<PAGE> 1
PRICING SUPPLEMENT NO. 77 Pursuant To Rule 424 b3
- ------------------------- Registration No. 33-64237
(TO PROSPECTUS AND PROSPECTUS SUPPLEMENT
DATED OCTOBER 24, 1996)
$300,000,000
[FORD LOGO]
FORD MOTOR CREDIT COMPANY
NOTES DUE MAY 23, 2002
------------------------
The $300,000,000 aggregate principal amount of Notes due May 23, 2002 (the
"Notes") are part of a series of Medium-Term Notes Due from 9 Months to 30 Years
from Date of Issue of Ford Motor Credit Company ("Ford Credit"). The Notes are
Fixed Rate Notes as described in the accompanying Prospectus and Prospectus
Supplement and will bear interest at the rate of 7.32% per annum (except as
provided below). On May 23, 1999 (the "Optional Conversion Date"), Ford Credit
may exercise an option to convert the Notes, in whole but not in part, to
Floating Rate Notes, all as more fully described below. The Notes will mature on
May 23, 2002 ("Maturity"). The Notes will be issued in book-entry form through
the facilities of The Depository Trust Company in minimum denominations of
$1,000 and integral multiples thereof.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT THE COMPANY(1)(2)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Per Note.......................... 100% .35% 99.65%
- -------------------------------------------------------------------------------------------------------------
Total............................. $300,000,000 $1,050,000 $298,950,000
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</TABLE>
(1) Plus accrued interest, if any, from May 23, 1997.
(2) Before deduction of expenses payable by Ford Credit.
------------------------
The Notes are offered by the Underwriter, subject to prior sale, when, as
and if issued by Ford Credit and accepted by the Underwriter and subject to
certain other conditions. The Underwriter reserves the right to reject orders in
whole or in part. It is expected that delivery of the Notes will be made through
the book-entry facilities of The Depository Trust Company on or about May 23,
1997.
------------------------
MERRILL LYNCH & CO.
------------------------
The date of this Pricing Supplement is May 15, 1997.
<PAGE> 2
Certain persons participating in this offering may engage in transactions
that stabilize, maintain, or otherwise affect the price of the Notes. For a
description of these activities, see "Plan of Distribution" in the accompanying
Prospectus and Prospectus Supplement.
DESCRIPTION OF THE NOTES
GENERAL
The Medium-Term Notes Due from 9 Months to 30 Years from Date of Issue
offered hereby are "Notes due May 23, 2002" and are referred to in this Pricing
Supplement as the "Notes." On the Optional Conversion Date, Ford Credit may
exercise an option to convert in whole, but not in part, the entire principal
amount of the Notes from Fixed Rate Notes to Floating Rate Notes (the "LIBOR
Conversion Option"), on notice given to the Holders of the Notes as provided in
the Indenture not more than 30 nor less than 15 days prior to such Optional
Conversion Date. If the Optional Conversion Date would fall on a day that is not
a Business Day (as that term is defined for purposes of Fixed Rate Notes), such
Optional Conversion Date shall be postponed to the following day that is a
Business Day. Except as provided below, the terms of the Notes will be as
described in the accompanying Prospectus and Prospectus Supplement.
PRIOR TO EXERCISE OF THE LIBOR CONVERSION OPTION
Prior to exercise by Ford Credit of the LIBOR Conversion Option, the Notes
will be Fixed Rate Notes except as described below. Certain provisions of the
Fixed Rate Notes are more fully described in the accompanying Prospectus and
Prospectus Supplement. The Notes will bear interest at the rate of 7.32% per
annum until the earlier of (i) the principal amount thereof is paid or made
available for payment or (ii) the LIBOR Conversion Option is exercised. Interest
payments on the Notes will equal the amount of interest accrued from and
including the immediately preceding Interest Payment Date in respect of which
interest has been paid (or from and including May 23, 1997 (the "Original Issue
Date"), if no interest has been paid with respect to the Notes), to, but
excluding, the related Interest Payment Date, Maturity or Optional Conversion
Date, as the case may be. Interest on the Notes will be computed on the basis of
a 360-day year of twelve 30-day months. Interest on the Notes will be payable
semiannually on May 23 and November 23 of each year, commencing November 23,
1997, and at Maturity if the LIBOR Conversion Option is not exercised.
SUBSEQUENT TO EXERCISE OF THE LIBOR CONVERSION OPTION
On and after the date on which the LIBOR Conversion Option is exercised, if
at all, the Notes will be Floating Rate Notes. Certain provisions of the
Floating Rate Notes are more fully described in the accompanying Prospectus and
Prospectus Supplement. The interest rate basis will be LIBOR Telerate; the Index
Maturity will be 3 Months and the Spread will be +0.1875%. The Interest Reset
Dates will be February 23, May 23, August 23 and November 23 of each year
commencing on the date the LIBOR Conversion Option is exercised. The Interest
Payment Dates will be February 23, May 23, August 23 and November 23 of each
year commencing on August 23, 1999. Interest payments on the Notes will equal
the amount of interest accrued from and including the immediately preceding
Interest Payment Date in respect of which interest has been paid (or from the
date on which the LIBOR Conversion Option is exercised, for the initial payment
as a Floating Rate Note), to but excluding the related Interest Payment Date or
Maturity. Interest on the Notes will be computed on the basis of the actual
number of days during the period for which payment is being made, divided by
360. Interest on the Notes will be computed and payable as a Floating Rate Note
as described in the accompanying Prospectus and Prospectus Supplement.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion supplements the discussion contained in the
accompanying Prospectus Supplement under the heading "United States Taxation --
Original Issue Discount". The following discussion assumes that the "issue
price" of the Notes, as determined for United States Federal income tax
purposes, will equal the principal amount.
PS-2
<PAGE> 3
The United States tax regulations dealing with Original Issue Discount
referred to in the accompanying Prospectus Supplement ("the OID Regulations") do
not specifically address the proper United States Federal income tax treatment
of a debt instrument which provides the issuer with an option to convert the
interest rate from a fixed rate to a floating rate, such as the LIBOR Conversion
Option applicable to the Notes. It is also unclear whether the tax treatment of
the Notes is properly governed by the OID Regulations or whether alternatively
the Notes constitute contingent payment debt obligations. Accordingly, the
proper United States Federal income tax treatment of the Notes is uncertain.
Due to the lack of authority directly addressing the proper United States
Federal income tax treatment of the Notes, since the OID Regulations contain an
analogous set of rules which apply to debt instruments which provide for
alternative payment schedules upon the occurrence of certain contingencies or
the exercise of certain options, although not expressly applicable to the Notes,
Ford Credit intends to apply similar rules for purposes of calculating the
amount and accrual of original issue discount and interest on the Notes. Based
upon such an approach, Ford Credit intends to assume that Ford Credit will not
exercise the LIBOR Conversion Option and that the Notes will accrue interest at
the 7.32% per annum fixed rate until the Maturity. Accordingly, under this
approach, the Notes will be treated as providing for stated interest throughout
the entire term thereof at a rate equal to the 7.32% per annum fixed rate. As a
result of the foregoing, under this approach, all interest on the Notes payable
at the 7.32% per annum fixed rate will constitute "qualified stated interest"
and will be taxed accordingly. Thus, under this approach, the Notes will not be
treated as having been issued with original issue discount for United States
Federal income tax purposes. Moreover, under this approach, if Ford Credit in
fact exercises the LIBOR Conversion Option, solely for purposes of determining
the accrual of original issue discount and interest on the Notes, the Notes will
be deemed to be reissued for an issue price equal to the principal amount, and
the floating interest rate of the LIBOR rate plus 0.1875% will constitute
qualified stated interest and will be taxed accordingly. Where required, Ford
Credit intends to file information returns with the IRS in accordance with the
foregoing treatment, in the absence of any change or clarification in the law,
by regulation or otherwise, requiring another treatment of the Notes for United
States Federal income tax purposes. There can be no assurance, however, that the
IRS will agree with the foregoing treatment, and it is possible that the IRS
could assert another treatment of the Notes.
Prospective investors in the Notes are urged to consult their own tax
advisors regarding the proper United States Federal income tax treatment of the
Notes.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriter") has
agreed to purchase from Ford Credit $300,000,000 aggregate principal amount of
the Notes.
The Underwriter has advised Ford Credit that it proposes initially to offer
all or part of the Notes directly to the public at the offering price set forth
on the cover page of this Pricing Supplement. After the initial public offering,
the public offering price may be changed.
The Underwriter is permitted to engage in certain transactions that
stabilize the price of the Notes. Such transactions consist of bids or purchases
for the purpose of pegging, fixing or maintaining the price of the Notes.
In general, purchases of a security for the purpose of stabilization could
cause the price of the security to be higher than it might be in the absence of
such purchases.
Neither Ford Credit nor the Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Notes. In addition, neither Ford
Credit nor the Underwriter makes any representation that the Underwriter will
engage in such transactions or that such transaction, once commenced, will not
be discontinued without notice. See "Plan of Distribution" in the accompanying
Prospectus and Prospectus Supplement.
PS-3
<PAGE> 4
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PRICING SUPPLEMENT, THE PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PRICING SUPPLEMENT,
THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY FORD CREDIT OR BY THE AGENT. NEITHER THE DELIVERY OF THIS PRICING SUPPLEMENT,
THE PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND
THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF FORD CREDIT SINCE THE DATE HEREOF. THIS PRICING
SUPPLEMENT, THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
PRICING SUPPLEMENT
Description of the Notes................ PS-2
Certain United States Federal Income Tax
Considerations........................ PS-2
Supplemental Plan of Distribution....... PS-3
PROSPECTUS SUPPLEMENT
Description of Notes.................... S-2
Special Provisions Relating to Foreign
Currency Notes........................ S-11
Foreign Currency Risks.................. S-13
United States Taxation.................. S-14
Plan of Distribution.................... S-23
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.................... 9
Legal Opinions.......................... 10
Experts................................. 10
</TABLE>
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$300,000,000
[FORD LOGO]
FORD MOTOR CREDIT COMPANY
NOTES DUE MAY 23, 2002
------------------------
PRICING SUPPLEMENT
------------------------
MERRILL LYNCH & CO.
MAY 15, 1997
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