<PAGE> 1
RULE 424(b)2
REGISTRATION STATEMENT NO. 333-50611
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 1, 1998
FORD MOTOR CREDIT COMPANY
DM2,000,000,000 5 1/4% NOTES DUE JUNE 16, 2008
------------------
The Notes are offered for sale in the United States, Europe and Asia. See
"Underwriting". The Notes will mature on June 16, 2008 and may not be redeemed
by Ford Motor Credit Company ("Ford Credit") prior to maturity unless certain
events occur involving United States taxation. See "Description of Notes --
Redemption".
Interest on the Notes is payable annually on June 16 of each year
commencing June 16, 1999.
The Notes will be represented by two fully registered Global Notes, one
registered in the name of the nominee of The Depository Trust Company, New York,
New York (the "Depository") for the account of its participants and one
registered in the name of Deutsche Borse Clearing AG, Frankfurt am Main
("Clearing AG"). The Global Note held by Clearing AG will be for the account of
Clearing AG's account holders and for participants in the Euroclear System
("Euroclear") and Cedel Bank, societe anonyme ("Cedel"). Financial institutions
that are participants in Euroclear and Cedel will hold beneficial interests in
the Notes indirectly through the account of Euroclear or Cedel, as the case may
be at Clearing AG. Beneficial interests in the Global Notes will be shown on,
and transfers thereof will be effected only through, records maintained by the
Depository and Clearing AG and its direct and indirect participants. Except as
described herein, Notes in definitive form will not be issued. All payments of
principal and interest will be made by Ford Credit in immediately available
Deutsche Mark or euro funds. See "Description of Notes -- Global Clearance and
Settlement Procedures". Purchasers of beneficial interests in the Notes are
required to pay for the Notes in immediately available Deutsche Mark funds. See
"Information on Foreign Exchange Exposure".
Beneficial owners of the Notes that are not United States persons must
certify that they are non-United States persons in order to receive payments on
those Notes free of United States withholding tax. See "United States Taxation
of Non-United States Persons -- Income and Withholding Tax".
Application has been made to the Luxembourg Stock Exchange and to the Stock
Exchange of Singapore Limited (the "Singapore Stock Exchange" and together the
"Exchanges") for permission to deal in, and for listing of, the Notes on such
Exchanges.
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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 TO WHICH IT
RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) FORD CREDIT(1)(3)
----------------- ------------ -----------------
<S> <C> <C> <C>
Per Note.............................. 99.619% .450% 99.169%
Total................................. DM1,992,380,000 DM9,000,000 DM1,983,380,000
</TABLE>
- ------------
(1) Plus accrued interest, if any, from June 16, 1998.
(2) Ford Credit has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, and
to pay to the Representative up to DM88,800 as reimbursement for all or a
portion of their expenses.
(3) Before deducting expenses payable by Ford Credit estimated to be
$200,000.
------------------
The Notes are offered severally by the Underwriters and through their
respective selling agents, as specified herein, subject to receipt and
acceptance by them and subject to their right to reject any order in whole or in
part. It is expected that delivery of the Global Notes, representing the Notes,
will be made on or about June 16, 1998 through the facilities of the Depository,
Clearing AG, Cedel and Euroclear, against payment therefor in immediately
available Deutsche Mark funds.
------------------
GOLDMAN, SACHS & CO. OHG
------------------
ABN AMRO BANK (DEUTSCHLAND) AG COMMERZBANK AKTIENGESELLSCHAFT
CREDIT SUISSE FIRST BOSTON AKTIENGESELLSCHAFT DEUTSCHE BANK AKTIENGESELLSCHAFT
DRESDNER KLEINWORT BENSON SOCIETE GENERALE S.A.
------------------
The date of this Prospectus Supplement is June 8, 1998.
<PAGE> 2
THE LUXEMBOURG STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF
THIS DOCUMENT, MAKES NO REPRESENTATION AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM
OR IN RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS DOCUMENT AND
THE PROSPECTUS.
THE SINGAPORE STOCK EXCHANGE ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS
OF ANY OF THE STATEMENTS OR OPINIONS MADE OR REPORTS CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS. ADMISSION TO THE OFFICIAL
LIST IS NOT TO BE TAKEN AS AN INDICATION OF THE MERITS OF THE ISSUER OR OF THE
NOTES.
THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS INCLUDE PARTICULARS
GIVEN IN COMPLIANCE WITH THE REQUIREMENTS OF THE SINGAPORE STOCK EXCHANGE FOR
THE PURPOSE OF GIVING INFORMATION WITH REGARD TO FORD CREDIT. FORD CREDIT
ACCEPTS FULL RESPONSIBILITY FOR THE ACCURACY OF THE INFORMATION CONTAINED IN
THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS AND CONFIRMS, HAVING MADE
ALL REASONABLE INQUIRIES, THAT TO THE BEST OF ITS KNOWLEDGE AND BELIEF THERE ARE
NO OTHER FACTS THE OMISSION OF WHICH WOULD MAKE ANY STATEMENT HEREIN MISLEADING
IN ANY MATERIAL RESPECT.
OFFERS AND SALES OF THE NOTES ARE SUBJECT TO RESTRICTIONS IN RELATION TO
THE UNITED KINGDOM, THE FEDERAL REPUBLIC OF GERMANY, JAPAN AND SINGAPORE,
DETAILS OF WHICH ARE SET OUT IN "UNDERWRITING" BELOW. THE DISTRIBUTION OF THIS
PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS AND THE OFFERING OF THE NOTES
IN CERTAIN OTHER JURISDICTIONS MAY ALSO BE RESTRICTED BY LAW.
---------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES INCLUDING
OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH NOTES, IN
CONNECTION WITH THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING".
IN CONNECTION WITH THIS OFFERING, CERTAIN PERSONS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE LUXEMBOURG STOCK EXCHANGE, THE SINGAPORE
STOCK EXCHANGE, THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
In this Prospectus Supplement and accompanying Prospectus, unless otherwise
specified or the context otherwise requires, references to "dollars", "$" and
"U.S.$" are to United States dollars, and references to "DM" are to the Deutsche
Mark.
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<PAGE> 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Ford Credit's Annual Report on Form 10-K for the year ended December 31,
1997 (the "1997 10-K Report"), Ford Credit's Quarterly Report on Form 10-Q for
the Quarter ended March 31, 1998 (the "First Quarter 10-Q Report"), and Ford
Credit's Current Reports on Form 8-K dated January 12, 1998, February 3, 1998
(the "February 8-K Report"), February 11, 1998, March 30, 1998, April 16, 1998
and April 27, 1998 are incorporated in this Prospectus Supplement 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 Notes shall be deemed to be
incorporated by reference into this Prospectus Supplement 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 ("Ford"), as
well as Ford Credit.
The financial statements which are incorporated in this Prospectus
Supplement and accompanying Prospectus by reference to the 1997 10-K Report and
the February 8-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 reports therein,
and have been so incorporated in reliance upon the report of that firm, given on
their authority as experts in accounting and auditing.
Coopers & Lybrand have given and not withdrawn their written consent to the
issue of this Prospectus Supplement and the accompanying Prospectus with the
incorporation by reference herein of (i) their report dated January 26, 1998 in
the 1997 10-K Report and in the February 8-K Report on the audited financial
statements of Ford Credit for the financial years ended December 31, 1997 and
(ii) their report dated April 15, 1998 in the First Quarter 10-Q Report on the
unaudited financial statements of Ford Credit for the periods ending March 31,
1998 and 1997 (which report states that they did not audit and do not express an
opinion on that interim financial information), Coopers and Lybrand have
consented to the references to their name in the form and context in which they
are included.
This Prospectus Supplement and accompanying Prospectus, together with the
documents incorporated by reference herein, will be available free of charge at
the office of Banque Internationale a Luxembourg S.A., 69 route d'Esch L-1470,
Luxembourg.
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<PAGE> 4
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS OF FORD CREDIT
E.S. Acton,
Vice President
M.E. Bannister,
Vice President
J.P. Burkhard,
Vice President-Treasurer
K.J. Coates,
Director and
Executive Vice President
J.M. Devine,
Director
D.C. Flanigan,
Director and
Executive Vice President
R.A. Kniebes,
Vice President
M.S. Macdonald,
Director
J.T. Noone,
Vice President
M.R. O'Rear,
Vice President
W.D. Roberts,
Vice President
D.E. Ross,
Vice President
A.J. Salmon,
Vice President
G.C. Smith,
Director and
Executive Vice President
R.C. VanLeeuwen,
Vice President
J.M. Walsh,
Vice President
G.E. Watts,
Vice President
K. Whipple,
Director and
Chairman of the Board
All of the above-named persons are full-time employees of Ford or Ford Credit.
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be added to the general
funds of Ford Credit and will be available for the purchase of receivables, for
loans and for the payment of maturing debt. Such proceeds initially may be used
to reduce short-term borrowings or may be invested temporarily in short-term
securities. Net proceeds to be paid to Ford Credit will be DM1,983,380,000.
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<PAGE> 5
CAPITALIZATION OF FORD MOTOR CREDIT COMPANY
AND SUBSIDIARIES
The capitalization of Ford Credit and its subsidiaries at March 31, 1998 is
as follows (in millions of U.S. dollars):
<TABLE>
<CAPTION>
OUTSTANDING ADDITIONAL
MARCH 31, LONG-TERM
1998 INDEBTEDNESS
----------- ------------
(UNAUDITED)
<S> <C> <C>
SENIOR INDEBTEDNESS, UNSECURED
Short-term
Commercial paper.................................. $ 42,299.5
Other short-term debt............................. 6,499.4
----------
Total short-term debt........................ 48,798.9
Long-term debt payable within one year................. 10,114.2
Long-term notes and debentures......................... 45,367.2
Notes offered hereby(1)..................................... -- $1,126.1
----------
Total debt................................... 104,280.3
----------
STOCKHOLDER'S EQUITY
Capital stock, par value $100 a share (250,000 common
shares authorized, issued, and outstanding)........... 25.0
Paid-in surplus (contributions by stockholder)......... 3,896.4
Note receivable from affiliated company................ (1,517.0)
Accumulated other comprehensive income................. (133.2)
Earnings retained for use in the business.............. 7,605.2
----------
Total stockholder's equity................... 9,876.4
----------
TOTAL CAPITALIZATION........................................ $114,156.7
==========
</TABLE>
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(1) Based on a spot rate of exchange of U.S.$1.00 = DM1.7760.
Except as set forth herein, there has been no material change in the
capitalization of Ford Credit since March 31, 1998 to the date of this
Prospectus Supplement.
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<PAGE> 6
EXCHANGE RATE INFORMATION
The Deutsche Mark is a freely convertible currency in accordance with
Article VIII of the Articles of Agreement of the International Monetary Fund.
The Federal Republic of Germany is a member of the European Monetary System
("EMS") and takes part in the exchange rate mechanism of the EMS, where the
Deutsche Mark serves as an anchor currency. Within the EMS, exchange rates may
fluctuate within permitted margins, fixed by central bank intervention. Against
currencies outside the EMS, the Deutsche Mark has, in theory, free floating
exchange rates, although central banks sometimes try to confine short-term
exchange rate fluctuations by intervening in foreign exchange markets.
Under the treaty establishing the European Community, as amended by the
Treaty on European Union (the "Maastricht Treaty"), to which the Federal
Republic of Germany is a signatory, it is provided that at January 1, 1999, and
subject to the fulfillment of certain conditions, a single unified currency (the
"euro") is to become legal tender in those Member States of the European Union
("EU") that satisfy the convergence criteria set forth in the Maastricht Treaty.
In May 1998, the Council of the European Union determined that eleven members of
the EU satisfied the convergence criteria. Germany satisfies the conversion
criteria and on January 1, 1999, the euro will replace the Deutsche Mark as
legal currency in the Federal Republic of Germany. The conversion rate between
the Deutsche Mark and the euro will be fixed by the Council of the European
Union. Bills and coins in euro will be circulated for the first time on January
1, 2002 and for a three-year transitional period until December 31, 2001, the
Deutsche Mark will remain legal tender in the Federal Republic of Germany as an
expression of the euro. Ford Credit may, during this transitional period,
continue to pay principal of and interest on the Notes in Deutsche Mark or may
redenominate the Notes into euro and thereafter pay principal of and interest on
the Notes in euro. See "Description of Notes -- Redenomination into Euro". After
December 31, 2001, all payments on the Notes must be made in euro.
Fluctuations in the exchange rate between the Deutsche Mark and the U.S.
dollar will affect the U.S. dollar equivalent both of the Deutsche Mark
principal of and interest on the Notes and of the price of the Notes if traded.
Fluctuations in exchange rates that have occurred in the past are not
necessarily indicative of fluctuations in the rate that may occur during the
term of the Notes.
The following table shows the period end, average high and low Noon Buying
Rate for Deutsche Mark, expressed in Deutsche Mark per $1.00, for the periods
and dates indicated. No representation is made that the Deutsche Mark or U.S.
dollar amounts referred to herein could have been or could be converted into
U.S. dollars or Deutsche Mark, as the case may be, at any particular rate.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, PERIOD END AVERAGE(1) HIGH LOW
- --------------------------------------- ---------- ---------- ------ ------
<S> <C> <C> <C> <C>
1993................................... 1.7395 1.6545 1.7405 1.5675
1994................................... 1.5495 1.6216 1.7627 1.4920
1995................................... 1.4345 1.4321 1.5612 1.3565
1996................................... 1.5387 1.5070 1.5655 1.4354
1997................................... 1.7991 1.7394 1.8810 1.5413
1998(2)................................ 1.7799 1.8148 1.8542 1.7590
</TABLE>
- ------------
(1) The average of the Noon Buying Rates on the last business day of each month
during the relevant period.
(2) Through June 8, 1998.
There are, except in limited embargo circumstances, no legal restrictions
in the Federal Republic of Germany on international capital movements and
foreign exchange transactions. However, for statistical purposes only, every
individual or corporation residing in the Federal Republic of Germany must
report to the Deutsche Bundesbank, subject to certain exceptions, any
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<PAGE> 7
payment received from or made to an individual or a corporation resident outside
of the Federal Republic of Germany if such payment exceeds DM5,000 (or the
equivalent in a foreign currency).
It is expected that dealers in the foreign exchange markets will provide
bid and offer quotations for the exchange rate of the euro in terms of most of
the world's currencies on a daily basis.
INFORMATION ON FOREIGN EXCHANGE EXPOSURE
For U.S. investors whose financial activities are denominated principally
in U.S. dollars, an investment in the Notes entails certain exposures that are
not associated with a similar investment in a security denominated in U.S.
dollars. Such exposures include the possibility of changes in the rate of
exchange between the U.S. dollar and the Deutsche Mark and, after redenomination
of the Notes into euro, the euro, and the possibility of the imposition of
foreign exchange controls by either the United States or Germany. In recent
years, rates of exchange between the U.S. dollar and the Deutsche Mark and other
European currencies have fluctuated. 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 the Notes.
Depreciation of the Deutsche Mark (or the euro) against the U.S. dollar would
result in a decrease in the U.S. dollar-equivalent yield of a Note, in the U.S.
dollar-equivalent value of the principal repayable at maturity of such Note and
generally in the U.S. dollar-equivalent market value of such Note, while
appreciation of the Deutsche Mark (or the euro) would have the opposite effects.
U.S. investors should consult their tax advisors as to the U.S. tax
implications of purchasing, holding and disposing of obligations (i.e. the
Notes) that are denominated in a currency other than U.S. dollars.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Debt Securities set forth in
the Prospectus. The Notes are part of the Debt Securities registered by Ford
Credit in May 1998 to be issued on terms to be determined at the time of sale.
GENERAL
The Notes will be limited to DM2,000,000,000 aggregate principal amount,
will be unsecured obligations of Ford Credit and will mature and be redeemed at
par on June 16, 2008. The Notes 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).
The Notes will bear interest from June 16, 1998 at the rate per annum set
forth on the cover page of this Prospectus Supplement, payable on June 16 of
each year, commencing June 16, 1999, to the person in whose name the Note was
registered at the close of business on the 15th day preceding the respective
Interest Payment Date. If any day on which a payment is due with respect to a
Note is not a Business Day, then the holder thereof shall not be entitled to
payment of the amount due until the next following Business Day nor to any
additional principal, interest or other payment as a result of such delay except
as otherwise provided under "Payment of Additional Amounts". "Business Day"
shall mean any day which is not a Saturday or Sunday or a day on which banks in
New York City or Frankfurt are authorized or obligated by law or regulation to
close.
The Notes are not subject to redemption prior to maturity unless certain
events occur involving United States taxation. In such event, the Notes will be
redeemed at a redemption price of 100% of their principal amount plus accrued
and unpaid interest to the date of redemption. See "Description of Notes --
Redemption".
S-7
<PAGE> 8
BOOK-ENTRY, DELIVERY AND FORM
The Notes will be issued in the form of two or more fully registered Global
Notes (the "Global Notes") certain of which will be deposited with, or on behalf
of, the Depository and registered in the name of Cede & Co., the Depository's
nominee (the "DTC Global Note"). The other Global Note or Notes will be
deposited with Clearing AG (the "DBC Global Note"), will be issued in registered
form and will represent the Notes kept in custody for financial institutions
that are accountholders in Clearing AG, including such Notes which are held
through Euroclear and Cedel, each of which has an account with Clearing AG, and
any other clearing system which maintains an account with Clearing AG. Together,
the Notes represented by the DBC Global Note and the DTC Global Note,
respectively, will equal the aggregate principal amount of the Notes outstanding
at any time. The amount of Notes represented by each of the DBC Global Note and
the DTC Global Note is evidenced by the register (the "Register") maintained for
that purpose by the Registrar and Transfer Agent (as defined under "Global
Clearance and Settlement Procedures -- Certification and Custody"). Beneficial
interests in the Global Notes will be represented through book-entry accounts of
financial institutions acting on behalf of beneficial owners as direct and
indirect participants in the Depository or Clearing AG. Investors may elect to
hold interests in the Global Notes through the Depository, Clearing AG,
Euroclear or Cedel, if they are participants of such systems, or indirectly
through organizations which are participants in such systems. If the Depository,
Clearing AG or another depository is at anytime unwilling or unable to continue
as a depository and a successor depository is not appointed by Ford Credit
within 90 days, Ford Credit will issue Notes in definitive form in exchange for
the Global Notes. In the event definitive Notes are issued, Ford Credit will
appoint a paying agent and transfer agent in Luxembourg and Singapore.
Transfers
Transfers of Notes will require appropriate entries in securities accounts:
(i) transfers of Notes between Clearing AG accountholders on the one
hand and Depository participants on the other hand will
be recorded on the Register and will be effected by an increase
or a reduction in the aggregate amount of Notes represented by
the DTC Global Note and a corresponding reduction or increase
in the aggregate amount of Notes represented by the DBC Global
Note;
(ii) transfers of Notes between Clearing AG accountholders will be
effected in accordance with procedures established for this
purpose by Clearing AG;
(iii) transfers of Notes between Depository participants will be
effected in accordance with procedures established for this
purpose by the Depository;
(iv) transfers of Notes between Euroclear participants, between Cedel
participants, and between Euroclear participants on the one hand
and Cedel participants on the other hand will be effected in
accordance with procedures established for these purposes by
Euroclear and Cedel, respectively; and
(v) transfers of Notes between Euroclear or Cedel participants on
the one hand and Clearing AG accountholders on the
other hand will be effected through Clearing AG in accordance
with the procedures established for this purpose.
Transfers of Notes pursuant to (i) above or exchanges of Notes pursuant to
"Exchanges" may not be effected during the period commencing on the Regular
Record Date and ending on the related Interest Payment Date (both dates
inclusive).
Exchanges
Notes represented by the DTC Global Note may be exchanged for Notes
represented by the DBC Global Note, and vice versa. Such exchanges will be
recorded on the Register and will be effected by an increase or a reduction in
the aggregate amount of Notes represented by the DTC Global Note and a
corresponding reduction or increase in the aggregate amount of Notes
S-8
<PAGE> 9
represented by the DTC Global Note and a corresponding reduction or increase in
the aggregate amount of Notes represented by the DBC Global Note by the
aggregate principal amount of Notes so exchanged.
PAYMENT
In order for a person holding a beneficial interest in the Notes directly
through the Depository to receive payments of the principal of, or interest on
the Notes, such holder must specify wire transfer instructions to the
Depository, who will notify Chase New York, who will instruct The Chase
Manhattan Bank, New York, Frankfurt Branch, Gruneburgweq 2, 60322 Frankfurt am
Main Germany (the "Paying Agent" or "Chase Frankfurt") of the Deutsche Mark
account in the Federal Republic of Germany where payments are to be made. In
order for payments of principal or interest to be made in a timely manner, such
instruction must be received by the Paying Agent no later than the fifth day
preceding the date of payment.
Distributions of principal of, and interests on, the Notes held through
Clearing AG, Euroclear or Cedel will be credited to the cash accounts of
Clearing AG account holders, Euroclear participants or Cedel participants in
accordance with the relevant systems rules and procedures, to the extent
received by Clearing AG.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Although the Depository, Clearing AG, Euroclear and Cedel have agreed to
the procedures provided below in order to facilitate transfers of beneficial
interests in the Notes among participants of the Depository, Clearing AG,
Euroclear and Cedel, they are under no obligation to perform or continue to
perform such procedures and such procedures may be modified or discontinued at
any time. None of Ford Credit, the Underwriters, the Trustee or the Paying Agent
will have any responsibility for the performance by the Depository, Clearing AG,
Euroclear or Cedel or their respective participants or indirect participants of
their respective obligations under the rules and procedures governing their
operations. The following information on clearance and settlement is based on
information provided by the several clearing systems identified herein.
Certification and Custody
Clearing and settlement arrangements, including the existing arrangements
between the Depository, Clearing AG, Euroclear and Cedel, will provide investors
access to four major clearing systems. At initial settlement, the Notes will be
represented by two Global Notes, which will not be exchangeable for Notes in
definitive form except in the limited circumstances described herein. Financial
institutions that are participants in the Depository, will hold beneficial
interests in the Notes through their accounts at the Depository. The DBC Global
Note will represent the Notes held by investors electing to hold Notes through
financial institutions that are participants in Clearing AG. Euroclear and Cedel
participate in Clearing AG by virtue of being participants in Clearing AG. Notes
held by investors electing to hold Notes through financial institutions that are
participants in Euroclear and Cedel are thus included in the DBC Global Notes.
Together, the Global Notes represented by the DBC Global Note and DTC
Global Note will equal the total aggregate principal amount of the Notes
outstanding at any time. When subsequent secondary market sales settle between
the Clearing AG and the Depository clearing systems, such sales shall be
recorded on the Register and shall be reflected by respective increases and
decreases in the DBC Global Note and DTC Global Note.
Ford Credit will appoint The Chase Manhattan Bank as the registrar and
transfer agent for the Notes (the "Registrar and Transfer Agent" or "Chase New
York").
Payment
All payments duly made by Ford Credit to, or to the order of, the
registered holders of the Global Notes, shall discharge the liability of Ford
Credit under the Notes to the extent of the sum or sums so paid. Therefore,
after such payments have been duly made, payments by direct and indirect
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<PAGE> 10
participants of the Depository and/or Clearing AG to owners of beneficial
interests in the Notes will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name", and will be the responsibility of
the direct or indirect participants of the Depository or Clearing AG, as the
case may be. None of Ford Credit, the Underwriters (except as direct or indirect
participants of the Depository or Clearing AG), the Trustee or the Paying Agent
will have any responsibility or liability for any aspect of the records relating
to or payments made or to be made on account of beneficial interests in the
Notes or for maintaining, supervising or reviewing any records relating to such
beneficial interests.
The Clearing Systems
The Depository
For a discussion concerning the Depository, see "Description of Debt
Securities -- Book-Entry, Delivery and Form" in the accompanying Prospectus.
Clearing AG
Clearing AG is incorporated under the laws of the Federal Republic of
Germany and acts as a specialized depositary and clearing organization. Clearing
AG is subject to regulation and supervision by the German Federal Banking
Authority (Bundesaufsichtsamt fur das Kreditwesen).
Clearing AG holds securities for its accountholders and facilitates the
clearance and settlement of securities transactions between its accountholders
through electronic book-entry changes in securities accounts with simultaneous
payment in Deutsche Mark in same-day funds. Thus, the need for physical delivery
of certificates is eliminated.
Clearing AG provides to its accountholders, among other things, services
for safekeeping, administration, clearance and settlement of domestic German and
internationally traded securities and securities lending and borrowing. Its
accountholders are banking institutions located in Germany, including German
branches of non-German financial institutions, and securities brokers or dealers
admitted to a German stock exchange that meet certain additional requirements.
Indirect access to Clearing AG is available to others such as the Underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and others, including individuals, that clear through or maintain custodial
relationships with its accountholders, either directly or indirectly.
Cedel
Cedel advises that it is incorporated under the laws of Luxembourg as a
professional depositary. Cedel holds securities for its participating
organizations ("Cedel Participants") and facilitates the clearance and
settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Cedel provides to
Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel interfaces with domestic markets in
several countries. As a professional depositary, Cedel is subject to regulation
by the Luxembourg Monetary Institute. Cedel Participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations and may include the Underwriters. Indirect access to Cedel
is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Cedel Participant
either directly or indirectly.
Distributions with respect to the Notes held beneficially through Cedel
will be credited to cash accounts of Cedel Participants in accordance with its
rules and procedures.
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Euroclear
Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in several
countries. Euroclear is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York (the "Euroclear Operator"), under contract
with Euroclear Clearance Systems S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for Euroclear on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries and may include the Underwriters.
Indirect access to Euroclear is also available to other firms that clear through
or maintain a custodial relationship with a Euroclear Participant, either
directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to the Notes held beneficially through Euroclear
will be credited to the cash accounts of Euroclear Participants in accordance
with the Terms and Conditions.
Initial Settlement
One or more DTC Global Notes will be delivered at initial settlement to The
Chase Manhattan Bank, in New York, as custodian for the Depository, and the DBC
Global Note will be delivered to Clearing AG. Initial settlement for the Notes
will be made in immediately available Deutsche Mark funds (i.e., for value on
the date of delivery of the Notes).
Customary settlement procedures will be followed for participants of the
Depository, Clearing AG, Euroclear or Cedel at initial settlement. Settlement
procedures applicable to the domestic Deutsche Mark market will be followed for
primary market purchasers which are Clearing AG account holders, and beneficial
interests in the Notes will be credited to their securities accounts on the
settlement date against payment in Deutsche Mark in same-day funds. Settlement
procedures applicable to Deutsche Mark eurobonds will be followed for primary
market purchasers which are Euroclear or Cedel participants, and beneficial
interests in the Notes will be credited to their securities accounts on the
settlement date against payment in same day funds. Primary market purchasers
which are Depository participants will have their securities accounts with the
Depository credited with beneficial interests in the Notes free of payment.
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<PAGE> 12
Secondary Market
Secondary market sales between purchasers within a single clearing system
and between Euroclear and Cedel Participants. Secondary market sales of
beneficial interests in Notes for settlement within each clearing system will be
settled in accordance with the rules and procedures established by the relevant
system. Sales to be settled within Euroclear or Cedel and between Euroclear and
Cedel will normally settle on a three business day basis unless parties specify
a different period (which may be as short as two business days). Sales to be
settled within the Depository will be settled using the Depository's procedures
applicable to U.S. corporate debt obligations free of payment. In such case,
separate payment arrangements outside of the Depository are required to be made
between the Depository participants.
Secondary market sales between Clearing AG account holders and Euroclear or
Cedel participants. These trades normally settle on a three business day basis
(unless parties specify a different period, which may be as short as two
business days).
Secondary market sales from a Depository participant to a Clearing AG
account holder or a Euroclear or Cedel Participant. Two days prior to a
settlement, a Depository participant selling Notes to a Clearing AG
accountholder or a Euroclear or Cedel Participant will notify Chase New York, of
the settlement instructions and will deliver the Notes to Chase New York by
means of the Depository's Deliver Order procedures. Chase New York will send the
settlement instructions to Chase Frankfurt. One day prior to settlement, Chase
Frankfurt will enter delivery free of payment instructions into Clearing AG for
settlement through its Clearing AG transfer account; the Euroclear or Cedel
Participant will instruct its clearing system to transmit receipt-versus-payment
instructions to Clearing AG, and the Clearing AG accountholder will transmit
such instructions directly to Clearing AG, with Chase New York as counterparty.
On the settlement date, the Depository participant will input a
Deposit/Withdrawal at Custodian ("DWAC") transaction to remove the Notes to be
sold from its Depository securities account; matched and pre-checked trades are
settled free of payment-the Clearing AG accountholder's or Cedel Participant's
securities account is credited same day value, the Euroclear Participant's
securities account is credited not later than the next day for value as of the
settlement date, and Chase Frankfurt causes the Depository participant's
pre-specified DM account at Chase Frankfurt to be credited for same day value,
or any other DM account pre-specified by such Depository participant for value
the next day. Transactions between Clearing AG and Depository participants can
only be made free of payment; thus, separate payment arrangements outside of the
Depository are required to be made. Notwithstanding the foregoing, transfers of
beneficial interests in Notes between Clearing AG, Euroclear and Cedel may be
effected against payment in Deutsche Mark within such systems.
Secondary market sales from a Clearing AG Accountholder or a Euroclear or
Cedel Participant to a Depository Participant. Two days prior to settlement, a
Depository participant will send Chase New York, the details of the transaction
for transmittal to Chase Frankfurt and instruct its bank to fund Chase Frankfurt
DM account one day prior to settlement.
A Euroclear or Cedel Bank Participant will instruct its clearing system no
later than one day prior to settlement to transmit delivery-versus-payment
instructions to Clearing AG, and a Depository accountholder will transmit one
day prior to settlement such instructions directly to Clearing AG, naming Chase
Frankfurt as counterparty with further credit to Depository. At the same time
(i.e., one day prior to settlement) Chase Frankfurt will transmit settlement to
Clearing AG.
On the settlement day, upon settlement of the trade in Clearing AG, Chase
Frankfurt will inform Chase New York of such settlement; the Depository
participant will initiate a DWAC deposit transaction for Chase Frankfurt to
approve, resulting in a deposit of Notes in the Depository participant's
securities account same day value. The Depository accountholder or a Euroclear
or Cedel Participant's accounts are credited with the sales proceeds same day
value.
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<PAGE> 13
REDENOMINATION INTO EURO
In accordance with the German Act Concerning the Redenomination of Debt
Obligations into the Euro and in accordance with the draft European Council
Regulation on Certain Provisions Relating to the Introduction of the Euro, Ford
Credit may, without the consent of the holders of the Notes, by giving notice as
described below, with effect from a date to be determined by it (the
"Redenomination Date"), after January 1, 1999 redenominate the aggregate
principal amount of the Notes, but not part thereof only, into the euro and,
after such redenomination, shall pay principal of and interest on the Notes in
euro. In connection with the redenomination, Ford Credit may (i) alter the
tradeable nominal amounts of the Notes, and (ii) adjust the provisions of the
Notes and the Indenture to European market practice regarding the accrual basis
in respect of interest payments for less than a year and regarding the business
day definition.
Such redenomination and any additional measures which may be taken pursuant
to the preceding paragraph may be taken by unilateral declaration by Ford
Credit. Any alteration of the tradeable nominal amounts shall be made in
accordance with existing or anticipated market practice and, if consistent
therewith, may be made by altering the tradeable nominal amounts of the Notes to
0.01 euro.
Notice of any such redenomination shall be published in accordance with "--
Notices" at least one month prior to the Redenomination Date with a copy to the
Trustee and Paying Agent. Such notice shall:
(a) designate the issue,
(b) specify the Redenomination Date,
(c) set forth the text of the amended provisions before and after the
amendment of the Global Notes, and
(d) specify the DM/euro conversion rate fixed by the Council of the
European Union.
Ford Credit shall not be obliged to exchange any Global Notes representing
the Notes for new Global Notes denominated in euro.
Unless Ford Credit redenominates the Notes as set forth above, Ford Credit
must continue to pay principal of and interest on the Notes in Deutsche Mark
until December 31, 2001 after which all payments can only be made in euro. See
"Exchange Rate Information".
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 to a holder who is a non-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
to be then due 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;
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<PAGE> 14
(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 a portion thereof, 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 of the holder or any other person
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, if
compliance is required by statute, by regulation of the United States
Treasury Department or by an applicable income tax treaty to which the
United States is a party 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 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 -- 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
headings "Description of Notes -- Redemption", "Certain United States Tax
Documentation Requirements" and "United States Taxation of Non-United States
Persons" the term "United States" means the United States of America (including
the States and the District of Columbia) and its territories, its possessions
and other areas subject to its jurisdiction, "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 and "non-United States
person" means a person who is not a United States person.
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<PAGE> 15
REDEMPTION
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 the date of this Prospectus Supplement, 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 the date of this
Prospectus Supplement, 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, each series of Notes on
not less than 30 nor more than 60 days' prior notice, at a redemption price
equal to 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.
NOTICES
Notices to holders of the Notes will be published in Authorized Newspapers,
which are published daily, in The City of New York, in London, in Frankfurt and,
so long as the Notes are listed on the Luxembourg Stock Exchange, in Luxembourg
and on the Singapore Stock Exchange, in Singapore. 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, in Frankfurt in the Borsen Zeitung, in Luxembourg
in the Luxemburger Wort and in Singapore in the Business Times. 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. In
addition, copies of all such notices will be sent to Euroclear, Cedel and
Clearing AG.
APPLICABLE LAW AND SERVICE OF PROCESS
The Notes and the Indenture will be governed by and construed in accordance
with the laws of the State of New York, except that, matters relating to the
redenomination of the Notes into euro will be governed by and construed in
accordance with the regulations of the Council of the European Union and the
applicable laws and regulations of the Federal Republic of Germany. See "--
Redenomination into Euro". Ford Credit has designated CT Corporation System in
New York City as the authorized agent to receive service of process in the State
of New York.
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<PAGE> 16
CERTAIN UNITED STATES TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of a Note will generally be subject to the 30% United
States federal withholding tax that generally applies to payments of interest on
a registered form debt obligation issued by a United States person, unless one
of the following steps is taken to obtain an exemption from or reduction of the
tax:
Exemption for Non-United States persons (IRS Form W-8). A beneficial owner
of a Note that is a non-United States person (other than certain persons that
are related to Ford Credit through stock ownership as described in clauses
(x)(a) and (b) of Paragraph (i) under "United States Taxation of Non-United
States Persons -- Income and Withholding Tax") can obtain an exemption from the
withholding tax by providing a properly completed IRS Form W-8 (Certificate of
Foreign Status). Copies of IRS Form W-8 may be obtained from the Luxembourg
listing agent.
Exemption for Non-United States persons with effectively connected income
(IRS Form 4224). A beneficial owner of a Note that is a non-United States
person, including a non-United States corporation or bank with a United States
branch, that conducts a trade or business in the United States with which
interest income on a Note is effectively connected, can obtain an exemption from
the withholding tax by providing a properly completed IRS Form 4224 (Exemption
from Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States).
Exemption or reduced rate for Non-United States persons entitled to the
benefits of a treaty (IRS Form 1001). A beneficial owner of a Note that is a
non-United States person entitled to the benefits of an income tax treaty to
which the United States is a party can obtain an exemption from or reduction of
the withholding tax (depending on the terms of the treaty) by providing a
properly completed IRS Form 1001 (Ownership, Exemption or Reduced Rate
Certificate).
Exemption for United States Persons (IRS Form W-9). A beneficial owner of a
Note that is a United States person can obtain a complete exemption from the
withholding tax by providing a properly completed IRS Form W-9 (Request for
Taxpayer Identification Number and Certification).
United States federal income tax reporting procedure. A beneficial owner of
a Note, or, in the case of IRS Forms 1001 and 4224, its agent, is required to
submit the appropriate IRS Form under applicable procedures to the person
through which the owner directly holds the Note. For example, if the beneficial
owner is listed directly on the books of Clearing AG as the holder of the Note,
the IRS Form must be provided to Clearing AG. Each other person through which a
Note is held must submit, on behalf of the beneficial owner, the IRS Form (or in
certain cases a copy thereof) under applicable procedures to the person through
which it holds the Note, until the IRS Form is received by the United States
person who would otherwise be required to withhold United States federal income
tax from interest on the Note. For example, in the case of Notes held through
Clearing AG, Euroclear or Cedel, the IRS Form (or a copy thereof) must be
received by the Paying Agent. Applicable procedures include additional
certification requirements, described in clause (x)(c)(B) of Paragraph (i) under
"United States Taxation of Non-United States Persons -- Income and Withholding
Tax", if a beneficial owner of the Note provides an IRS Form W-8 to a securities
clearing organization, bank or other financial institution that holds the Note
on its behalf.
Regulations recently issued by the IRS, which will be effective for
payments made after December 31, 1999, make certain modifications to the
certification procedures applicable to non-United States persons. Prospective
investors should consult their tax advisors regarding the certification
requirements for non-United States persons.
EACH HOLDER OF A NOTE SHOULD BE AWARE THAT IF IT DOES NOT PROPERLY PROVIDE
THE REQUIRED IRS FORM, OR IF THE IRS FORM (OR, IF PERMISSIBLE, A COPY OF SUCH
FORM) IS NOT PROPERLY TRANSMITTED TO AND RECEIVED BY THE UNITED STATES PERSON
OTHERWISE REQUIRED TO WITHHOLD UNITED STATES FEDERAL INCOME TAX, INTEREST ON THE
NOTE MAY BE SUBJECT TO UNITED STATES WITHHOLDING TAX AT A 30%
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<PAGE> 17
RATE AND THE HOLDER (INCLUDING THE BENEFICIAL OWNER) WILL NOT BE ENTITLED TO ANY
ADDITIONAL AMOUNTS FROM FORD CREDIT DESCRIBED UNDER THE HEADING "DESCRIPTION OF
NOTES -- PAYMENT OF ADDITIONAL AMOUNTS" WITH RESPECT TO SUCH TAX. SUCH TAX,
HOWEVER, MAY IN CERTAIN CIRCUMSTANCES BE ALLOWED AS A REFUND OR AS A CREDIT
AGAINST SUCH HOLDER'S UNITED STATES FEDERAL INCOME TAX. THE FOREGOING DOES NOT
DEAL WITH ALL ASPECTS OF FEDERAL INCOME TAX WITHHOLDING THAT MAY BE RELEVANT TO
FOREIGN HOLDERS OF THE NOTES. INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX
ADVISORS FOR SPECIFIC ADVICE CONCERNING THE OWNERSHIP AND DISPOSITION OF NOTES.
UNITED STATES TAXATION OF NON-UNITED STATES PERSONS
INCOME AND WITHHOLDING TAX
In the opinion of Sullivan & Cromwell, special tax counsel to the Company,
and Shearman & Sterling, counsel for the Underwriters, under United States
federal tax law as of the date of this Prospectus Supplement, and subject to the
discussion of backup withholding below:
(i) payments of principal and interest on a Note that is beneficially
owned by a non-United States person will not be subject to United States
federal withholding tax; provided, that in the case of interest, (x) (a)
the beneficial owner does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of Ford Credit
entitled to vote, (b) the beneficial owner is not a controlled foreign
corporation that is related to Ford Credit through stock ownership, and (c)
either (A) the beneficial owner of the Note certifies to the person
otherwise required to withhold United States federal income tax from such
interest, under penalties of perjury, that it is not a United States person
and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") and holds the Note certifies to the person otherwise required
to withhold United States federal income tax from such interest, under
penalties of perjury, that such statement has been received from the
beneficial owner by it or by a financial institution between it and the
beneficial owner and furnishes the payor with a copy thereof; (y) the
beneficial owner is entitled to the benefits of an income tax treaty under
which the interest is exempt from United States federal withholding tax and
the beneficial owner of the Note or such owner's agent provides an IRS Form
1001 claiming the exemption; or (z) the beneficial owner conducts a trade
or business in the United States to which the interest is effectively
connected and the beneficial owner of the Note or such owner's agent
provides an IRS Form 4224; provided that in each such case, the relevant
certification or IRS Form is delivered pursuant to applicable procedures
and is properly transmitted to the person otherwise required to withhold
United States federal income tax, and none of the persons receiving the
relevant certification or IRS Form has actual knowledge that the
certification or any statement on the IRS Form is false;
(ii) a non-United States person will not be subject to United States
federal withholding tax on any gain realized on the sale, exchange or
redemption of a Note unless the gain is effectively connected with the
beneficial owner's trade or business in the United States or, in the case
of an individual, the holder is present in the United States for 183 days
or more in the taxable year in which the sale, exchange or redemption
occurs and certain other conditions are met; and
(iii) a Note owned by an individual who at the time of death is not a
citizen or resident of the United States will not be subject to United
States federal estate tax as a result of such individual's death if the
individual does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of Ford Credit entitled to
vote and the income on the Note would not have been effectively connected
with a U.S. trade or business of the individual.
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<PAGE> 18
Interest on a Note that is effectively connected with the conduct of a
trade or business in the United States by a holder of a Note who is a non-United
States person, although exempt from United States withholding tax, may be
subject to United States income tax as if such interest was earned by a United
States person.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments of
principal and interest made on a Note and the proceeds of the sale of a Note
within the United States to non-corporate holders of the Notes, and "backup
withholding" at a rate of 31% will apply to such payments if the holder fails to
provide an accurate taxpayer identification number in the manner required or to
report all interest and dividends required to be shown on its federal income tax
returns.
Information reporting on IRS Form 1099 and backup withholding will not
apply to payments made by Ford Credit or a paying agent to a non-United States
person on a Note if, in the case of interest, the IRS Form described in clause
(y) or (z) in Paragraph (i) under "Income and Withholding Tax" has been provided
under applicable procedures, or, in the case of interest or principal, the
certification described in clause (x)(c) in Paragraph (i) under "Income and
Withholding Tax" and a certification that the beneficial owner satisfies certain
other conditions have been supplied under applicable procedures, provided that
the payor does not have actual knowledge that the certifications are incorrect.
Payments of the proceeds from the sale of a Note made to or through a
foreign office of a broker will not be subject to information reporting or
backup withholding, except that if the broker is a United States person, a
controlled foreign corporation for United States tax purposes or a foreign
person 50% or more of whose gross income is effectively connected with a United
States trade or business for a specified three-year period, information
reporting may apply to such payments. Payments of the proceeds from the sale of
a Note to or through the United States office of a broker are subject to
information reporting and backup withholding unless the holder or beneficial
owner certifies that it is a non-United States person and that it satisfies
certain other conditions or otherwise establishes an exemption from information
reporting and backup withholding.
Regulations recently issued by the IRS, which will be effective for
payments made after December 31, 1999, make certain modifications to the
certification procedures applicable to non-United States persons. Prospective
investors should consult their tax advisors regarding the certification
requirements for non-United States persons.
Backup withholding is not a separate tax, but is allowed as a refund or
credit against the holder's United States federal income tax, provided the
necessary information is furnished to the Internal Revenue Service.
Interest on a Note that is beneficially owned by a non-United States person
will be reported annually on IRS Form 1042S, which must be filed with the
Internal Revenue Service and furnished to such beneficial owner.
------------------------------
INFORMATION CONCERNING FORD CREDIT
Ford Credit was incorporated in Delaware in 1959 and is an indirect
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 and its subsidiaries provide wholesale financing and capital
loans to Ford Motor Company retail dealerships and associated non-Ford
dealerships throughout the world, most of which are privately owned and
financed, and purchase 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 dealerships. In addition, subsidiaries of Ford
Credit provide these financing services in the United States, Europe, Canada and
Australia to non-Ford dealerships. A substantial majority of all new vehicles
financed by Ford Credit are manufactured by Ford and its affiliates. Ford
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<PAGE> 19
Credit also provides retail financing for used vehicles built by Ford and other
manufacturers. In addition to vehicle financing, Ford Credit makes loans to
affiliates of Ford and finances certain receivables of Ford and its
subsidiaries.
Ford Credit also conducts insurance operations through The American Road
Insurance Company ("American Road") and its subsidiaries in the United States
and Canada. American Road's business consists of extended service plan contracts
for new and used vehicles manufactured by affiliated and nonaffiliated
companies, primarily originating from Ford dealers, physical damage insurance
covering vehicles and equipment financed at wholesale by Ford Credit, and the
reinsurance of credit life and credit disability insurance for retail purchasers
of vehicles and equipment.
The mailing address of Ford Credit's executive offices is The American
Road, Dearborn, Michigan 48121, United States of America. The telephone number
of such offices is (313) 322-3000.
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FORD MOTOR CREDIT COMPANY AND CONSOLIDATED SUBSIDIARIES
SELECTED FINANCIAL DATA
(DOLLAR AMOUNTS IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
OR AT MARCH 31 YEARS ENDED OR AT DECEMBER 31
------------------------ --------------------------------------
1998 1997 1997 1996 1995
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Total revenue............... $ 4,558.2 $ 4,242.0 $ 17,344.1 $ 16,650.2 $ 14,997.2
Interest expense............ 1,610.5 1,559.0 6,268.2 6,259.7 5,998.3
Provision for credit
losses................... 321.5 355.7 1,338.2 993.3 480.4
Income before income
taxes.................... 489.2 473.8 1,806.0 2,240.2 2,327.8
Net income.................. 277.8 275.9 1,030.8 1,440.6 1,579.4
Cash dividends.............. -- (14.5) (595.5) (949.0) (816.3)
Memo:
Net credit losses amount.... $ 268.0 $ 239.2 $ 1,007.1 $ 830.0 $ 485.9
As percentage of average net
finance receivables
outstanding*
(annualized)............. 0.93% 0.87% 0.89% 0.78% 0.51%
BALANCE SHEET DATA
Net investment, operating
leases................... $ 35,299.1 $ 32,660.5 $ 34,746.0 $ 30,645.2 $ 25,680.2
========== ========== ========== ========== ==========
Finance receivables, net.... $ 82,335.8 $ 78,436.6 $ 81,312.6 $ 80,848.0 $ 76,376.7
========== ========== ========== ========== ==========
Capital
Short-term debt.......... $ 48,798.9 $ 43,066.3 $ 46,207.8 $ 43,017.0 $ 42,200.1
Long-term debt (including
current portion)....... 55,481.4 54,888.8 54,517.2 55,007.3 49,980.2
Stockholder's equity..... 9,876.4 9,322.5 9,584.5 9,203.7 8,670.7
---------- ---------- ---------- ---------- ----------
Total capital.......... $114,156.7 $107,277.6 $110,309.5 $107,228.0 $100,851.0
========== ========== ========== ========== ==========
</TABLE>
- ---------------
* Includes net investment in operating leases.
FIRST QUARTER 1998 RESULTS OF OPERATIONS
Ford Credit's consolidated net income in the first quarter of 1998 was $278
million, up $2 million from 1997. Compared with results from a year ago, the
increase primarily reflects a smaller increase in credit loss reserve
requirements and higher levels of earning assets. Lower net financing margins,
higher credit losses and higher operating costs were partial offsets.
Net financing margins decreased compared with the same period a year ago
primarily reflecting increased depreciation expense for leased vehicles offset
partially by lower borrowing costs (6.37% net borrowing rate in first quarter
1998 compared with 6.45% in first quarter 1997). Increased depreciation expense
for leased vehicles primarily reflects lower than anticipated residual values on
off-lease vehicles. Higher depreciation expense on leased vehicles is expected
to adversely affect Ford Credit's earnings for the remainder of 1998.
The smaller increase in credit loss reserve requirements in first quarter
1998 compared with first quarter 1997 reflects Ford Credit's estimate that the
increase in credit losses for 1998 over 1997 will be less than the increase that
occurred in 1997 over 1996. Credit losses as a percent of average
S-20
<PAGE> 21
net finance receivables, including net investment in operating leases, increased
to 0.93% in 1998 from 0.87% in 1997, reflecting higher losses per repossession
offset partially by a decrease in repossession rates. The increase in losses per
repossession reflects a weaker used vehicle market resulting in Ford Credit
realizing lower prices for repossessed units sold at auction.
Total net finance receivables and net investment in operating leases at
March 31, 1998 were $117.6 billion, up $6.5 billion or 6% from a year earlier.
For the first quarter of 1998, Ford Credit financed 38% of all new cars and
trucks sold by Ford Motor Company dealers in the U.S. compared with 39% in the
first quarter of 1997. In Europe, Ford Credit financed 26% of all new vehicles
sold by Ford Motor Company in the first quarter of 1998, compared with 25% in
the first quarter of 1997. Ford Credit provided retail customers with financing
for 627,000 new and used vehicles in the United States and 192,000 in Europe. In
the first quarter of 1998, Ford Credit provided wholesale financing for 80% of
Ford Motor Company U.S. factory sales and 95% of Ford Motor Company factory
sales in Europe compared with 77% for the U.S. and 94% for Europe in first
quarter 1997.
1997 RESULTS OF OPERATIONS
Ford Credit's consolidated net income in 1997 was $1,031 million, down $410
million or 28% from 1996. Compared with results from a year ago, the decrease
primarily reflects lower net margins, higher credit losses and loss reserve
requirements and higher taxes. Lower operating costs and higher levels of
earning assets were a partial offset.
The deterioration in net financing margins reflects higher depreciation on
operating leases. Higher depreciation resulted from higher residual losses on
off-lease vehicles and higher residual reserves.
Credit losses as a percent of average net finance receivables including net
investment in operating leases increased to 0.89% in 1997 compared with 0.78% in
1996 reflecting higher losses per repossession partially offset by a decrease in
repossession rates. The increase in loss per repossession reflects a weaker used
vehicle market resulting in Ford Credit realizing lower prices for repossessed
units sold at auction.
Total net finance receivables and net investment in operating leases at
December 31, 1997 were $116.1 billion, up $4.6 billion or 4% from a year
earlier.
During 1997, Ford Credit financed 38% of all new cars and trucks sold by
Ford Motor Company dealers in the U.S., unchanged from 1996. In Europe, Ford
Credit financed 29% of all new vehicles sold by Ford Motor Company, also
unchanged from 1996. Ford Credit provided retail customers with financing for
2.5 million new and used vehicles in the United States and 0.7 million in
Europe. In 1997, Ford Credit provided wholesale financing for 80% of Ford Motor
Company factory sales in the U.S. and 95% of Ford Motor Company factory sales in
Europe compared with 80% for the U.S. and 91% for Europe in 1996.
For the Fourth Quarter of 1997, Ford Credit's consolidated net income was
$218 million, down $167 million from 1996. The deterioration primarily reflects
lower net margins and higher taxes, partially offset by lower operating costs.
Credit losses did not materially increase in the fourth quarter of 1997 compared
to the same period in 1996.
NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income", is effective for fiscal years beginning after December
15, 1997. This statement requires all items that are required to be recognized
under accounting standards as components of comprehensive income be reported in
a financial statement that is displayed with the same prominence as other
financial statements. This new accounting standard is not expected to have a
material impact on
S-21
<PAGE> 22
Ford Credit's financial statements. Ford Credit adopted this standard on January
1, 1998 as required.
Statement of Financial Accounting Standards No. 131, "Disclosure about
Segments of an Enterprise and Related Information," is effective for periods
beginning after December 15, 1997. This statement establishes standards for
reporting information about operating segments in annual financial statements
and requires that enterprises report selected information about operating
segments in interim financial reports. This new accounting standard is not
expected to have a material impact on Ford Credit's financial statements. Ford
Credit adopted this standard on January 1, 1998 as required.
YEAR 2000 DATE CONVERSION
An issue affecting Ford Credit and most other companies is whether computer
systems and applications will recognize and process the year 2000 and beyond.
Ford Credit has a Year 2000 Program Office to coordinate the identification,
evaluation, and implementation of changes to systems and applications globally
to achieve compliance with the year 2000 date conversion. Ford Credit is in the
process of assessing and implementing necessary changes for all areas of its
business that could be impacted, such as business computer applications,
technical infrastructure, end-user computing, building facilities, and
vendor-supplied applications and services.
Ford Credit has investigated the impact of the year 2000 issue on all
critical business applications and many are already compliant. Those which are
not will be modified or replaced. Plans have been established to complete all
necessary modifications to critical applications by the end of 1998. Ford
Credit, however, has little or no control over whether its vendors will make the
appropriate modifications to applications on a timely basis. Ford Credit is
working actively through the Automotive Industry Action Group with other
financial services companies in assessing and monitoring supplier readiness. In
addition, all vendors will be expected to ensure compliance of business
applications and technical services they supply.
Based on assessments completed to date and compliance plans in process,
Ford Credit does not expect that the year 2000 issue, including the cost of
making its critical systems and applications compliant on a timely basis, will
have a material adverse effect on its business operations, consolidated
financial condition, cash flows, or results of operations. However, if
appropriate modifications are not made by Ford Credit's vendors, or if Ford
Credit's actual costs or timing for the year 2000 date conversion differ
materially from its present estimates, Ford Credit's operations and financial
results could be significantly adversely affected.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Ford Credit is exposed to a variety of market risks, including the effects
of changes in foreign currency exchange rates and interest rates. To ensure
funding over business and economic cycles and to minimize overall borrowing
costs, Ford Credit issues debt and other payables with various maturity and
interest rate structures. The maturity and interest rate structures frequently
differ from the invested assets. Exposures to fluctuations in interest rates are
created by the differences in maturities of liabilities versus the maturities of
assets.
These financial exposures are monitored and managed by Ford Credit as an
integral part of the overall risk management program, which recognizes the
unpredictability of financial markets and seeks to reduce the potentially
adverse effects on Ford Credit's operating results. The effect of changes in
exchange rates and interest rates on Ford Credit's results generally has been
small relative to other factors.
The following quantifies Ford Credit's interest rate risk and foreign
currency exchange rate risk.
S-22
<PAGE> 23
Interest Rate Risk
Interest rate swaps (including those with a currency swap component) are
used by Ford Credit to mitigate the effects of interest rate fluctuations on
earnings by changing the characteristics of its debt to match the
characteristics of its assets. Ford Credit uses a model to assess the
sensitivity of its earnings to changes in market interest rates. The model
recalculates earnings by adjusting the rates associated with variable rate
instruments on the repricing date and adjusting the rates on fixed rate
instruments scheduled to mature in the subsequent twelve months, effective on
their scheduled maturity date. Interest income and interest expense are then
recalculated based on the revised rates. Assuming an instantaneous decrease of
one percentage point in interest rates applied to all financial instruments and
leased assets, Ford Credit's after-tax earnings would have declined by $30
million over the ensuing twelve month period.
Foreign Currency Risk
Ford Credit's foreign currency risk is substantially reduced by the natural
hedging process of both borrowing and lending in the local currencies of the
home countries. Additionally, Ford Credit uses foreign currency agreements to
hedge specific debt instruments and intercompany loans. Ford Credit's earnings
in the ensuing twelve month period would not be materially affected by an
instantaneous 10% change in foreign currency exchange rates.
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, the
issuance of term debt and, in the case of Ford Credit Europe plc, certificates
of deposit. 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. For
additional information regarding liquidity and capital resources, see Item 1 --
Business -- "Business of Ford Credit -- Borrowings and Other Sources of Funds"
in the 1997 10-K Report and see the First 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 1997 10-K
Report.
INFORMATION CONCERNING FORD
Ford was incorporated in Delaware in 1919 and acquired the business of a
Michigan company, also known as Ford Motor Company, incorporated in 1903 to
produce automobiles designed and engineered by Henry Ford. Ford is the world's
largest producer of trucks and the second largest producer of cars and trucks
combined. Ford and its subsidiaries also engage in automotive-related
businesses, such as, financing and renting vehicles and manufacturing automotive
components and systems.
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. Substantially all of Ford's automotive products are marketed
through retail dealerships, most of which are privately owned and financed.
The primary activities of the Financial Services segment consist of
financing operations, vehicle and equipment leasing and rental operations, and
insurance operations. These activities primarily are conducted through Ford's
subsidiaries, Ford Credit and The Hertz Corporation ("Hertz").
S-23
<PAGE> 24
SELECTED FINANCIAL DATA AND OTHER DATA OF FORD
The following table sets forth selected financial data and other data
concerning Ford:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
OR AT MARCH 31 YEARS ENDED OR AT DECEMBER 31
------------------- ----------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(UNAUDITED)
(IN MILLIONS EXCEPT PER SHARE AND UNIT SALES AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME
INFORMATION
Automotive
Sales................................. $ 29,076 $ 30,037 $122,935 $118,023 $110,496 $107,137 $ 91,568
Operating income...................... 1,806 1,704 6,946 2,516 3,281 5,826 1,432
Net income............................ 1,235 1,004 4,714 1,655 2,056 3,913 1,008
Financial Services Revenues............. 7,508 7,277 30,692 28,968 26,641 21,302 16,953
Income before gain on spin-off of The
Associates and income taxes......... 858 -- -- -- -- -- --
Gain on spin-off of The Associates.... 15,955 -- -- -- -- -- --
Income before income taxes............ 16,813 830 3,857 4,222 3,539 2,792 2,712
Net income............................ 16,411 465 2,206 2,791 2,083 1,395 1,521
Total Ford
Net income............................ 17,646 1,469 6,920 4,446 4,139 5,308 2,529
Amounts Per Share of Common Stock and
Class B Stock After Preferred Stock
Dividends*
Basic earnings per share.............. 14.48 1.23 5.75 3.73 3.58 4.97 2.27
Diluted earnings per share............ 14.23 1.20 5.62 3.64 3.33 4.44 2.10
Cash dividends........................ 0.42 0.385 1.645 1.47 1.23 0.91 0.80
CONSOLIDATED BALANCE SHEET INFORMATION
Automotive
Total assets.......................... 85,504 80,422 85,079 79,658 72,772 68,639 61,737
Debt payable within one year.......... 801 1,756 1,129 1,661 1,832 155 932
Long-term debt -- noncurrent
portion............................. 7,377 6,446 7,047 6,495 5,475 7,103 7,084
Financial Services
Total assets.......................... 137,734 181,535 194,018 183,209 170,511 150,983 137,201
Debt.................................. 113,375 149,669 160,071 150,205 141,317 123,713 103,960
Deposit accounts**.................... -- -- -- -- -- -- 10,549
Total Ford
Total assets.......................... 223,238 261,957 279,097 262,867 243,283 219,622 198,938
Debt.................................. 121,553 157,871 168,247 158,361 148,624 130,971 122,525
Stockholders' equity.................. 21,497 27,252 30,734 26,762 24,547 21,659 15,574
Cash dividends........................ 519 472 2,020 1,800 1,559 1,205 1,086
OTHER DATA
Total Ford
Capital expenditures.................. 2,199 1,739 8,717 8,651 8,997 8,546 6,814
Depreciation and amortization of
special tools....................... 3,435 3,235 13,583 12,791 11,719 9,336 7,468
Worldwide vehicle unit sales of cars,
trucks and tractors (in
thousands).......................... 1,721 1,681 6,943 6,653 6,606 6,853 6,184
</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 Financial Corporation (for
1993).
S-24
<PAGE> 25
FINANCIAL REVIEW OF FORD
FIRST QUARTER 1998 RESULTS OF OPERATIONS
Overview
Ford's worldwide operating earnings were $1,691 million in first quarter
1998, or $1.36 per diluted share of Common and Class B Stock in first quarter
1998, compared with $1,469 million, or $1.20 per diluted share in first quarter
1997.
These operating results exclude a one-time gain of $15,955 million, or
$12.94 per diluted share, resulting from the spin-off of The Associates First
Capital Corporation ("The Associates") (discussed below), and a one-time
earnings per share reduction of $0.07 per share resulting from the premium paid
to repurchase Ford's Series B Cumulative Preferred Stock. Including both one-
time factors, Ford's reported first quarter earnings were $17,646 million, or
$14.23 per diluted share. Ford's results in first quarter 1998 include Ford's
share of The Associates' earnings through March 12, the record date for the
spin-off of The Associates.
Ford's worldwide sales and revenues were $36.6 billion in first quarter
1998, down $730 million from first quarter 1997. Vehicle unit sales of cars and
trucks were 1,721,000, up 40,000 units or 2% from a year ago. Stockholders'
equity was $21.5 billion at March 31, 1998, compared with $30.7 billion at
December 31, 1997. The reduction in stockholders' equity reflects primarily The
Associates spin-off.
Ford's net income for worldwide Automotive operations in first quarter 1998
and 1997 was as follows (in millions):
<TABLE>
<CAPTION>
FIRST QUARTER 1998
------------------- O/(U)
1998 1997 1997
---- ---- -----
<S> <C> <C> <C>
North America Automotive.................................... $1,010 $1,020 $(10)
Automotive Outside North America
Europe.................................................... 230 105 125
South America............................................. (45) (47) 2
Other..................................................... 40 (74) 114
------ ------ ----
Total Automotive Outside North America................. 225 (16) 241
------ ------ ----
Total Automotive.................................. $1,235 $1,004 $231
====== ====== ====
</TABLE>
Ford's net income for worldwide Financial Services operations in first
quarter 1998 and 1997 was as follows (in millions):
<TABLE>
<CAPTION>
FIRST QUARTER 1998
------------------ O/(U)
1998 1997 1997
---- ---- -----
<S> <C> <C> <C>
Ford Credit................................................. $ 278 $276 $ 2
The Associates.............................................. 220* 238 (18)
Hertz....................................................... 35 20 15
Minority Interests, Eliminations and Other.................. (77) (69) (8)
------- ---- -------
Financial Services (excluding the gain on The
Associates spin-off)................................. 456 465 (9)
Gain on Spin-Off of The Associates.......................... 15,955 -- 15,955
------- ---- -------
Total Financial Services.......................... $16,411 $465 $15,946
======= ==== =======
Memo: Ford's share of earnings in The Associates............ $ 177* $192 $ (15)
Hertz....................................................... 29 20 9
</TABLE>
- ------------
* Through March 12, 1998
S-25
<PAGE> 26
Automotive Operations
Ford's worldwide Automotive operations earned $1,235 million in first
quarter 1998 on sales of $29.1 billion, compared with earnings of $1,004 million
on sales of $30 billion in first quarter 1997. Increased earnings in first
quarter 1998 compared with first quarter 1997 reflect primarily continued cost
reductions, the effects of improved product mix, and higher volumes outside
North America. Adjusted for constant volume and mix, total automotive costs were
down $400 million compared with first quarter a year ago.
Earnings for Automotive operations in North America were $1,010 million in
first quarter 1998, down $10 million compared with first quarter a year ago.
Cost reductions in North America were offset by higher marketing costs. The
after-tax return on sales was 5%, up 1/10 of a point from first quarter 1997.
The U.S. economy continued on a path of strong growth, low unemployment,
and moderate inflation in first quarter 1998. The seasonally-adjusted annual
selling rate for the U.S. car and truck industry was 15.3 million units in first
quarter 1998, down from 15.9 million units in first quarter 1997. Ford expects
car and truck industry sales for full-year 1998 to be slightly lower than the
15.5 million units in 1997. Ford's combined U.S. car and truck share was 24.5%,
down 6/10 of a point from first quarter a year ago.
Automotive operations in Europe earned $230 million in first quarter 1998,
up $125 million compared with first quarter a year ago. The improvement
reflected primarily higher volumes and lower operating costs, offset partially
by increased marketing costs.
The seasonally-adjusted annual selling rate for the European car and truck
industry was 15.5 million units in first quarter 1998, compared with 14.3
million units in first quarter 1997. European car and truck industry sales in
full-year 1998 are expected to be about equal to or slightly higher than the 15
million units in 1997. Ford's combined European car and truck share was 11.5% in
first quarter 1998, unchanged from first quarter a year ago.
Automotive operations in South America lost $45 million in first quarter
1998, compared with a loss of $47 million in first quarter a year ago. In first
quarter 1998, the seasonally-adjusted annual selling rate for the Brazilian car
and truck industry totaled 1.6 million units, compared with 1.8 million units in
first quarter a year ago. For full-year 1998, Ford expects the car and truck
industry in Brazil to be lower than the 1.9 million units in 1997. Ford's
combined car and truck share in Brazil was 13.7% in first quarter 1998, up 2.7
points from first quarter 1997.
Financial Services Operations
Operating results for Financial Services operations in first quarter 1998
were $456 million, down $9 million compared with first quarter a year ago.
Including the gain on the spin-off of The Associates in first quarter 1998,
results were $16,411 million, up $15,946 million from first quarter 1997.
Excluding Ford's share of The Associates operating income in first quarter 1998
($177 million through March 12) and the gain on the spin-off, operating results
were $279 million, compared with $273 million in first quarter 1997 on a
comparable basis.
For a discussion of Ford Credit's results of operations in first quarter
1998, see "Ford Motor Credit Company and Consolidated Subsidiaries -- First
Quarter 1998 Results of Operations."
Earnings at Hertz in first quarter 1998 were a record $35 million (of which
$29 million was Ford's share), up $15 million from the same period a year ago.
The increase reflects primarily higher revenues in U.S. car rental operations.
S-26
<PAGE> 27
LIQUIDITY AND CAPITAL RESOURCES
Automotive Operations
Automotive cash and marketable securities were $21.3 billion at March 31,
1998, up $442 million from December 31, 1997. Ford paid $519 million in cash
dividends on its Common Stock, Class B Stock and Preferred Stock during first
quarter 1998. As described below, in connection with The Associates spin-off, a
$3.2 billion cash dividend on shares of Ford stock held in U.S. employee savings
plans was paid on April 7, 1998.
Automotive capital expenditures totaled $2.1 billion in first quarter 1998,
up $488 million from first quarter 1997. Capital expenditures were 7.2% of sales
in first quarter 1998, up 1.8 points from first quarter 1997.
Automotive debt at March 31, 1998 totaled $8.2 billion, which was 28% of
total capitalization (stockholders' equity and Automotive debt), compared with
$8.1 billion, or 21% of total capitalization at December 31, 1997. The increase
in the ratio in 1998 reflects the reduction in stockholders' equity resulting
from The Associates spin-off.
Financial Services Operations
Ford's balance sheet at March 31, 1998 does not include The Associates,
which explains primarily the declines discussed below.
Financial Services cash and investments in securities totaled $2.5 billion
at March 31, 1998, down $1.3 billion from December 31, 1997.
Net receivables and lease investments were $124.1 billion at March 31,
1998, down $52.3 billion from December 31, 1997.
Total debt was $113.4 billion at March 31, 1998, down $46.7 billion from
December 31, 1997.
Outstanding commercial paper at March 31, 1998 totaled $42.3 billion at
Ford Credit, and $1.5 billion at Hertz, with an average remaining maturity of 22
days and 42 days, respectively.
SPIN-OFF OF THE ASSOCIATES
On March 2, 1998, the Board of Directors of Ford approved the spin-off of
The Associates by declaring a dividend on Ford's outstanding shares of Common
and Class B Stock consisting of Ford's 80.7% interest (279.5 million shares) in
The Associates. The Board of Directors also declared a dividend in cash on
shares of Ford's stock held in U.S. employee savings plans equal to the market
value of The Associates stock to be distributed per share of Ford's Common and
Class B Stock. Both the stock dividend and the cash dividend were paid on April
7, 1998 to stockholders of record on March 12, 1998.
Holders of Ford Common and Class B Stock on the record date received
0.262085 shares of The Associates common stock for each share of Ford stock, and
participants in U.S. employee savings plans who held Ford stock in such plans on
the record date received $22.12 in cash per share of Ford stock, which amount
was based on the volume-weighted average price of The Associates stock of
$84.3849 per share on the New York Stock Exchange on April 7, 1998. The total
value of the distribution (including the $3.2 billion cash dividend) was $26.8
billion or $22.12 per share of Ford stock.
As a result of the spin-off of The Associates, Ford realized a gain of
$15,955 million based on the fair value of The Associates as of the record date,
March 12, 1998. Ford has received a ruling from the U.S. Internal Revenue
Service that the distribution qualifies as a tax-free transaction for U.S.
federal income tax purposes.
Ford's results in first quarter 1998 include Ford's share of The Associates
earnings through the record date, March 12, ($177 million). The balance sheet at
March 31, 1998 does not include The
S-27
<PAGE> 28
Associates, but it includes in "Other payables" a $3.2 billion dividend payable
generated by the cash dividend to participants in U.S. employee savings plans.
INDUSTRY DATA AND MARKET SHARE OF FORD
The following table shows the U.S. industry retail deliveries of cars and
trucks for the periods indicated:
<TABLE>
<CAPTION>
U.S. INDUSTRY RETAIL DELIVERIES
(MILLIONS OF UNITS)
----------------------------------------------------------------
THREE MONTHS
ENDED
MARCH 31* YEARS ENDED DECEMBER 31
-------------- --------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Cars..................................... 7.9 8.7 8.3 8.6 8.6 9.0 8.5
Trucks................................... 7.4 7.2 7.2 6.9 6.5 6.4 5.7
</TABLE>
- ---------------
* Seasonally adjusted annual rates
The following table shows Ford's U.S. car and truck market shares for the
periods indicated:
<TABLE>
<CAPTION>
FORD U.S. CAR AND TRUCK MARKET SHARES
----------------------------------------------------------------
THREE MONTHS
ENDED
MARCH 31 YEARS ENDED DECEMBER 31
-------------- --------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Cars................................... 20.1% 19.4% 19.5% 20.6% 20.9% 21.8% 22.3%
Trucks................................. 29.2 31.8 31.2 31.1 31.9 30.1 30.5
</TABLE>
For additional information regarding Ford, see the 1997 10-K Report and the
First Quarter 10-Q Report.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of "earnings" to "fixed charges" for Ford Credit and Ford were as
follows for each of the periods indicated:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------------------------------------------
THREE MONTHS
ENDED
MARCH 31, 1998 1997 1996 1995 1994 1993
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ford Motor Credit Company................ 1.3 1.3 1.3 1.3 1.5 1.5
Ford Motor Company....................... 8.0* 2.0 1.6 1.6 2.0 1.5
</TABLE>
- ---------------
* Earnings used in calculation of this ratio include the $15,955 million gain on
spin-off of The Associates. Excluding this gain, the ratio would have been
2.0.
For purposes of the Ford Credit ratio, "earnings" consist of income before
income taxes and fixed charges. Income before income taxes of Ford Credit
includes the equity in net income of all unconsolidated affiliates and minority
interest in net income of subsidiaries. "Fixed charges" consist of interest on
borrowed funds, amortization of debt discount, premium, and issuance expense and
one-third of all rental expense (the proportion deemed representative of the
interest factor).
For purposes of the Ford ratio, "earnings" include the income before income
taxes of Ford and its majority-owned subsidiaries and trusts, whether or not
consolidated, its proportionate share of any fifty-percent-owned companies, and
any income received from less-than-fifty-percent-owned companies and fixed
charges. "Fixed charges" consist of interest on borrowed funds, preferred stock
dividend requirements of majority-owned subsidiaries and trusts, amortization of
debt discount, premium, and issuance expense, and one-third of all rental
expense (the proportion deemed representative of the interest factor).
S-28
<PAGE> 29
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated June 8, 1998 and the Pricing Agreement dated June 8, 1998 relating to the
Notes, Ford Credit has agreed to sell to each of the underwriters named below
(the "Underwriters") and each of the Underwriters, for whom Goldman, Sachs & Co.
oHG are acting as representatives (the "Representatives"), has severally agreed
to purchase the principal amount of Notes set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS OF NOTES
------------ ----------------
<S> <C>
Goldman, Sachs & Co. oHG .................................. DM1,202,000,000
ABN AMRO Bank (Deutschland) AG............................. 133,000,000
Commerzbank Aktiengesellschaft............................. 133,000,000
Credit Suisse First Boston Aktiengesellschaft.............. 133,000,000
Deutsche Bank Aktiengesellschaft........................... 133,000,000
Dresdner Bank Aktiengesellschaft........................... 133,000,000
Societe Generale S.A....................................... 133,000,000
---------------
Total.......................................... DM2,000,000,000
===============
</TABLE>
In the event of default by one or more Underwriters, the Underwriting
Agreement provides that in certain circumstances other Underwriters may be
substituted or the commitment of each non-defaulting Underwriter may be
increased up to 10%. However, if the default involves more than one-eleventh of
the aggregate principal amount of any series of Notes, the Pricing Agreement
relating to such series of Notes may be terminated by Ford Credit or by 50% or
more in interest of non-defaulting Underwriters, or, if not so terminated, less
than all the Notes may be sold.
The Underwriters have advised Ford Credit that they propose initially to
offer all or part of the Notes directly to retail purchasers at the initial
public offering price set forth on the cover page of this Prospectus Supplement,
and to certain securities dealers at such price less a concession not in excess
of 0.300% Notes. After the Notes are released for sale to the public, the
offering price and other selling terms may from time to time be varied by the
Underwriters.
The Notes are offered for sale by the Underwriters or their respective
selling agents in the United States, Europe and Asia.
Each of the Underwriters has agreed that it will not offer, sell or deliver
any of the Notes, directly or indirectly, or distribute this Prospectus
Supplement or the accompanying Prospectus or any other offering material
relating to the Notes, in or from any jurisdiction except under circumstances
that will to the best knowledge and belief of such Underwriter result in
compliance with the applicable laws and regulations thereof and which will not
impose any obligations on Ford Credit except as set forth in the Underwriting
Agreement and the Pricing Agreement.
Each Underwriter acknowledges that this Prospectus Supplement and
accompanying Prospectus has not been registered with the Registrar of Companies
in Singapore and that the Notes are offered in Singapore pursuant to an
exemption invoked under section 106C of the Companies Act, Chapter 50 of
Singapore (the "Singapore Companies Act"). Accordingly, each Underwriter has
represented and agreed that the Notes may not be offered or sold, nor may this
Prospectus Supplement and accompanying Prospectus or any other offering document
or material relating to the Notes be circulated or distributed, directly or
indirectly, to the public or any member of the public in Singapore other than
(1) to an institutional investor or other body or person specified in section
106C of the Singapore Companies Act, or (2) to a sophisticated investor
specified in section 106D of the Singapore Companies Act, or (3) otherwise
pursuant to, and in accordance with the conditions of section 106E(2) of the
Singapore Companies Act or any other applicable exemption invoked under Division
5A of Part IV of the Singapore Companies Act.
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<PAGE> 30
Each of the Underwriters has agreed that it has not offered or sold, and it
will not offer or sell, directly or indirectly, any of the Notes in or to
residents of Japan or to any persons for reoffering or resale, directly or
indirectly, in Japan or to any resident of Japan except pursuant to an exemption
from the registration requirements of the Securities and Exchange Law available
thereunder and in compliance with the other relevant laws of Japan.
Each Underwriter will acknowledge the fact that no sales prospectus
(Wertpapier-Verkaufsprospekt) within the meaning of the Securities Sales
Prospectus Act of the Federal Republic of Germany
(Wertpapier-Verkaufsprospektgesetz) of December 13, 1990 (the "Securities
Prospectus Act") has been and will be published in Germany and each Underwriter
will represent and warrant that it has not offered and sold and will not offer
or sell any Notes in the Federal Republic of Germany otherwise than in
accordance with the provisions of the Securities Prospectus Act.
Each Underwriter 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 purpose 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 1996, as amended, or is a
person to whom the document may otherwise lawfully be issued or passed on.
Purchasers of the Notes may be required to pay stamp taxes and other
charges in accordance with the laws and practices of the country of purchase in
addition to the issue price set forth on the cover page hereof.
The Notes are a new issue of securities with no established trading market.
Ford Credit has been advised by the Underwriters that they intend to 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. No assurance can be given as to
the liquidity of the trading market for the Notes.
In connection with the offering, the Underwriters may purchase and sell the
Notes in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover syndicate short positions
created by the Underwriters in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Notes; and syndicate short
positions created by the Underwriters involve the sale by the Underwriters of a
greater number of Notes than they are required to purchase from Ford Credit in
the offering. These activities may stabilize, maintain or otherwise affect the
market price of the Notes, which may be higher than the price that might
otherwise prevail in the open market; and these activities, if commenced, may be
discontinued at any time. These transactions may be effected on the Luxembourg
Stock Exchange, the Singapore Stock Exchange, the over-the-counter market or
otherwise.
All secondary trading in the Notes will settle in immediately available
funds. See "Description of Notes -- Global Clearance and Settlement Procedures".
It is expected that delivery of the Notes will be made against payment
therefor on or about June 16, 1998 (such settlement cycle being herein referred
to as "T+6"). Purchasers of Notes should note that the ability to settle
secondary market trades of the Notes effected on the date of pricing and the
next succeeding business day may be affected by the T+6 settlement.
S-30
<PAGE> 31
Ford Credit has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
In the ordinary course of their respective business, affiliates of Chase
Securities Inc. engage in general financing and banking transactions with both
Ford and Ford Credit.
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, the Indenture and Ford
Credit's current Annual and Quarterly Reports, as well as all future Annual
Reports and Quarterly Reports, so long as any of the Notes are outstanding, will
be made available for inspection at the main office of Banque Internationale a
Luxembourg S.A. in Luxembourg. Banque Internationale a Luxembourg S.A. will act
as intermediary between the Luxembourg Stock Exchange and Ford Credit and the
holders of the Notes. In addition, copies of the Annual Reports and Quarterly
Reports of Ford Credit may be obtained free of charge at such office.
Application has also been made to list the Notes on the Singapore Stock
Exchange. So long as any of the Notes remain outstanding, copies of the
Indenture, this Prospectus Supplement, the accompanying Prospectus, and the
Certificate of Incorporation and By-Laws of Ford Credit will be available for
inspection at the offices of The Chase Manhattan Bank, 150 Beach Road, Gateway
West, 31st Floor, Singapore 189720. In addition, copies of all documents
incorporated in this document and the accompanying Prospectus by reference and
copies of all future annual reports and quarterly reports of Ford Credit may be
obtained, free of charge, at the offices of The Chase Manhattan Bank in
Singapore.
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 March 31, 1998.
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.
Ford Credit accepts responsibility for the information contained in this
Prospectus Supplement and accompanying Prospectus.
Resolutions relating to the issue and sale of the Notes were adopted by the
Board of Directors of Ford Credit on March 14, 1997.
The Notes have been assigned Euroclear and Cedel Common Code No. 8815194,
International Security Identification Number (ISIN) DE0002483005 and CUSIP No.
345397RZ8.
------------------------
S-31
<PAGE> 32
FORD MOTOR CREDIT COMPANY
DEBT SECURITIES
Ford Credit, in May 1998 and December 1997, respectively, registered with
the Securities and Exchange Commission $10,000,000,000 and $5,000,000,000
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. In addition to the
$10,000,000,000 principal amount of Debt Securities registered in May 1998
pursuant to the Registration Statement of which this Prospectus is a part, the
principal amount of Debt Securities covered by this Prospectus includes
$400,000,000 principal amount of Debt Securities registered in December 1997.
The Prospectus Supplement accompanying this Prospectus sets forth, with respect
to the particular series of Debt Securities for which this Prospectus and the
Prospectus 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 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 will be 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 June 1, 1998.
<PAGE> 33
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, "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 CITICORP 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. THE COMMISSION MAINTAINS A WEB SITE
THAT CONTAINS REPORTS, PROXY AND INFORMATION STATEMENTS AND OTHER INFORMATION
REGARDING FORD AND FORD CREDIT (HTTP://WWW.SEC.GOV). 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,
AND, WITH RESPECT TO FORD CREDIT, ALSO AT THE OFFICES OF THE AMERICAN STOCK
EXCHANGE, INC., 86 TRINITY PLACE, NEW YORK, NEW YORK 10006, 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,
1997 (the "1997 10-K Report"), Ford Credit's Quarterly Report on Form 10-Q for
the period ended March 31, 1998 (the "First Quarter 10-Q Report") and Ford
Credit's Current Reports on Form 8-K dated January 12, 1998, February 3, 1998
(the "February 8-K Report"), February 11, 1998, March 30, 1998, April 16, 1998
and April 27, 1998 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.
2
<PAGE> 34
INFORMATION CONCERNING FORD CREDIT
Ford Credit was incorporated in Delaware in 1959 and is an indirect
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 and its subsidiaries provide wholesale financing and capital
loans to Ford Motor Company retail dealerships and associated non-Ford
dealerships throughout the world, most of which are privately owned and
financed, and purchase 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 dealerships. In addition, subsidiaries of Ford
Credit provide these financing services in the United States, Europe, Canada and
Australia to non-Ford dealerships. A substantial majority of all new vehicles
financed by Ford Credit are manufactured by Ford and its affiliates. Ford Credit
also provides retail financing for used vehicles built by Ford and other
manufacturers. In addition to vehicle financing, Ford Credit makes loans to
affiliates of Ford and finances certain receivables of Ford and its
subsidiaries.
Ford Credit also conducts insurance operations through The American Road
Insurance Company ("American Road") and its subsidiaries in the United States
and Canada. American Road's business consists of extended service plan contracts
for new and used vehicles manufactured by affiliated and nonaffiliated
companies, primarily originating from Ford dealers, physical damage insurance
covering vehicles and equipment financed at wholesale by Ford Credit, and the
reinsurance of credit life and credit disability insurance for retail purchasers
of vehicles and equipment.
The mailing address of Ford Credit's executive offices is The American
Road, Dearborn, Michigan 48121, United States of America. The telephone number
of such offices is (313) 322-3000.
------------------------
INFORMATION CONCERNING FORD
Ford was incorporated in Delaware in 1919 and acquired the business of a
Michigan company, also known as Ford Motor Company, incorporated in 1903 to
produce automobiles designed and engineered by Henry Ford. Ford is the world's
largest producer of trucks and the second largest producer of cars and trucks
combined. Ford and its subsidiaries also engage in automotive-related
businesses, such as, financing and renting vehicles and manufacturing automotive
components and systems.
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. Substantially all of Ford's automotive products are marketed
through retail dealerships, most of which are privately owned and financed.
The primary activities of the Financial Services segment consist of
financing operations, vehicle and equipment leasing and rental operations, and
insurance operations. These activities primarily are conducted through Ford's
subsidiaries, Ford Credit and The Hertz Corporation.
------------------------
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> 35
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 The Chase Manhattan Bank ("Chase"),
Trustee. The term "Trustee", as used herein, shall mean Chase 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 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 the Prospectus 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 $10,400,000,000
aggregate principal amount or the equivalent thereof in any currency, although
the Indenture provides that additional debt securities may be issued thereunder
up to the aggregate principal amount, which is not limited by the Indenture,
authorized from time to time by Ford Credit's Board of Directors. So long as a
single Trustee is acting for the benefit of the holders of all the Debt
Securities offered hereby and any such additional debt securities issued under
the Indenture, the Debt Securities and any such additional debt securities are
herein collectively referred to as the "Indenture Securities". The Indenture
also provides that there may be more than one Trustee under the Indenture, each
with respect to one or more different series of Indenture Securities. See also
"Trustee" herein. At any time when two or more Trustees are acting, each with
respect to only certain series, the term "Indenture Securities" as used herein
shall mean the one or more series with respect to which each respective Trustee
is acting and the powers and trust obligations of each such Trustee as described
herein shall extend only to the one or more series of Indenture Securities for
which it is acting as Trustee. The effect of the provisions contemplating that
there might be more than one Trustee acting for different series of Indenture
Securities is that, in that event, those Indenture Securities (whether
4
<PAGE> 36
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 which accompanies 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 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 issuable as a Global Security; and (14) any other term
or provision relating to such Debt Securities which is not inconsistent with the
provisions of the Indenture.
One or more series of 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 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).
Except as otherwise provided in the Prospectus Supplement, principal,
premium, if any, and interest, if any, will be payable at an office or agency to
be maintained by Ford Credit in New York City, except that at the option of Ford
Credit interest may be paid by check mailed to the person entitled thereto.
(Form of Security and Sections 10.01 and 10.02).
Except as otherwise provided in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form without coupons and may
be presented for registration of transfer or exchange at the corporate trust
office of the Trustee. No service charge will be made for any transfer 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).
BOOK-ENTRY, DELIVERY AND FORM
Unless otherwise specified in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in the form of one or more fully
registered Global Notes (the "Global Notes") which will be deposited with, or on
behalf of, The Depository Trust Company, New York, New York (the "Depository")
and registered in the name of Cede & Co., the Depository's nominee. Except as
set forth below, the Global Notes may be transferred, in whole and not in part,
only to another nominee of the Depository or to a successor of the Depository or
its nominee.
The Depository has advised as follows: It is a limited-purpose trust
company which holds securities for its participating organizations (the
"Participants") and facilitates the settlement among Participants of securities
transactions in such securities through electronic book-entry changes in its
Participants' accounts. Participants include securities brokers and dealers
(including certain of the underwriters or agents), banks and trust companies,
clearing corporations and certain other organizations. Access to the
Depository's system is also available to others such as banks,
5
<PAGE> 37
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("indirect
participants"). Persons who are not Participants may beneficially own securities
held by the Depository only through Participants or indirect participants.
The Depository advises that its established procedures provide that (i)
upon issuance of the Debt Securities by Ford Credit the Depository will credit
the accounts of Participants designated by the underwriters or agents with the
principal amounts of the Debt Securities purchased by the underwriters or
through the agents, and (ii) ownership of interests in the Global Notes will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the Depository, the Participants and the indirect
participants. The laws of some states may require that certain persons take
physical delivery in definitive form of securities which they own. Consequently,
the ability to transfer beneficial interests in the Global Notes is limited to
such extent.
So long as a nominee of the Depository is the registered owner of the
Global Notes, such nominee for all purposes will be considered the sole owner or
holder of such Debt Securities under the Indenture. Except as provided below or
in the Prospectus Supplement, owners of beneficial interests in the Global Notes
will not be entitled to have Debt Securities registered in their names, will not
receive or be entitled to receive physical delivery of Debt Securities in
definitive form, and will not be considered the owners or holders thereof under
the Indenture.
Neither Ford Credit, the Trustee, any Paying Agent nor the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Notes, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Principal and interest payments on the Debt Securities registered in the
name of the Depository's nominee will be made by the Trustee to the Depository.
Under the terms of the Indenture, Ford Credit and the Trustee will treat the
persons in whose names the Debt Securities are registered as the owners of such
Debt Securities for the purpose of receiving payment of principal and interest
on the Debt Securities and for all other purposes whatsoever. Therefore, neither
Ford Credit, the Trustee nor any Paying Agent has any direct responsibility or
liability for the payment of principal or interest on the Debt Securities to
owners of beneficial interests in the Global Notes. The Depository has advised
Ford Credit and the Trustee that its present practice is to credit the accounts
of the Participants on the appropriate payment date in accordance with their
respective holdings in principal amount of beneficial interests in the Global
Notes as shown on the records of the Depository, unless the Depository has
reason to believe that it will not receive payment on such payment date.
Payments by Participants and indirect participants to owners of beneficial
interests in the Global Notes will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of the Participants or indirect participants.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by Ford Credit within 90
days, Ford Credit will issue Debt Securities in definitive form in exchange for
the Global Notes. In addition, Ford Credit may at any time determine not to have
a series of Debt Securities represented by Global Notes and, in such event, will
issue Debt Securities of such series in definitive form in exchange for the
Global Notes. In either instance, an owner of a beneficial interest in the
Global Notes will be entitled to have Debt Securities of such series equal in
principal amount to such beneficial interest registered in its name and will be
entitled to physical delivery of such Debt Securities in definitive form. Unless
otherwise specified in the Prospectus Supplement, Debt Securities so issued in
definitive form will be issued in denominations of $1,000 and integral multiples
thereof and will be issued in registered form only, without coupons.
6
<PAGE> 38
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).
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
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<PAGE> 39
the Indenture Securities outstanding of such series may declare the principal
amount (or, if the Indenture Securities of such series are Original Issue
Discount Securities (as defined in the indenture), such portion of the principal
amount as may be specified in the terms of such series) of all of the Indenture
Securities of such series to be due and payable immediately. At any time after
such a declaration of acceleration in respect of a particular series of
Indenture Securities has been made, but before a judgment or decree for the
payment of money due upon acceleration has been obtained by the Trustee, the
holders of a majority in aggregate principal amount of the Indenture Securities
outstanding of such series may, under certain circumstances, waive all defaults
and rescind and annul such declaration and its consequences if all Events of
Default in respect of the Indenture Securities of such series, other than the
non-payment of principal due solely by such declaration of acceleration, have
been cured or waived as provided in the Indenture. (Section 5.02).
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default in respect of a particular series of Indenture
Securities, give the holders of such series notice of all uncured defaults known
to it (the term "default" to include the events specified above without grace
periods); provided that, except in the case of default in the payment of the
principal of, or premium, if any, on, or interest on any of the Indenture
Securities of such series, the Trustee shall be 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 6.01).
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 the nature thereof. (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).
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).
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 6.08). 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 6.09).
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<PAGE> 40
CONCERNING CHASE
The Chase Manhattan 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.
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 sets forth the terms of the offering of the
particular series of Debt Securities to which such Prospectus Supplement
relates, 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 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 H. D. Smith, Esq., Secretary and Corporate 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. Smith is a full-time employee of Ford Credit and owns
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<PAGE> 41
and holds options to purchase shares of Common Stock of Ford. Shearman &
Sterling have in the past provided, and may continue to provide, legal services
to Ford and its subsidiaries, including Ford Credit.
EXPERTS
The consolidated financial statements which are incorporated in this
Prospectus by reference to the 1997 10-K Report and the February 8-K Report have
been audited by Coopers & Lybrand L.L.P., 400 Renaissance Center, Detroit,
Michigan 48243, independent certified public accountants, to the extent
indicated in their reports therein, and have been so incorporated in reliance
upon the report of that firm, given on their authority as experts in accounting
and auditing.
With respect to the unaudited interim financial information of Ford Credit
for the periods ended March 31, 1998 and 1997, included in the First Quarter
10-Q Report, 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 report
included in the First Quarter 10-Q Report states 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 report on the unaudited interim financial information
because 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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<PAGE> 42
PRINCIPAL OFFICES OF
FORD MOTOR CREDIT COMPANY
The American Road
Dearborn, Michigan 48121
TRUSTEE, REGISTRAR AND TRANSFER AGENT
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
PAYING AGENT
The Chase Manhattan Bank, New York, Frankfurt Branch
Gruneburgweq 2
60322 Frankfurt am Main Germany
LUXEMBOURG STOCK EXCHANGE LISTING AGENT
Banque Internationale a Luxembourg S.A.
69 route d'Esch
L-1470 Luxembourg
LEGAL ADVISERS
<TABLE>
<S> <C>
To Ford Motor Company as to Special United States Tax Counsel to
United States Law Ford Motor Credit Company
H.D. SMITH SULLIVAN & CROMWELL
Secretary and Corporate Counsel 125 Broad Street
Ford Motor Credit Company New York, New York 10004
The American Road
Dearborn, Michigan 48121
To the Underwriters To the Issue
as to United States Law as to Singapore Law
SHEARMAN & STERLING YOONG & PARTNERS
599 Lexington Avenue 11 Collyer Quay #05-06
New York, New York 10022 The Arcade
Singapore 049317
</TABLE>
AUDITORS TO
FORD MOTOR
CREDIT COMPANY
COOPERS & LYBRAND L.L.P.
400 Renaissance Center
Detroit, Michigan 48243
<PAGE> 43
=========================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Incorporation of Certain Documents By
Reference............................ S-3
Directors and Principal Executive
Officers of Ford Credit.............. S-4
Use of Proceeds........................ S-4
Capitalization of Ford Motor Credit
Company and Subsidiaries............. S-5
Exchange Rate Information.............. S-6
Information on Foreign Exchange
Exposure............................. S-7
Description of Notes................... S-7
Certain United States Tax Documentation
Requirements......................... S-16
United States Taxation of Non-United
States Persons....................... S-17
Information Concerning Ford Credit..... S-18
Ford Motor Credit Company and
Consolidated Subsidiaries -- Selected
Financial Data....................... S-20
Information Concerning Ford............ S-23
Selected Financial Data and Other Data
of Ford.............................. S-24
Financial Review of Ford............... S-25
Industry Data and Market Share of
Ford................................. S-28
Ratio of Earnings to Fixed Charges..... S-28
Underwriting........................... S-29
General Information.................... S-31
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......................... 9
Experts................................ 10
</TABLE>
=========================================================
=========================================================
DM2,000,000,000
FORD MOTOR
CREDIT COMPANY
5 1/4% NOTES DUE JUNE 16, 2008
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO. OHG
ABN AMRO BANK (DEUTSCHLAND) AG
COMMERZBANK AKTIENGESELLSCHAFT
CREDIT SUISSE FIRST BOSTON AKTIENGESELLSCHAFT
DEUTSCHE BANK AKTIENGESELLSCHAFT
DRESDNER KLEINWORT BENSON
SOCIETE GENERALE S.A.
=========================================================
