<PAGE> 1
Rule 424(b)5
Registration Statement No. 333-40477
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JANUARY 7, 1998)
$3,250,000,000
FORD MOTOR CREDIT COMPANY
$2,250,000,000 6 1/8% NOTES DUE APRIL 28, 2003
$1,000,000,000 FLOATING RATE NOTES DUE APRIL 28, 2005
------------------
The 6 1/8% Notes due April 28, 2003 (the "Fixed Rate Notes") and the
Floating Rate Notes due April 28, 2005 (the "Floating Rate Notes" and together
with the Fixed Rate Notes, the "Notes") are offered for sale in the United
States, Europe and Asia. See "Underwriting". The Fixed Rate Notes will mature on
April 28, 2003 and the Floating Rate Notes will mature on April 28, 2005 and may
not be redeemed by Ford Motor Credit Company ("Ford Credit") prior to their
respective maturities unless certain events occur involving United States
taxation. See "Description of Notes -- Redemption".
Interest on the Fixed Rate Notes is payable semi-annually on April 28 and
October 28 of each year commencing October 28, 1998.
The Floating Rate Notes will bear interest at a floating rate equal to the
Three Month LIBOR Rate, reset quarterly, plus 18.75 basis points, payable
quarterly on the Interest Payment Dates occurring in January, April, July and
October of each year, commencing on the Interest Payment Date in July 1998.
Each series of the Notes will be represented by one or more Global Notes
registered in the name of the Depository's nominee. Beneficial interests in the
Global Notes will be shown on, and transfers thereof will be effected only
through, records maintained by the Depository and its participants, including
the U.S. Depositaries for Cedel and Euroclear. Except as described herein, Notes
in definitive form will not be issued. The Notes will trade in the Depository's
Same-Day Funds Settlement System until maturity, and secondary market trading
activity for the Notes will, therefore, settle in immediately available funds.
All payments of principal and interest will be made by Ford Credit in
immediately available funds. See "Description of Notes -- Global Clearance and
Settlement Procedures".
Application has been made to the Luxembourg Stock Exchange and to the Stock
Exchange of Singapore Limited (the "Singapore Stock Exchange" and together the
"Exchanges") for permission to deal in, and for listing of, the Notes on such
Exchanges.
------------------
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>
=================================================================================================================================
INITIAL PUBLIC UNDERWRITING DISCOUNTS AND PROCEEDS TO
OFFERING PRICE(1) COMMISSIONS(2) FORD CREDIT(1)(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Fixed Rate Note....................... 99.809% 0.35% 99.459%
- ---------------------------------------------------------------------------------------------------------------------------------
Total..................................... $2,245,702,500 $7,875,000 $2,237,827,500
- ---------------------------------------------------------------------------------------------------------------------------------
Per Floating Rate Note.................... 99.870% 0.25% 99.620%
- ---------------------------------------------------------------------------------------------------------------------------------
Total..................................... $998,700,000 $2,500,000 $996,200,000
=================================================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from April 28, 1998.
(2) Ford Credit has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, and
to pay to the Representative up to $50,000 as reimbursement for all or a
portion of their expenses.
(3) Before deducting expenses payable by Ford Credit estimated to be
$200,000.
------------------
The Notes are offered severally by the Underwriters as specified herein,
subject to receipt and acceptance by them and subject to their right to reject
any order in whole or in part. It is expected that delivery of the Global Notes,
representing each series of Notes, will be made on or about April 28, 1998
through the facilities of the Depository, Cedel and Euroclear, against payment
therefor in immediately available funds.
------------------
The Underwriters for the Fixed Rate Notes:
SALOMON SMITH BARNEY BEAR, STEARNS INTERNATIONAL LIMITED
ABN AMRO HOARE GOVETT CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON GOLDMAN, SACHS & CO.
J.P. MORGAN & CO. MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
The Underwriters for the Floating Rate Notes:
SALOMON SMITH BARNEY BEAR, STEARNS INTERNATIONAL LIMITED
BARCLAYS CAPITAL HSBC MARKETS
LEHMAN BROTHERS MERRILL LYNCH & CO.
PARIBAS
The date of this Prospectus Supplement is April 21, 1998.
<PAGE> 2
THE LUXEMBOURG STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF
THIS DOCUMENT, MAKES NO REPRESENTATION AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM
OR IN RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS DOCUMENT AND
THE PROSPECTUS.
THE SINGAPORE STOCK EXCHANGE ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS
OF ANY OF THE STATEMENTS OR OPINIONS MADE OR REPORTS CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS. ADMISSION TO THE OFFICIAL
LIST IS NOT TO BE TAKEN AS AN INDICATION OF THE MERITS OF THE ISSUER OR OF THE
NOTES.
THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS INCLUDE PARTICULARS
GIVEN IN COMPLIANCE WITH THE REQUIREMENTS OF THE SINGAPORE STOCK EXCHANGE FOR
THE PURPOSE OF GIVING INFORMATION WITH REGARD TO FORD CREDIT. FORD CREDIT
ACCEPTS FULL RESPONSIBILITY FOR THE ACCURACY OF THE INFORMATION CONTAINED IN
THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS AND CONFIRMS, HAVING MADE
ALL REASONABLE INQUIRIES, THAT TO THE BEST OF ITS KNOWLEDGE AND BELIEF THERE ARE
NO OTHER FACTS THE OMISSION OF WHICH WOULD MAKE ANY STATEMENT HEREIN MISLEADING
IN ANY MATERIAL RESPECT.
OFFERS AND SALES OF THE NOTES ARE SUBJECT TO RESTRICTIONS IN RELATION TO
THE UNITED KINGDOM, JAPAN AND SINGAPORE, DETAILS OF WHICH ARE SET OUT IN
"UNDERWRITING" BELOW. THE DISTRIBUTION OF THIS PROSPECTUS SUPPLEMENT AND
ACCOMPANYING PROSPECTUS AND THE OFFERING OF THE NOTES IN CERTAIN OTHER
JURISDICTIONS MAY ALSO BE RESTRICTED BY LAW.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE NOTES,
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, NOTES IN THE OPEN MARKET. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITING."
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus Supplement or the
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized. This Prospectus Supplement and the
Prospectus do not constitute an offer to sell or the solicitation of an offer to
buy any securities other than the securities described in this Prospectus
Supplement or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus Supplement or the Prospectus nor any
sale made hereunder or thereunder shall, under any circumstances, create any
implication that the information contained herein or therein is correct as of
any time subsequent to the date of such information.
In this Prospectus Supplement and accompanying Prospectus, unless otherwise
specified or the context otherwise requires, references to "dollars", "$" and
"U.S.$" are to United States dollars.
S-2
<PAGE> 3
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Certain Documents By Reference............. S-3
Directors and Principal Executive Officers of Ford Credit... S-5
Use of Proceeds............................................. S-5
Capitalization of Ford Motor Credit Company and
Subsidiaries.............................................. S-6
Description of Notes........................................ S-7
Certain United States Tax Documentation Requirements........ S-13
United States Taxation of Non-United States Persons......... S-15
Information Concerning Ford Credit.......................... S-16
Ford Motor Credit Company and Consolidated Subsidiaries --
Selected Financial Data................................... S-17
Information Concerning Ford................................. S-20
Selected Financial Data and Other Data of Ford.............. S-21
Financial Review of Ford.................................... S-22
Industry Data and Market Share of Ford...................... S-23
Ratio of Earnings to Fixed Charges.......................... S-23
Underwriting................................................ S-25
General Information......................................... S-27
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>
------------------------
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") 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 and April 16, 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 Notes shall be
deemed to be incorporated by reference into this Prospectus Supplement and to be
a part hereof from the date of filing such documents. Such reports include, and
such documents may include, information concerning Ford, as well as Ford Credit.
The financial statements which are incorporated in this Prospectus
Supplement and accompanying Prospectus by reference to the 1997 10-K Report and
the February 8-K Report have been audited by Coopers & Lybrand L.L.P. ("Coopers
& Lybrand"), 400 Renaissance Center, Detroit, Michigan 48243, independent
certified public accountants, to the extent indicated in their reports therein,
and have been so incorporated in reliance upon the report of that firm, given on
their authority as experts in accounting and auditing.
Coopers & Lybrand have given and not withdrawn their written consent to the
issue of this Prospectus Supplement and the accompanying Prospectus with the
incorporation by reference
S-3
<PAGE> 4
herein of their report dated January 26, 1998 in the 1997 10-K Report and in the
February 8-K Report on the audited financial statements of Ford Credit for the
financial years ended December 31, 1997.
This Prospectus Supplement and accompanying Prospectus, together with the
documents incorporated by reference herein, will be available free of charge at
the office of Banque Internationale a Luxembourg S.A., 69 route d'Esch L-1470,
Luxembourg.
S-4
<PAGE> 5
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS OF FORD CREDIT
E.S. Acton,
Vice President
M.E. Bannister,
Vice President
J.D. Bringard,
Vice President-General Counsel
J.P. Burkhard,
Vice President-Treasurer
K.J. Coates,
Director and
Executive Vice President
J.M. Devine,
Director
D.C. Flanigan,
Director and
Executive Vice President
E.B. Ford II,
Director, President
and Chief Operating Officer
R.A. Kniebes,
Vice President
M.S. Macdonald,
Director
J.T. Noone,
Vice President
M.R. O'Rear,
Vice President
W.D. Roberts,
Vice President
D.E. Ross,
Vice President
A.J. Salmon,
Vice President
G.C. Smith,
Director and
Executive Vice President
R.C. VanLeeuwen,
Vice President
J.M. Walsh,
Vice President
G.E. Watts,
Vice President
K. Whipple,
Director and
Chairman of the Board
All of the above-named persons are full-time employees of Ford Motor Company
("Ford") or Ford Credit.
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be added to the general
funds of Ford Credit and will be available for the purchase of receivables, for
loans and for the payment of maturing debt. Such proceeds initially may be used
to reduce short-term borrowings or may be invested temporarily in short-term
securities. Net proceeds to be paid to Ford Credit will be U.S. $3,234,027,500.
S-5
<PAGE> 6
CAPITALIZATION OF FORD MOTOR CREDIT COMPANY
AND SUBSIDIARIES
The capitalization of Ford Credit and its subsidiaries at March 31, 1998 is
as follows (in millions of U.S. dollars):
<TABLE>
<CAPTION>
OUTSTANDING ADDITIONAL
MARCH 31, LONG-TERM
1998 INDEBTEDNESS
----------- ------------
(UNAUDITED)
<S> <C> <C>
SENIOR INDEBTEDNESS, UNSECURED
Short-term
Commercial paper.................................. $ 42,299.5
Other short-term debt............................. 6,499.4
----------
Total short-term debt........................ 48,798.9
Long-term debt payable within one year................. 10,114.2
Long-term notes and debentures......................... 45,367.2
Notes offered hereby........................................ -- $3,250
----------
Total debt................................... 104,280.3
----------
STOCKHOLDER'S EQUITY
Capital stock, par value $100 a share (250,000 common
shares authorized, issued, and outstanding)........... 25.0
Paid-in surplus (contributions by stockholder)......... 3,896.4
Note receivable from affiliated company................ (1,517.0)
Accumulated other comprehensive income................. (133.1)
Earnings retained for use in the business.............. 7,605.1
----------
Total stockholder's equity................... 9,876.4
----------
TOTAL CAPITALIZATION........................................ $114,156.7
==========
</TABLE>
Except as set forth herein, there has been no material change in the
capitalization of Ford Credit since March 31, 1998 to the date of this
Prospectus Supplement.
S-6
<PAGE> 7
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of Debt Securities set forth in
the Prospectus. The Notes are part of the Debt Securities registered by Ford
Credit in December 1997 to be issued on terms to be determined at the time of
sale. In addition to the Notes offered hereby, Debt Securities in the aggregate
principal amount of $1,250,000,000 previously have been sold.
GENERAL
The Fixed Rate Notes will initially be limited to $2,250,000,000 aggregate
principal amount and the Floating Rate Notes will initially be limited to
$1,000,000,000 aggregate principal amount. Ford Credit may, without the consent
of the holders of the Fixed Rate Notes or the Floating Rate Notes create and
issue additional notes ranking pari passu with the Fixed Rate Notes or the
Floating Rate Notes, as the case may be, in all respects (or in all respects
except that the Interest Rate for the initial Interest Period with respect to
additional floating rate notes will be the Interest Rate set at the immediately
preceding Interest Reset Date) and so that such further notes shall be
consolidated and form a single series with the Fixed Rate Notes or the Floating
Rate Notes, as the case may be, and shall have the same terms as to status,
redemption or otherwise as such Notes. No additional notes may be issued if an
Event of Default has occurred with respect to the Notes.
The Fixed Rate Notes and the Floating Rate Notes will be unsecured
obligations of Ford Credit and will mature and be redeemed at par on April 28,
2003 and April 28, 2005 (the "Floating Rate Maturity Date"), respectively. The
Notes will rank prior to all subordinated indebtedness of Ford Motor Credit
Company (parent company only) and pari passu with all other unsecured and
unsubordinated indebtedness of Ford Motor Credit Company (parent company only).
The Fixed Rate Notes will bear interest from April 28, 1998 at the rate per
annum set forth on the cover page of this Prospectus Supplement, payable on
April 28 and October 28 of each year -- (each such day a "Fixed Rate Interest
Payment Date") commencing October 28, 1998, to the person in whose name the
Fixed Rate Note was registered at the close of business on the 15th day
preceding the respective Fixed Rate Interest Payment Date. If any day on which a
payment is due with respect to a Fixed Rate Note is not a Business Day, then the
holder thereof shall not be entitled to payment of the amount due until the next
following Business Day nor to any additional principal, interest or other
payment as a result of such delay except as otherwise provided under "Payment of
Additional Amounts." "Business Day" with respect to a Fixed Rate Note, shall
mean any day which is not a Saturday or Sunday or a day on which banks in New
York City and Philadelphia and any other place of payment are authorized or
obligated by law or regulation to close.
The Floating Rate Notes will bear interest from April 28, 1998 at a
floating rate determined in the manner provided below, payable on January 28,
April 28, July 28 and October 28 of each year (each such day a "Floating Rate
Interest Payment Date"), commencing July 28, 1998, to the person in whose name
the Floating Rate Note was registered at the close of business on the 15th day
preceding the respective Floating Rate Interest Payment Date, subject to certain
exceptions.
The Notes are not subject to redemption prior to maturity unless certain
events occur involving United States taxation. In such event, the Notes will be
redeemed at a redemption price of 100% of their principal amount plus accrued
and unpaid interest to the date of redemption. See "Description of Notes --
Redemption".
FLOATING RATE INTEREST
The per annum interest rate on the Floating Rate Notes (the "Floating
Interest Rate") in effect for each day of an Interest Period (as defined below)
will be equal to the Three Month LIBOR Rate plus 18.75 basis points (0.1875%).
The Interest Rate for each Interest Period will be set on the
S-7
<PAGE> 8
28th day of the months of January, April, July and October of each year,
commencing with April 28, 1998 (each such date an "Interest Reset Date") until
the principal on the Notes is paid or made available for payment (the "Principal
Payment Date"). If any Interest Reset Date (other than the initial Interest
Reset Date occurring on April 28, 1998) and Floating Rate Interest Payment Date
would otherwise be a day that is not a LIBOR Business Day, such Interest Reset
Date and Floating Rate 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 Interest Reset Date and Floating
Rate 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.
"Interest Period" shall mean the period from and including an Interest Reset
Date to but excluding the next succeeding Interest Reset Date and, in the case
of the last such period, from and including the Interest Reset Date immediately
preceding the Maturity Date or Principal Payment Date, as the case may be, to
but not including the Maturity Date or Principal Payment Date, as the case may
be. If the Principal Payment Date or Maturity Date is not a LIBOR Business Day,
then the principal amount of the Floating Rate Notes plus accrued and unpaid
interest thereon shall be paid on the next succeeding Floating Rate Business Day
and no interest shall accrue for the Floating Rate Maturity Date, the Principal
Payment Date or any day thereafter. "Floating Rate 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 Interest Reset
Date (each such date an "Interest Determination Date"), The Chase Manhattan
Bank (the "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 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 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 an 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 Reference
Agent (the "Reference Banks") at approximately 11:00 a.m., London time, on
such 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 Reference Agent will request
the principal London office of each of such Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the
Three Month LIBOR Rate on such 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 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 Reference Agent at approximately 11:00
a.m., New York
S-8
<PAGE> 9
City time, on such 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 Reference Agent are not quoting as mentioned in this sentence, the
Interest Rate for the Interest Period commencing on the Interest Reset Date
following such Interest Determination Date will be the Interest Rate in
effect on such Interest Determination Date.
The amount of interest for each day that a Floating Rate Note is
outstanding (the "Daily Interest Amount") will be calculated by dividing the
Floating Interest Rate in effect for such day by 360 and multiplying the result
by the principal amount of such Floating Rate Note. The amount of interest to be
paid on such Floating Rate Note for any Interest Period will be calculated by
adding the Daily Interest Amounts for each day in such Interest Period.
The Interest Rate on the Floating Rate Notes will in no event be higher
than the maximum rate permitted by New York law as the same may be modified by
United States law of general application.
The Floating Interest Rate and amount of interest to be paid on the
Floating Rate Notes for each Interest Period will be determined by the Reference
Agent. So long as the Floating Rate Notes are listed on the Luxembourg Stock
Exchange and the Singapore Stock Exchange, the Floating Rate Interest Payment
Date, the Floating Interest Rate and amount of interest to be paid on the
Floating Rate Notes for each Interest Period will be communicated to each such
Exchange by the Reference Agent no later than the first day of the relevant
Interest Period and published in accordance with "Notices" below. All
calculations made by the Reference Agent shall in the absence of manifest error
be conclusive for all purposes and binding on Ford Credit and the holders of the
Floating Rate Notes. So long as the Three Month LIBOR Rate is required to be
determined with respect to the Floating Rate Notes, there will at all times be a
Reference Agent. In the event that any then acting Reference Agent shall be
unable or unwilling to act, or that such Reference Agent shall fail duly to
establish the Three Month LIBOR Rate for any Interest Period, or that Ford
Credit proposes to remove such Reference Agent, Ford Credit shall appoint itself
or another person which is a bank, trust company, investment banking firm or
other financial institution to act as the Reference Agent.
BOOK-ENTRY, DELIVERY AND FORM
Each series of Notes 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.
S-9
<PAGE> 10
Cedel advises that it is incorporated under the laws of Luxembourg as a
professional depositary. Cedel holds securities for its participating
organizations ("Cedel Participants") and facilitates the clearance and
settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Cedel provides to
Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel interfaces with domestic markets in
several countries. As a professional depositary, Cedel is subject to regulation
by the Luxembourg Monetary Institute. Cedel Participants are recognized
financial institutions around the world, including underwriters, securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations and may include the Underwriters. Indirect access to Cedel
is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Cedel Participant
either directly or indirectly.
Distributions with respect to each series Notes 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 each series of Notes 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. In the event definitive Notes are issued,
Ford Credit will appoint a paying agent and transfer agent in Luxembourg and
Singapore.
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GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the Notes 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 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 Notes 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 Notes 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 Notes 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 Notes 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.
PAYMENT OF ADDITIONAL AMOUNTS
Ford Credit will, subject to the exceptions and limitations set forth
below, pay as additional interest on each series of Notes, such additional
amounts as are necessary in order that the net payment by Ford Credit or a
paying agent of the principal of and interest on the Notes to a holder who is a
non-United States person (as defined below), after deduction for any present or
future tax, assessment or governmental charge of the United States or a
political subdivision or taxing authority thereof or therein, imposed by
withholding with respect to the payment, will not be less than the amount
provided in the Notes to be then due and payable; provided, however, that the
foregoing obligation to pay additional amounts shall not apply:
(1) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of the holder, or a fiduciary, settlor,
beneficiary, member or shareholder of the holder if the holder is an
estate, trust, partnership or corporation, or a person holding a power over
an estate or trust administered by a fiduciary holder, being considered as:
(a) being or having been present or engaged in trade or business in
the United States or having or having had a permanent establishment in
the United States;
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(b) having a current or former relationship with the United States,
including a relationship as a citizen or resident thereof;
(c) being or having been a foreign or domestic personal holding
company, a passive foreign investment company or a controlled foreign
corporation with respect to the United States or a corporation that has
accumulated earnings to avoid United States federal income tax; or
(d) being or having been a "10-percent shareholder" of Ford Credit
as defined in section 871(h)(3) of the United States Internal Revenue
Code or any successor provision;
(2) to any holder that is not the sole beneficial owner of the Note,
or a portion thereof, or that is a fiduciary or partnership, but only to
the extent that a beneficiary or settlor with respect to the fiduciary, a
beneficial owner or member of the partnership would not have been entitled
to the payment of an additional amount had the beneficiary, settlor,
beneficial owner or member received directly its beneficial or distributive
share of the payment;
(3) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of the failure of the holder or any other person
to comply with certification, identification or information reporting
requirements concerning the nationality, residence, identity or connection
with the United States of the holder or beneficial owner of such Note, if
compliance is required by statute, by regulation of the United States
Treasury Department or by an applicable income tax treaty to which the
United States is a party as a precondition to exemption from such tax,
assessment or other governmental charge;
(4) to a tax, assessment or governmental charge that is imposed
otherwise than by withholding by Ford Credit or a paying agent from the
payment;
(5) to a tax, assessment or governmental charge that is imposed or
withheld solely by reason of a change in law, regulation, or administrative
or judicial interpretation that becomes effective more than 15 days after
the payment becomes due or is duly provided for, whichever occurs later;
(6) to an estate, inheritance, gift, sales, excise, transfer, wealth
or personal property tax or a similar tax, assessment or governmental
charge;
(7) to any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or interest
on any Note, if such payment can be made without such withholding by any
other paying agent; or
(8) in the case of any combination of items (1), (2), (3), (4), (5),
(6) and (7).
The Notes are subject in all cases to any tax, fiscal or other law or regulation
or administrative or judicial interpretation applicable thereto. Except as
specifically provided under this heading "Payment of Additional Amounts" and
under the heading "Description of Notes -- Redemption", Ford Credit shall not be
required to make any payment with respect to any tax, assessment or governmental
charge imposed by any government or a political subdivision or taxing authority
thereof or therein.
As used under this heading "Payment of Additional Amounts" and under the
headings "Description of Notes -- Redemption", "Certain United States Tax
Documentation Requirements" and "United States Taxation of Non-United States
Persons" the term "United States" means the United States of America (including
the States and the District of Columbia) and its territories, its possessions
and other areas subject to its jurisdiction, "United States person" means any
individual who is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any estate or trust the income of which is subject to United
States federal income taxation regardless of its source and "non-United States
person" means a person who is not a United States person.
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REDEMPTION
If (a) as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States (or any
political subdivision or taxing authority thereof or therein), or any change in,
or amendments to, official position regarding the application or interpretation
of such laws, regulations or rulings, which change or amendment is announced or
becomes effective on or after the date of this Prospectus Supplement, Ford
Credit becomes or will become obligated to pay additional amounts as described
herein under the heading "Payment of Additional Amounts" or (b) any act is taken
by a taxing authority of the United States on or after the date of this
Prospectus Supplement, whether or not such act is taken with respect to Ford
Credit or any affiliate, that results in a substantial probability that Ford
Credit will or may be required to pay such additional amounts, then Ford Credit
may, at its option, redeem, as a whole, but not in part, each series of Notes on
not less than 30 nor more than 60 days' prior notice, at a redemption price
equal to 100% of their principal amount, together with interest accrued thereon
to the date fixed for redemption; provided that Ford Credit determines, in its
business judgment, that the obligation to pay such additional amounts cannot be
avoided by the use of reasonable measures available to it, not including
substitution of the obligor under the Notes. No redemption pursuant to (b) above
may be made unless Ford Credit shall have received an opinion of independent
counsel to the effect that an act taken by a taxing authority of the United
States results in a substantial probability that it will or may be required to
pay the additional amounts described herein under the heading "Payment of
Additional Amounts" and Ford Credit shall have delivered to the Trustee a
certificate, signed by a duly authorized officer, stating that based on such
opinion Ford Credit is entitled to redeem the Notes pursuant to their terms.
NOTICES
Notices to holders of the Notes will be published in Authorized Newspapers
in The City of New York, in London, and, so long as the Notes are listed on the
Luxembourg Stock Exchange, in Luxembourg and on the Singapore Stock Exchange, in
Singapore. It is expected that publication will be made in The City of New York
in The Wall Street Journal, in London in the Financial Times, in Luxembourg in
the Luxemburger Wort and in Singapore in the Business Times. Any such notice
shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication.
APPLICABLE LAW AND SERVICE OF PROCESS
The Notes and the Indenture will be governed by and construed in accordance
with the laws of the State of New York. Ford Credit has designated CT
Corporation System in New York City as the authorized agent to receive service
of process in the State of New York.
CERTAIN UNITED STATES TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of a Note will generally be subject to the 30% United
States federal withholding tax that generally applies to payments of interest on
a registered form debt obligation issued by a United States person, unless one
of the following steps is taken to obtain an exemption from or reduction of the
tax:
Exemption for Non-United States persons (IRS Form W-8). A beneficial owner
of a Note that is a non-United States person (other than certain persons that
are related to Ford Credit through stock ownership as described in clauses
(x)(a) and (b) of Paragraph (i) under "United States Taxation of Non-United
States Persons -- Income and Withholding Tax") can obtain an exemption from the
withholding tax by providing a properly completed IRS Form W-8 (Certificate of
Foreign Status). Copies of IRS Form W-8 may be obtained from the Luxembourg
listing agent.
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Exemption for Non-United States persons with effectively connected income
(IRS Form 4224). A beneficial owner of a Note that is a non-United States
person, including a non-United States corporation or bank with a United States
branch, that conducts a trade or business in the United States with which
interest income on a Note is effectively connected, can obtain an exemption from
the withholding tax by providing a properly completed IRS Form 4224 (Exemption
from Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States).
Exemption or reduced rate for Non-United States persons entitled to the
benefits of a treaty (IRS Form 1001). A beneficial owner of a Note that is a
non-United States person entitled to the benefits of an income tax treaty to
which the United States is a party can obtain an exemption from or reduction of
the withholding tax (depending on the terms of the treaty) by providing a
properly completed IRS Form 1001 (Ownership, Exemption or Reduced Rate
Certificate).
Exemption for United States Persons (IRS Form W-9). A beneficial owner of a
Note that is a United States person can obtain a complete exemption from the
withholding tax by providing a properly completed IRS Form W-9 (Request for
Taxpayer Identification Number and Certification).
United States federal income tax reporting procedure. A beneficial owner of
a Note, or, in the case of IRS Forms 1001 and 4224, its agent, is required to
submit the appropriate IRS Form under applicable procedures to the person
through which the owner directly holds the Note. For example, if the beneficial
owner is listed directly on the books of Euroclear or Cedel as the holder of the
Note, the IRS Form must be provided to Euroclear or Cedel, as the case may be.
Each other person through which a Note is held must submit, on behalf of the
beneficial owner, the IRS Form (or in certain cases a copy thereof) under
applicable procedures to the person through which it holds the Note, until the
IRS Form is received by the United States person who would otherwise be required
to withhold United States federal income tax from interest on the Note. For
example, in the case of Notes held through Euroclear or Cedel, the IRS Form (or
a copy thereof) must be received by the U.S. Depositary of such clearing agency.
Applicable procedures include additional certification requirements, described
in clause (x)(c)(B) of Paragraph (i) under "United States Taxation of Non-United
States Persons -- Income and Withholding Tax", if a beneficial owner of the Note
provides an IRS Form W-8 to a securities clearing organization, bank or other
financial institution that holds the Note on its behalf.
Regulations recently issued by the IRS, which will be effective for
payments made after December 31, 1999, make certain modifications to the
certification procedures applicable to non-United States persons. Prospective
investors should consult their tax advisors regarding the certification
requirements for non-United States persons.
EACH HOLDER OF A NOTE SHOULD BE AWARE THAT IF IT DOES NOT PROPERLY PROVIDE
THE REQUIRED IRS FORM, OR IF THE IRS FORM (OR, IF PERMISSIBLE, A COPY OF SUCH
FORM) IS NOT PROPERLY TRANSMITTED TO AND RECEIVED BY THE UNITED STATES PERSON
OTHERWISE REQUIRED TO WITHHOLD UNITED STATES FEDERAL INCOME TAX, INTEREST ON THE
NOTE MAY BE SUBJECT TO UNITED STATES WITHHOLDING TAX AT A 30% RATE AND THE
HOLDER (INCLUDING THE BENEFICIAL OWNER) WILL NOT BE ENTITLED TO ANY ADDITIONAL
AMOUNTS FROM FORD CREDIT DESCRIBED UNDER THE HEADING "DESCRIPTION OF NOTES --
PAYMENT OF ADDITIONAL AMOUNTS" WITH RESPECT TO SUCH TAX. SUCH TAX, HOWEVER, MAY
IN CERTAIN CIRCUMSTANCES BE ALLOWED AS A REFUND OR AS A CREDIT AGAINST SUCH
HOLDER'S UNITED STATES FEDERAL INCOME TAX. THE FOREGOING DOES NOT DEAL WITH ALL
ASPECTS OF FEDERAL INCOME TAX WITHHOLDING THAT MAY BE RELEVANT TO FOREIGN
HOLDERS OF THE NOTES. INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS
FOR SPECIFIC ADVICE CONCERNING THE OWNERSHIP AND DISPOSITION OF NOTES.
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UNITED STATES TAXATION OF NON-UNITED STATES PERSONS
INCOME AND WITHHOLDING TAX
In the opinion of Sullivan & Cromwell, special tax counsel to the Company,
and Shearman & Sterling, counsel for the Underwriters, under United States
federal tax law as of the date of this Prospectus Supplement, and subject to the
discussion of backup withholding below:
(i) payments of principal and interest on a Note that is beneficially
owned by a non-United States person will not be subject to United States
federal withholding tax; provided, that in the case of interest, (x) (a)
the beneficial owner does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of Ford Credit
entitled to vote, (b) the beneficial owner is not a controlled foreign
corporation that is related to Ford Credit through stock ownership, and (c)
either (A) the beneficial owner of the Note certifies to the person
otherwise required to withhold United States federal income tax from such
interest, under penalties of perjury, that it is not a United States person
and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") and holds the Note certifies to the person otherwise required
to withhold United States federal income tax from such interest, under
penalties of perjury, that such statement has been received from the
beneficial owner by it or by a financial institution between it and the
beneficial owner and furnishes the payor with a copy thereof; (y) the
beneficial owner is entitled to the benefits of an income tax treaty under
which the interest is exempt from United States federal withholding tax and
the beneficial owner of the Note or such owner's agent provides an IRS Form
1001 claiming the exemption; or (z) the beneficial owner conducts a trade
or business in the United States to which the interest is effectively
connected and the beneficial owner of the Note or such owner's agent
provides an IRS Form 4224; provided that in each such case, the relevant
certification or IRS Form is delivered pursuant to applicable procedures
and is properly transmitted to the person otherwise required to withhold
United States federal income tax, and none of the persons receiving the
relevant certification or IRS Form has actual knowledge that the
certification or any statement on the IRS Form is false;
(ii) a non-United States person will not be subject to United States
federal withholding tax on any gain realized on the sale, exchange or
redemption of a Note unless the gain is effectively connected with the
beneficial owner's trade or business in the United States or, in the case
of an individual, the holder is present in the United States for 183 days
or more in the taxable year in which the sale, exchange or redemption
occurs and certain other conditions are met; and
(iii) a Note owned by an individual who at the time of death is not a
citizen or resident of the United States will not be subject to United
States federal estate tax as a result of such individual's death if the
individual does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of Ford Credit entitled to
vote and the income on the Note would not have been effectively connected
with a U.S. trade or business of the individual.
Interest on a Note that is effectively connected with the conduct of a
trade or business in the United States by a holder of a Note who is a non-United
States person, although exempt from United States withholding tax, may be
subject to United States income tax as if such interest was earned by a United
States person.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to payments of
principal and interest made on a Note and the proceeds of the sale of a Note
within the United States to non-corporate holders of the Notes, and "backup
withholding" at a rate of 31% will apply to such payments if the holder fails to
provide an accurate taxpayer identification number in the manner required or to
report all interest and dividends required to be shown on its federal income tax
returns.
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Information reporting on IRS Form 1099 and backup withholding will not
apply to payments made by Ford Credit or a paying agent to a non-United States
person on a Note if, in the case of interest, the IRS Form described in clause
(y) or (z) in Paragraph (i) under "Income and Withholding Tax" has been provided
under applicable procedures, or, in the case of interest or principal, the
certification described in clause (x)(c) in Paragraph (i) under "Income and
Withholding Tax" and a certification that the beneficial owner satisfies certain
other conditions have been supplied under applicable procedures, provided that
the payor does not have actual knowledge that the certifications are incorrect.
Payments of the proceeds from the sale of a Note made to or through a
foreign office of a broker will not be subject to information reporting or
backup withholding, except that if the broker is a United States person, a
controlled foreign corporation for United States tax purposes or a foreign
person 50% or more of whose gross income is effectively connected with a United
States trade or business for a specified three-year period, information
reporting may apply to such payments. Payments of the proceeds from the sale of
a Note to or through the United States office of a broker are subject to
information reporting and backup withholding unless the holder or beneficial
owner certifies that it is a non-United States person and that it satisfies
certain other conditions or otherwise establishes an exemption from information
reporting and backup withholding.
Regulations recently issued by the IRS, which will be effective for
payments made after December 31, 1999, make certain modifications to the
certification procedures applicable to non-United States persons. Prospective
investors should consult their tax advisors regarding the certification
requirements for non-United States persons.
Backup withholding is not a separate tax, but is allowed as a refund or
credit against the holder's United States federal income tax, provided the
necessary information is furnished to the Internal Revenue Service.
Interest on a Note that is beneficially owned by a non-United States person
will be reported annually on IRS Form 1042S, which must be filed with the
Internal Revenue Service and furnished to such beneficial owner.
------------------------------
INFORMATION CONCERNING FORD CREDIT
Ford Credit was incorporated in Delaware in 1959 and is an indirect
wholly-owned subsidiary of Ford. As used herein "Ford Credit" refers to Ford
Motor Credit Company and its subsidiaries unless the context otherwise requires.
Ford Credit and its subsidiaries provide wholesale financing and capital
loans to Ford Motor Company retail dealerships and associated non-Ford
dealerships throughout the world, most of which are privately owned and
financed, and purchase retail installment sale contracts and retail leases from
them. Ford Credit also makes loans to vehicle leasing companies, the majority of
which are affiliated with such dealerships. In addition, subsidiaries of Ford
Credit provide these financing services in the United States, Europe, Canada and
Australia to non-Ford dealerships. A substantial majority of all new vehicles
financed by Ford Credit are manufactured by Ford and its affiliates. Ford Credit
also provides retail financing for used vehicles built by Ford and other
manufacturers. In addition to vehicle financing, Ford Credit makes loans to
affiliates of Ford and finances certain receivables of Ford and its
subsidiaries.
Ford Credit also conducts insurance operations through The American Road
Insurance Company ("American Road") and its subsidiaries in the United States
and Canada. American Road's business consists of extended service plan contracts
for new and used vehicles manufactured by affiliated and nonaffiliated
companies, primarily originating from Ford dealers, physical damage insurance
covering vehicles and equipment financed at wholesale by Ford Credit, and the
reinsurance of credit life and credit disability insurance for retail purchasers
of vehicles and equipment.
The mailing address of Ford Credit's executive offices is The American
Road, Dearborn, Michigan 48121, United States of America. The telephone number
of such offices is (313) 322-3000.
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FORD MOTOR CREDIT COMPANY AND CONSOLIDATED SUBSIDIARIES
SELECTED FINANCIAL DATA
(DOLLAR AMOUNTS IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
OR AT MARCH 31 YEARS ENDED OR AT DECEMBER 31
------------------------ --------------------------------------
1998 1997 1997 1996 1995
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Total revenue............... $ 4,558.2 $ 4,242.0 $ 17,344.1 $ 16,650.2 $ 14,997.2
Interest expense............ 1,610.5 1,559.0 6,268.2 6,259.7 5,998.3
Provision for credit
losses................... 321.5 355.7 1,338.2 993.3 480.4
Income before income
taxes.................... 489.2 473.8 1,806.0 2,240.2 2,327.8
Net income.................. 277.8 275.9 1,030.8 1,440.6 1,579.4
Cash dividends.............. -- (14.5) (595.5) (949.0) (816.3)
Memo:
Net credit losses amount.... $ 268.0 $ 239.2 $ 1,007.1 $ 830.0 $ 485.9
As percentage of average net
finance receivables
outstanding*
(unannualized)........... 0.93% 0.87% 0.89% 0.78% 0.51%
BALANCE SHEET DATA
Net investment, operating
leases................... $ 35,299.1 $ 32,660.5 $ 34,746.0 $ 30,645.2 $ 25,680.2
========== ========== ========== ========== ==========
Finance receivables, net.... $ 82,335.8 $ 78,436.6 $ 81,312.6 $ 80,848.0 $ 76,376.7
========== ========== ========== ========== ==========
Capital
Short-term debt.......... $ 48,798.9 $ 43,066.3 $ 46,207.8 $ 43,017.0 $ 42,200.1
Long-term debt (including
current portion)....... 55,481.4 54,888.8 54,517.2 55,007.3 49,980.2
Stockholder's equity..... 9,876.4 9,322.5 9,584.5 9,203.7 8,670.7
---------- ---------- ---------- ---------- ----------
Total capital.......... $114,156.7 $107,277.6 $110,309.5 $107,228.0 $100,851.0
========== ========== ========== ========== ==========
</TABLE>
- ---------------
* Includes net investment in operating leases.
FIRST QUARTER 1998 RESULTS OF OPERATIONS
Ford Credit's consolidated net income in the first quarter of 1998 was $278
million, up $2 million from 1997. Compared with results from a year ago, the
increase primarily reflects a smaller increase in credit loss reserve
requirements and higher levels of earning assets. Lower net financing margins,
higher credit losses and higher operating costs were partial offsets.
Net financing margins decreased compared with the same period a year ago
primarily reflecting increased depreciation expense for leased vehicles offset
partially by lower borrowing costs (6.37% net borrowing rate in first quarter
1998 compared with 6.45% in first quarter 1997). Increased depreciation expense
for leased vehicles primarily reflects lower than anticipated residual values on
off-lease vehicles. Higher depreciation expense on leased vehicles is expected
to adversely affect Ford Credit's earnings for the remainder of 1998.
The smaller increase in credit loss reserve requirements in first quarter
1998 compared with first quarter 1997 reflects Ford Credit's estimate that the
increase in credit losses for 1998 over 1997 will be less than the increase that
occurred in 1997 over 1996. Credit losses as a percent of average
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net finance receivables, including net investment in operating leases, increased
to 0.93% in 1998 from 0.87% in 1997, reflecting higher losses per repossession
offset partially by a decrease in repossession rates. The increase in losses per
repossession reflects a weaker used vehicle market resulting in Ford Credit
realizing lower prices for repossessed units sold at auction.
Total net finance receivables and net investment in operating leases at
March 31, 1998 were $117.6 billion, up $6.5 billion or 6% from a year earlier.
For the first quarter of 1998, Ford Credit financed 38% of all new cars and
trucks sold by Ford Motor Company dealers in the U.S. compared with 39% in the
first quarter of 1997. In Europe, Ford Credit financed 26% of all new vehicles
sold by Ford Motor Company in the first quarter of 1998, compared with 25% in
the first quarter of 1997. Ford Credit provided retail customers with financing
for 627,000 new and used vehicles in the United States and 192,000 in Europe. In
the first quarter of 1998, Ford Credit provided wholesale financing for 80% of
Ford Motor Company U.S. factory sales and 95% of Ford Motor Company factory
sales in Europe compared with 77% for the U.S. and 94% for Europe in first
quarter 1997.
1997 RESULTS OF OPERATIONS
Ford Credit's consolidated net income in 1997 was $1,031 million, down $410
million or 28% from 1996. Compared with results from a year ago, the decrease
primarily reflects lower net margins, higher credit losses and loss reserve
requirements and higher taxes. Lower operating costs and higher levels of
earning assets were a partial offset.
The deterioration in net financing margins reflects higher depreciation on
operating leases. Higher depreciation resulted from higher residual losses on
off-lease vehicles and higher residual reserves.
Credit losses as a percent of average net finance receivables including net
investment in operating leases increased to 0.89% in 1997 compared with 0.78% in
1996 reflecting higher losses per repossession partially offset by a decrease in
repossession rates. The increase in loss per repossession reflects a weaker used
vehicle market resulting in Ford Credit realizing lower prices for repossessed
units sold at auction.
Total net finance receivables and net investment in operating leases at
December 31, 1997 were $116.1 billion, up $4.6 billion or 4% from a year
earlier.
During 1997, Ford Credit financed 38% of all new cars and trucks sold by
Ford Motor Company dealers in the U.S., unchanged from 1996. In Europe, Ford
Credit financed 29% of all new vehicles sold by Ford Motor Company, also
unchanged from 1996. Ford Credit provided retail customers with financing for
2.5 million new and used vehicles in the United States and 0.7 million in
Europe. In 1997, Ford Credit provided wholesale financing for 80% of Ford Motor
Company factory sales in the U.S. and 95% of Ford Motor Company factory sales in
Europe compared with 80% for the U.S. and 91% for Europe in 1996.
For the Fourth Quarter of 1997, Ford Credit's consolidated net income was
$218 million, down $167 million from 1996. The deterioration primarily reflects
lower net margins and higher taxes, partially offset by lower operating costs.
Credit losses did not materially increase in the fourth quarter of 1997 compared
to the same period in 1996.
NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income", is effective for fiscal years beginning after December
15, 1997. This statement requires all items that are required to be recognized
under accounting standards as components of comprehensive income be reported in
a financial statement that is displayed with the same prominence as other
financial statements. This new accounting standard is not expected to have a
material impact on
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Ford Credit's financial statements. Ford Credit adopted this standard on January
1, 1998 as required.
Statement of Financial Accounting Standards No. 131, "Disclosure about
Segments of an Enterprise and Related Information," is effective for periods
beginning after December 15, 1997. This statement establishes standards for
reporting information about operating segments in annual financial statements
and requires that enterprises report selected information about operating
segments in interim financial reports. This new accounting standard is not
expected to have a material impact on Ford Credit's financial statements. Ford
Credit adopted this standard on January 1, 1998 as required.
YEAR 2000 DATE CONVERSION
An issue affecting Ford Credit and most other companies is whether computer
systems and applications will recognize and process the year 2000 and beyond.
Ford Credit has a Year 2000 Program Office to coordinate the identification,
evaluation, and implementation of changes to systems and applications globally
to achieve compliance with the year 2000 date conversion. Ford Credit is in the
process of assessing and implementing necessary changes for all areas of its
business that could be impacted, such as business computer applications,
technical infrastructure, end-user computing, building facilities, and
vendor-supplied applications and services.
Ford Credit has investigated the impact of the year 2000 issue on all
critical business applications and many are already compliant. Those which are
not will be modified or replaced. Plans have been established to complete all
necessary modifications to critical applications by the end of 1998. Ford
Credit, however, has little or no control over whether its vendors will make the
appropriate modifications to applications on a timely basis. Ford Credit is
working actively through the Automotive Industry Action Group with other
financial services companies in assessing and monitoring supplier readiness. In
addition, all vendors will be expected to ensure compliance of business
applications and technical services they supply.
Based on assessments completed to date and compliance plans in process,
Ford Credit does not expect that the year 2000 issue, including the cost of
making its critical systems and applications compliant on a timely basis, will
have a material adverse effect on its business operations, consolidated
financial condition, cash flows, or results of operations. However, if
appropriate modifications are not made by Ford Credit's vendors, or if Ford
Credit's actual costs or timing for the year 2000 date conversion differ
materially from its present estimates, Ford Credit's operations and financial
results could be significantly adversely affected.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Ford Credit is exposed to a variety of market risks, including the effects
of changes in foreign currency exchange rates and interest rates. To ensure
funding over business and economic cycles and to minimize overall borrowing
costs, Ford Credit issues debt and other payables with various maturity and
interest rate structures. The maturity and interest rate structures frequently
differ from the invested assets. Exposures to fluctuations in interest rates are
created by the differences in maturities of liabilities versus the maturities of
assets.
These financial exposures are monitored and managed by Ford Credit as an
integral part of the overall risk management program, which recognizes the
unpredictability of financial markets and seeks to reduce the potentially
adverse effects on Ford Credit's operating results. The effect of changes in
exchange rates and interest rates on Ford Credit's results generally has been
small relative to other factors.
The following quantifies Ford Credit's interest rate risk and foreign
currency exchange rate risk.
S-19
<PAGE> 20
Interest Rate Risk
Interest rate swaps (including those with a currency swap component) are
used by Ford Credit to mitigate the effects of interest rate fluctuations on
earnings by changing the characteristics of its debt to match the
characteristics of its assets. Ford Credit uses a model to assess the
sensitivity of its earnings to changes in market interest rates. The model
recalculates earnings by adjusting the rates associated with variable rate
instruments on the repricing date and adjusting the rates on fixed rate
instruments scheduled to mature in the subsequent twelve months, effective on
their scheduled maturity date. Interest income and interest expense are then
recalculated based on the revised rates. Assuming an instantaneous decrease of
one percentage point in interest rates applied to all financial instruments and
leased assets, Ford Credit's after-tax earnings would have declined by $30
million over the ensuing twelve month period.
Foreign Currency Risk
Ford Credit's foreign currency risk is substantially reduced by the natural
hedging process of both borrowing and lending in the local currencies of the
home countries. Additionally, Ford Credit uses foreign currency agreements to
hedge specific debt instruments and intercompany loans. Ford Credit's earnings
in the ensuing twelve month period would not be materially affected by an
instantaneous 10% change in foreign currency exchange rates.
LIQUIDITY AND CAPITAL RESOURCES
Ford Credit relies heavily on its ability to raise substantial amounts of
funds. These funds are obtained primarily by sales of commercial paper, the
issuance of term debt and, in the case of Ford Credit Europe plc, certificates
of deposit. Funds also are provided by retained earnings and sales of
receivables. The level of funds can be affected by certain transactions with
Ford, such as capital contributions, interest supplements and other support
costs from Ford for vehicles financed and leased by Ford Credit under
Ford-sponsored special financing and leasing programs, and dividend payments,
and the timing of payments for the financing of dealers' wholesale inventories
and for income taxes. Ford Credit's ability to obtain funds is affected by its
debt ratings, which are closely related to the outlook for, and financial
condition of, Ford, and the nature and availability of support facilities. For
additional information regarding liquidity and capital resources, see Item 1 --
Business -- "Business of Ford Credit -- Borrowings and Other Sources of Funds"
in the 1997 10-K Report. For additional information regarding Ford Credit's
association with Ford, see Item 1 -- Business -- "Certain Transactions with Ford
and Affiliates" in the 1997 10-K Report.
INFORMATION CONCERNING FORD
Ford was incorporated in Delaware in 1919 and acquired the business of a
Michigan company, also known as Ford Motor Company, incorporated in 1903 to
produce automobiles designed and engineered by Henry Ford. Ford is the world's
largest producer of trucks and the second largest producer of cars and trucks
combined. Ford and its subsidiaries also engage in automotive-related
businesses, such as, financing and renting vehicles and manufacturing automotive
components and systems.
Ford's two principal business segments are Automotive and Financial
Services. The activities of the Automotive segment consist of the design,
manufacture, assembly and sale of cars and trucks and related parts and
accessories. Substantially all of Ford's automotive products are marketed
through retail dealerships, most of which are privately owned and financed.
The primary activities of the Financial Services segment consist of
financing operations, vehicle and equipment leasing and rental operations, and
insurance operations. These activities primarily are conducted through Ford's
subsidiaries, Ford Credit and The Hertz Corporation ("Hertz").
S-20
<PAGE> 21
SELECTED FINANCIAL DATA AND OTHER DATA OF FORD
The following table sets forth selected financial data and other data
concerning Ford:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
OR AT MARCH 31 YEARS ENDED OR AT DECEMBER 31
------------------- ----------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(UNAUDITED)
(IN MILLIONS EXCEPT PER SHARE AND UNIT SALES AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME
INFORMATION
Automotive
Sales................................. $ 29,076 $ 30,037 $122,935 $118,023 $110,496 $107,137 $ 91,568
Operating income...................... 1,806 1,704 6,946 2,516 3,281 5,826 1,432
Net income............................ 1,235 1,004 4,714 1,655 2,056 3,913 1,008
Financial Services Revenues............. 7,508 7,277 30,692 28,968 26,641 21,302 16,953
Income before gain on spin-off of The
Associates and income taxes......... 858 -- -- -- -- -- --
Gain on spin-off of The Associates.... 15,955 -- -- -- -- -- --
Income before income taxes............ 16,813 830 3,857 4,222 3,539 2,792 2,712
Net income............................ 16,411 465 2,206 2,791 2,083 1,395 1,521
Total Ford
Net income............................ 17,646 1,469 6,920 4,446 4,139 5,308 2,529
Amounts Per Share of Common Stock and
Class B Stock After Preferred Stock
Dividends*
Basic earnings per share.............. 14.48 1.23 5.75 3.73 3.58 4.97 2.27
Diluted earnings per share............ 14.23 1.20 5.62 3.64 3.33 4.44 2.10
Cash dividends........................ 0.42 0.385 1.645 1.47 1.23 0.91 0.80
CONSOLIDATED BALANCE SHEET INFORMATION
Automotive
Total assets.......................... 85,504 80,422 85,079 79,658 72,772 68,639 61,737
Debt payable within one year.......... 801 1,756 1,129 1,661 1,832 155 932
Long-term debt -- noncurrent
portion............................. 7,377 6,446 7,047 6,495 5,475 7,103 7,084
Financial Services
Total assets.......................... 137,734 181,535 194,018 183,209 170,511 150,983 137,201
Debt.................................. 113,375 149,669 160,071 150,205 141,317 123,713 103,960
Deposit accounts**.................... -- -- -- -- -- -- 10,549
Total Ford
Total assets.......................... 223,238 261,957 279,097 262,867 243,283 219,622 198,938
Debt.................................. 121,553 157,871 168,247 158,361 148,624 130,971 122,525
Stockholders' equity.................. 21,497 27,252 30,734 26,762 24,547 21,659 15,574
Cash dividends........................ 519 472 2,020 1,800 1,559 1,205 1,086
OTHER DATA
Total Ford
Capital expenditures.................. 2,199 1,739 8,717 8,651 8,997 8,546 6,814
Depreciation and amortization of
special tools....................... 3,435 3,235 13,583 12,791 11,719 9,336 7,468
Worldwide vehicle unit sales of cars,
trucks and tractors (in
thousands).......................... 1,721 1,681 6,943 6,653 6,606 6,853 6,184
</TABLE>
- ------------
* Share data have been restated to reflect the 2-for-1 stock split that became
effective June 6, 1994.
** Deposit accounts relate to First Nationwide Financial Corporation (for
1993).
S-21
<PAGE> 22
FINANCIAL REVIEW OF FORD
FIRST QUARTER 1998 RESULTS OF OPERATIONS
Continued improvement in automotive results raised Ford's operating
earnings for the first quarter of 1998 to $1.7 billion, or $1.36 per diluted
share of common and Class B stock. These results compare with earnings of $1.5
billion, or $1.20 a diluted share in the first quarter of 1997, and exceed the
previous first quarter record of $1.6 billion set in 1989.
The operating results shown above exclude a one-time gain of $16 billion,
or $12.94 per diluted share, resulting from the spin-off of Associates First
Capital Corporation ("The Associates") (which was completed on April 7, 1998),
and a one-time earnings per share reduction of $.07 per share resulting from the
premium paid to repurchase Ford's Series B preferred stock. Including both
one-time factors, Ford's first quarter 1998 earnings were $17.6 billion, or
$14.23 per diluted share.
Ford has increased its year-over-year earnings for eight consecutive
quarters and posted five straight quarters in which total automotive costs have
declined (at constant volume and mix) compared with the year-earlier period. In
the first quarter of 1998, Ford's total automotive costs declined by $400
million compared with the first quarter of 1997 (at constant volume and mix).
AUTOMOTIVE OPERATIONS
Ford's first quarter 1998 net income from worldwide automotive operations
was $1.235 billion, up $231 million from a year ago, or 23 percent. Vehicle unit
sales of cars and trucks were 1,721,000, up 40,000 units or two percent from
first quarter 1997. Automotive return on sales in the first quarter improved
nine-tenths of a point to 4.3 percent worldwide. Total automotive cash was $21.3
billion at the end of the quarter and net cash was $13.1 billion.
NORTH AMERICA: In North America, automotive operations earned $1.0 billion
in the first quarter of 1998, essentially unchanged from a year ago. North
American automotive return on sales was 5.0 percent. This solid level of
profitability reflects strong acceptance of new products and continuing progress
on cost and quality performance. During the quarter, Ford accelerated production
of the new F-Series Super Duty truck line.
In the U.S., industry volume in the first quarter was at an annual rate of
15.3 million units. Ford continues to project full-year industry volumes to be
between 15 million and 15.5 million units.
EUROPE: In Europe, which continues to be an intensely competitive market,
Ford earned $230 million in the first quarter of 1998, up from $105 million a
year ago. Europe continues to be extremely challenging; industry volumes are
strong, but intense price competition has not abated. Ford will continue to
focus on improving quality and reducing total costs in Europe to achieve its
1998 profit target for European operations.
SOUTH AMERICA: Ford lost $45 million in South America in the first quarter
of 1998, compared with a loss of $47 million a year ago. The successful launches
of the Ka, Fiesta, Ranger, F-Series and Courier have reestablished Ford as a
major presence in South America, but economic conditions in Brazil have reduced
industry volumes. Ford's goal remains to break even in South America in 1998,
but it will be hard to achieve.
FINANCIAL SERVICES
Financial Services earnings in the first quarter of 1998, excluding The
Associates' earnings and the one-time gain resulting from the The Associates
spin-off, were $279 million, compared with $273 million a year ago on a
comparable basis.
For a discussion of Ford Credit's first quarter 1998 results of operations,
see "Ford Motor Credit Company and Consolidated Subsidiaries -- First Quarter
1998 Results of Operations."
S-22
<PAGE> 23
Ford Credit's loan volumes, operating costs and interest margins are at
good levels. However, depreciation expense for leased vehicles continues to be a
drag on profits. As a result, based on the present outlook, the goal of 10
percent or greater earnings growth for Ford Credit in 1998 will be very
difficult to achieve.
The Hertz Corporation reported record first quarter 1998 earnings of $35
million, versus $20 million earned in the same period a year ago. Ford's share
of Hertz' first quarter 1998 earnings was $29 million.
The Associates reported record earnings of $281 million for the first
quarter of 1997, compared with $238 million a year ago. Ford's share of The
Associates earnings was $177 million, reflecting Ford's 80.7 percent ownership
interest through March 12, 1998, the record date for the spin-off. Going
forward, Ford's results no longer will include earnings of The Associates.
INDUSTRY DATA AND MARKET SHARE OF FORD
The following table shows the U.S. industry retail deliveries of cars and
trucks for the periods indicated:
<TABLE>
<CAPTION>
U.S. INDUSTRY RETAIL DELIVERIES
(MILLIONS OF UNITS)
----------------------------------------------------------------
THREE MONTHS
ENDED
MARCH 31* YEARS ENDED DECEMBER 31
-------------- --------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Cars..................................... 7.9 8.7 8.3 8.6 8.6 9.0 8.5
Trucks................................... 7.4 7.2 7.2 6.9 6.5 6.4 5.7
</TABLE>
- ---------------
* Seasonally adjusted annual rates
The following table shows Ford's U.S. car and truck market shares for the
periods indicated:
<TABLE>
<CAPTION>
FORD U.S. CAR AND TRUCK MARKET SHARES
----------------------------------------------------------------
THREE MONTHS
ENDED
MARCH 31 YEARS ENDED DECEMBER 31
-------------- --------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Cars................................... 20.1% 19.4% 19.5% 20.6% 20.9% 21.8% 22.3%
Trucks................................. 29.2 31.8 31.2 31.1 31.9 30.1 30.5
</TABLE>
For additional information regarding Ford, see the 1997 10-K Report.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of "earnings" to "fixed charges" for Ford Credit and Ford were as
follows for each of the periods indicated:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------------------------------------------
THREE MONTHS
ENDED
MARCH 31, 1998 1997 1996 1995 1994 1993
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ford Motor Credit Company................ 1.3 1.3 1.3 1.3 1.5 1.5
Ford Motor Company....................... 8.0* 2.0 1.6 1.6 2.0 1.5
</TABLE>
- ---------------
* Earnings used in calculation of this ratio include the $15,955 million gain on
spin-off of The Associates. Excluding this gain, the ratio would have been
2.0.
S-23
<PAGE> 24
For purposes of the Ford Credit ratio, "earnings" consist of income before
income taxes and fixed charges. Income before income taxes of Ford Credit
includes the equity in net income of all unconsolidated affiliates and minority
interest in net income of subsidiaries. "Fixed charges" consist of interest on
borrowed funds, amortization of debt discount, premium, and issuance expense and
one-third of all rental expense (the proportion deemed representative of the
interest factor).
For purposes of the Ford ratio, "earnings" include the income before income
taxes of Ford and its majority-owned subsidiaries and trusts, whether or not
consolidated, its proportionate share of any fifty-percent-owned companies, and
any income received from less-than-fifty-percent-owned companies and fixed
charges. "Fixed charges" consist of interest on borrowed funds, preferred stock
dividend requirements of majority-owned subsidiaries and trusts, amortization of
debt discount, premium, and issuance expense, and one-third of all rental
expense (the proportion deemed representative of the interest factor).
S-24
<PAGE> 25
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated April 21, 1998 and the Fixed Rate and Floating Rate Pricing Agreements
each dated April 21, 1998 relating to the Fixed Rate Notes and Floating Rate
Notes, respectively, Ford Credit has agreed to sell to each of the underwriters
named below (the "Underwriters") and each of the Underwriters, for whom Salomon
Brothers Inc is acting as representative (the "Representative"), has severally
agreed to purchase the principal amount of Notes set forth opposite its name
below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
UNDERWRITERS FIXED RATE NOTES
------------ -------------------
<S> <C>
Salomon Brothers Inc........................................ $ 950,000,000
Bear, Stearns International Limited......................... 950,000,000
ABN AMRO Bank N.V........................................... 50,000,000
Chase Securities Inc........................................ 50,000,000
Credit Suisse First Boston Corporation...................... 50,000,000
Goldman, Sachs & Co. ....................................... 50,000,000
J.P. Morgan Securities Inc. ................................ 50,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... 50,000,000
Morgan Stanley & Co. Incorporated........................... 50,000,000
--------------
Total........................................... $2,250,000,000
==============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
UNDERWRITERS FLOATING RATE NOTES
------------ -------------------
<S> <C>
Salomon Brothers Inc........................................ $ 400,000,000
Bear, Stearns International Limited......................... 400,000,000
Banque Paribas.............................................. 40,000,000
Barclays de Zoete Wedd Limited.............................. 40,000,000
Lehman Brothers International (Europe)...................... 40,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... 40,000,000
Midland Bank plc............................................ 40,000,000
--------------
Total........................................... $1,000,000,000
==============
</TABLE>
In the event of default by one or more Underwriters, the Underwriting
Agreement provides that in certain circumstances other Underwriters may be
substituted or the commitment of each non-defaulting Underwriter may be
increased up to 10%. However, if the default involves more than one-eleventh of
the aggregate principal amount of any series of Notes, the Pricing Agreement
relating to such series of Notes may be terminated by Ford Credit or by 50% or
more in interest of non-defaulting Underwriters, or, if not so terminated, less
than all the Notes may be sold.
The Underwriters have advised Ford Credit that they propose initially to
offer all or part of the Notes directly to retail purchasers at the initial
public offering price set forth on the cover page of this Prospectus Supplement,
and to certain securities dealers at such price less a concession not in excess
of 0.25% and 0.15% of the principal amount of the Fixed Rate Notes and Floating
Rate Notes, respectively. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of 0.125% of the principal amount of both
the Fixed Rate Notes and the Floating Rate Notes to certain other dealers. After
the Notes are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the Underwriters.
The Notes are offered for sale in the United States, Europe and Asia.
Each of the Underwriters has agreed that it will not offer, sell or deliver
any of the Notes, directly or indirectly, or distribute this Prospectus
Supplement or the accompanying Prospectus or any other
S-25
<PAGE> 26
offering material relating to the Notes, in or from any jurisdiction except
under circumstances that will to the best knowledge and belief of such
Underwriter result in compliance with the applicable laws and regulations
thereof and which will not impose any obligations on Ford Credit except as set
forth in the Underwriting Agreement and the Pricing Agreement.
Each Underwriter acknowledges that this Prospectus Supplement and
accompanying Prospectus has not been registered with the Registrar of Companies
in Singapore and that the Notes are offered in Singapore pursuant to an
exemption invoked under section 106C of the Companies Act, Chapter 50 of
Singapore (the "Singapore Companies Act"). Accordingly, each Underwriter has
represented and agreed that the Notes may not be offered or sold, nor may this
Prospectus Supplement and accompanying Prospectus or any other offering document
or material relating to the Notes be circulated or distributed, directly or
indirectly, to the public or any member of the public in Singapore other than
(1) to an institutional investor or other body or person specified in section
106C of the Singapore Companies Act, or (2) to a sophisticated investor
specified in section 106D of the Singapore Companies Act, or (3) otherwise
pursuant to, and in accordance with the conditions of section 106E(2) of the
Singapore Companies Act or any other applicable exemption invoked under Division
5A of Part IV of the Singapore Companies Act.
Each of the Underwriters has agreed that it has not offered or sold, and it
will not offer or sell, directly or indirectly, any of the Notes in or to
residents of Japan or to any persons for reoffering or resale, directly or
indirectly, in Japan or to any resident of Japan except pursuant to an exemption
from the registration requirements of the Securities and Exchange Law available
thereunder and in compliance with the other relevant laws of Japan.
Each Underwriter has represented and agreed that (a) it has not offered or
sold, and, prior to the expiration of the period of six months from the closing
date for the issue of the Notes, will not offer or sell any Notes to persons in
the United Kingdom, except to those persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purpose of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities Regulations
1995, (b) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986, with respect to anything done by it in relation to
the Notes in, from or otherwise involving the United Kingdom, and (c) it has
only issued or passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the Notes to a
person who is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1996, as amended, or is a
person to whom the document may otherwise lawfully be issued or passed on.
Purchasers of the Notes may be required to pay stamp taxes and other
charges in accordance with the laws and practices of the country of purchase in
addition to the issue price set forth on the cover page hereof.
The Notes are a new issue of securities with no established trading market.
Ford Credit has been advised by the Underwriters that they intend to make a
market in the Notes, but they are not obligated to do so and may discontinue
such market-making at any time without notice. No assurance can be given as to
the liquidity of the trading market for the Notes.
In connection with the offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Notes. Specifically, the Underwriters may over-allot in connection with the
offering, creating a short position. In addition, the Underwriters may bid for,
and purchase, Notes in the open market to cover any short position or to
stabilize the price of the Notes. Any of these activities may stabilize or
maintain the market price of the Notes above independent market levels. The
Underwriters are not required to engage in these activities, and may end any of
these activities at any time.
S-26
<PAGE> 27
All secondary trading in the Notes will settle in immediately available
funds. See "Description of Notes -- Global Clearance and Settlement Procedures".
It is expected that delivery of the Notes will be made against payment
therefor on or about April 28, 1998, which is the seventh business day following
the date hereof (such settlement cycle being herein referred to as "T+5").
Purchasers of Notes should note that the ability to settle secondary market
trades of the Notes effected on the date of pricing and the next succeeding
business day may be affected by the T+5 settlement.
Ford Credit has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
In the ordinary course of their respective business, affiliates of Chase
Securities Inc. engage in general financing and banking transactions with both
Ford and Ford Credit.
GENERAL INFORMATION
Application has been made to list the Notes on the Luxembourg Stock
Exchange. In connection with the listing application, the Certificate of
Incorporation and the By-Laws of Ford Credit and a legal notice relating to the
issuance of the Notes have been deposited prior to listing with Greffier en Chef
du Tribunal d'Arrondissement de et a Luxembourg, where copies thereof may be
obtained upon request. Copies of the above documents together with this
Prospectus Supplement, the accompanying Prospectus, the Indenture and Ford
Credit's current Annual and Quarterly Reports, as well as all future Annual
Reports and Quarterly Reports, so long as any of the Notes are outstanding, will
be made available for inspection at the main office of Banque Internationale a
Luxembourg S.A. in Luxembourg. Banque Internationale a Luxembourg S.A. will act
as intermediary between the Luxembourg Stock Exchange and Ford Credit and the
holders of the Notes. In addition, copies of the Annual Reports and Quarterly
Reports of Ford Credit may be obtained free of charge at such office.
Application has also been made to list the Notes on the Singapore Stock
Exchange. So long as any of the Notes remain outstanding, copies of the
Indenture, this Prospectus Supplement, the accompanying Prospectus, and the
Certificate of Incorporation and By-Laws of Ford Credit will be available for
inspection at the offices of The Chase Manhattan Bank, 150 Beach Road, Gateway
West, 31st Floor, Singapore 189720. In addition, copies of all documents
incorporated in this document and the First Supplement by reference and copies
of all future annual reports and quarterly reports of Ford Credit may be
obtained, free of charge, at the offices of The Chase Manhattan Bank in
Singapore.
Other than as disclosed or contemplated herein or in the documents
incorporated herein by reference, there has been no material adverse change in
the financial position of Ford Credit since March 31, 1998.
Neither Ford Credit nor any of its subsidiaries is involved in litigation,
arbitration, or administrative proceedings relating to claims or amounts that
are material in the context of the issue of the Notes and Ford Credit is not
aware of any such litigation, arbitration, or administrative proceedings pending
or threatened.
Ford Credit accepts responsibility for the information contained in this
Prospectus Supplement and accompanying Prospectus.
Resolutions relating to the issue and sale of the Notes were adopted by the
Board of Directors of Ford Credit on March 14, 1997.
The Fixed Rate Notes have been assigned Euroclear and Cedel Common Code No.
8675759, International Security Identification Number (ISIN) US345397 RW52 and
CUSIP No. 345397 RW5 and the Floating Rate Notes have been assigned Euroclear
and Cedel Common Code No. 8675767, International Security Identification Number
(ISIN) US345397 RX36 and CUSIP No. 345397 RX3.
------------------------
S-27
<PAGE> 28
FORD MOTOR CREDIT COMPANY
DEBT SECURITIES
Ford Credit, in December 1997, registered with the Securities and Exchange
Commission $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 $5,000,000,000 principal amount of Debt Securities registered in December
1997 pursuant to the Registration Statement of which this Prospectus is a part,
the principal amount of Debt Securities covered by this Prospectus includes
$725,000,000 principal amount of Debt Securities registered in January 1996. 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 JANUARY 7, 1998.
<PAGE> 29
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,
1996 (the "1996 10-K Report"), Ford Credit's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1997 (the "First Quarter 10-Q Report"), June 30,
1997 (the "Second Quarter 10-Q Report") and September 30, 1997 (the "Third
Quarter 10-Q Report"), and Ford Credit's Current Reports on Form 8-K dated
January 29, 1997, February 12, 1997, February 19, 1997, February 26, 1997, April
18, 1997, June 9, 1997, July 16, 1997, September 8, 1997, October 8, 1997,
October 9, 1997 and October 16, 1997 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 (i) after the date of the
initial Registration Statement and prior to the effective date of the
Registration Statement and (ii) 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.
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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's insurance operations are conducted by The American Road
Insurance Company and its subsidiaries in the United States and Canada and
consist 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 also is one of the largest providers of financial services
worldwide.
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 the
following subsidiaries: Ford Credit, Associates First Capital Corporation ("The
Associates") and The Hertz Corporation.
On October 8, 1997, Ford announced its plan to "spin off" or distribute its
80.7% interest in The Associates to Ford Common and Class B stockholders. The
spin-off is subject to the receipt of a ruling from the U.S. Internal Revenue
Service that the transaction will be tax-free to Ford and its stockholders. The
ruling process is expected to take several months. Upon receipt of a favorable
ruling, Ford plans to distribute its 279.5 million shares of The Associates to
Ford stockholders in proportion to their ownership of Common and Class B stock.
In 1996 and in first nine months 1997, The Associates contributed 16.8% and
11.9%, respectively, to Ford's consolidated earnings. Generally, the earnings of
The Associates have been retained by The Associates to fund its growth.
------------------------
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.
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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 August 1, 1994, as supplemented from time to time (the
"Indenture"), between Ford Credit and First Union National Bank ("First Union"),
Trustee. The term "Trustee", as used herein, shall mean First Union 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 $5,725,000,000
aggregate principal amount or the equivalent thereof in any currency, although
the Indenture provides that additional debt securities may be issued thereunder
up to the aggregate principal amount, which is not limited by the Indenture,
authorized from time to time by Ford Credit's Board of Directors. So long as a
single Trustee is acting for the benefit of the holders of all the Debt
Securities offered hereby and any such additional debt securities issued under
the Indenture, the Debt Securities and any such additional debt securities are
herein collectively referred to as the "Indenture Securities". The Indenture
also provides that there may be more than one Trustee under the Indenture, each
with respect to one or more different series of Indenture Securities. See also
"Trustee" herein. At any time when two or more Trustees are acting, each with
respect to only certain series, the term "Indenture Securities" as used herein
shall mean the one or more series with respect to which each respective Trustee
is acting and the powers and trust obligations of each such Trustee as described
herein shall extend only to the one or more series of Indenture Securities for
which it is acting as Trustee. The effect of the provisions contemplating that
there might be more than one Trustee acting for different series of Indenture
Securities is that, in that event, those Indenture Securities (whether of one or
more than
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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 or currency units in which such Debt Securities are issued or
payable; (10) the provisions for a sinking fund, if any; (11) any additional
restrictive covenants included for the benefit of the holders of such Debt
Securities; (12) any additional Event of Default with respect to such Debt
Securities; (13) whether such Debt Securities are 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,
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<PAGE> 33
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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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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the Indenture Securities outstanding of such series may declare the principal
amount (or, if the Indenture Securities of such series are Original Issue
Discount Securities (as defined in the indenture), such portion of the principal
amount as may be specified in the terms of such series) of all of the Indenture
Securities of such series to be due and payable immediately. At any time after
such a declaration of acceleration in respect of a particular series of
Indenture Securities has been made, but before a judgment or decree for the
payment of money due upon acceleration has been obtained by the Trustee, the
holders of a majority in aggregate principal amount of the Indenture Securities
outstanding of such series may, under certain circumstances, waive all defaults
and rescind and annul such declaration and its consequences if all Events of
Default in respect of the Indenture Securities of such series, other than the
non-payment of principal due solely by such declaration of acceleration, have
been cured or waived as provided in the Indenture. (Section 5.02).
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of a default in respect of a particular series of Indenture
Securities, give the holders of such series notice of all uncured defaults known
to it (the term "default" to include the events specified above without grace
periods); provided that, except in the case of default in the payment of the
principal of, or premium, if any, on, or interest on any of the Indenture
Securities of such series, the Trustee shall be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interests of the holders of such series. (Section 6.01).
Pursuant to the terms of the Indenture, Ford Credit is required to furnish
to the Trustee annually a statement of certain officers of Ford Credit stating
whether or not to the best of their knowledge Ford Credit is in default in
respect of any series of Indenture Securities in the performance and observance
of the terms of the Indenture and, if Ford Credit is in default, specifying such
default and the nature thereof. (Section 10.05).
The Indenture provides that the holders of a majority in aggregate
principal amount of all Indenture Securities of a particular series then
outstanding will have the right to waive certain defaults in respect of such
series and, subject to certain limitations, to direct the time, method and place
of conducting any proceedings for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee. (Sections 5.12 and
5.13).
MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture, the rights and obligations of Ford
Credit and the rights of the holders of a particular series may be modified by
Ford Credit with the consent of the holders of not less than 66 2/3% in
aggregate principal amount of the Indenture Securities of such series then
outstanding; but no such modification may be made which would (i) extend the
fixed maturity of any Indenture Security of such series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, without the consent of the holder of each Indenture Security of such
series so affected; or (ii) reduce the above-stated percentage of Indenture
Securities of such series, the consent of the holders of which is required to
modify or alter the Indenture, without the consent of the holders of all
Indenture Securities of such series then outstanding. (Section 9.02).
TRUSTEE
The Trustee may resign or be removed with respect to one or more series of
Indenture Securities and a successor Trustee may be appointed to act with
respect to such one or more series. (Section 6.08). In the event that there
shall be two or more persons acting as Trustee with respect to different series
of Indenture Securities, each such Trustee shall be a trustee of a trust or
trusts under the Indenture separate and apart from the trust or trusts
administered by any other such Trustee, and any action described herein to be
taken by the "Trustee" may then be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Indenture Securities for
which it is acting as Trustee. (Section 6.09).
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CONCERNING FIRST UNION
First Union National Bank, Trustee under the Indenture, is a depositary of
Ford Credit, has a committed credit facility available to Ford Credit and its
subsidiaries and has performed other services for Ford Credit 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 J. D. Bringard, Esq., Vice President -- General Counsel of Ford
Credit, or other counsel satisfactory to any underwriters or agents, and for any
underwriters or agents by Shearman & Sterling, 599 Lexington Avenue, New York,
N.Y. Mr. Bringard is a full-time employee of Ford Credit and owns and holds
options to purchase shares of Common Stock of Ford. Shearman & Sterling have in
the past
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provided, and may continue to provide, legal services to Ford and its
subsidiaries, including Ford Credit.
EXPERTS
The financial statements which are incorporated in this Prospectus by
reference to the 1996 10-K Report have been audited by Coopers & Lybrand L.L.P.
("Coopers & Lybrand"), 400 Renaissance Center, Detroit, Michigan 48243,
independent certified public accountants, to the extent indicated in their
report therein, and have been so incorporated in reliance upon the report of
that firm, given on their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information of Ford Credit
for the periods ended March 31, 1997 and 1996, June 30, 1997 and 1996, and
September 30, 1997 and 1996, included in the First Quarter 10-Q Report, the
Second Quarter 10-Q Report and the Third Quarter 10-Q Report, respectively,
incorporated by reference in this Prospectus, Coopers & Lybrand have reported
that they have applied limited procedures in accordance with professional
standards for a review of such information. However, their reports included in
the First Quarter 10-Q Report, the Second Quarter 10-Q Report and the Third
Quarter 10-Q Report state that they did not audit and they do not express an
opinion on that interim financial information. The accountants are not subject
to the liability provisions of Section 11 of the Securities Act for their
reports on the unaudited interim financial information because each such report
is not a "report" or a "part" of the registration statement prepared or
certified by the accountants within the meaning of Sections 7 and 11 of such
Act.
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PRINCIPAL OFFICES OF
FORD MOTOR CREDIT COMPANY
The American Road
Dearborn, Michigan 48121
TRUSTEE
First Union National Bank
765 Broad Street
Newark, New Jersey 07102
LUXEMBOURG STOCK EXCHANGE LISTING AGENT
Banque Internationale a Luxembourg S.A.
69 route d'Esch
L-1470 Luxembourg
LEGAL ADVISERS
<TABLE>
<S> <C>
To Ford Motor Company as to Special United States Tax Counsel to
United States Law Ford Motor Credit Company
J.D. BRINGARD SULLIVAN & CROMWELL
Vice President-General Counsel 125 Broad Street
Ford Motor Credit Company New York, New York 10004
The American Road
Dearborn, Michigan 48121
To the Underwriters To the Issue
as to United States Law as to Singapore Law
SHEARMAN & STERLING YOONG & PARTNERS
599 Lexington Avenue 11 Collyer Quay #05-06
New York, New York 10022 The Arcade
Singapore 049317
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AUDITORS TO
FORD MOTOR
CREDIT COMPANY
COOPERS & LYBRAND L.L.P.
400 Renaissance Center
Detroit, Michigan 48243
