PROSPECTUS Pricing Supplement No. 1799
Dated July 12, 1993 Dated February 15, 1994
PROSPECTUS SUPPLEMENT Rule 424(b)(3)-Registration Statement
No. 33-58506
Dated July 12, 1993 Rule 424(b)(3)-Registration Statement
No. 33-58508
GENERAL ELECTRIC CAPITAL CORPORATION
GLOBAL MEDIUM-TERM NOTES
(Principal-Indexed Fixed Rate Notes)
Series: A X B __ C __ Trade Date: February 15, 1994
Principal Amount (in Specified Currency): US$40,000,000
Settlement Date (Original Issue Date): February 22, 1994
If Specified Currency is other than
U.S. dollars, equivalent amount in U.S. dollars: N/A
Maturity Date: February 22, 1995
Agent's Discount or Commission: 0.000%
Price to Public (Issue Price): 100.00%
Net Proceeds to Issuer (in Specified Currency): US$40,000,000
Interest Rate: 4.000%
Interest Payment Period:
__ Annual X Semi-Annual __ Monthly __ Quarterly
Interest Payment Dates if other than as set forth in the Prospectus
Supplement: August 22, 1994 and February 22, 1995.
Form of Notes:
The Notes will be issued in the form of a fully-registered global
note deposited with or on behalf of The Depository Trust Company
and will be available in book-entry form in minimum denominations
of $500,000.
TERMS NOT DEFINED HEREIN SHALL HAVE THE MEANING ASSIGNED TO THEM IN
THE ATTACHED PROSPECTUS SUPPLEMENT. SEE "ADDITIONAL TERMS" ON THE
FOLLOWING PAGES.
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Repayment, Redemption and Acceleration:
Optional Repayment Date: N/A
Annual Redemption Percentage Reduction: N/A
Initial Redemption Date: N/A
Modified Payment Upon Acceleration: N/A
Initial Redemption Percentage: N/A
Original Issue Discount
Amount of OID: N/A
Interest Accrual Date: N/A
Yield to Maturity: N/A
Initial Accrual Period OID: N/A
Amortizing Notes:
Amortization Schedule: N/A
Indexed Notes:
The percentage of the face amount payable at maturity will be
indexed to the JPY/USD Exchange Rate (as defined herein) determined
as provided below. See "Additional Terms -- Redemption at
Maturity."
Additional Terms:
Interest. Interest on the Notes will be payable on August 22,
1994 and on February 22, 1995 (each an "Interest Payment Date") at
the rate of 4.000% per annum. Interest will be computed and paid
on the basis of a 360-day year of twelve 30-day months. In the
event that any Interest Payment Date or the Maturity Date is not a
Business Day (as defined below), interest on the Notes will be paid
on the next succeeding Business Day and no interest on such payment
shall accrue for the period from and after such Interest Payment
Date or the Maturity Date.
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Redemption at Maturity. The percentage (rounded upward to three
decimal places) of the face amount of the Notes to be paid on the
Maturity Date (the "Redemption Percentage") shall be determined by
the Determination Agent (as defined below) on the Determination
Date (as defined below) in accordance with the following formula:
Redemption Percentage =
100% x [1 + (1.5 * {(JPY/USD Exchange Rate - 102.25)
JPY/USD Exchange Rate})]
;provided, however, in no event shall the Redemption Percentage be
less than 60%. Any amount in excess of 100% of the face amount of
the Notes which is payable on the Maturity Date will represent
interest on the Notes.
Certain Defined Terms. As used herein, the terms set forth
below shall have the following meanings:
"JPY/USD Exchange Rate" means the mid-market spot rate for
exchanging Japanese Yen for United States dollars appearing on
Reuters Page SPOU (as defined below), as of 12:00 noon, London
time, on the Determination Date; provided that if on the
Determination Date such rate does not appear on Reuters Page SPOU,
the JPY/USD Exchange Rate shall be the mid-market spot rate for
exchanging Japanese Yen for United States dollars that appears on
Reuters Page WRLD (as defined below); provided further that, if on
the Determination Date such rate does not appear on either Reuters
Page SPOU or Reuters Page WRLD, the Determination Agent (as defined
below) will request each of five Reference Dealers (as defined
below) to provide the Determination Agent with its offer quotation
for exchanging Japanese Yen for United States dollars as of 12:00
noon, London time, on the applicable Determination Date in an
amount that is representative for a single transaction in the
relevant market at the relevant time. If at least three quotations
are received from the Reference Dealers, the Determination Agent
will determine the JPY/USD Exchange Rate by computing the
arithmetic mean of such quotations, discarding the highest and
lowest quotation. If fewer than three quotations are received from
the Reference Dealers, the Determination Agent will compute the
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arithmetic mean without discarding the highest and lowest
quotations. If on the Determination Date, no rate appears on
Reuters Page SPOU or Reuters Page WRLD and the Determination Agent
does not receive at least one quote from the Reference Dealers,
then the JPY/USD Exchange Rate shall be the last available mid-
market spot rate for exchanging Japanese Yen for United States
dollars appearing on Reuters Page SPOU prior to the Determination
Date.
"Business Day" means any day other than a Saturday or Sunday or
any other day on which banking institutions are generally
authorized or obligated by law or regulation to close in New York,
New York or London, England.
"Determination Agent" means Williams Financial Markets (A
Division of Jefferies & Company, Inc.).
"Determination Date" means five Business Days prior to the
Maturity Date, being the date on which the Determination Agent
shall determine the Redemption Percentage of the Notes.
"Reference Dealer" means any major bank or banking corporation
selected in good faith by the Determination Agent (which may
include the Determination Agent) for the purpose of providing
offered quotations on the JPY/USD Exchange Rate.
"Reuters Page SPOU" means the page designated as "Page SPOU" on
the Reuters Monitor Money Rates Service (or such other page as
shall replace Page SPOU on such service for the purpose of
displaying Japanese Yen/United States dollar exchange rates).
"Reuters Page WRLD" means the page designated as "Page WRLD" on
the Reuters Monitor Money Rate Service (or such other page as shall
replace Page WRLD on such service for the purpose of displaying
Japanese Yen/United States dollar exchange rates.
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References to "JPY" or "Yen" are to the lawful currency of Japan.
References to "USD", "United States dollars" or "US$" are to the
lawful currency of the United States of America.
Historical Rate Information
The following table sets forth historical information with
respect to the JPY/USD Exchange Rate on the last business day of
each of the months indicated below, together with a computation of
the hypothetical percentage of the original Principal Amount
repayable at maturity (the "Redemption Percentage") had the Notes
matured on such date.1
Hypothetical
JPY/USD Redemption
Month/Year Exchange Rate Percentage 2
Jan. 1991 131.45% 133.32%
Feb. 1991 132.95 134.64
Mar. 1991 140.60 140.91
Apr. 1991 136.38 137.54
May 1991 138.45 139.22
June 1991 137.90 138.78
July 1991 137.42 138.39
Aug. 1991 136.85 137.92
Sep. 1991 132.85 134.55
Oct. 1991 130.60 132.56
Nov. 1991 130.08 132.09
Dec. 1991 124.90 127.20
Jan. 1992 125.55 127.84
Feb. 1992 129.15 131.24
Mar. 1992 132.92 134.61
Apr. 1992 133.30 134.94
May 1992 127.75 129.94
June 1992 125.87 128.15
July 1992 127.20 129.42
Aug. 1992 123.08 125.39
Sep. 1992 120.07 122.26
Oct. 1992 123.45 125.76
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Hypothetical
JPY/USD Redemption
Month/Year Exchange Rate Percentage 2
Nov. 1992 124.75 127.05
Dec. 1992 124.86 127.16
Jan. 1993 124.73 127.03
Feb. 1993 118.25 120.30
Mar. 1993 114.88 116.49
Apr. 1993 111.05 111.89
May 1993 107.08 106.77
June 1993 107.30 107.06
July 1993 105.10 104.07
Aug. 1993 104.75 103.58
Sep. 1993 106.30 105.71
Oct. 1993 108.60 108.77
Nov. 1993 109.08 109.39
Dec. 1993 111.85 112.87
Jan. 1994 108.49 108.63
Feb. 19943 104.25 102.88
1 Source: Williams Financial Markets (A Division of Jefferies &
Company, Inc.)
2 After application of the 60% minimum Redemption Percentage
floor.
3 Based on the JPY/USD Exchange Rate at the close of business on
February 17, 1994.
Fluctuations in the JPY/USD Exchange Rate and the Redemption
Percentage that have occurred in the past should not be taken as an
indication of future performance during the term of the Notes.
Fluctuations may occur in the 3 Year French Franc Swap Rate during
the term of the Notes which are wider or more confined than those
that have occurred historically. Accordingly, prospective
investors should consult their own financial and legal advisors as
to the risks entailed by an investment in the Notes and the
suitability of the Notes in light of their particular
circumstances.
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Certain Investment Considerations
An investment in the Notes entails significant risks that are not
associated with similar investments in a conventional fixed-rate
debt security. The secondary market for the Notes will be affected
by a number of factors, independent of the creditworthiness of the
Company and the value of the JPY/USD Exchange Rate, including, but
not limited to, the volatility of the USD/JPY Exchange Rate, the
time remaining to the Maturity Date and market interest rates. No
established secondary market exist for the Notes. Neither the
Company nor the Agent referred to below under "Plan of
distribution" can provide any assurance that there will be
secondary market liquidity with respect to the Notes. See
"Description of the Notes--Indexed Notes--Risk Factors" in the
attached Prospectus Supplement.
The principal amount payable on the Maturity Date is linked to
the value of the JPY/USD Exchange Rate. An decrease in the JPY/USD
Exchange Rate below the level of 102.25 will decrease the amount of
money an investor will receive in payment of principal on the Notes
on the Maturity Date and vice versa. In addition, the formula used
to determine the Redemption Percentage contains a leverage factor
which has the effect of magnifying the impact of changes in the
JPY/USD Exchange Rate. Further, the formula used to compute the
Redemption Percentage is formulated such that a decrease in the
JPY/USD Exchange Rate will result in a greater decrease in the
Redemption Percentage than would result from a corresponding
increase in the JPY/USD Exchange Rate. Investors should be aware
that, depending on the level of the JPY/USD Exchange Rate, an
investor may receive more or less money on the Maturity Date then
was initially paid for the Notes, including the possibility that
only 60% of the original Principal Amount will be payable on the
Maturity Date.
Certain United States Federal Income Tax Considerations
The following United States federal income tax discussion
supplements the discussion under the caption "United States Tax
Considerations" in the Prospectus Supplement dated July 12, 1993.
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The tax consequences (as discussed in greater detail below) of
the purchase, ownership and disposition of the Notes are uncertain
because of the lack of applicable legal precedent and the
possibility of changes in law, and thus, persons considering the
purchase of a Note should consult their own tax advisors
concerning the application of United Sates federal, state, local
and any other income or estate tax law to the purchase, ownership
or disposition of a Note.
Although no authority exists that directly addresses the
characterization, for United States federal income tax purposes, of
securities with terms substantially similar to the Notes, and the
matter therefore is not entirely free from doubt, the Company
believes, based upon the advise of its tax counsel, that the Notes
should be treated as debt obligations of the Company for United
States federal income tax purposes. The Company currently intends
to treat the Notes as debt obligations of the Company for United
States federal income tax purposes and, where required, intends to
file information returns with the Internal Revenue Service ("IRS")
in accordance with such treatment, in the absence of any change or
clarification in the law, by regulation or otherwise, requiring a
different characterization. Prospective investors in the Notes
should be aware, however, that the IRS is not bound by the
Company's characterization of the Notes as indebtedness and the IRS
could possibly take a different position as to the proper
characterization of the Notes for United States federal income tax
purposes. The following discussion is based upon the assumption
that the Notes will be treated as debt obligations of the Company
for United States federal income tax purposes. If the Notes are
not in fact treated as debt obligations of the Company for United
States federal income tax purposes, then the United States federal
income tax treatment of the purchase, ownership and disposition of
the Notes could differ from the treatment discussed below.
The Notes have a maturity of one year or less and thus will be
treated as short-term notes ("Short-Term Notes") for United States
federal income tax purposes. Generally, an accrual basis taxpayer,
and certain other holders, are required to accrued interest earned
on the Notes as described under "United States Tax Considerations-
Short-Term Notes" in the Prospectus Supplement. Generally, a cash
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basis taxpayer will be required to include in gross income the
interest payments made on each Interest Payment Date subject to
certain elections discussed under "United States Tax
Considerations-Short-Term Notes" in the Prospectus Supplement.
Under general principles of current United States federal income
tax law, the amount payable at maturity with respect to a Note in
excess of the Principal Amount (other than the stated coupon
payment), if any, will be treated as contingent interest and
generally will be includible in income by a U.S. Holder as ordinary
interest on the date the amount payable at maturity becomes fixed
or when such amount is received (in accordance with the U.S.
Holder's regular method of tax accounting). In addition, it is
possible (as discussed further below), that under section 988 of
the Internal Revenue Code of 1986 (the "Code") all or a portion of
the payment made in excess of the Principal Amount of the Notes
(other than the stated coupon payment) will be treated as foreign
currency gain and such gain will be treated as ordinary income as
opposed to interest income.
Upon the sale, exchange or retirement of a Note, a U.S. Holder
generally will recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or
retirement and such U.S. Holder's tax basis in the Note. A U.S.
Holder's tax basis in a Note will generally equal the cost of a
Note to such U.S. Holder increased by the amount of any original
issued discount previously included in income and reduced by any
payments of accrued original issue discount. It is unclear under
existing law what portion, if any, of any gain realized (due to
changes in the JPY/USD Exchange Rate) on sale or exchange of a Note
prior to maturity will be treated as ordinary income as opposed to
short-term capital gain. Any loss realized on the sale, exchange
or retirement of a Note will be treated as a short-term capital
loss. It is also possible, as discussed further below, that all or
a portion of the gain or loss recognized on a sale, exchange or
retirement of a Note will be treated as foreign currency gain or
loss and such gain or loss will be treated as ordinary income or
loss under Code section 988.
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As discussed above, it is possible that Code section 988 may
apply to the Notes. In addition, it is possible that proposed
Treasury regulations concerning contingent payment debt obligations
(the "Proposed Contingent Payment Regulations") issued under the
original issued discount provisions of the Code could apply to the
Notes. Generally, Code section 988 and the Treasury regulations
promulgated thereunder provide that, in the case of a debt
obligation that provides for payments determined by reference to a
nonfunctional currency (generally, any currency other than the
U.S. dollar for most U.S. taxpayers), any gain or loss realized
with respect to such debt instrument by reasons of changes in
foreign currency exchange rates generally must be treated as
foreign currency gain or loss and must be treated as ordinary
income or loss, as the case may be, to the extent such foreign
currency gain or loss does not exceed the total gain or loss
realized on such debt instrument. However, Code section 988 and
the Treasury regulations promulgated thereunder do not specifically
address the proper treatment of the Notes including the
application, if any, of the Proposed Contingent Payment Regulations
(in that the Treasury regulations under Code section 988 reserve on
the treatment of debt instruments that are both subject to Code
section 988 and treated as contingent payment debt obligations)
and, therefore, the application of Code section 988 and the
Proposed Contingent Payment Regulations is not clear. The Proposed
Contingent Payment Regulations contain a retroactive effective date
prior to the settlement date of the Notes. If the Proposed
Contingent Payment Regulations apply to the Notes, the application
of the Proposed Contingent Payment Regulations would cause the
timing and character of income, gain or loss recognized on a Note
to differ form the timing and character of income, gain or loss on
a Note had the Proposed Contingent Payment Regulations not applied.
Under the Proposed Contingent Payment Regulations (assuming they
apply to the Notes), the Notes will be treated as having contingent
interest and principal because the amount received by a U.S. Holder
upon the redemption of the Notes is contingent on the JPY/USD
Exchange Rate on the Determination Date and the total non-
contingent payments on the Notes will be less than the issue price
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of the Notes. As a result, under the Proposed Contingent Payment
Regulations, the first payment designated as a semi-annual interest
payment will be treated for Untied States federal income tax
purposes as a principal payment on the Notes thereby reducing the
outstanding principal balance on the Notes. Accordingly, under the
Proposed Contingent Payment Regulations a U.S. Holders would not be
required to include such payment in income. Any payment at maturity
of the Notes (whether designated as interest or principal) would be
applied to reduce the remaining outstanding principal balance of
the Notes. To the extent such payment exceeds the remaining
outstanding principal balance, such excess would be treated as
interest which would be includible in the income of a U.S. Holder
at the time such amount is determined. If such payment at maturity
is less than the outstanding principal balance, a U.S. Holder would
recognize a short-term capital loss on such redemption of the Notes
to the extent the outstanding principal balance exceeds such
payment at maturity.
Upon the sale or exchange of a Note, a U.S. Holder would
recognize taxable gain or loss equal to the difference between the
amount realized on the sale or exchange and such U.S. Holder's
adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis
in a Note will equal the cost of such Note reduced by any principal
payments (including, as described above, payments designated as
interest but treated as principal under the Proposed Contingent
Payment Regulations) received by the U.S. Holder. It is unclear
under existing law what portion, if any, of any gain realized (due
to changes in the JPY/USD Exchange Rate) on sale or exchange of a
Note prior to maturity will be treated as ordinary income. Any
loss realized on the sale, exchange or retirement of a Note will be
treated as a short-term capital loss. As discussed above, it is
not clear how the Code section 988 rules would apply to an
instrument that is a contingent payment instrument subject to Code
section 988, and it is possible that all or a portion of any gain
or loss on the Notes will be treated as ordinary gain or loss under
Code section 988.
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There is no assurance that the Proposed Contingent Payment
Regulations will be adopted, or if adopted, adopted in their
current form. In addition, on January 19, 1993, the Treasury
Department issued Proposed Contingent Payment Regulations (the
"1993 Proposed Regulations"), concerning contingent payment debt
obligations, which would have replaced the Proposed Contingent
Payment Regulations and which would have provided for a set of
rules with respect to the timing and character of income
recognition on contingent payment debt obligations that differs
from the rules contained in the Proposed Contingent Payment
Regulations with respect to the timing and character of income
recognition on contingent payment debt obligations. The 1993
Proposed Regulations would have applied to debt instruments issued
60 days or more after the date the 1993 Proposed Regulations became
final. However, on January 22, 1993, the United State's
Government's Office of Management and Budget announced that certain
proposed regulations which had not yet been published in the
Federal Register, including the 1993 Proposed Regulations, had been
withdrawn. It is unclear whether the 1993 Proposed Regulations
will be reproposed or, if reproposed, what effect, if any, such
regulations would have on the Notes. Based upon the foregoing, the
continued viability of the Proposed Contingent Payment Regulations
is uncertain. It should also be noted that proposed Treasury
regulations are not binding upon either the IRS or taxpayers prior
to becoming effective as temporary or final regulations.
Prospective investors in the Notes are urged to consult their own
tax advisors regarding the application, if any, of Code section 988
and the Proposed Contingent Payment Regulations to their investment
in the Notes and the effect of possible changes to the Code section
988 rules and the Proposed Contingent Payment Regulations.
Plan of Distribution
Williams Financial Markets (A Division of Jefferies & Co., Inc.)
is acting as Agent in connection with the sale of the Notes.
