<PAGE> 1
Pursuant to Rule 424b5
Registration No. 333-50611
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 1, 1998
$700,000,000
FORD MOTOR CREDIT COMPANY
FLOATING RATE TERM ENHANCED REMARKETABLE SECURITIES(SM) ("TERMS(SM)")
---------------------------
The Floating Rate Term Enhanced ReMarketable Securities ("TERMS(SM)") of Ford
Motor Credit Company ("Ford Credit") will bear interest at a floating rate to
August 27, 2001 (the "Initial Investor Maturity Date") equal to the Three Month
LIBOR Rate, reset quarterly, plus 10 basis points. The TERMS are subject to
mandatory tender to Credit Suisse First Boston Corporation, as Remarketing
Dealer (the "Remarketing Dealer"), on each of (i) the Initial Investor Maturity
Date and (ii) if, as described herein under "Description of the TERMS -- Tender
of the TERMS; Remarketing -- Remarketing Dates; Adjustment to Maturity Date,"
the Initial Investor Maturity Date is designated as a Window Period Remarketing
Date, the first day of each Window Recouponing Period and the Additional
Remarketing Date. Each of the Initial Investor Maturity Date and the Additional
Remarketing Date, if any, are referred to herein as a "Remarketing Date." The
final maturity date (the "Maturity Date") is scheduled to occur on August 27,
2006 but may be adjusted as described herein due to the occurrence, if any, of
either or both of (i) the Additional Remarketing Date or (ii) adjustment of the
Maturity Date of the TERMS by Ford Credit at its option as herein provided. If
the Remarketing Dealer for any reason does not purchase all TERMS on the Initial
Investor Maturity Date,
(continued on following page)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS FORD CREDIT(1)(2)(3)
--------- ---------------------- --------------------
<S> <C> <C> <C>
Per TERMS............... 99.93068% .250% 99.68068%
Total................... $699,514,760 $1,750,000 $697,764,760
</TABLE>
(1) Plus accrued interest, if any, from August 27, 1998.
(2) Before deducting expenses payable by Ford Credit estimated to be $400,000.
(3) Plus consideration received for the right to remarket the TERMS.
The TERMS are offered by the several Underwriters specified herein when, as
and if issued by Ford Credit, delivered to and accepted by the Underwriters and
subject to the Underwriters' right to reject orders in whole or in part. It is
expected that delivery of the TERMS will be made in book-entry form through the
facilities of the Depository, on or about August 27, 1998, against payment in
immediately available funds.
CREDIT SUISSE FIRST BOSTON NATIONSBANC MONTGOMERY SECURITIES LLC
SALOMON SMITH BARNEY WARBURG DILLON READ LLC
Prospectus Supplement dated August 18, 1998
- -------------------------
"Term Enhanced ReMarketable Securities(SM)" and "TERMS(SM)" are service marks
owned by Credit Suisse First Boston Corporation.
<PAGE> 2
(continued from previous page)
the first day of any Window Recouponing Period or the Additional Remarketing
Date, as the case may be, Ford Credit will be required to repurchase all the
TERMS on such date at 100% of the principal amount thereof plus accrued
interest. As a result, whether or not the Initial Investor Maturity Date is a
Window Period Remarketing Date, beneficial owners of TERMS on the Initial
Investor Maturity Date, will, in all cases, (i) be entitled to receive 100% of
the principal amount of the TERMS and (ii) be obligated to surrender the TERMS,
in each case on the Initial Investor Maturity Date. In addition, if the Initial
Investor Maturity Date is designated as a Window Period Remarketing Date,
beneficial owners of TERMS on the first day of each Window Recouponing Period or
the Additional Remarketing Date, as the case may be, will, in all cases (i) be
entitled to receive 100% of the principal amount of the TERMS and (ii) be
obligated to surrender the TERMS, in each case on the first day of such Window
Recouponing Period and the Additional Remarketing Date, as the case may be.
Interest on the TERMS accruing during the period from and including August
27, 1998 (the "Issue Date"), to but excluding, the Initial Investor Maturity
Date (the "Initial Period") will be payable quarterly on February 27, May 27,
August 27 and November 27 of each year (each such date an "Initial Interest
Payment Date"), commencing on November 27, 1998. Interest on the TERMS accruing
from the Initial Investor Maturity Date (if such date is not a Window Period
Remarketing Date) or the Additional Remarketing Date (if the Initial Investor
Maturity Date is a Window Period Remarketing Date) will be paid semiannually on
each day that is a six-month anniversary of such date. Interest on the TERMS
accruing during the period from and including the Initial Investor Maturity Date
(if the Initial Investor Maturity Date is a Window Period Remarketing Date) to,
but excluding, the Additional Remarketing Date (the "Window Period"), if
applicable, will be payable on the first day of each Window Recouponing Period
commencing subsequent to the Initial Investor Maturity Date and on the
Additional Remarketing Date. Each day on which interest is scheduled to be paid
is hereinafter referred to as an "Interest Payment Date." Interest payable on
any Interest Payment Date will be payable to the persons in whose names the
TERMS are registered on the fifteenth calendar day (whether or not a Business
Day) immediately preceding the related Interest Payment Date; provided, that, in
the case of any Interest Payment Date relating to the Window Period, interest
will be payable on the first day of each Window Recouponing Period and on the
Additional Remarketing Date to the person entitled to receive principal on such
date.
<PAGE> 3
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
DESCRIPTION OF TERMS
The following description of the particular terms of the TERMS 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 TERMS 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.
In addition to the TERMS offered hereby, Debt Securities in the approximate
aggregate principal amount of $1,126,000,000 previously have been sold.
GENERAL
The TERMS will be limited to $700,000,000 aggregate principal amount, will
be unsecured obligations of Ford Credit and will be scheduled to mature and be
redeemed at par on August 27, 2006 (the "Maturity Date") which date may be reset
due to the occurrence, if any, of the Window Period or as otherwise determined
by Ford Credit at its option, as provided herein. The TERMS 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 TERMS will bear interest from and including the Issue Date to, but
excluding August 27, 2001 (the "Initial Investor Maturity Date") at the Initial
Interest Rate determined in the manner provided below. The Initial Investor
Maturity Date or, if the Initial Investor Maturity Date is designated as a
Window Period Remarketing Date as described below under "Tender of the TERMS;
Remarketing; Remarketing Dates; Adjustment to Maturity Date," the Additional
Remarketing Date, will be the Remarketing Date for the TERMS. If the Remarketing
Dealer elects to remarket the TERMS, except in the limited circumstances
described herein, (i) the TERMS will be subject to mandatory tender to the
Remarketing Dealer at 100% of the principal amount thereof for remarketing on
the Initial Investor Maturity Date, or the first day of each Window Recouponing
Period and on the Additional Remarketing Date, as the case may be, on the terms
and subject to the conditions described herein, and (ii) on and after each such
date, the TERMS will bear interest at the rate determined by the Remarketing
Dealer in accordance with the procedures set forth below. See "Tender of TERMS;
Remarketing" below.
Under the circumstances described below, the TERMS are subject to
redemption by Ford Credit from the Remarketing Dealer on the Initial Investor
Maturity Date, or the first day of each Window Recouponing Period and on the
Additional Remarketing Date, as the case may be. See "Redemption" below. If the
Remarketing Dealer for any reason does not purchase all TERMS on the Initial
Investor Maturity Date, or the first day of any Window Recouponing Period or on
the Additional Remarketing Date, as the case may be, or elects not to remarket
the TERMS, or in certain other limited circumstances described herein, Ford
Credit will be required to repurchase all the TERMS on such date, at 100% of the
principal amount thereof plus accrued interest, if any. See "Repurchase" below.
Interest on the TERMS at the Initial Interest Rate accruing during the
Initial Period will be payable quarterly on February 27, May 27, August 27 and
November 27 of each year, commencing November 27, 1998. Interest on the TERMS
accruing from the Initial Investor Maturity Date (if such date is not a Window
Period Remarketing Date) or the Additional Remarketing Date (if the Initial
Investor Maturity Date is a Window Period Remarketing Date) will be paid
semiannually on each day that is a six-month anniversary of such date. Interest
on the TERMS accruing during the Window
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<PAGE> 4
Period, if applicable, will be payable on the first day of each Window
Recouponing Period and on the Additional Remarketing Date. Interest payable on
any Interest Payment Date will be payable to the persons in whose names the
TERMS are registered on the fifteenth calendar day (whether or not a Business
Day) immediately preceding the related Interest Payment Date; provided, that, in
the case of any Interest Payment Date relating to the Window Period, interest
will be payable to the persons to whom principal shall be payable on the first
day of each Window Recouponing Period and on the Additional Remarketing Date.
Interest on the TERMS (i) during the Initial Period will be computed as provided
under "-- Determination of Applicable Interest Rate for Initial Period" and (ii)
after the Initial Period will be computed on the basis of a 360-day year of
twelve 30-day months; provided, that, interest accruing during each Window
Interest Period in the Window Period will be computed on the basis of the actual
number of days in such Window Interest Period over a 360-day year. "Business
Day" and "LIBOR Business Day" shall have the respective meanings specified under
"-- Determination of Applicable Interest Rate for Initial Period" below. As used
herein, "Window Interest Period" means the period from and including the Window
Period Remarketing Date to, but excluding, the next following Window Interest
Reset Date and thereafter the period from and including a Window Interest Reset
Date to, but excluding, the next following Window Interest Reset Date; provided,
however that the final Window Interest Period in the Window Period shall
commence on and include the Window Interest Reset Date immediately preceding the
Additional Remarketing Date and end on, but exclude, the Additional Remarketing
Date; and "Window Interest Reset Date" means the Window Period Remarketing Date
and the Wednesday of each calendar week during the Window Period commencing on
the first Wednesday occurring after the Window Period Remarketing Date; except
that if the One Week LIBOR Rate is selected as the Reference Rate and such
Window Interest Reset Date is not a LIBOR Business Day then such Window Interest
Reset Date shall be the next succeeding LIBOR Business Day unless such next
succeeding LIBOR Business Day falls in the next calendar month, in which case
such Window Interest Reset Date shall be the preceding LIBOR Business Day.
Interest payable on any Interest Payment Date and at the Maturity Date or
date of earlier redemption or repurchase shall be the amount of interest accrued
from and including the next preceding Interest Payment Date in respect of which
interest has been paid or duly provided for (or from and including the Issue
Date if no interest has been paid or duly provided for with respect to the
TERMS) to but excluding such Interest Payment Date or the Maturity Date or date
of redemption or repurchase, as the case may be. If any Interest Payment Date or
the Maturity Date or date of redemption or repurchase of TERMS falls on a day
that is not a Business Day, the payment otherwise then due shall be made on the
next Business Day with the same force and effect as if it were made on the date
such payment was due and no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date or the Maturity Date or
date of earlier redemption or repurchase, as the case may be; provided, however,
that with respect to an Initial Interest Payment Date and an Interest Payment
Date during the Window Period on which interest is based on the One Week LIBOR
Rate, then if such Interest Payment Date is not a LIBOR Business Day then such
Interest Payment Date shall be the next succeeding LIBOR Business Day unless
such next succeeding LIBOR Business Day would fall in the next succeeding month,
in which case such Interest Payment Date shall be the immediately preceding
LIBOR Business Day.
The TERMS will be issued in denominations of $1,000 and integral multiples
thereof.
TENDER OF TERMS; REMARKETING
Mandatory Tender. Provided that the Remarketing Dealer gives notice to Ford
Credit, the Depository and the Trustee on a Business Day not earlier than
fifteen nor later than five Business Days prior to the Initial Investor Maturity
Date of its intention to purchase the TERMS for remarketing (the "Notification
Date"), each TERMS will be automatically tendered, or deemed tendered, to the
Remarketing Dealer for purchase on each of (i) the Initial Investor Maturity
Date, and (ii) if the Initial Investor Maturity Date is designated as a Window
Period Remarketing Date, the
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<PAGE> 5
first day of each Window Recouponing Period and the Additional Remarketing Date,
except in the circumstances described under "-- Repurchase" or "-- Redemption"
below. The purchase price for the TERMS to be paid by the Remarketing Dealer
will equal 100% of the principal amount thereof. See "Notification of Results;
Settlement" below. When the TERMS are tendered for remarketing, the Remarketing
Dealer may remarket the TERMS for its own account at varying prices to be
determined by the Remarketing Dealer at the time of each sale. From and after
the Initial Investor Maturity Date (if such date is not a Window Period
Remarketing Date) or the Additional Remarketing Date (if the Initial Investor
Maturity Date is a Window Period Remarketing Date), the TERMS will bear interest
at the Interest Rate to Maturity, determined as set forth under "--
Determination of Applicable Interest Rate Subsequent to Initial Period" below.
During each Window Recouponing Period in the Window Period, if applicable, the
TERMS will bear interest at the Window Period Interest Rate determined as set
forth under "-- Determination of Applicable Interest Rate Subsequent to Initial
Period" below. If the Remarketing Dealer elects to remarket the TERMS, the
obligation of the Remarketing Dealer to purchase the TERMS on the applicable
Remarketing Date and the first day of any Window Recouponing Period is subject,
among other things, to the conditions that, since the Notification Date, no
material adverse change in the condition of Ford Credit and its subsidiaries,
considered as one enterprise, shall have occurred and be in effect, and that no
Event of Default (as described under "Description of Debt Securities -- Events
of Default and Notice Thereof" in the Prospectus), or any event which, with the
giving of notice or passage of time, or both, would constitute an Event of
Default with respect to the TERMS shall have occurred and be continuing. If for
any reason the Remarketing Dealer does not purchase all TERMS on the Remarketing
Date or first day of a Window Recouponing Period, as the case may be, Ford
Credit will be required to repurchase all the TERMS at a price equal to 100% of
the principal amount thereof plus all accrued and unpaid interest, if any, on
the TERMS to such date of purchase. See "-- Repurchase" below.
The Initial Investor Maturity Date will be August 27, 2001. The Maturity
Date of the TERMS is scheduled to occur on August 27, 2006, but may be adjusted
due to the occurrence, if any, of either, or both of (i) the Window Period or
(ii) modification by Ford Credit of the Maturity Date of the TERMS.
Remarketing Dates; Adjustment to Maturity Date. If the Remarketing Dealer
elects to remarket the TERMS on the Initial Investor Maturity Date, then not
later than 4:00 p.m., New York City time, on the fourth Business Day prior to
the Initial Investor Maturity Date, Ford Credit may notify the Remarketing
Dealer, the Trustee and the Depository by telephone, confirmed in writing, that
it elects the Initial Investor Maturity Date to be a Window Period Remarketing
Date (the "Window Period Remarketing Date"). If Ford Credit does not provide
such notification, the Initial Investor Maturity Date will be the only
Remarketing Date and, subject to the immediately following paragraph, the TERMS
will mature on the Maturity Date. If Ford Credit provides such notification,
then (i) the Additional Remarketing Date will be any one of the one week
anniversary dates following the Initial Investor Maturity Date during the Window
Period (or if any such day is not a Business Day, the next following Business
Day) designated by Ford Credit not later than the fifth Business Day prior to
such one-week anniversary date (the "Additional Remarketing Date"); provided,
however, that, if Ford Credit fails to so designate the Additional Remarketing
Date during the Window Period, the Additional Remarketing Date will be the date
that is the last day of the last Window Recouponing Period (or if such day is
not a Business Day, the next following Business Day) and (ii) the Maturity Date
of the TERMS, subject to the immediately following paragraph, will be a date
that is the fifth year anniversary of the Additional Remarketing Date (whether
or not a Business Day).
Notwithstanding the foregoing paragraph, Ford Credit (upon notice by
telephone, confirmed in writing, to the Remarketing Dealer, the Trustee and the
Depository) may, at its option, elect to modify the Maturity Date of the TERMS
by designating an anniversary of the Initial Investor Maturity Date (if there is
no Window Period) or of the Additional Remarketing Date (if there is a Window
Period) to an anniversary date not later than the fifth anniversary thereof as
the Maturity Date of the
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TERMS. Such notice must be given no later than 4:00 p.m., New York City time, on
the fourth Business Day prior to the Initial Investor Maturity Date (if there is
no Window Period) or no later than the designation by Ford Credit of the
Additional Remarketing Date (if there is a Window Period).
Determination of Applicable Interest Rate for Initial Period. The per annum
interest rate on the TERMS in effect for each day of an Initial Interest Period
will be equal to the Three Month LIBOR Rate plus 10 basis points (0.10%) (the
"Initial Interest Rate"). The Initial Interest Rate for each Initial Interest
Period will be set on the 27th day of the months of February, May, August and
November of each year, except that the Initial Interest Rate for the first
Initial Interest Period will be set on the Issue Date (each such date an
"Initial Interest Reset Date"). If any Initial Interest Reset Date (other than
the first Initial Interest Reset Date occurring on the Issue Date) and Initial
Interest Payment Date would otherwise be a day that is not a LIBOR Business Day,
such Initial Interest Reset Date and Initial Interest Payment Date shall be the
next succeeding LIBOR Business Day, unless the next succeeding LIBOR Business
Day is in the next succeeding calendar month, in which case such Initial
Interest Reset Date and Initial Interest Payment Date shall be the immediately
preceding LIBOR Business Day. "LIBOR Business Day" means any day that is not a
Saturday or Sunday and that, in the City of New York or the City of London, is
not a day on which banking institutions are generally authorized or obligated by
law to close. "Initial Interest Period" shall mean the period from and including
an Initial Interest Reset Date to but excluding the next succeeding Initial
Interest Reset Date and, in the case of the last such period, from and including
the Initial Interest Reset Date immediately preceding the Initial Investor
Maturity Date, to but not including the Initial Investor Maturity Date. If the
Initial Investor Maturity Date is not a Business Day, then the principal amount
of the TERMS plus accrued and unpaid interest thereon shall be paid on the next
succeeding Business Day and no interest shall accrue for the Initial Investor
Maturity Date or any day thereafter. "Business Day" shall mean any day that is
not a Saturday or Sunday and that, in the City of New York, is not a day on
which banking institutions are generally authorized or obligated by law to
close.
The "Three Month LIBOR Rate" shall mean the rate determined in accordance
with the following provisions:
(i) On the second day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market preceding each Initial
Interest Reset Date (each such date a "LIBOR Interest Determination Date"),
the The Chase Manhattan Bank (the "LIBOR Reference Agent"), as agent for
Ford Credit, will determine the Three Month LIBOR Rate which shall be the
rate for deposits in U.S. dollars having a three-month maturity which
appears on the Telerate Page 3750 as of 11:00 a.m., London time, on such
LIBOR Interest Determination Date. "Telerate Page 3750" means the display
page so designated on the Dow Jones Markets Limited (or such other page as
may replace that page on that service or such other service or services as
may be nominated by the British Bankers' Association for the purpose of
displaying London interbank offered rates for U.S. dollar deposits). If the
Three Month LIBOR Rate on such LIBOR Interest Determination Date does not
appear on the Telerate Page 3750, such Three Month LIBOR Rate will be
determined as described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date for which the
Three Month LIBOR Rate does not appear on the Telerate Page 3750 as
specified in (i) above, the Three Month LIBOR Rate will be determined on
the basis of the rates at which deposits in U.S. dollars are offered by
four major banks in the London interbank market selected by the LIBOR
Reference Agent (the "Initial Period Reference Banks") at approximately
11:00 a.m., London time, on such LIBOR Interest Determination Date to prime
banks in the London interbank market having a three-month maturity and in a
principal amount equal to an amount of not less than U.S. $1,000,000 that
is representative for a single transaction in such market at such time. The
LIBOR Reference Agent will request the principal London office of each of
such Initial Period Reference Banks to provide a quotation of its rate. If
at least two such quotations are provided,
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the Three Month LIBOR Rate on such LIBOR Interest Determination Date will
be the arithmetic mean (rounded upwards, if necessary, to the nearest one
hundred-thousandth of a percentage point, with 5 one-millionths of a
percentage point rounded upwards) of such quotations. If fewer than two
quotations are provided, the Three Month LIBOR Rate on such LIBOR Interest
Determination Date will be the arithmetic mean (rounded upwards, if
necessary, to the nearest one hundred-thousandth of a percentage point,
with 5 one-millionths of a percentage point rounded upwards) of the rates
quoted by three major banks in New York City selected by the LIBOR
Reference Agent at approximately 11:00 a.m., New York City time, on such
LIBOR Interest Determination Date for loans in U.S. dollars to leading
European banks, having a three-month maturity and in a principal amount
equal to an amount of not less than U.S. $1,000,000 that is representative
for a single transaction in such market at such time; provided, however,
that if the banks in New York City selected as aforesaid by the Remarketing
Dealer are not quoting as mentioned in this sentence, the Initial Interest
Rate for the Initial Interest Period commencing on the Initial Interest
Reset Date following such LIBOR Interest Determination Date will be the
Initial Interest Rate in effect on such LIBOR Interest Determination Date.
The amount of interest for each day that a TERM is outstanding (the "Daily
Interest Amount") during any Initial Interest Period will be calculated by
dividing the Initial Interest Rate in effect for such day by 360 and multiplying
the result by the principal amount of such TERM. The amount of interest to be
paid on such TERM for any Initial Interest Period will be calculated by adding
the Daily Interest Amounts for each day in such Initial Interest Period.
The Initial Interest Rate on the TERMS during any Initial Interest Period
will in no event be higher than the maximum rate permitted by New York law as
the same may be modified by United States law of general application.
Determination of Applicable Interest Rate Subsequent to Initial
Period. From, and including, the Initial Investor Maturity Date if such date is
not a Window Period Remarketing Date or, from and including the Additional
Remarketing Date, if the Initial Investor Maturity Date is a Window Period
Remarketing Date, to but excluding the Maturity Date, the TERMS will bear
interest at the Interest Rate to Maturity. From, and including, the Initial
Investor Maturity Date if such date is a Window Period Remarketing Date to, but
excluding, the Additional Remarketing Date (the "Window Period"), if applicable,
the TERMS will bear interest for each Window Recouponing Period during the
Window Period at the Window Period Interest Rate.
The "Window Recouponing Period" means the period or periods within the
Window Period, selected by Ford Credit, from the following alternatives:
(a) each of the 104 successive one week periods from and including the
Window Period Remarketing Date;
(b) each of the 24 successive 30 day periods from and including the
Window Period Remarketing Date;
(c) each of the 8 successive 90 day periods from and including the
Window Period Remarketing Date;
(d) each of the 4 successive 180 day periods from and including the
Window Period Remarketing Date;
(e) each of the 2 successive one year periods from and including the
Window Period Remarketing Date; or
(f) the two year period from (and including) the Window Period
Remarketing Date;
provided, however, that if on the Notification Date, Ford Credit's senior
unsecured debt is not rated at least "Baa3" by Moody's Investors Service and
"BBB-" by Standard & Poor's Ratings Group, or the equivalent thereof by each
such rating agency at such time, then the Window Recouponing
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Period means the period or periods within the Window Period, selected by Ford
Credit, from the following alternatives:
(v) each of the 52 successive one week periods from and including the
Window Period Remarketing Date;
(w) each of the 12 successive 30 day periods from and including the
Window Period Remarketing Date;
(x) each of the 4 successive 90 day periods from and including the
Window Period Remarketing Date;
(y) each of the 2 successive 180 day periods from and including the
Window Period Remarketing Date; or
(z) the one year period from (and including) the Window Period
Remarketing Date;
provided, further, that if during the Window Period Ford Credit's senior
unsecured debt ceases to be rated at least "Baa3" by Moody's Investors Service
and "BBB-" by Standard & Poor's Ratings Group, or the equivalent thereof by each
such rating agency at such time, and there is more than one year remaining in
the Window Period, then the Window Period shall be shortened so that the
Additional Remarketing Date is not more than 52 weeks from such event, and Ford
Credit shall have the option in its sole discretion to select a new Window
Recouponing Period by giving notice to the Remarketing Dealer, the Trustee and
the Depository.
The "Interest Rate to Maturity" shall be the per annum rate determined by
the Remarketing Dealer by 3:30 p.m., New York City time, on the third Business
Day immediately preceding the Initial Investor Maturity Date (if such date is
not a Window Period Remarketing Date) or the Additional Remarketing Date (if the
Initial Investor Maturity Date is a Window Period Remarketing Date) (the
"Re-pricing Date"), to the nearest one hundred-thousandth (0.00001) of one
percent per annum, and will be equal to the sum of the Base Rate plus the
Applicable Spread, which will be based on the Dollar Price of the TERMS.
"Base Rate" means 5.347%.
The "Applicable Spread" will be the lowest bid indication, expressed as a
spread (in the form of a percentage or number of basis points) above the Base
Rate, obtained by the Remarketing Dealer on the Re-pricing Date from the bids
quoted by five Reference Corporate Dealers for the full aggregate principal
amount of the TERMS at the Dollar Price, but assuming (i) an issue date of the
Initial Investor Maturity Date (if such date is not a Window Period Remarketing
Date) or the Additional Remarketing Date (if the Initial Investor Maturity Date
is a Window Period Remarketing Date) with settlement on such date without
accrued interest, (ii) a maturity date equal to the Maturity Date of the TERMS,
and (iii) a stated annual interest rate, payable semiannually, equal to the Base
Rate plus the spread bid by the applicable Reference Corporate Dealer. If fewer
than five Reference Corporate Dealers bid as described above, then the
Applicable Spread shall be the lowest of such bid indications obtained as
described above.
"Dollar Price" means, with respect to the TERMS, the present value, as of
the Initial Investor Maturity Date, of the Remaining Scheduled Payments
discounted to the Initial Investor Maturity Date, on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months), at the Treasury
Rate; provided that in the case of the Additional Remarketing Date and the first
day of any Window Recouponing Period, the Dollar Price will be the Accreted
Dollar Price; provided, further, that the Dollar Price in the case of the
Initial Investor Maturity Date or the Additional Remarketing Date may be any
other amount agreed to in writing by the Remarketing Dealer and Ford Credit.
"Accreted Dollar Price" means, with respect to the Additional Remarketing
Date or the first day of any Window Recouponing Period, the Dollar Price as of
the Initial Investor Maturity Date (determined by the Remarketing Dealer on the
Notification Date for the Initial Investor Maturity Date as if the Initial
Investor Maturity Date were not a Window Period Remarketing Date) plus the
product
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of (i) such Dollar Price less the principal amount of the TERMS as of the
Initial Investor Maturity Date and (ii) the weighted average per annum Window
Period Interest Rate for the Window Period and (iii) the number of days in the
Window Period divided by 360.
"Reference Corporate Dealers" means leading dealers of publicly traded debt
securities of Ford Credit in The City of New York or Chicago (which shall
include the Remarketing Dealer or one of its affiliates) selected by Ford
Credit.
"Remaining Scheduled Payments" means, with respect to the TERMS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only and assuming (i) a maturity date equal to the
day that is five years from the Initial Investor Maturity Date of the TERMS
(whether or not a Business Day) and, (ii) that Ford Credit did not elect the
Initial Investor Maturity Date to be a Window Period Remarketing Date.
"Treasury Rate" means the yield to maturity of the offered-side quote for
the then current 5 Year US Treasury Bond or the interpolated yield of other then
current US Treasury Bonds as agreed to by Ford Credit and the Remarketing
Dealer, as the case may be, shown on Telerate page 500 (or any successor page),
as of 11:00 a.m., New York City time, on the Notification Date. The 5 year
offered-side yield will be used to determine the Dollar Price with respect to
the determination of the Interest Rate to Maturity. In the event that the
offered-side quote for any such Treasury Bond is no longer shown on Telerate
page 500 and there is no successor page, the Treasury Rate will be calculated by
the Remarketing Dealer and will be a yield to maturity of the arithmetic mean of
the secondary market bid rates, as of approximately 11:00 a.m., New York City
time, on the Notification Date, of five leading primary United States government
securities dealers (which shall include the Remarketing Dealer or an affiliate
of the Remarketing Dealer) selected by the Remarketing Dealer, excluding the
highest (or one of the highest if there are more than one highest bid rates) and
lowest (or one of the lowest if there are more than one of the lowest bid rates)
of such bids, for an aggregate principal amount of the then current 5 Year US
Treasury Bond, or the interpolated yield of other then current US Treasury Bonds
as agreed to by Ford Credit and the Remarketing Dealer, as the case may be,
equal to the full aggregate principal amount of the TERMS. If fewer than three
such United States government securities dealers provide bids, the Treasury Rate
shall be the average of such bids. If only one such United States government
securities dealer provides such a bid, then the Treasury Rate shall be equal to
such bid.
The interest rate for each Window Recouponing Period during the Window
Period will be reset on each Window Interest Reset Date during the Window
Recouponing Period and will equal the Reference Rate plus the Basic Spread, in
each case as calculated by the Remarketing Dealer (the "Window Period Interest
Rate"). The "Window Interest Determination Date" applicable to a Window Interest
Reset Date will be the second Business Day (or LIBOR Business Day if the
Reference Rate is the One Week LIBOR Rate) preceding such Window Interest Reset
Date; provided, however, that if the Reference Rate selected is the One Week
LIBOR Rate, then such Window Interest Determination Date shall be a LIBOR
Interest Determination Date. The interest rate in effect from and including the
Window Period Remarketing Date which is the first day of the Window Period to,
but excluding, the first Window Interest Reset Date during such Window Period
will be determined as if the Window Period Remarketing Date were a Window
Interest Reset Date and the Window Interest Determination Date for such Window
Interest Reset Date were the second Business Day (or LIBOR Business Day) prior
to the Window Period Remarketing Date.
The "Reference Rate" means, with respect to each Window Interest Reset
Date, one of the following indexes selected by Ford Credit and notified to the
Remarketing Dealer no later than four Business Days prior to the Window Period
Remarketing Date and no later than four Business Days prior to each Window
Recouponing Period: (i) the per annum rate equal to the One Week LIBOR Rate, or
the LIBOR rate for such other period as may be mutually agreed to by Ford Credit
and the Remarketing Dealer, on the LIBOR Interest Determination Date, or (ii)
the per annum rate equal to the average of the federal funds rates shown on
Telerate page 5 (or any successor page) at
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11:00 a.m., New York City time, on the Window Interest Determination Date and
each of the four Business Days prior such Window Interest Determination Date, or
(iii) the one-week "AA" non-financial commercial paper rate, or the "AA"
non-financial commercial paper rate for such other period as may be mutually
agreed to by Ford Credit and the Remarketing Dealer, as shown on the internet
world wide web page (or any successor page) of the Board of Governors of the
Federal Reserve System (www.bog.frb.fed.us/releases/CP/) at 11:00 a.m., New York
City time, on the Interest Determination Date. The One Week LIBOR Rate shall be
determined by the Remarketing Dealer in the same manner as the LIBOR Reference
Agent determines the Three Month LIBOR Rate, except, that, in the determination
thereof, the term "One Week LIBOR Rate" shall be substituted for "Three Month
LIBOR Rate", the term "Window Interest Reset Date" shall be substituted for the
term "Initial Interest Reset Date" and the phrase "one-week maturity" shall be
substituted for "three-month maturity" throughout.
The "Basic Spread" will be the lowest bid indication, expressed as a spread
(in the form of a percentage or number of basis points) above the Reference
Rate, obtained by the Remarketing Dealer on the third Business Day prior to the
Window Period Remarketing Date and the first day of each subsequent Window
Recouponing Period from the bids quoted from five Reference Money Market Dealers
on such date for the full aggregate principal amount of the TERMS at a dollar
price equal to par, but assuming (i) an issue date of the Window Period
Remarketing Date, or the first day of each subsequent Window Recouponing Period,
as the case may be, with settlement on such date without accrued interest, (ii)
a maturity date equal to the day that is the first day of the immediately
following Window Recouponing Period or the last day of the Window Period, as the
case may be, (iii) that the TERMS are callable by the Remarketing Dealer on a
weekly basis after the Window Period Remarketing Date, (iv) that the TERMS will
be repurchased by Ford Credit at par on the day that is the first day of the
immediately following Window Recouponing Period or the last day of the Window
Period, as the case may be, if not previously called by the Remarketing Dealer
and (v) a stated annual interest rate, payable on the first day of the
immediately following Window Recouponing Period or on the Additional Remarketing
Date, as the case may be, equal to the Reference Rate plus the spread bid by the
applicable Reference Money Market Dealer. If fewer than five Reference Money
Market Dealers bid as described above, then the Basic Spread shall be the lowest
of such bid indications obtained as described above.
"Reference Money Market Dealers" means leading dealers, selected by Ford
Credit, of publicly traded debt securities of Ford Credit in The City of New
York or Chicago (which shall include the Remarketing Dealer or one of its
affiliates) who are also leading dealers in money market instruments. Ford
Credit will notify the Remarketing Dealer of the identity of such Reference
Money Market Dealers no later than four Business Days prior to the Window Period
Remarketing Date and the first day of each Window Recouponing Period.
Notification of Results; Settlement. Provided the Remarketing Dealer has
previously notified Ford Credit, the Depository and the Trustee on the
Notification Date of its intention to purchase all TERMS on the Initial Investor
Maturity Date, the Remarketing Dealer will notify Ford Credit, the Trustee and
the Depository by telephone, confirmed in writing, by 4:00 p.m., New York City
time, on the third Business Day prior to the Initial Investor Maturity Date (if
such date is not a Window Period Remarketing Date) or the Additional Remarketing
Date (if the Initial Investor Maturity Date is a Window Period Remarketing
Date), of the Interest Rate to Maturity. If the Initial Investor Maturity Date
is a Window Period Remarketing Date, the Remarketing Dealer shall provide Ford
Credit, the Trustee and Depository with notice in accordance with the preceding
sentence, on the second Business Day prior to the Initial Investor Maturity Date
and of the first day of each Window Interest Period, of the Window Period
Interest Rate which will be in effect during such Window Interest Period.
All of the TERMS will be automatically delivered to the account of the
Trustee, by book-entry through the Depository pending payment of the purchase
price therefor, on the first day of each Window Recouponing Date and each
Remarketing Date.
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In the event that the Remarketing Dealer purchases the TERMS on the first
day of a Window Recouponing Period or a Remarketing Date, payment therefor will
be made to the Depository for distribution by the Depository to the Depository
participant (each, a "DTC Participant") of each beneficial owner of TERMS, by
the close of business on such date against delivery through the Depository of
such beneficial owner's TERMS, of 100% of the principal amount of the TERMS that
have been purchased by the Remarketing Dealer. If the Remarketing Dealer does
not purchase all of the TERMS on the first day of a Window Recouponing Period or
a Remarketing Date, it will be the obligation of Ford Credit to make or cause to
be made such payment for the TERMS, as described below under "Repurchase." In
any case, payment of interest to the DTC Participant of each beneficial owner of
TERMS due on the first day of a Window Recouponing Period or a Remarketing Date
will be made by Ford Credit by book entry through the Depository by the close of
business on such date.
The transactions described above will be executed through the Depository in
accordance with the procedures of the Depository, and the accounts of the
respective DTC Participants will be debited and credited and the TERMS delivered
by book-entry as necessary to effect the purchases and sales thereof.
Transactions involving the sale and purchase of TERMS remarketed by the
Remarketing Dealer will settle in immediately available funds through the
Depository's Same-Day Funds Settlement System.
The tender and settlement procedures described above, including provisions
for payment by purchasers of TERMS in the remarketing or for payment to selling
beneficial owners of TERMS, may be modified to the extent required by the
Depository or to the extent required to facilitate the tender and remarketing of
TERMS in certificated form, if the book-entry system is no longer available for
the TERMS at the time of the remarketing. In addition, in accordance with the
terms of the Indenture, the tender and settlement procedures set forth above may
be modified in order to facilitate the tender and settlement process.
As long as the Depository or its nominee holds the certificates
representing any TERMS in the book-entry system of the Depository, no
certificates for such TERMS will be delivered to reflect any transfer of such
TERMS effected in the remarketing. In addition, under the terms of the TERMS and
the Remarketing Agreement, Ford Credit has agreed that, notwithstanding any
provision to the contrary set forth in the Indenture, prior to the Additional
Remarketing Date (i) it will use its best efforts to maintain the TERMS in
book-entry form with the Depository or any successor thereto and to appoint a
successor depositary to the extent necessary to maintain the TERMS in book-entry
form, and (ii) it will waive any discretionary right it otherwise has under the
Indenture to cause the TERMS to be issued in certificated form.
For further information with respect to transfers and settlement through
the Depository, see "Description of Debt Securities -- Book-Entry, Delivery and
Form" in the accompanying Prospectus.
The Remarketing Dealer. Ford Credit and the Remarketing Dealer are entering
into a Remarketing Agreement, the general terms and provisions of which are
summarized below.
In connection with the remarketing of the TERMS bearing the Interest Rate
to Maturity, the Remarketing Dealer will sell the TERMS for distribution to the
Reference Corporate Dealer that provides the lowest bid indication with respect
to the determination of the Applicable Spread. The Remarketing Agreement
provides the Remarketing Dealer with the right to match the lowest bid
indication received from the Reference Corporate Dealers with respect to the
determination of the Interest Rate to Maturity and to thereby have the right to
distribute the TERMS.
Ford Credit will agree to indemnify the Remarketing Dealer against certain
liabilities, including liabilities under the Securities Act of 1933 (the
"Securities Act"), arising out of or in connection with its duties under the
Remarketing Agreement.
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In the event that the Remarketing Dealer elects to remarket the TERMS as
described herein, the obligation of the Remarketing Dealer to purchase TERMS
from Holders of TERMS will be subject to several conditions precedent set forth
in the Remarketing Agreement, including the conditions that, since the
Notification Date, no material adverse change in the financial condition or
results of operations of Ford Credit and its subsidiaries, considered as one
enterprise, shall have occurred and be continuing and that no Event of Default
(as defined in the Indenture), or any event which, with the giving of notice or
passage of time, or both, would constitute an Event of Default, with respect to
the TERMS shall have occurred and be continuing. In addition, the Remarketing
Agreement will provide for the termination thereof on or before a Remarketing
Date or the first day of a Window Recouponing Period upon the occurrence of
certain events as set forth in the Remarketing Agreement.
No Holder of any TERMS shall have any rights or claims under the
Remarketing Agreement or against the Remarketing Dealer as a result of the
Remarketing Dealer not purchasing such TERMS.
The Remarketing Agreement will also provide that the Remarketing Dealer may
resign at any time as Remarketing Dealer, such resignation to be effective 10
days after the delivery to Ford Credit and the Trustee of notice of such
resignation. In certain limited circumstances, the Remarketing Dealer may be
terminated. In either such case, the Remarketing Dealer shall select its
successor from a group of five broker-dealers of national standing identified by
Ford Credit who, subject to certain conditions, may assume the Remarketing
Dealer's rights and obligations under the Remarketing Agreement.
The Remarketing Dealer, in its individual or any other capacity, may buy,
sell, hold and deal in any of the TERMS. The Remarketing Dealer, if a beneficial
owner of any of the TERMS, may exercise any vote or join in any action which any
beneficial owner of TERMS may be entitled to exercise or take with like effect
as if it did not act in any capacity under the Remarketing Agreement. The
Remarketing Dealer, in its individual capacity, either as principal or agent,
may also engage in or have an interest in any financial or other transaction
with Ford Credit as freely as if did not act in any capacity under the
Remarketing Agreement.
REPURCHASE
In the event that (i) the Remarketing Dealer for any reason does not notify
Ford Credit of the Interest Rate to Maturity or of the Window Period Interest
Rate by (a) in the case of the Interest Rate to Maturity, 4:00 p.m., New York
City time, on the third Business Day prior to the (x) Initial Investor Maturity
Date (if the Initial Investor Maturity Date is not a Window Period Remarketing
Date) or (y) the Additional Remarketing Date (if the Initial Investor Maturity
Date is a Window Period Remarketing Date), or (b) in the case of the Window
Period Interest Rate, 4:00 p.m., New York City time, on the second Business Day
prior to (x) the Initial Investor Maturity Date or (y) the first day of any
Window Interest Period, as the case may be, or (ii) prior to a Remarketing Date
or the first day of any Window Recouponing Period, the Remarketing Dealer has
resigned and no successor has been appointed on or before the third Business Day
immediately preceding such date, or (iii) since the Notification Date, a
material adverse change in the financial condition or results of operations of
Ford Credit and its subsidiaries, considered as one enterprise, shall have
occurred and be continuing or an Event of Default, or any event which, with the
giving of notice or passage of time, or both, would constitute an Event of
Default, with respect to the TERMS shall have occurred and be continuing, or any
other event constituting a termination event under the Remarketing Agreement
shall have occurred and be continuing, or (iv) the Remarketing Dealer for any
reason elects not to purchase the TERMS for remarketing on a Remarketing Date or
the first day of any Window Recouponing Period, as the case may be, or (v) the
Remarketing Dealer for any reason does not purchase all tendered TERMS on the
applicable Remarketing Date or the first day of any Window Recouponing Period,
as the case may be, Ford Credit will repurchase the TERMS as a whole on such
Remarketing Date at a price equal to 100% of the principal amount of the TERMS
plus all accrued and unpaid interest, if any, on the TERMS to such date. In any
such case, payment
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will be made by Ford Credit to the Trustee for payment to the DTC Participant of
each tendering beneficial owner of TERMS, by book-entry through the Depository
by the close of business on the Remarketing Date or the first day of any Window
Recouponing Period, as the case may be, against delivery through the Depository
of such beneficial owner's tendered TERMS.
REDEMPTION
If the Remarketing Dealer elects to remarket the TERMS on a Remarketing
Date, the TERMS will be subject to mandatory tender to the Remarketing Dealer
for remarketing on a Remarketing Date and on the first day of any Window
Recouponing Period, in each case subject to the conditions described above under
"Tender of TERMS; Remarketing" and "Repurchase" and to Ford Credit's right to
redeem the TERMS from the Remarketing Dealer as described in the next sentence.
Ford Credit will notify the Remarketing Dealer, the Depository and the Trustee,
not later than the fourth Business Day immediately preceding the Remarketing
Date or the first day of any Window Recouponing Period, as the case may be, if
Ford Credit irrevocably elects to exercise its right to redeem the TERMS, in
whole but not in part, from the Remarketing Dealer on such date at the Optional
Redemption Price.
The "Optional Redemption Price" shall be the sum of (i) the greater of (x)
100% of the full aggregate principal amount of the TERMS and (y) the Dollar
Price as of the Initial Investor Maturity Date, or the first day of a Window
Recouponing Period or the Additional Remarketing Date (which, in the case of the
first day of a Window Recouponing Period or the Additional Remarketing Date,
will equal the Accreted Dollar Price), as the case may be, plus, in the case of
either (x) or (y) above, accrued and unpaid interest to the applicable date of
purchase.
BOOK-ENTRY, DELIVERY AND FORM
The TERMS 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. 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. Investors may elect to hold interests in the
Global Notes through either the Depository (in the United States) or Cedel Bank,
societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System ("Euroclear") (in Europe) if they
are participants of such systems, or indirectly through organizations which are
participants in such systems. Cedel and Euroclear will hold interests on behalf
of their participants through customers' securities accounts in Cedel's and
Euroclear's names on the books of their respective depositaries, which in turn
will hold such interests in customers' securities accounts in the depositaries'
names on the books of the Depository. Citibank, N.A. will act as depositary for
Cedel and The Chase Manhattan Bank will act as depositary for Euroclear (in such
capacities, the "U.S. Depositaries"). Beneficial interests in the Global Notes
will be held in denominations of $1,000 and integral multiples thereof. 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.
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
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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 TERMS held beneficially through Cedel
will be credited to cash accounts of Cedel Participants in accordance with its
rules and procedures, to the extent received by the U.S. Depositary for Cedel.
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 Euro-clear 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 TERMS held beneficially through Euroclear
will be credited to the cash accounts of Euroclear Participants in accordance
with the Terms and Conditions, to the extent received by the U.S. Depositary for
Euroclear.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the TERMS will be made in immediately available
funds. Secondary market trading between DTC Participants will occur in the
ordinary way in accordance with Depository rules and will be settled in
immediately available funds using the Depository's Same-Day Funds Settlement
System. Secondary market trading between Cedel Participants and/or Euroclear
Participants will occur in the ordinary way in accordance with the applicable
rules and operating procedures of Cedel and Euroclear and will be settled using
the procedures applicable to conventional eurobonds in immediately available
funds.
Cross-market transfers between persons holding directly or indirectly
through the Depository on the one hand, and directly or indirectly through Cedel
or Euroclear Participants, on the other, will be effected in the Depository in
accordance with the Depository rules on behalf of the relevant
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European international clearing system by its U.S. Depositary; however, such
cross-market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). The relevant European international clearing system will, if
the transaction meets its settlement requirements, deliver instructions to its
U.S. Depositary to take action to effect final settlement on its behalf by
delivering or receiving the TERMS in the Depository, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to the Depository. Cedel Participants and Euroclear Participants may
not deliver instructions directly to their respective U.S. Depositaries.
Because of time-zone differences, credits of the TERMS received in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during subsequent securities settlement processing and dated the business day
following the Depository settlement date. Such credits or any transactions in
such TERMS settled during such processing will be reported to the relevant
Euroclear or Cedel Participants on such business day. Cash received in Cedel or
Euroclear as a result of sales of TERMS by or through a Cedel Participant or a
Euroclear Participant to a DTC Participant will be received with value on the
Depository settlement date but will be available in the relevant Cedel or
Euroclear cash account only as of the business day following settlement in the
Depository.
Although the Depository, Cedel and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Notes among participants of the
Depository, Cedel and Euroclear, they are under no obligation to perform or
continue to perform such procedures and such procedures may be discontinued at
any time.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Shearman & Sterling, counsel to the Underwriters, the
following summary of certain United States Federal income tax consequences of
the purchase, ownership and disposition of the TERMS is based upon laws,
regulations, rulings and decisions now in effect, all of which are subject to
change (including changes in effective dates) or possible differing
interpretations. It deals only with TERMS held as capital assets and does not
purport to deal with persons in special tax situations, such as financial
institutions, insurance companies, regulated investment companies, dealers in
securities or currencies, persons holding TERMS as a hedge against currency risk
or as a position in a "straddle" for tax purposes, or persons whose functional
currency is not the U.S. dollar. Persons considering the purchase of the TERMS
should consult their own tax advisors concerning the application of United
States Federal income tax laws to their particular situations as well as any
consequences of the purchase, ownership and disposition of the TERMS arising
under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a Holder of a TERMS that is
for United States Federal income tax purposes (i) a citizen or individual
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof (other than a partnership that is not treated as a
United States person under any applicable Treasury regulations), (iii) an estate
whose income is subject to United States Federal income tax regardless of its
source, or (iv) a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust, or (v) any other person whose income or gain in respect of a TERMS is
effectively connected with the conduct of a United States trade or business.
Notwithstanding the preceding sentence, to the extent provided in Treasury
regulations, certain trusts in existence on August 20, 1996, and treated as
United States persons prior to such date, that elect to continue to be treated
as United States persons also will be a U.S. Holder. As used herein, the term
"non-U.S. Holder" means a Holder of a TERMS that is not a U.S. Holder.
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The United States Federal income tax treatment of debt obligations such as
the TERMS is not entirely certain. Because the TERMS are subject to mandatory
tender on the Initial Investor Maturity Date, the Company intends to treat the
TERMS as maturing on the Initial Investor Maturity Date for United States
Federal income tax purposes. By purchasing the TERMS, the U.S. Holder agrees to
follow such treatment for United States Federal income tax purposes. Based on
such treatment, interest on the TERMS will constitute "qualified stated
interest" and generally will be taxable to a U.S. Holder as ordinary interest
income at the time such payments are accrued or received (in accordance with the
U.S. Holder's regular method of tax accounting). Under the foregoing, if the
TERMS are issued to the Holder at par value or alternatively, the excess of the
par value over the issue price does not exceed the statutory de minimis amount
(generally 1/4 of 1% of the TERMS' stated redemption price at the Initial
Investor Maturity Date multiplied by the number of complete years to the Initial
Investor Maturity Date from its issue date), the TERMS will not be treated as
having original issue discount.
It is expected that the TERMS will be issued without having original issue
discount. If, however, the TERMS are issued at a discount greater than the
statutory de minimis amount, a Holder would be required to include original
issue discount in income as ordinary interest for United States Federal income
tax purposes as it accrues under a constant yield method in advance of receipt
of the cash payments attributable to such income, regardless of the Holder's
regular method of accounting.
Under the foregoing treatment, upon the sale, exchange or retirement of a
TERMS, a U.S. Holder generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such U.S.
Holder's adjusted tax basis in the TERMS. A U.S. Holder's adjusted tax basis in
a TERMS generally will equal such U.S. Holder's initial investment in the TERMS
increased by any original issue discount included in income (and accrued market
discount, if any, if the U.S. Holder has included such market discount in
income) and decreased by the amount of any payments, other than qualified stated
interest payments, received and amortizable bond premium taken with respect to
such TERMS. Such gain or loss will generally be long-term capital gain or loss
if the TERMS were held for more than one year. Gains recognized on capital
assets held by an individual taxpayer for more than twelve months are subject to
a 20% maximum rate.
There can be no assurance that the Internal Revenue Service ("IRS") will
agree with the Company's treatment of the TERMS and it is possible that the IRS
could assert another treatment. For instance, it is possible that the IRS could
seek to treat the TERMS as maturing on the Maturity Date.
In the event the TERMS were treated as maturing on the Maturity Date for
United States Federal income tax purposes, because the interest rate for certain
periods (i.e., the Window Period Interest Rate and the Interest Rate to
Maturity) will not be determined until a later time, the TERMS would be treated
as having contingent interest under the Internal Revenue Code of 1986, as
amended (the "Code"). In such event, under Treasury Regulations governing debt
instruments that provide for contingent payments (the "Contingent Payment
Regulations"), the Company would be required to construct a projected payment
schedule for the TERMS, based upon the Company's current borrowing costs for
comparable debt instruments of the Company, from which an estimated yield on the
TERMS would be calculated. A U.S. Holder would be required to include in income
original issue discount in an amount equal to the product of the adjusted issue
price of the TERMS at the beginning of each interest accrual period and the
estimated yield of the TERMS. In general, for these purposes, a TERMS' adjusted
issue price would equal the TERMS' issue price increased by the interest
previously accrued on the TERMS, and reduced by all payments made on the TERMS.
As a result of the application of the Contingent Payment Regulations, it is
possible that a U.S. Holder would be required to include interest in income in
excess of actual cash payments received for certain taxable years.
S-15
<PAGE> 17
In addition, the character of any gain or loss, upon the sale or exchange
of a TERMS (including a sale pursuant to the mandatory tender on the Initial
Investor Maturity Date) by a U.S. Holder, will likely differ if the TERMS were
treated as contingent payment obligations. Any such taxable gain generally would
be treated as ordinary income. Any such taxable loss generally would be ordinary
to the extent of previously accrued original issue discount, and any excess
would generally be treated as capital loss.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original issue
discount, if any) on a TERMS, unless such non-U.S. Holder is a direct or
indirect 10% or greater shareholder of the Company, a controlled foreign
corporation related to the Company or a bank receiving interest described in
section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation,
the last United States payor in the chain of payment prior to payment to a
non-U.S. Holder (the "Withholding Agent") must have received in the year in
which a payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that (i) is signed by the Holder of the
TERMS under penalties of perjury, (ii) certifies that such owner is not a U.S.
Holder and (iii) provides the name and address of the Holder. The statement may
be made on an IRS Form W-8 or a substantially similar form, and the Holder must
inform the Withholding Agent of any change in the information on the statement
within 30 days of such change. If a TERMS is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent. However, in
such case, the signed statement must be accompanied by a copy of the IRS Form
W-8 or the substitute form provided by the Holder to the organization or
institution. The Treasury Department is considering implementation of further
certification requirements aimed at determining whether the issuer of a debt
obligation is related to holders thereof.
Generally, a non-U.S. Holder will not be subject to United States Federal
income taxes on any amount which constitutes gain upon retirement or disposition
of a TERMS, provided the gain is not effectively connected with the conduct of a
trade or business in the United States by the non-U.S. Holder. Certain other
exceptions may be applicable, and a non-U.S. Holder should consult its tax
advisor in this regard.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the TERMS to registered owners who are not
"exempt recipients" and who fail to provide certain identifying information
(such as the registered owner's taxpayer identification number) in the required
manner. Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients. Payments made in
respect of the TERMS to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or establishes an exemption. Compliance with
the identification procedures described in the preceding section would establish
an exemption from backup withholding for those non-U.S. Holders who are not
exempt recipients.
In addition, upon the sale of a TERMS to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-U.S.
Holder (and certain other conditions are met). Such a sale must also be reported
by the broker to the IRS, unless either (i) the broker determines that the
seller is an exempt recipient or (ii) the seller certifies its non-U.S. status
(and certain other conditions are met). Certification of the registered owner's
non-U.S. status would be made normally on an IRS Form W-8 under penalties of
perjury, although in certain cases it may be possible to submit other
documentary evidence.
S-16
<PAGE> 18
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain restrictions on (a) employee benefit plans (as
defined in section 3(3) of ERISA), (b) plans described in section 4975(e)(1) of
the Code, including individual retirement accounts or Keogh plans, (c) entities
whose underlying assets include plan assets by reason of a plan's investment in
such entities (each a "Plan") as well as (d) persons who have certain specified
relationships to such Plans ("Parties-in-Interest" under ERISA and "Disqualified
Persons" under the Code). ERISA also imposes certain duties on persons who are
fiduciaries of Plans subject to ERISA and prohibits certain transactions between
a Plan and Parties-in-Interest or Disqualified Persons with respect to such
Plans.
Ford Credit and the Remarketing Dealer, because of their activities or the
activities of their respective affiliates, may be considered to be
Parties-in-Interest or Disqualified Persons with respect to certain Plans. If
the TERMS are acquired by a Plan with respect to which Ford Credit or the
Remarketing Dealer is, or subsequently becomes, a Party-in-Interest or
Disqualified Person, the purchase, holding or sale of TERMS could be deemed to
be or result in a direct or indirect violation of the prohibited transaction
rules of ERISA and the Code unless such transaction were subject to one or more
statutory or administrative exemptions (such as Prohibited Transaction Class
Exemption ("PTCE") 75-1, which exempts certain transactions involving employee
benefit plans and certain broker-dealers, reporting dealers and banks; PTCE
84-14, which exempts certain transactions effected on behalf of a Plan by a
"qualified professional asset manager"; PTCE 90-1, which exempts certain
transactions between insurance company pooled separate accounts and Parties-
in-Interest or Disqualified Persons; PTCE 91-38, which exempts certain
transactions between bank collective investment funds and Parties-in-Interest or
Disqualified Persons; PTCE 95-60, which exempts certain transactions between
insurance company general accounts and Parties-in-Interest or Disqualified
Persons; or PTCE 96-23, which exempts certain transactions effected on behalf of
a Plan by an "in-house asset manager"). Even if the conditions specified in one
or more of these exemptions are met, the scope of relief provided by these
exemptions will not necessarily cover all possible prohibited transactions that
could arise as a result of the purchase, holding or sale of the TERMS.
Accordingly, prior to making an investment in the TERMS, a Plan should
determine whether Ford Credit or the Remarketing Dealer is a Party-in-Interest
or Disqualified Person with respect to such Plan and, if so, whether the
transactions relating to the TERMS are subject to one or more statutory or
administrative exemptions, including those described above.
Prior to making an investment in the TERMS, each Plan fiduciary
contemplating such an investment should consult with its legal advisors
concerning the impact of ERISA and the Code and the potential consequences of
such investment with respect to their specific circumstances. Moreover, each
Plan fiduciary should take into account, among other considerations, whether the
fiduciary has the authority to make the investment on behalf of the Plan;
whether the purchase, holding or sale of TERMS would constitute or result in a
direct or indirect transaction with any Party-in-Interest or Disqualified Person
with respect to the Plan; and whether under the general fiduciary standards of
investment procedure and diversification an investment in the TERMS is prudent
and appropriate for the Plan, taking into account the overall investment policy
of the Plan and the composition of the Plan's investment portfolio.
S-17
<PAGE> 19
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement and the Pricing Agreement, the Underwriters named below (the
"Underwriters"), for whom Credit Suisse First Boston Corporation and Nationsbanc
Montgomery Securities LLC are acting as representatives (the "Representatives"),
have severally but not jointly agreed to purchase from Ford Credit the following
respective principal amounts of the TERMS:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ---------
<S> <C>
Credit Suisse First Boston Corporation.......... $300,000,000
NationsBanc Montgomery Securities LLC........... 300,000,000
Salomon Brothers Inc............................ 50,000,000
Warburg Dillon Read LLC......................... 50,000,000
------------
Total........................................... $700,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all the TERMS, if any are purchased.
The Underwriting Agreement provides that, in the event of a default by one or
more Underwriters, in certain circumstances other Underwriters may be
substituted or the commitment of each non-defaulting Underwriter may be
increased up to 10% or the Underwriting Agreement may be terminated. However, if
the default involves more than one-eleventh of the aggregate principal amount of
the TERMS, the Pricing Agreement relating to the TERMS 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 TERMS may be sold.
Ford Credit has been advised by the Underwriters that the Underwriters
propose to offer the TERMS to the public initially at the public offering price
set forth on the cover page of this Prospectus Supplement and, through the
Representatives, to certain dealers at such price less a concession of 0.15% of
the principal amount and the Underwriters and such dealers may allow a discount
of 0.125% of such principal amount on sales to certain other dealers. After the
initial public offering, the public offering price and concession and discount
to dealers may be changed by the Underwriters.
Ford Credit has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or contribute
to payments which the Underwriters may be required to make in respect thereof.
The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids. Over-allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position. Stabilizing transactions permit
bids to purchase the underlying security so long as the stabilizing bids do not
exceed a specified maximum. Syndicate covering transactions involve purchases of
the TERMS in the open market after the distribution has been completed in order
to cover syndicate short positions. Penalty bids permit the Representatives to
reclaim a selling concession from a syndicate member when the TERMS originally
sold by such syndicate member are purchased in a syndicate covering transaction
to cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Securities to
be higher than it would otherwise be in the absence of such transactions.
S-18
<PAGE> 20
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the TERMS in Canada is being made only on a private
placement basis exempt from the requirement that Ford Credit prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of TERMS are effected. Accordingly, any resale of the TERMS in Canada
must be made in accordance with applicable securities laws which will vary
depending on the relevant jurisdiction, and which may require resales to be made
in accordance with available statutory exemptions or pursuant to a discretionary
exemption granted by the applicable Canadian securities regulatory authority.
Purchasers are advised to seek legal advice prior to any resale of the TERMS.
REPRESENTATIONS OF PURCHASERS
Each purchaser of TERMS in Canada who receives a purchase confirmation will
be deemed to represent to Ford Credit and the dealer from whom such purchase
confirmation is received that (i) such purchaser is entitled under applicable
provincial securities laws to purchase such TERMS without the benefit of a
prospectus qualified under such securities laws, (ii) where required by law,
that such purchaser is purchasing as principal and not as agent, and (iii) such
purchaser has reviewed the text above under "Resale Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of TERMS to whom the Securities Act (British Columbia) applies
is advised that such purchaser is required to file with the British Columbia
Securities Commission a report within ten days of the sale of any TERMS acquired
by such purchaser pursuant to this offering. Such report must be in the form
attached to British Columbia Securities Commission Blanket Order BOR #95/17, a
copy of which may be obtained from Ford Credit. Only one such report must be
filed in respect of TERMS acquired on the same date and under the same
prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of TERMS should consult their own legal and tax
advisers with respect to the tax consequences of an investment in the TERMS in
their particular circumstances and with respect to the eligibility of the TERMS
for investment by the purchaser under relevant Canadian legislation.
S-19
<PAGE> 21
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> 22
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> 23
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> 24
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> 25
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> 26
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.
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<PAGE> 27
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> 28
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).
8
<PAGE> 29
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
9
<PAGE> 30
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> 31
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY FORD CREDIT
OR ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF FORD CREDIT OR FORD MOTOR COMPANY SINCE SUCH DATE.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Description of TERMS......................... S-2
Certain United States Federal Income
Tax Considerations................. S-14
ERISA Considerations......................... S-17
Underwriting................................. S-18
Notice to Canadian Residents................. S-19
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>
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[FORD MOTOR LOGO]
FORD MOTOR
CREDIT COMPANY
$700,000,000
FLOATING RATE TERM ENHANCED
REMARKETABLE SECURITIES(SM)
("TERMS(SM)")
PROSPECTUS SUPPLEMENT
CREDIT SUISSE FIRST BOSTON
NATIONSBANC MONTGOMERY SECURITIES LLC
SALOMON SMITH BARNEY
WARBURG DILLON READ LLC
"Term Enhanced ReMarketable Securities(SM)" and "TERMS(SM)" are service marks
owned by Credit Suisse First Boston Corporation
- --------------------------------------------------------------------------------
