, at Ford's option, by any affiliate of
Ford; however, any borrowing by an affiliate will be guaranteed by Ford. In
addition, Ford has the ability to transfer on a nonguaranteed basis the entire
$8.4 billion in varying portions to Ford Credit and Ford Credit Europe.
Financial Services Operations
Financial Services' cash, cash equivalents and investments in securities
totaled $9.2 billion at June 30, 1995, up $1.4 billion from December 31, 1994.
Net receivables and lease investments were $143.5 billion at June 30, 1995,
up $13.2 billion from December 31, 1994. The increase reflected continued growth
in earning assets at Ford Credit and The Associates.
Total debt was $136.5 billion at June 30, 1995, up $12.8 billion from
December 31, 1994. The increase resulted from higher debt levels required to
finance growth in earning assets at Ford Credit and The Associates.
At June 30, 1995, Financial Services had $34.8 billion of contractually
committed support facilities (including the $5.9 billion of the Ford credit
agreements) for use in the U.S.; less than 2% of these facilities, excluding the
Ford credit agreements, were in use. An additional $9 billion of contractually
committed support facilities were available outside the U.S. at June 30, 1995;
$1.5 billion of these were in use. The majority of these facilities that were
available for use by Ford Credit and Ford Credit Europe and their subsidiaries
($21.3 billion, excluding the $5.9 billion of the Ford credit agreements) have
been terminated effective July 1, 1995, and have been replaced by contractually
committed global credit agreements under which $19.8 billion and $4.1 billion
are available to Ford Credit and Ford Credit Europe, respectively, from various
banks; 62% and 75%, respectively, of such facilities are available through June
30, 2000. The entire $19.8 billion may be used, at Ford Credit's option, by any
subsidiary of Ford Credit, and the entire $4.1 billion may be used, at Ford
Credit Europe's option, by any subsidiary of Ford Credit Europe. Any borrowings
by such subsidiaries will be guaranteed by Ford Credit or Ford Credit Europe, as
the case may be.
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)
--------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30* YEARS ENDED DECEMBER 31
----------------- ----------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Cars................................... 8.5 9.1 9.0 8.5 8.2 8.2 9.3
Trucks................................. 6.4 6.4 6.4 5.7 4.9 4.3 4.8
</TABLE>
- ------------
* Seasonally adjusted annual rates.
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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
--------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30 YEARS ENDED DECEMBER 31
----------------- ----------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Cars................................. 21.6% 21.3% 21.8% 22.3% 21.8% 20.1% 21.1%
Trucks............................... 32.6 29.7 30.1 30.5 29.7 28.9 29.3
</TABLE>
For additional information regarding Ford, see the 1994 10-K Report, the
First Quarter 10-Q Report and the Second Quarter 10-Q Report.
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<PAGE> 13
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. $4,000,000,000 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
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<PAGE> 14
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.
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<PAGE> 15
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.
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<PAGE> 16
(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 Bank, societe anonyme ("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
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<PAGE> 17
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.
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 (a) it has not offered or sold
and, prior to the expiration of the period of six months from the closing date
for the issue of the Notes, will not offer or sell any Notes to persons in the
United Kingdom, except to those persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995,
(b) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986, with respect to anything done by it in relation to
the Notes in, from or otherwise involving the United Kingdom, and (c) 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 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
the document may otherwise lawfully be issued or passed on.
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 in Japan or to
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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,
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 owning 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 rules of the
Luxembourg Stock Exchange so require, 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 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.
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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 October 10, 1995, 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 October 10, 1995, 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 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
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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 composition of the ECU with respect to any Notes
denominated in ECU ("ECU Notes"), will be equal to the composition of the ECU
that is from time to time used as the unit of account of the European
Communities ("EC") and which is at the date hereof composed of specified amounts
of the currencies of twelve of the member countries of the European Union ("EU")
as shown below.
Pursuant to Council Regulation (EC) No. 3320/94 of 22nd December, 1994 the
composition of the ECU is as follows:
<TABLE>
<C> <S> <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>
Changes as to the nature or composition of the ECU may be made by the EU,
in which event 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 neither used as the unit of account of the EC nor used as the currency of
the EU, 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 neither used as
the unit of account of the EC nor used as the currency of the EU, 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 Chosen Currency shall be computed on
the basis of the equivalent
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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 when the ECU was most recently used as the unit of
account of the EC. 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.
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.
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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 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
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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 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
S-26
<PAGE> 27
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 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
S-27
<PAGE> 28
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, 1994.
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 will appoint
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 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.
S-28
<PAGE> 29
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,
1994, Ford Credit's Quarterly Report on Form 10-Q for the quarter ended March
31, 1995, Ford Credit's Quarterly Report on Form 10-Q for the quarter ended June
30, 1995, and Ford Credit's Current Reports on Form 8-K dated January 17, 1995,
February 10, 1995, February 17, 1995, February 21, 1995, March 24, 1995, July
19, 1995, August 17, 1995, October 5, 1995 and October 10, 1995 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. $4,000,000,000 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-29
<PAGE> 30
- ------------------------------------------------------
- ------------------------------------------------------
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 Subsidiaries............. S-2
Directors and Principal Executive
Officers of Ford Credit.............. S-3
Ford Motor Credit Company and
Consolidated Subsidiaries -- Selected
Financial Data....................... S-4
Selected Financial Data and Other Data
of Ford.............................. S-7
Financial Review of Ford............... S-8
Industry Data and Market Share of
Ford................................. S-11
Description of Notes................... S-13
Special Provisions Relating to Foreign
Currency Notes....................... S-22
Currency Risks......................... S-25
United States Taxation................. S-26
Plan of Distribution................... S-27
General Information.................... S-28
Incorporation of Certain Documents by
Reference............................ S-29
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
Information Concerning Ford Credit..... 3
Information Concerning Ford............ 3
Use of Proceeds........................ 4
Description of Debt Securities......... 4
Plan of Distribution................... 10
Legal Opinions......................... 11
Experts................................ 11
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
U.S. $4,000,000,000
FORD MOTOR
CREDIT COMPANY
EURO MEDIUM-TERM NOTES
------------------
K(LOGO)
------------------
GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL LIMITED
CS FIRST BOSTON
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 31
FORD MOTOR CREDIT COMPANY
DEBT SECURITIES
Ford Credit, in October 1994, registered with the Securities and Exchange
Commission $4,000,000,000 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
set 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 October 10, 1995.
<PAGE> 32
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,
1994 (the "1994 10-K Report"), Ford Credit's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1995 (the "First Quarter 10-Q Report"), Ford
Credit's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995 (the
"Second Quarter 10-Q Report"), and Ford Credit's Current Reports on Form 8-K
dated January 17, 1995, February 10, 1995, February 17, 1995, February 21, 1995,
March 24, 1995, July 19, 1995, August 17, 1995, October 5, 1995 and October 10,
1995 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> 33
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
franchisees 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 84% 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.
------------------------
INFORMATION CONCERNING FORD
The business of Ford Credit is substantially dependent upon 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 design,
manufacture, assembly and sale of cars and trucks and related parts and
accessories. The Financial Services segment is comprised of the following direct
subsidiaries, the activities of which include financing operations, vehicle and
equipment leasing and insurance operations: Ford Credit, Ford Credit Europe plc
("Ford Credit Europe"), Ford Holdings, The Hertz Corporation and Granite
Management Corporation (formerly First Nationwide Financial Corporation). Ford
Holdings is a holding company that owns primarily Associates First Capital
Corporation ("The Associates"), USL Capital and American Road. In addition,
there are a number of international affiliates not listed above that are
consolidated in the total Financial Services results, but are managed by either
Ford Credit (which manages Ford Credit Europe, as well as other international
affiliates), The Associates or USL Capital.
------------------------
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> 34
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.
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 $4,000,000,000
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
4
<PAGE> 35
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.
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 in definitive
form 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
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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 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
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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 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.
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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 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
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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 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
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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 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
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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 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 have in the past provided, and may continue to
provide, legal services to Ford and its subsidiaries, including Ford Credit.
EXPERTS
The financial statements which are incorporated in this Prospectus by
reference to the 1994 10-K Report have been audited by Coopers & Lybrand L.L.P.
("Coopers & Lybrand"), 400 Renaissance Center, Detroit, Michigan 48243,
independent certified public accountants, to the extent indicated in their
report therein, and have been so incorporated in reliance upon the report of
that firm, given on their authority as experts in accounting and auditing, which
report includes an
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explanatory paragraph indicating Ford Credit changed its methods of accounting
for postretirement healthcare benefits and income taxes in 1992.
With respect to the unaudited interim financial information of Ford Credit
for the periods ended March 31, 1995 and 1994 and June 30, 1995 and 1994,
included in the First Quarter 10-Q Report and Second Quarter 10-Q Report,
respectively, incorporated by reference in this Prospectus, Coopers & Lybrand
have reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their reports
included in the First Quarter 10-Q Report and the Second Quarter 10-Q Report
state that they did not audit and they do not express an opinion on that interim
financial information. The accountants are not subject to the liability
provisions of Section 11 of the Securities Act for their reports on the
unaudited interim financial information because each such report is not a
"report" or a "part" of the registration statement prepared or certified by the
accountants within the meaning of Sections 7 and 11 of such Act.
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