PROSPECTUS Filed Pursuant to Rule 424(B)(3)
Registration No. 333-31166
U.S.$15,000,000,000
GENERAL MOTORS ACCEPTANCE CORPORATION
MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
General Motors Acceptance Corporation may offer at various times up to
U.S. $15,000,000,000 of its medium-term notes or the equivalent amount in one or
more foreign or composite currencies. The following terms may apply to the
notes. We will provide the final terms for each note in a pricing supplement.
o The notes will mature in 9 months to 30 years.
o The notes may be subject to redemption or repayment at our option
or the option of the holder.
o The notes will be denominated in U.S. dollars unless otherwise specified
by us in the applicable pricing supplement.
o The notes will bear interest at either a fixed or floating rate.
The floating interest rate formula may be based on:
o CD Rate o Treasury Rate
o Commercial Paper Rate o Prime Rate
o Federal Funds Rate o CMT Rate
o LIBOR o A basis, index or formula
specified in the applicable
pricing supplement
o The notes will be in certificated or book-entry form.
o Interest will be paid on fixed rate notes on April 1 and October 1 of each
year, or on each October 1, as selected by you, or as otherwise specified in
the applicable pricing supplement.
o Interest will be paid on floating rate notes on dates specified in the
applicable pricing supplement.
o The notes will have minimum denominations of $1,000 increased in multiples
of $1,000 or other specified denominations and multiples for a foreign or
composite currency as specified in the applicable pricing supplement.
INVESTING IN THE NOTES INVOLVES RISK.
SEE "RISK FACTORS" ON PAGE 2.
We may sell the notes to the agents as principals for resale at varying
or fixed offering prices or through the agents as agents using their reasonable
best efforts on our behalf. We will sell the notes to the public at 100% of the
principal amount unless otherwise specified in the applicable pricing
supplement. We will pay commissions to agents, unless otherwise specified in the
applicable pricing supplement, ranging from .05% to .60% of the principal amount
of each note sold through each agent, depending on the stated maturity of the
note. If we sell all the notes, we will receive between $14,910,000,000 and
$14,992,500,000 of the proceeds from the sale after paying the agents discounts
and concessions of between $7,500,000 and $90,000,000 and before deducting
expenses payable by us, including reimbursement of a portion of the agents'
expenses. We may also sell the notes without the assistance of the agents.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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Merrill Lynch & Co.
Salomon Smith Barney
Morgan Stanley Dean Witter
Lehman Brothers
J.P. Morgan & Co.
Bear, Stearns & Co. Inc.
Warburg Dillon Read LLC
Banc of America Securities LLC
Chase Securities Inc.
THE DATE OF THIS PROSPECTUS IS MARCH 3, 2000.
<PAGE>
You should rely only on the information contained in or incorporated by
reference in this prospectus or any accompanying pricing supplement. We have not
authorized anyone to provide you with different information or to make any
additional representations. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information contained in or incorporated by reference in this prospectus is
accurate as of any date other than the date on the front of this prospectus.
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TABLE OF CONTENTS
PAGE
Risk Factors............................................................ 2
Available Information................................................... 4
Incorporation of Certain Documents by Reference......................... 4
Description of General Motors Acceptance Corporation.................... 5
Principal Executive Offices............................................. 5
Ratio of Earnings to Fixed Charges...................................... 5
Use of Proceeds......................................................... 6
Description of Notes.................................................... 6
Important Currency Exchange Information................................. 32
United States Federal Taxation.......................................... 32
Certain Covenants as to Liens........................................... 38
Modification of the Indenture........................................... 38
Events of Default....................................................... 39
Concerning the Trustee.................................................. 39
Concerning the Paying Agents............................................ 39
Plan of Distribution.................................................... 40
Legal Opinions.......................................................... 41
Experts................................................................. 41
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Unless the context indicates otherwise, the words "GMAC", "we", "our",
"ours" and "us" refer to General Motors Acceptance Corporation.
PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE,
MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES OFFERED IN THIS PROSPECTUS,
INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SHORT-COVERING TRANSACTIONS
AND PENALTY BIDS. THESE TRANSACTIONS IF COMMENCED MAY BE DISCONTINUED AT ANY
TIME.
<PAGE>
RISK FACTORS
........Your investment in the notes includes risks. In consultation with your
own financial and legal advisers, you should carefully consider, among other
matters, the following discussion of risks before deciding whether an investment
in the notes is suitable for you. The notes are not an appropriate investment
for you if you are unsophisticated with respect to their significant components
and/or financial matters.
INVESTING IN INDEXED NOTES INVOLVES ADDITIONAL RISK
........An investment in indexed notes entails significant risks that are not
associated with an investment in a conventional fixed-rate or floating rate debt
security. Indexation of the interest rate of a note may result in an interest
rate that is less than the rate payable on a conventional fixed-rate debt
security issued at the same time, including the possibility that no interest
will be paid. Indexation of the principal of and/or premium on a note may result
in an amount of principal and/or premium payable that is less than the original
purchase price of the note, including the possibility that no principal will be
paid.
........The value of an index can depend on a number of factors over which we
have no control, including economic, financial and political events. These
factors are important in determining the existence, magnitude and longevity of
the risks and their results. If the formula used to determine the amount of
principal, premium and/or interest payable with respect to indexed notes
contains a multiplier or leverage factor, the effect of any change in the index
will be magnified. In recent years, values of indices and formulas have been
volatile and you should be aware that volatility may occur in the future.
Nonetheless, the historical experience of an index should not be taken as an
indication of its future performance. You should consult your own financial and
legal advisors as to the risks entailed by an investment in indexed notes and
the suitability of the notes in light of your particular circumstances.
OUR ABILITY TO REDEEM THE NOTES MAY ADVERSELY AFFECT YOUR RETURN ON THE NOTES
........If your notes are redeemable at our option or subject to mandatory
redemption, we may, in the case of optional redemption, or must, in the case of
mandatory redemption, choose to redeem the notes at times when prevailing
interest rates may be relatively low. Accordingly, you will not be able to
reinvest the redemption proceeds in a comparable security at an interest rate as
high as that of the notes.
OUR CREDIT RATINGS MAY NOT REFLECT ALL RISKS OF YOUR INVESTMENT IN THE NOTES
........Our credit ratings are an assessment of our ability to pay our
obligations. Consequently, real or anticipated changes in our credit ratings
will generally affect the market value of your notes. Our credit ratings may not
reflect the potential impact of risks related to structure, market or other
factors discussed in this prospectus on the value of your notes.
WE CANNOT ASSURE YOU THAT A MARKET WILL DEVELOP FOR YOUR NOTES OR WHAT THE
MARKET PRICE WILL BE
........We cannot assure you that a trading market for your notes will develop
or be maintained. Many factors independent of our creditworthiness affect the
trading market. These factors include:
o....complexity and volatility of the index or formula applicable
to the notes,
o method of calculating the principal, premium and interest in
respect of the notes,
o time remaining to the maturity of the notes,
o outstanding amount of the notes,
o redemption features of the notes,
o amount of other debt securities linked to the index or formula
applicable to the notes, and
o level, direction and volatility of market interest rates
generally.
Also, because we have designed some notes for specific investment
objectives or strategies, these notes have a more limited trading market and
experience more price volatility. You should be aware that there may be few
investors willing to buy when you decide to sell your notes. This limited market
may affect the price you receive for your notes or your ability to sell your
notes. You should not purchase notes unless you understand, and know you can
bear, the investment risks.
INVESTING IN NOTES DENOMINATED IN A NON-U.S. CURRENCY WILL EXPOSE YOU TO
EXCHANGE CONTROLS RISK
If you invest in a note denominated in a currency other than U.S.
dollars, there will be significant risks. These risks include the possibility of
significant changes in the exchange rate between the U.S. dollar and each other
currency and the imposition or modification of foreign exchange controls by
either the United States or foreign governments. We have no control over the
factors that generally affect these risks, such as economic, financial and
political events and the supply and demand for the currencies. Also, if payments
on notes denominated in a foreign currency are determined by a formula
containing a multiplier or leverage factors, the effect of any change in the
exchange rates between the currencies will be magnified. In recent years,
exchange rates between the U.S. dollar and certain currencies have been highly
volatile, and you should be aware that volatility may occur in the future.
Fluctuations in any exchange rate that have occurred in the past, however, do
not necessarily indicate fluctuations that may occur during the term of the
notes. Depreciation of the specified currency for a note against the U.S. dollar
would result in a decrease in the yield of your foreign currency notes on a U.S.
dollar basis below its coupon rate and, in certain circumstances, could result
in a loss to you on a U.S. dollar basis.
Governmental exchange controls could affect exchange rates and the
availability of the specified currency on a required payment date. Even if there
are no exchange controls, it is possible that the specified payment currency
will not be available on a required payment date due to circumstances beyond our
control. In such cases, we will be allowed to satisfy our obligations in U.S.
dollars.
A pricing supplement relating to notes having a specified currency other
than U.S. dollars may contain information about historical exchange rates for
that currency against the U.S. dollar or other relevant currency and any
relevant exchange controls. If we furnish information concerning exchange rates
it will be as a matter of information only, and you should not regard this
information as indicative of the range of, or trends in, future fluctuations in
currency exchange rates.
THE INFORMATION IN THIS PROSPECTUS IS DIRECTED TO YOU IF YOU ARE A
RESIDENT OF THE UNITED STATES. WE DO NOT CLAIM ANY RESPONSIBILITY TO ADVISE YOU
IF YOU ARE A RESIDENT OF A COUNTRY OTHER THAN THE UNITED STATES WITH RESPECT TO
ANY MATTERS THAT MAY AFFECT THE PURCHASE, SALE, HOLDING OR RECEIPT OF PAYMENTS
OF PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST, IF ANY, ON, THE NOTES. IF YOU
ARE NOT A RESIDENT OF THE UNITED STATES, YOU SHOULD CONSULT YOUR OWN LEGAL AND
FINANCIAL ADVISORS WITH REGARD TO THESE MATTERS.
YOU MAY SUFFER LOSSES RELATED TO JUDGMENTS ENTERED IN A NON-U.S. CURRENCY
The notes will be governed by and construed in accordance with the laws
of the State of New York. New York courts customarily enter judgments or decrees
for money damages in the foreign currency in which notes are denominated. These
amounts are then converted into U.S. dollars at the rate of exchange in effect
on the date the judgment or decree is entered. Courts in the United States
outside New York customarily have not rendered judgments for money damages
denominated in any currency other than the U.S. dollar.
AVAILABLE INFORMATION
We file annual, quarterly, and special reports and other information
with the SEC. You may read and copy any reports or other information we file at
the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. You may also inspect our filings at the following Regional Offices of the
SEC located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and Seven World Trade Center, Suite 1300, New York, New York
10048. You may also request copies of our documents upon payment of a
duplicating fee, by writing to the SEC's Public Reference Room. You may obtain
information regarding the Public Reference Room by calling the SEC at
1-800-SEC-0330. SEC filings are also available to the public from commercial
document retrieval services and over the Internet at http://www.sec.gov. Reports
and other information concerning GMAC can also be inspected at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
We have filed with the SEC a registration statement on Form S-3 under
the Securities Act with respect to the notes. This prospectus, which constitutes
part of the registration statement, does not contain all of the information set
forth in the registration statement. Certain parts of the registration statement
are omitted from the prospectus in accordance with the rules and regulations of
the SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information we file with
them into this document, which means that we can disclose important information
to you by referring you to those documents, including our annual, quarterly and
current reports, that are considered part of this prospectus. Information that
we file later with the SEC will automatically update and supersede this
information.
This prospectus incorporates by reference the documents set forth below
that we previously filed with the SEC. These documents contain important
information about GMAC and its finances.
SEC FILINGS (FILE NO. 1-3754) PERIOD
----------------------------- ------
Annual Report on Form 10-K Year ended December 31, 1998
Quarterly Report on Form 10-Q Quarters ended March 31, 1999, June 30, 1999
and September 30, 1999
Current Reports on Form 8-K Dated January 21, 1999
Dated April 15, 1999
Dated April 22, 1999
Dated June 8, 1999
Dated July 20, 1999
Dated October 14, 1999
Dated January 20, 2000
You may request a copy of the documents incorporated by reference in
this prospectus except exhibits to such prospectus, at no cost, by writing or
telephoning the office of G.E. Gross, Comptroller, at the following address and
telephone number:
General Motors Acceptance Corporation
3044 West Grand Boulevard
Mail code 482-1x1-103
Detroit, Michigan 48202
Tel: (313) 556-1240
DESCRIPTION OF GENERAL MOTORS ACCEPTANCE CORPORATION
We are a wholly-owned subsidiary of General Motors Corporation and were
incorporated in 1997 under the Delaware General Corporation Law. On January 1,
1998, we merged with our predecessor which was originally incorporated in 1919
under the New York Banking Law relating to investment companies and assumed all
of our predecessor's assets, liabilities and obligations. We operate directly as
well as through subsidiaries and associated companies in which we have equity
investments, and we offer a wide variety of automotive financial services to and
through franchised General Motors dealers in many countries throughout the
world. We also offer financial services to other automobile dealerships and to
the customers of those dealerships. Other financial services we offer include
insurance and mortgage banking.
Our principal business is:
o to finance acquisitions of various new automotive and
nonautomotive products manufactured by General Motors Corporation
for resale by franchised General Motors dealers;
o to acquire from these dealers, either directly or indirectly,
installment obligations covering retail sales and leases of new
General Motors products as well as used units of any make;
o to finance new products of other manufacturers; and
o to lease motor vehicles and capital equipment.
The automotive financing industry is highly competitive. We principally
compete with affiliated finance subsidiaries of other major manufacturers as
well as banks, commercial finance companies, savings and loan associations and
credit unions. Our business is influenced by our ability to offer competitive
financing rates which is directly affected by our access to capital markets.
PRINCIPAL EXECUTIVE OFFICES
Our principal executive offices are located at 3044 West Grand
Boulevard, Detroit, Michigan 48202 and our telephone number is 313-556-5000.
RATIO OF EARNINGS TO FIXED CHARGES
YEARS ENDED
DECEMBER 31,
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
1.33 1.42 1.41 1.36 1.33
We compute the ratio of earnings to fixed charges by dividing earnings
before income taxes and fixed charges by the fixed charges. This ratio includes
our consolidated earnings and fixed charges. Fixed charges consist of interest
and discount and the portion of rentals for real and personal properties in an
amount we deem to be representative of the interest factor.
USE OF PROCEEDS
We will add the net proceeds from the sale of the notes to our general
funds and they will be available for the purchase of receivables, the making of
loans or the repayment of debt. We may initially use the proceeds to reduce
short-term borrowings or invest in short-term securities.
DESCRIPTION OF NOTES
The terms and conditions in this prospectus will apply to each note
unless otherwise specified in the applicable pricing supplement and in the note.
It is important for you to consider the information contained in this prospectus
and the pricing supplement in making your investment decision.
This section describes some technical concepts, and we occasionally use
defined terms. You will find an alphabetized glossary beginning on page 9 of
this prospectus that defines all of the capitalized terms used in this section
that are not defined in this section.
GENERAL TERMS OF THE NOTES
CURRENCIES
Unless otherwise indicated in the applicable pricing supplement, the
notes will be denominated in U.S. dollars, and payment of principal of, premium,
if any, and interest, if any, on the notes will be made in U.S. dollars. If any
note is not to be denominated in U.S. dollars, the currency in which a note is
denominated (or the currency which is then legal tender in the country issuing
that currency) is referred to as the "Specified Currency." If the currency or
currencies in which the principal, premium, if any, and interest, if any, with
respect to the note are to be paid, is different than the currency in which the
note is denominated, this information and any other terms relating to the
non-U.S. dollar denomination, including historical exchange rates for the
Specified Currency as against the U.S. dollar and any exchange controls or other
foreign currency risks relating to the Specified Currency, will be indicated in
the applicable pricing supplement. See "Risk Factors-Investing in Notes
Denominated in a Non-U.S. Currency Will Expose You to Exchange Controls Risk"
and "Risk Factors-You May Suffer Losses Related to Judgments Entered in a
Non-U.S. Currency." References in this prospectus to "U.S. dollars" and "$" are
to the currency of the United States of America.
AMOUNT
The notes will be limited to U.S.$15,000,000,000 aggregate initial
offering price, or its equivalent in one or more Specified Currencies. The U.S.
dollar equivalent of notes denominated in a Specified Currency, excluding notes
denominated in U.S. dollars will be determined on the Business Day prior to the
date of our acceptance of a purchase of notes and will be determined on the
basis of the Market Exchange Rate (as defined below) for such Specified
Currency.
INDENTURE
We will issue the notes under an Indenture dated as of December 1, 1993,
as amended by a First Supplemental Indenture dated as of January 1, 1998
(together, the "Indenture") between us and Citibank, N.A., as Trustee. The
Indenture does not limit the amount of additional unsecured indebtedness ranking
equally and ratably with the notes that we may incur. We may, from time to time,
without the consent of the holders of the notes, provide for the issuance of
notes under the Indenture in addition to the U.S.$15,000,000,000 aggregate
initial offering price of the notes offered in this prospectus. The statements
in this prospectus concerning the notes and the Indenture are not complete and
you should refer to the provisions in the Indenture which are controlling.
Provisions and defined terms in the Indenture are incorporated by reference in
this prospectus as a part of the statements we are making, and these statements
are qualified in their entirety by these references.
RANKING
The notes will constitute unsecured and unsubordinated indebtedness of
GMAC and will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of GMAC (other than obligations preferred by
mandatory provisions of law).
MATURITY
The notes we offer from time to time will mature on any day, nine months to
thirty years from the Issue Date (as defined below), as selected by you and
agreed to by us. The principal amount of the notes will be payable at Maturity
(as defined below) at the Corporate Trust Office of Citibank, N.A., Corporate
Trust Services, 111 Wall Street, 5th Floor, New York, New York 10043, or at such
other place as we may designate.
INTEREST
Each note will bear interest from the Issue Date at either:
o a fixed rate ("Fixed Rate Notes"), which may be zero in the case
of a note issued at an Issue Price (as defined below)
representing a substantial discount from the principal amount
payable upon the Maturity Date (a "Zero-Coupon Note"), or
o a floating rate or rates determined by reference to one or more
Base Rates (as defined below), which may be adjusted by a Spread
and/or Spread Multiplier (each as defined below) ("Floating Rate
Notes").
Interest rates offered by us with respect to the notes may differ depending
upon, among other things, the aggregate principal amount of the notes purchased
in any single transaction.
BOOK ENTRY, DELIVERY AND FORM OF THE NOTES
We will issue each note in fully registered form without coupons, and
each note will be represented by a global note registered in the name of a
nominee of the depositary. Except as set forth in this prospectus, notes will be
issuable only in global form. See "Description of Notes-Book-Entry; Delivery and
Form." All notes issued on the same day and having the same terms, including,
but not limited to, the same:
o designation,
o currency,
o Interest Payment Dates,
o rate of interest,
o Maturity Date, and
o redemption or repayment provisions,
may be represented by a single note. Your beneficial interest in a note will be
shown on, and transfers of the note will be effected only through, records
maintained by the depositary or its participants. Payments of principal of,
premium, if any, and interest, if any, on notes represented by a global note
will be made by us or our paying agent to The depositary or its nominee. Unless
otherwise specified in the applicable pricing supplement, The Depository Trust
Company ("DTC") will be the depositary. See "Description of Notes-Book-Entry;
Delivery and Form."
AMORTIZING NOTES
We may from time to time offer notes ("Amortizing Notes") with the
amount of principal and interest payable in installments over the term of the
notes. Unless otherwise specified in the applicable pricing supplement, interest
on each Amortizing Note will be computed on the basis of a 360-day year of
twelve 30-day months. Payments with respect to Amortizing Notes will be applied
first to the interest due and payable and then to the reduction of the unpaid
principal amount. Further information about Amortizing Notes will be specified
in the applicable pricing supplement, including a table setting forth repayment
information for the Amortizing Notes.
DENOMINATIONS
Unless otherwise specified in the applicable pricing supplement, the
authorized denominations of U.S. dollar denominated notes will be U.S.$1,000 and
integral multiples of U.S.$1,000 for an amount in excess of U.S. $1,000. The
authorized denominations of notes denominated in a Specified Currency other than
U.S. dollars will be set forth in the applicable pricing supplement.
REDEMPTION
Unless otherwise specified in the applicable pricing supplement, the
notes may not be redeemed by us, or repaid at your option, or both, prior to
their Maturity Date (as defined below). Unless otherwise specified in the
applicable pricing supplement, the notes, other than Amortizing Notes, will not
be subject to any sinking fund. See "Description of Notes-Redemption and
Repayment."
Unless otherwise specified in the applicable pricing supplement, the
amount of any Original Issue Discount Note (as such term is defined in
"Description of Notes-Original Issue Discount Notes") payable upon redemption by
us, repayment at your option or acceleration of Maturity, in lieu of the stated
principal amount due at the Maturity Date, will be the Amortized Face Amount of
the Original Issue Discount Note as of the date of the redemption, repayment or
acceleration. To determine if holders of the requisite amount of outstanding
notes under the Indenture have made a demand or given a notice or waiver or
taken any other action, the outstanding principal amount of any Original Issue
Discount Note will be the Amortized Face Amount.
The "Amortized Face Amount" of an Original Issue Discount Note is the
amount equal to (a) the Issue Price of an Original Issue Discount Note set forth
in the applicable pricing supplement plus (b) the portion of the difference
between the Issue Price and the principal amount of the Original Issue Discount
Note that has accrued at the yield to maturity set forth in the pricing
supplement (computed in accordance with generally accepted United States bond
yield computation principles) at the date the Amortized Face Amount is
calculated, but in no event will the Amortized Face Amount of the Original Issue
Discount Note exceed its stated principal amount. See also "United States
Federal Taxation-Tax Consequences to U.S. Holders-Original Issue Discount
Notes."
PRICING SUPPLEMENT
Unless otherwise specified in this prospectus, the pricing supplement
relating to each note or notes will describe the following terms:
o the Specified Currency;
o whether the note is a Fixed Rate Note, a Floating Rate Note, an
Amortizing Note, a Zero-Coupon Note or other Original Issue
Discount Note;
o whether the note is a Currency Indexed Note or other Indexed
Note;
o the price at which the note will be issued to the public (the
"Issue Price");
o the date on which the note will be issued to the public (the
"Issue Date");
o the Maturity Date of the note;
o if the note is a Fixed Rate Note, the rate per annum at which the
note will bear interest, if any (the "Interest Rate");
o if the note is a Floating Rate Note, the Base Rate or Rates, the
Initial Interest Rate or formula for determining the Initial
Interest Rate, the Interest Reset Period, the Interest Reset
Dates, the Interest Payment Period, the Interest Payment Dates,
the Index Maturity, the Maximum Interest Rate and the Minimum
Interest Rate, if any, and the Spread and/or Spread Multiplier,
if any (all as defined in the prospectus ), and any other terms
relating to the method of calculating the Interest Rate for the
note;
o if the note is an Amortizing Note, whether payments of principal
and interest will be made quarterly or semiannually, and the
redemption or repayment information;
o whether the interest rate on such note may be reset upon the
occurrence of certain events or at our option;
o whether the note may be redeemed at our option, or repaid at your
option, prior to its Maturity Date, and if so, the terms of the
redemption or repayment;
o special United States Federal income tax consequences of the
purchase, ownership and disposition of the notes, if any; and
o any other terms of the note that do not conflict with the
provisions of the Indenture.
GLOSSARY
You should refer to the Indenture and the form of notes filed as
exhibits to the registration statement to which this prospectus relates for the
full definition of terms used in this prospectus and those capitalized terms
which are undefined in this prospectus. We have set forth below a number of
definitions of terms used in this prospectus with respect to the notes.
"Business Day" with respect to any note means, unless otherwise
specified in the applicable pricing supplement, any day, other than a Saturday
or Sunday, that is:
o not a day on which banking institutions are authorized or
required by law, regulation or executive order to be closed in
The City of New York,
o if the note is denominated in a Specified Currency other than
U.S. dollars or Euro, not a day on which banking institutions are
authorized or required by law, regulation or executive order to
close in the Principal Financial Center of the country issuing
the Specified Currency and is a day on which banking institutions
in such Principal Financial Center are carrying out transactions
in such Specified Currency,
o if the note is denominated in Euro, a day on which the
Trans-European Automated Real-Time Gross Settlement Express
Transfer ("TARGET") System is open, and
o with respect to London Inter Bank Offer Rate Notes ("LIBOR
Notes"), is also a London Banking Day.
"Interest Payment Date" with respect to any note means a date, other
than at Maturity, on which, under the terms of such Note, regularly scheduled
interest shall be payable.
"London Banking Day" means any day on which dealings in deposits in the
Indexed Currency are transacted in the London interbank market.
"Maturity Date" with respect to any note means the date on which the
note will mature, as specified on the note, and "Maturity" means the date on
which the principal of a note or an installment of principal becomes due and
payable in full in accordance with its terms and the terms of the Indenture,
whether at its Maturity Date or by declaration of acceleration, call for
redemption at our option, repayment at your option, or otherwise.
"Principal Financial Center" means (i) the capital city of the country
issuing the Specified Currency or (ii) the capital city of the country to which
the Indexed Currency relates, as applicable, except, in the case of (i) or (ii)
above, that with respect to United States dollars, Australian dollars, Canadian
dollars, Deutsche marks, Dutch guilders, Portuguese escudos, Italian lire, and
Swiss francs, the "Principal Financial Center" shall be The City of New York,
Sydney and (solely in the case of the Specified Currency) Melbourne, Toronto,
Frankfurt, Amsterdam, Lisbon (solely in the case of the Indexed Currency),
Milan, and Zurich, respectively.
"Regular Record Date" with respect to:
o any Interest Payment Date for Fixed Rate Notes means, unless
otherwise specified in the applicable pricing supplement, whether
or not a Business Day, the fifteenth day of the calendar month
preceding the Interest Payment Date unless the Interest Payment
Date falls on the 16th through the 31st day of the calendar month
in which case the Regular Record Date shall be the last day of
the calendar month preceding that interest payment date; and
o any Interest Payment Date for notes other than Fixed Rate Notes
means, unless otherwise specified in the applicable pricing
supplement, the date, whether or not a Business Day, 15 calendar
days prior to the Interest Payment Date.
BOOK-ENTRY; DELIVERY AND FORM
GLOBAL NOTES
Upon issue, all Fixed Rate Notes having the same Issue Date, interest
rate, if any, amortization schedule, if any, Maturity Date and other terms, if
any, will be represented by one or more fully registered global notes (the
"Global Notes") and all Floating Rate Notes having the same Issue Date, Initial
Interest Rate, Base Rate, Interest Period, Interest Payment Dates, Index
Maturity, Spread and/or Spread Multiplier, if any, Minimum Interest Rate, if
any, Maximum Interest Rate, if any, Maturity Date and other terms, if any, will
be represented by one or more Global Notes; provided, that no single Global Note
will exceed U.S.$50,000,000. Each Global Note will be deposited with, or on
behalf of, the depositary and registered in the name of the depositary or its
nominee.
THE DEPOSITARY
Unless otherwise specified in the applicable pricing supplement, the DTC
will be the initial depositary with respect to the notes. DTC has advised us and
the agents that it is a limited-purpose trust company organized under the laws
of the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered under the Exchange Act. DTC was created to hold
securities of its participants and to facilitate the clearance and settlement of
securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates.
DTC's participants include securities brokers and dealers (including the
agents), banks, trust companies, clearing corporations and certain other
organizations, some of whom, and/or their representatives, own DTC. Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. Persons who are
not participants may beneficially own securities held by DTC only through
participants. The rules applicable to DTC and its participants are on file with
the SEC.
OWNERSHIP OF GLOBAL NOTES
When we issue the notes represented by a Global Note, the depositary
will credit, on its book-entry registration and transfer system, the
participants' accounts with the principal amounts of the notes represented by
the Global Note beneficially owned by such participants. The accounts to be
credited will be designated by the agents of those notes, or by us, if the notes
are offered and sold directly by us. Ownership of beneficial interests in a
Global Note will be limited to participants or persons that hold interests
through participants. Ownership of beneficial interests in notes represented by
a Global Note or Global Notes will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the depositary,
or by participants in the depositary or persons that may hold interests through
participants. The laws of some states require that purchasers of securities take
physical delivery of securities in definitive form. These limits and laws may
impair your ability to transfer beneficial interests in a Global Note.
So long as the depositary for a Global Note or its nominee is the
registered owner of the Global Note, the depositary or its nominee, will be
considered the sole owner or holder of the notes represented by a Global Note
for all purposes under the Indenture. Except as provided below, you, as the
owner of beneficial interests in notes represented by a Global Note or Global
Notes (a) will not be entitled to register the notes represented by a Global
Note registered in your name, (b) will not receive or be entitled to receive
physical delivery of notes in definitive form and (c) will not be considered the
owners or holders of the notes under the Indenture.
Accordingly, you must rely on the procedures of the depositary or on the
procedures of the participant through which you own your interest, to exercise
any rights of a holder under the Indenture or a Global Note. We understand that
under existing policy of the depositary and industry practices, if (a) we
request any action of holders, or (b) you desire to give notice or take action
which a holder is entitled under the Indenture or a Global Note, the depositary
would authorize the participants holding the beneficial interests to give the
notice or take the action.
If you are a beneficial owner that is not a participant, you must rely
on the contractual arrangements you have directly, or indirectly through your
financial intermediary, with a participant to give notice or take action.
PAYMENTS
We will make payments of principal of, premium, if any, and interest, if
any, on the notes represented by a Global Note through the Trustee to the
depositary or its nominee, as the registered owner of a Global Note. Neither we,
the Trustee, any Paying Agent nor any other of our agents will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Note or
for maintaining, supervising or reviewing any records relating to beneficial
ownership interests. We expect that the depositary, upon receipt of any
payments, will immediately credit the accounts of the related participants with
payments in amounts proportionate to their beneficial interest in such Global
Note. We also expect that payments by participants to owners of beneficial
interests in a Global Note will be governed by standing customer instructions
and customary practices and will be the responsibility of the participants.
CERTIFICATED NOTES
If DTC or any other designated replacement depositary is at any time
unwilling or unable to continue as depositary or ceases to be a clearing agency
registered under the Exchange Act and a successor depositary registered as a
clearing agency under the Exchange Act is not appointed by us within 90 days, we
will issue certificated notes in exchange for all the Global Notes. Also, we may
at any time and in our sole discretion determine not to have the notes
represented by the Global Note and, in such event, will issue certificated notes
in exchange for all the Global Notes. In either instance, you, as an owner of a
beneficial interest in a Global Note, will be entitled to have certificated
notes equal in principal amount to such beneficial interest registered in your
name and will be entitled to physical delivery of the certificated notes. The
certificated notes will be registered in the name or names as the depositary
shall instruct the Trustee. These instructions may be based upon directions
received by the depositary from participants with respect to beneficial
interests in such Global Notes. These certificated notes will be issued in
denominations of U.S.$1,000 or more, in multiples of U.S.$1,000, and will be
issued in registered form only, without coupons. No service charge will be made
for any transfer or exchange of certificated notes, but we may require payment
of a sum sufficient to cover any tax or other governmental charge. (See section
2.07 of the Indenture.)
PAYMENT CURRENCY
U.S. DOLLARS
Unless otherwise specified in the applicable pricing supplement, and
except as otherwise described in this prospectus with respect to Currency
Indexed Notes, we will pay principal, premium, if any, and interest, if any, in
U.S. dollars, even if a note is denominated in a Specified Currency other than
U.S. dollars. You may elect to receive all payments in the Specified Currency
(subject to those conditions described in "Risk Factors-Investing in Notes
Denominated in a Non-U.S. Currency Will Expose You to Exchange Controls Risk")
by delivering a written request to our paying agent (the "Paying Agent") in The
City of New York. The Paying Agent must receive your election on or prior to the
applicable Regular Record Date or at least 15 calendar days prior to Maturity,
and no election or change of election may be made with respect to payments on
any note if:
o an Event of Default has occurred,
o we have exercised any of our discharge or defeasance options, or
o we have given a notice of redemption.
Your election will remain in effect unless and until you change it by sending
written notice to the Paying Agent, but the Paying Agent must receive your
notice on or prior to the applicable Regular Record Date or at least 15 calendar
days prior to Maturity.
PAYING AGENT
Until we repay the notes or provide for their repayment, we will, at all
times, maintain a Paying Agent in The City of New York capable of performing the
duties described in this prospectus. We have initially appointed Citibank, N.A.,
New York, New York as Paying Agent under the Indenture. We will notify you of
any change in the Paying Agent or its address. Except as may otherwise be
provided in a pricing supplement with respect to Foreign Currency Notes, we will
bear all currency exchange costs unless you have made the election referred to
above. If you have made the above election, you will bear the currency exchange
costs related to your note, which costs will be deducted from the payments due
you.
DETERMINATION OF U.S. DOLLAR AMOUNTS
Unless otherwise specified in the applicable pricing supplement, in the
case of a note denominated in a Specified Currency other than U.S. dollars, the
amount of U.S. dollar payments with respect to the note will be determined by us
or our agent as specified in the applicable pricing supplement (the "Exchange
Rate Agent"). The amount of this payment will be based on the indicative
quotation in The City of New York selected by the Exchange Rate Agent at
approximately 11:00 a.m., New York City time, on the second Business Day
preceding the applicable payment date that yields the largest number of U.S.
dollars upon conversion of the Specified Currency. Unless otherwise specified in
the applicable pricing supplement, the selection shall be made in the following
order:
o first, from among the quotations appearing on the bank composite
or multi- contributor pages of the Reuters Monitor Foreign
Exchange Service;
o second, from the Bridge Telerate, Inc.(or successor) Monitor
Foreign Exchange Service; or
o third, from the quotations received by the Exchange Rate Agent
from three recognized foreign exchange dealers in The City of New
York selected by the Exchange Rate Agent and approved by us (one
of which may be the Exchange Rate Agent) (the "Exchange Rate")
for the purchase by the quoting dealer, for settlement on the
payment date, of the Specified Currency for U.S. dollars.
If none of these bid quotations are available, we will make payments in
the Specified Currency unless the Specified Currency is unavailable due to
exchange controls or other circumstances beyond our control or is no longer used
by the issuing government or by the international banking community. In this
case, we will make payments in U.S. dollars on the basis of the noon buying rate
in The City of New York for cable transfers in the Specified Currency as
certified for customs purposes by the Federal Reserve Bank of New York (the
"Market Exchange Rate") for the Specified Currency on the second Business Day
prior to the payment date, or on another basis as specified in the applicable
pricing supplement.
In the event the Market Exchange Rate is not available, we will be entitled
to make payments in U.S. dollars:
o if the Specified Currency is not a composite currency, on the
basis of the most recently available Market Exchange Rate for the
Specified Currency, or
o if the Specified Currency is a composite currency, in an amount
determined by the Exchange Rate Agent to be the sum of the number
of units of each component currency of the composite currency, as
of the most recent date on which the composite currency was used,
multiplied by the Market Exchange Rate for the component currency
on the second Business Day prior to the payment date (or if the
Market Exchange Rate is not then available, by the most recently
available Market Exchange Rate for the component currency, or as
specified in the applicable pricing supplement).
Any payment made under these circumstances in U.S. dollars where the required
payment is in a Specified Currency other than U.S. dollars will not constitute
an Event of Default.
Unless otherwise specified in the applicable pricing supplement, if you
have elected to receive payments of principal of, premium, if any, and interest,
if any, on a note in a foreign currency as described above, and the foreign
currency is unavailable as of the due date for payment because of the imposition
of exchange controls or other circumstances beyond our control, or is no longer
used by the issuing government or by the international banking community, then
we may make all payments in U.S. dollars until the foreign currency is available
or is used. The Exchange Rate Agent will determine the rate at which the amount
payable on any date in the foreign currency will be converted into U.S. dollars,
based on the most recently available Market Exchange Rate or as specified in the
applicable pricing supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a component
will be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as components will be replaced by an amount in the single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in the single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a component will be replaced
by the amounts of the two or more currencies with an aggregate value on the date
of division equal to the amount of the former component currency immediately
before the division.
All these determinations made by the Exchange Rate Agent are in its sole
discretion, except that we must approve any determination made by an Exchange
Rate Agent that is not us, and, in the absence of manifest error, all
determinations will be conclusive for all purposes and binding on holders of the
notes.
NO CHANGE IN PAYMENT OBLIGATION
In the event of an official redenomination of a Specified Currency
(including, without limitation, a composite currency), our payment obligations
will not change as a result of the redenomination. Except in the case of
Currency Indexed Notes as described under "Description of Notes-Currency Indexed
Notes-Payment of Principal and Interest," if any other formulae are provided for
in the applicable pricing supplement, we will not adjust any amount payable
under the notes as a result of:
o any change in the value of a Specified Currency relative to any
other currency due solely to fluctuations in exchange rates, or
o any redenomination of any component currency of any composite
currency (unless the composite currency is itself officially
redenominated).
Currently, there are limited facilities in the United States for
conversion of U.S. dollars into foreign currencies and vice versa. In addition,
banks do not generally offer non-U.S. dollar denominated checking or savings
account facilities in the United States. Accordingly, we will make payments on
notes made in a Specified Currency other than U.S. dollars from a bank account
located outside the United States, unless otherwise specified in the applicable
pricing supplement.
INTEREST AND PAYMENTS OF PRINCIPAL AND INTEREST
GENERAL
Except as described below and unless otherwise specified in the
applicable pricing supplement, we will pay interest on the notes and principal
of Amortizing Notes, in each case other than payments made at Maturity, by
mailing a check from a bank account located outside the United States if the
check is payable in a currency other than U.S. dollars, to you at your address
appearing on our security register on the applicable Regular Record Date. Unless
otherwise specified in the applicable pricing supplement, in the case of a note
issued between a Regular Record Date and the Related Interest Payment Date, we
will pay your interest (and, in the case of an Amortizing Note, principal) on
the note from the Issue Date to the Interest Payment Date on the Interest
Payment Date following the succeeding Regular Record Date to you, as the
registered holder as of the succeeding Regular Record Date. Notwithstanding the
foregoing, if you are the holder of U.S.$10,000,000 or more in aggregate
principal amount of notes of like tenor and term, or if you are the holder of
the equivalent in a Specified Currency other than U.S. dollars, you will be
entitled to receive interest, and principal payments in the case of Amortizing
Notes, in immediately available funds, but only if the Paying Agent has received
from you complete and appropriate instructions in writing on or prior to the
applicable Regular Record Date.
We will pay you, as the owner of a beneficial interest in a note, in
accordance with the procedures of the depositary and the participant, in effect
from time to time as described under "Description of Notes-Book-Entry; Delivery
and Form." Simultaneously with your election to receive payments in a Specified
Currency other than U.S. dollars (as provided above), you may, if so entitled as
described above, elect to receive the payments in immediately available funds by
providing complete and appropriate instructions to the Paying Agent. All
payments to you in respect of principal of, premium, if any, and interest, if
any, on the note will be made in immediately available funds to an account
maintained by you with a bank located outside the United States or as otherwise
provided in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement,
payments of principal, premium, if any, and interest, if any, at Maturity will
be made by us to you in immediately available funds when you surrender the note
at the office of the Paying Agent, provided that you present the note to the
Paying Agent in time for the Paying Agent to make payments in funds in
accordance with its normal procedures and payable to an account maintained by
you with a bank located outside the United States if payable in a Specified
Currency other than U.S. dollars. See "Important Currency Exchange Information."
Unless otherwise specified in the applicable pricing supplement, the Paying
Agent will pay principal, and premium, if any, and interest, if any, payable at
Maturity of a note by wire transfer in immediately available funds to an account
specified by the depositary. Unless otherwise specified in the applicable
pricing supplement, payments of interest on a Note, and principal of Amortizing
Notes in global form (in each case, other than at Maturity) will be made in
same-day funds in accordance with existing arrangements between the Paying Agent
and the depositary.
We will pay any administrative costs imposed by banks for payments in
immediately available funds, but you will bear any tax, assessment or
governmental charge imposed upon payments, including, without limitation, any
withholding tax.
If a note, such as an Original Issue Discount Note, is considered issued
with original issue discount, you must include the discount in income for United
States Federal income tax purposes at a constant rate, prior to your receiving
the cash attributable to that income. See "United States Federal Taxation-Tax
Consequences to U.S. Holders-Original Issue Discount Notes." Unless otherwise
specified in the applicable pricing supplement, if the principal of any Original
Issue Discount Note is declared due and payable immediately as described under
"Description of Debt Securities-Events of Default," the amount of principal due
and payable is limited to the aggregate principal amount of the note multiplied
by the sum (expressed as a percentage of the aggregate principal amount) of its
Issue Price plus the original issue discount amortized using the "interest
method" (computed in accordance with generally accepted accounting principles in
effect on the date of declaration) from the Issue Date to the date of
declaration. Special considerations applicable to the notes will be set forth in
the applicable pricing supplement.
The Interest Payment Dates for Fixed Rate Notes are described below
under "Fixed Rate Notes," and the Interest Payment Dates for Floating Rate Notes
are indicated in the applicable pricing supplement.
FIXED RATE NOTES
INTEREST PERIODS
Each Fixed Rate Note will bear interest from and including its Issue
Date at the rate per annum set forth on the note and in the applicable pricing
supplement until we pay or make available for payment the principal amount of
the note in full, except as described below under "Description of
Notes-Subsequent Interest Periods" and "Description of Notes-Extension of
Maturity." Unless otherwise specified in the applicable pricing supplement, we
will pay interest on each Fixed Rate Note (other than a Zero-Coupon Note or an
Amortizing Note), either semiannually each April 1 and October 1, or annually
each October 1, as selected by you, and at Maturity.
When we pay interest on a Fixed Rate Note, we will include accrued
interest from and including the Issue Date or from and including the last day
for which interest has been paid (or provided for), to, but excluding, the
Interest Payment Date or date of Maturity.
PAYMENT DATES
Unless otherwise specified in the applicable pricing supplement, we will
pay principal of and interest on each Amortizing Note, either quarterly each
January 1, April 1, July 1 and October 1, or semiannually each April 1 and
October 1, as selected by you, and at Maturity. Payments with respect to
Amortizing Notes will be applied first to interest due and payable on the notes
and then to the reduction of the unpaid principal amount of the notes. A table
setting forth repayment information for each Amortizing Note will be set forth
in the applicable pricing supplement.
Any payment of principal, premium, if any, or interest required to be
made on a Fixed Rate Note on a day which is not a Business Day does not have to
be made on that day, but may be made on the next succeeding Business Day, and no
additional interest will accrue as a result of the delayed payment. Unless
otherwise specified in the applicable pricing supplement, any interest on Fixed
Rate Notes will be computed on the basis of a 360-day year of twelve 30-day
months.
INTEREST RATES
We may change the interest rates that we offer on Fixed Rate Notes
without notice from time to time, but no change will affect any Fixed Rate Notes
already issued or for which we have accepted an offer to purchase.
FLOATING RATE NOTES
INTEREST RATES
Unless otherwise specified in the applicable pricing supplement, each
Floating Rate Note will bear interest at a rate determined by:
o an interest rate base (the "Base Rate"), which may be adjusted by
a Spread and/or a Spread Multiplier (each as defined below), or
o an interest rate determined by reference to two or more Base
Rates, as adjusted by the applicable Spread and/or a Spread
Multiplier (as specified in the applicable pricing supplement).
The "Spread" is the number of basis points (one basis point equals one
hundredth of a percentage point) to be added to or subtracted from the Base Rate
applicable to the interest rate for the Floating Rate Note.
The "Spread Multiplier" is the percentage of the Base Rate applicable to
the Base Rate Note used to determine the interest rate on the Floating Rate
Note. Each Floating Rate Note and the applicable pricing supplement will specify
the Index Maturity and the Spread and/or Spread Multiplier, if any.
The "Index Maturity" for any Floating Rate Note is the period to
maturity of the instrument or obligation from which the Base Rate is calculated
and will be specified in the applicable pricing supplement.
We may change the Multiplier, Index Maturity and other variable terms of
the Floating Rate Notes from time to time, but no change will affect any note
already issued or for which we have accepted an offer to purchase.
The applicable pricing supplement will designate one of the following
Base Rates for each Floating Rate Note:
o the Certificate of Deposit Rate (a "CD Rate Note"),
o the Commercial Paper Rate (a "Commercial Paper Rate Note"),
o the Federal Funds Rate (a "Federal Funds Rate Note"),
o LIBOR (a "LIBOR Note"),
o the Prime Rate (a "Prime Rate Note"),
o the Treasury Rate (a "Treasury Rate Note"),
o the CMT Rate (a "CMT Rate Note") or
o any other Base Rate or interest rate formula as is set forth in
such pricing supplement and in such Floating Rate Note.
As specified in the applicable pricing supplement, a Floating Rate Note
may also have:
o a ceiling on the interest rate during any Interest Period
("Maximum Interest Rate") and/or
o a floor on the interest rate during any Interest Period ("Minimum
Interest Rate").
In addition, the interest rate on a Floating Rate Note will not be higher than
the maximum rate permitted by applicable law, as the same may be modified by
United States law of general application. Under present New York law, the
maximum rate of interest, with certain exceptions, for any loan in an amount
less than U.S.$250,000 is 16% and for any loan equal to or greater than
U.S.$250,000 and less than U.S.$2,500,000 is 25% per annum on a simple interest
basis. These limits do not apply to loans of U.S.$2,500,000 or more.
INTEREST RESET DATES
Each Floating Rate Note and the applicable pricing supplement will
specify if the interest rate on the Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semiannually or annually (each an "Interest Reset
Period") and the date on which the interest rate will be reset (each an
"Interest Reset Date"). Unless otherwise specified in the applicable pricing
supplement, the Interest Reset Date will be, in the case of Floating Rate Notes
that reset:
o daily, on each Business Day;
o weekly, on the Wednesday of each week; except in the case of
Treasury Rate Notes, on the Tuesday of each week (except as
provided below);
o monthly, on the third Wednesday of each month;
o quarterly, on the third Wednesday of January, April, July and
October;
o semiannually, on the third Wednesday of the specified two months
of each year; and
o annually, on the third Wednesday of the specified month.
The interest rate in effect from the Issue Date to the first Interest Reset Date
will be the Initial Interest Rate (as defined below).
If any Interest Reset Date for any Floating Rate Note is not a Business
Day, the Interest Reset Date will be postponed to the next succeeding Business
Day. However, in the case of a LIBOR Note, if the next succeeding Business Day
falls in the next succeeding calendar month, the Interest Reset Date will be the
immediately preceding Business Day. The interest rate or the formula for
establishing the interest rate effective for a Floating Rate Note from the Issue
Date to the first Interest Reset Date (the "Initial Interest Rate") will be
specified in the applicable pricing supplement.
INTEREST PAYMENT DATES
Except as provided below, and unless otherwise specified in the
applicable pricing supplement, we will pay interest:
o in the case of Floating Rate Notes with a daily, weekly or
monthly Interest Reset Date, on the third Wednesday of each month
or on the third Wednesday of January, April, July and October, as
specified in the applicable pricing supplement;
o in the case of Floating Rate Notes with a quarterly Interest
Reset Date, on the third Wednesday of January, April, July and
October;
o in the case of Floating Rate Notes with a semiannual Interest
Reset Date, on the third Wednesday of the specified two months of
each year;
o in the case of Floating Rate Notes with an annual Interest Reset
Date, on the third Wednesday of the specified month, and,
o in each case, at Maturity.
Subject to the last sentence of this paragraph, unless otherwise specified in
the applicable pricing supplement, if an Interest Payment Date (other than at
Maturity) with respect to any Floating Rate Note falls on a day that is not a
Business Day, the Interest Payment Date will be postponed to the next succeeding
Business Day. In the case of LIBOR Notes, if the next succeeding Business Day
falls in the next succeeding calendar month, the Interest Payment Date will be
the immediately preceding Business Day. Any payment of principal, premium, if
any, and interest, if any, required to be made on a Floating Rate Note at
Maturity that is not a Business Day will be made on the next succeeding Business
Day and no interest will accrue as a result of any delayed payment.
ACCRUED INTEREST
Unless otherwise specified in the applicable pricing supplement, we will
pay interest on each Interest Payment Date or at Maturity for Floating Rate
Notes equal to the interest accrued from and including the Issue Date or from
and including the last Interest Payment Date to which interest has been paid to,
but excluding, the Interest Payment Date or date of Maturity (an "Interest
Period").
Unless otherwise specified in the applicable pricing supplement, with
respect to a Floating Rate Note, accrued interest will be calculated by
multiplying the principal amount of the Floating Rate Note by an accrued
interest factor. Unless otherwise specified in the applicable pricing
supplement, the accrued interest factor will be computed by adding the interest
factors calculated for each day in the Interest Period for which accrued
interest is being calculated. Unless otherwise specified in the applicable
pricing supplement, the interest factor for each day is computed by dividing the
interest rate applicable on such day by 360, in the cases of CD Rate Notes,
Commercial Paper Rate Notes, Federal Funds Rate Notes, Prime Rate Notes and
LIBOR Notes, or by the actual number of days in the year, in the case of
Treasury Rate Notes or CMT Rate Notes. Except as set forth above, or in the
applicable pricing supplement, the interest rate in effect on each day will be:
o if the day is an Interest Reset Date, the interest rate
determined as of the Interest Determination Date (as defined
below) immediately preceding this Interest Reset Date, or
o if the day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately
preceding the Interest Reset Date (or if none, the Initial
Interest Rate).
ROUNDING
Unless otherwise specified in the applicable pricing supplement, all
interest rates on a Floating Rate Note will be expressed as a percentage
rounded, if necessary, to the nearest one hundred-thousandth of a percent
(.0000001), with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)). All U.S.
dollars amounts related to interest on Floating Rate Notes will be rounded to
the nearest cent or, in the case of notes not denominated in U.S. dollars, the
nearest unit (with one-half cent or unit being rounded upwards).
INTEREST DETERMINATION DATE
Unless otherwise specified in the applicable pricing supplement, the
"Interest Determination Date" pertaining to an Interest Reset Date for CD Rate
Notes, CMT Rate Notes, Commercial Paper Rate Notes, Prime Rate Notes and Federal
Funds Rate Notes will be the second Business Day preceding the Interest Reset
Date; the Interest Determination Date pertaining to an Interest Reset Date for a
LIBOR Note will be the second London Banking Day preceding the Interest Reset
Date; and the Interest Determination Date pertaining to an Interest Reset Date
for a Treasury Rate Note will be the day of the week in which the Interest Reset
Date falls on which direct obligations of the United States ("Treasury Bills")
of the applicable Index Maturity (as specified on the face of such Treasury Rate
Note) are auctioned. Treasury Bills are normally sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that the auction may be held on
the preceding Friday. If, as the result of a legal holiday, an auction is held
on the preceding Friday, that Friday will be the Interest Determination Date
pertaining to the Interest Reset Date occurring in the next succeeding week. If
an auction falls on a day that is an Interest Reset Date, the Interest Reset
Date will be the next following Business Day. Unless otherwise specified in the
applicable pricing supplement, the Interest Determination Date pertaining to a
note having an interest rate determined by reference to two or more Base Rates,
will be the first Business Day at least two Business Days prior to the Interest
Reset Date for the note.
Unless otherwise specified in the applicable pricing supplement, the
"Calculation Date," where applicable, pertaining to an Interest Determination
Date will be the earlier of:
o the tenth calendar day after the Interest Determination Date, or,
if such day is not a Business Day, the next succeeding Business
Day, or
o the Business Day preceding the applicable Interest Payment Date
or the Maturity Date.
The applicable pricing supplement shall specify a calculation agent (the
"Calculation Agent"), which may be GMAC, with respect to any issue of Floating
Rate Notes. Upon your request, the Calculation Agent will provide the interest
rate then in effect and, if determined, the interest rate that will become
effective on the next Interest Reset Date with respect to your Floating Rate
Note. If at any time the Trustee is not the Calculation Agent, we will notify
the Trustee of each determination of the interest rate applicable to any
Floating Rate Note.
BASE RATES ON FLOATING RATE NOTES
The interest rate in effect with respect to a Floating Rate Note from
the Issue Date to the first Interest Reset Date will be the Initial Interest
Rate which is specified in the applicable pricing supplement. The interest rate
for each subsequent Interest Reset Date will be determined by the Calculation
Agent as follows:
CD RATE NOTES
CD Rate Notes will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any and
subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in the CD Rate Notes and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, the "CD
Rate" means, with respect to any Interest Determination Date, the rate on that
date for negotiable certificates of deposit having the Index Maturity designated
in the applicable pricing supplement as published in H.15(519) (as defined
below), under the heading "CDs (secondary market)." If the rate is not published
by 3:00 p.m., New York City time, on the Calculation Date pertaining to the
Interest Determination Date, the CD Rate will be the rate on the Interest
Determination Date for negotiable certificates of deposit of the applicable
Index Maturity specified in the applicable pricing supplement as published in
H.15 Daily Update (as defined below) or such other recognized electronic source
displaying the rate, under the heading "CD (secondary market)."
If the rate is not yet published in either H.15(519), H.15 Daily Update
or another recognized electronic source by 3:00 p.m., New York City time, on the
Calculation Date pertaining to the Interest Determination Date, the CD Rate on
the Interest Determination Date will be calculated by the Calculation Agent. The
CD Rate will be the arithmetic mean of the secondary market offered rates as of
10:00 a.m., New York City time, on such Interest Determination Date, of three
leading non-bank dealers in negotiable U.S. dollar certificates of deposit in
The City of New York selected by the Calculation Agent, after consultation with
us, for negotiable certificates of deposit of major United States money center
banks (in the market for negotiable certificates of deposit) with a remaining
maturity closest to the applicable Index Maturity in a denomination of
U.S.$5,000,000. If the dealers selected by the Calculation Agent are not quoting
the secondary market offered rates, the rate of interest in effect for the
applicable period will be the rate of interest in effect on such Interest
Determination Date.
"H.15 (519)" means the weekly statistical release designated as such, or
any successor publication published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519) available
through the World Wide Web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/release/h15/update, or any successor site or
publication.
You should be aware that CD Rate Notes, like other notes, are not
deposit obligations of a bank and are not insured by the Federal Deposit
Insurance Corporation.
COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread and/or
the Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, if any) specified in the Commercial Paper Rate Notes and
in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, the
"Commercial Paper Rate" means, with respect to any Interest Determination Date,
the Money Market Yield (as defined below) on the date of the rate for commercial
paper having the Index Maturity specified in the applicable pricing supplement,
as published in H.l5(519) under the heading "Commercial Paper-Nonfinancial." In
the event that the rate is not published prior to 3:00 p.m., New York City time,
on the Calculation Date pertaining to the Interest Determination Date, then the
Commercial Paper Rate will be the Money Market Yield on the Interest
Determination Date of the rate for commercial paper of the applicable Index
Maturity as published in H.15 Daily Update, or another recognized electronic
source displaying the rate, under the heading "Commercial Paper-Nonfinancial."
If the rate is not yet published in either H.15(519), H.15 Daily Update
or another recognized electronic source by 3:00 p.m., New York City time, on the
Calculation Date pertaining to the Interest Determination Date, then the
Commercial Paper Rate will be the Money Market Yield of the arithmetic mean of
the offered rates as of 11:00 a.m., New York City time, on the Interest
Determination Date, of three leading dealers of commercial paper in The City of
New York selected by the Calculation Agent, after consultation with us, for
commercial paper of the applicable Index Maturity, placed for industrial issuers
whose bond rating is "AA," or the equivalent, from a nationally recognized
statistical rating agency. If the dealers selected by the Calculation Agent are
not quoting the offered rates, the rate of interest for the applicable period
will be the rate of interest in effect on the Interest Determination Date.
"Money Market Yield" will be a yield calculated using the following
formula:
Money Market Yield = D X 360 x 100
-------------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Interest Period for which interest is being calculated.
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread and/or the
Spread Multiplier, if any, and subject to the Minimum Interest Rate and the
Maximum Interest Rate, if any) specified in the Federal Funds Rate Notes and in
the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, the
"Federal Funds Rate" means, with respect to any Interest Determination Date, the
rate on that date for Federal Funds as published in H.15(519) under the heading
"Federal Funds (Effective)", as displayed on Bridge Telerate, Inc. (or any
successor service) on page 120 (or any replacement page) ("Telerate Page 120").
If the rate does not appear on Telerate Page 120 or is not published by 3:00
p.m., New York City time, on the Calculation Date pertaining to the Interest
Determination Date, the Federal Funds Rate will be the rate on the Interest
Determination Date as published in H.15 Daily Update, or another recognized
electronic source displaying the rate, under the heading "Federal Funds
(Effective)."
If the rate is not yet published in either H.15(519), H.15 Daily Update
or another recognized electronic source by 3:00 p.m., New York City time, on the
Calculation Date pertaining to the Interest Determination Date, then the Federal
Funds Rate for the Interest Determination Date will be calculated by the
Calculation Agent. The Federal Funds Rate will be the arithmetic mean of the
rates for the last transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in The City of New York selected
by the Calculation Agent, after consultation with us, as of 9:00 a.m., New York
City time, on the Interest Determination Date. If the brokers selected by the
Calculation Agent are not quoting these rates, the rate of interest in effect
for the applicable period will be the rate of interest in effect on the Interest
Determination Date.
LIBOR NOTES
LIBOR Notes will bear interest at the interest rate (calculated with
reference to LIBOR and the Spread and/or the Spread Multiplier, if any, and
subject to the Minimum Interest Rate and the Maximum Interest Rate, if any)
specified in the LIBOR Notes and in the applicable pricing supplement.
Unless otherwise specified in the applicable pricing supplement, "LIBOR"
means the rate determined by the Calculation Agent in accordance with the
following provisions:
o With respect to an Interest Determination Date relating to a
LIBOR Note or any Floating Rate Note for which the interest rate
is determined with reference to LIBOR, LIBOR will be either (a)
if "LIBOR Reuters" is specified in the applicable pricing
supplement, the arithmetic mean of the offered rates (unless the
specified Designated LIBOR Page provides only for a single rate,
in which case a single rate shall be used) for deposits in the
Index Currency having the Index Maturity designated in the
applicable pricing supplement, commencing on the second London
Banking Day immediately following that Interest Determination
Date, that appear on the Designated LIBOR Page specified in the
applicable pricing supplement as of 11:00 a.m. London time, on
that Interest Determination Date, if at least two offered rates
appear (unless only a single rate is required) on the Designated
LIBOR Page, or (b) if "LIBOR Telerate" is specified in the
applicable pricing supplement, the rate for deposits in the Index
Currency having the Index Maturity designated in the applicable
pricing supplement commencing on the second London Banking Day
immediately following that Interest Determination Date that
appears on the Designated LIBOR Page specified in the applicable
pricing supplement as of 11:00 a.m. London time, on that Interest
Determination Date. If fewer than two offered rates appear, or no
rate appears, LIBOR will be determined as if the parties had
specified the rate described in the immediately following clause.
o With respect to an Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, on the
applicable Designated LIBOR Page as specified in the immediately
preceding clause, the Calculation Agent will request the
principal London offices of each of four major reference banks in
the London interbank market, as selected by the Calculation
Agent, after consultation with us, to provide the Calculation
Agent with its offered quotation for deposits in the Index
Currency for the period of the Index Maturity designated in the
applicable pricing supplement, commencing on the second London
Banking Day immediately following the Interest Determination
Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on the Interest
Determination Date and in a principal amount that is
representative for a single transaction in the Index Currency in
the market at such time. If at least two quotations are provided,
LIBOR determined on such Interest Determination Date will be the
arithmetic mean of those quotations. If fewer than two quotations
are provided, LIBOR determined on the Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately
11:00 a.m., in the applicable Principal Financial Center, on the
Interest Determination Date by three major banks in the Principal
Financial Center selected by the Calculation Agent, after
consultation with us, for loans in the Index Currency to leading
European banks, having the Index Maturity designated in the
applicable pricing supplement, commencing on the second London
Banking Day immediately following the Interest Determination
Date, and in a principal amount that is representative for a
single transaction in the Index Currency in the market at such
time. If the banks selected by the Calculation Agent are not
quoting the necessary rates, LIBOR determined on the Interest
Determination Date will be LIBOR in effect on the Interest
Determination Date.
"Index Currency" means the currency (including composite currencies)
specified in the applicable pricing supplement as the currency for which LIBOR
shall be calculated. If no currency is specified in the applicable pricing
supplement, the Index Currency shall be U.S. dollars.
"Designated LIBOR Page" means either:
o if "LIBOR Reuters" is designated in the applicable pricing
supplement, the display on the Reuters Monitor Money Rates
Service (or any successor service) for displaying the London
interbank rates of major banks for the applicable Index Currency,
or
o if "LIBOR Telerate" is designated in the applicable pricing
supplement, the display on Bridge Telerate, Inc. (or any
successor service) for displaying the London interbank rates of
major banks for the applicable Index Currency.
If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable
pricing supplement, LIBOR for the applicable Index Currency will be determined
as if LIBOR Telerate (and, if the U.S. dollar is the Index Currency, page 3750)
had been specified.
PRIME RATE NOTES
Prime Rate Notes will bear interest at the rates, calculated with
reference to the Prime Rate and the Spread and/or Spread Multiplier, if any,
specified in the applicable Prime Rate Notes and any applicable pricing
supplement.
"Prime Rate" means:
o the rate on the applicable Interest Determination Date as published in
H.15(519) under the heading "Bank Prime Loan", or
o if the rate referred to in the first clause is not so published by
3:00 P.M., New York City time, on the related calculation date, the
rate on the applicable Interest Determination Date published in H.15
Daily Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate under the caption "Bank
Prime Loan", or
o if the rate referred to in the second clause is not so published by
3:00 P.M., New York City time, on the related calculation date, the
rate calculated by the calculation agent as the arithmetic mean of the
rates of interest publicly announced by at least four banks that
appear on the Reuters Screen US PRIME 1 Page as the particular bank's
prime rate or base lending rate as of 11:00 A.M., New York City time,
on the applicable Interest Determination Date, or
o if fewer than four rates described in the third clause by 3:00 P.M.,
New York City time, on the related calculation date as shown on
Reuters Screen US PRIME 1, the rate on the applicable Interest
Determination Date calculated by the calculation agent as the
arithmetic mean of the prime rates or base lending rates quoted on the
basis of the actual number of days in the year divided by a 360-day
year as of the close of business on the applicable Interest
Determination Date by three major banks, which may include affiliates
of the agent, in The City of New York selected by the calculation
agent, or
o if the banks selected by the calculation agent are not quoting as
mentioned in the fourth clause, the rate in effect on the applicable
Interest Determination Date.
"Reuters Screen US PRIME 1 Page" means the display on the Reuter Monitor Money
Rates Service or any successor service on the "US PRIME 1" Page or other page as
may replace the US PRIME 1 Page on such service for the purpose of displaying
prime rates or base lending rates of major United States banks.
TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread and/or the Spread Multiplier,
if any, and subject to the Minimum Interest Rate and the Maximum Interest Rate,
if any) specified in the Treasury Rate Notes and in the applicable pricing
supplement.
Unless otherwise specified in the applicable pricing supplement, the
"Treasury Rate" means, with respect to any Interest Determination Date, the rate
for the auction held on the Interest Determination Date of direct obligations of
the United States ("Treasury Bills") having the Index Maturity designated in the
applicable pricing supplement, under the heading "Investment Rate" on the
display on Bridge Telerate, Inc. (or any successor service) on Page 56 (or any
replacement page) ("Telerate Page 56") or page 57 (or any replacement page)
("Telerate Page 57"). If the rate is not published by 3:00 p.m., New York City
time on the Calculation Date pertaining to the Interest Determination Date, the
rate will be the Bond Equivalent Yield (as defined below) of the rate for
Treasury Bills as published in H.15 Daily Update, or another recognized
electronic source displaying the rate, under the caption "U.S. Government
Securities/Treasury Bills/Auction High". If the rate is not published in H.15
Daily Update or another electronic source by 3:00 p.m., New York City time, on
the related Calculation Date, the rate will be the Bond Equivalent Yield of the
auction rate of the Treasury Bills as announced by the United States Department
of the Treasury.
In the event that the results of the auction of Treasury Bills having
the applicable Index Maturity designated in the applicable pricing supplement
are not announced by 3:00 p.m., New York City time, on the Calculation Date or
if no auction is held on the Interest Determination Date, then the Treasury Rate
will be the Bond Equivalent Yield of the rate on the Treasury Rate Interest
Determination Date of Treasury Bills having the Index Maturity specified in the
applicable pricing supplement as published in H.15(519) under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market". If the rate is not yet
published in H.15(519)by 3:00 p.m., New York City time, on the related
Calculation Date, the rate will be the rate on the Treasury Rate Interest
Determination Date of the Treasury Bills as published in H.15 Daily Update, or
another recognized electronics source displaying the rate, under the caption
"U.S. Government Securities/Treasury Bills/Secondary Market." If the rate is not
yet published in H.15(519) H.15 Daily Update or another recognized electronic
source, then the Treasury Rate will be calculated by the Calculation Agent and
will be the Bond Equivalent Yield of the arithmetic mean of the secondary market
bid rates, as of approximately 3:30 p.m., New York City time, on the Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent, after consultation with us, for the
issue of Treasury Bills with a remaining maturity closest to the Index Maturity
designated in the applicable pricing supplement. If the dealers selected by the
Calculation Agent are not quoting bid rates, the interest rate for the
applicable period will be the interest rate in effect on such Interest
Determination Date.
"Bond Equivalent Yield" means a yield (expressed as a percentage)
calculated using the following formula:
Bond Equivalent Yield = D X N x 100
-----------------
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the applicable Interest Reset Period.
CMT RATE NOTES
Unless otherwise specified in the applicable pricing supplement, "CMT
Rate" means, with respect to any Interest Determination Date relating to a
Floating Rate Note for which the interest rate is determined with reference to
the CMT Rate (a "CMT Rate Interest Determination Date"), the rate displayed on
the Designated CMT Telerate Page under the caption "...Treasury Constant
Maturities...Federal Reserve Board Release H.15...Mondays Approximately 3:45
p.m.," under the column for the Designated CMT Maturity Index for:
o if the Designated CMT Telerate Page is 7051, the rate on the CMT Rate
Interest Determination Date, and
o if the Designated CMT Telerate Page is 7052, the weekly or monthly average
as specified in the applicable pricing supplement for the week, or the
month, ended immediately preceding the week or the month, in which the
related CMT Rate Interest Determination Date occurs.
If this rate is no longer displayed on the relevant page or is not displayed by
3:00 p.m., New York City time, on the related Calculation Date, then the CMT
Rate for the CMT Rate Interest Determination Date will be the treasury constant
maturity rate for the Designated CMT Maturity Index as published in the relevant
H.15(519).
If the rate is no longer published or is not published by 3:00 p.m., New
York City time, on the related Calculation Date, then the CMT Rate on the CMT
Rate Interest Determination Date will be the treasury constant maturity rate for
the Designated CMT Maturity Index, or other United States Treasury Rate for the
Designated CMT Maturity Index, for the CMT Rate Interest Determination Date with
respect to the Interest Reset Date as then published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If the information is not provided by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate on the CMT Rate
Interest Determination Date will be calculated by the Calculation Agent. The
rate will then be a yield to maturity, based on the arithmetic mean of the
secondary market bid rates as of approximately 3:30 p.m., New York City time, on
the CMT Rate Interest Determination Date reported by three leading primary
United States government securities dealers (each, a "Reference Dealer") in The
City of New York (which may include the agent or its affiliates) selected by the
Calculation Agent (from an initial group of five Reference Dealers selected by
the Calculation Agent after consultation with us, and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than the Designated
CMT Maturity Index minus one year.
If the Calculation Agent is unable to obtain three Treasury Note
quotations, the CMT Rate on the CMT Rate Interest Determination Date will be
calculated by the Calculation Agent. The rate will then be a yield to maturity
based on the arithmetic mean of the secondary market bid side prices as of
approximately 3:30 p.m., New York City time, on the CMT Rate Interest
Determination Date of three Reference Dealers in The City of New York (from an
initial group of five Reference Dealers selected by the Calculation Agent, after
consultation with us, and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the designated CMT Maturity
Index and in an amount of at least $100 million. If three or four (and not five)
of the Reference Dealers are quoting these rates, then the CMT Rate will be
based on the arithmetic mean of the bid prices obtained and neither the highest
nor the lowest of the quotes will be eliminated. If fewer than three Reference
Dealers selected by the Calculation Agent are quoting these rates, the CMT Rate
determined as of the CMT Rate Interest Determination Date will be the CMT Rate
in effect on the CMT Rate Interest Determination Date. If two Treasury Notes
with an original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index have remaining terms to maturity equally close to
the Designated CMT Maturity Index, the Calculation Agent will obtain quotations
for the Treasury Note with the shorter remaining term to maturity from five
Reference Dealers.
"Designated CMT Telerate Page" means the display on the Bridge Telerate,
Inc. (or any successor service) on the page specified in the applicable pricing
supplement (or any replacement page) for displaying Treasury Constant Maturities
as reported in H.15(519), or if no page is specified in the applicable pricing
supplement, page 7052.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable pricing supplement with respect to which the CMT
Rate will be calculated.
ORIGINAL ISSUE DISCOUNT NOTES
We may issue notes at a price less than the stated redemption price at
maturity of the notes of an amount greater than a DE MINIMIS amount (0.25% of
the stated redemption price at maturity multiplied by the number of complete
years to maturity, or, in the case of a note providing for payments prior to
maturity of amounts other than qualified stated interest, the weighted average
maturity). As a result, these notes will be treated as if they were issued with
original issue discount for United States Federal income tax purposes ("Original
Issue Discount Notes"). Original Issue Discount Notes may currently pay no
interest or interest at a rate which is below market rates at the time of
issuance. See "United States Federal Taxation-Tax Consequences to U.S.
Holders-Original Issue Discount Notes." Additional considerations relating to
Original Issue Discount Notes will be described in the applicable pricing
supplement.
CURRENCY INDEXED NOTES
We may from time to time offer notes where the principal amount payable
at Maturity and/or the rate of interest on the notes is determined by reference
to the rate of exchange between the currency or composite currency in which the
notes ("Currency Indexed Notes") are denominated (the "Denominated Currency")
and the currency or currencies or composite currency or composite currencies
(the "Indexed Currency") specified or determined in the applicable pricing
supplement.
Unless otherwise specified in the applicable pricing supplement:
o if you hold a Currency Indexed Note you will be entitled to
receive a principal amount greater than the face amount of
Currency Indexed Notes specified in the applicable pricing
supplement (the "Face Amount") if, at Maturity, the rate at which
the Denominated Currency can be exchanged for the Indexed
Currency is greater than the rate of the exchange designated as
the Base Exchange Rate, expressed in units of the Indexed
Currency per one unit of the Denominated Currency, in the
applicable pricing supplement (the "Base Exchange Rate"), and
o if you hold a Currency Indexed Note you will be entitled to
receive a principal amount less than the Face Amount of those
notes if, at Maturity, the rate at which the Denominated Currency
can be exchanged for the Indexed Currency is less than the Base
Exchange Rate, in each case determined as described below under
"Currency Indexed Notes-Payment of Principal and Interest."
The applicable pricing supplement will set forth information about the
historical value of the applicable Denominated Currency against the applicable
Indexed Currency, any exchange controls applicable to the Denominated Currency
or Indexed Currency and the tax consequences which you may encounter. You should
be aware that historical information is not necessarily indicative of future
performance. See "Risk Factors-Investing in Notes Denominated in a Non-U.S.
Currency Will Expose You to Exchange Controls Risk" and "Risk Factors-Investing
in Indexed Notes Involves Additional Risk."
PAYMENT OF PRINCIPAL AND INTEREST
INTEREST
Unless otherwise specified in the applicable pricing supplement, we will
pay interest in the Denominated Currency based on the Face Amount of the
Currency Indexed Notes at the rate and times and in the manner set forth in this
prospectus and in the applicable pricing supplement.
PRINCIPAL
Unless otherwise specified in the applicable pricing supplement, we will
pay principal of a Currency Indexed Note in the Denominated Currency at
Maturity. The amount of principal will equal the Face Amount of the Currency
Indexed Note, plus or minus an amount of the Denominated Currency determined by
the Exchange Rate Agent specified in the applicable pricing supplement, which
may be GMAC, by reference to the difference between the Base Exchange Rate and
the rate at which the Denominated Currency can be exchanged for the Indexed
Currency as determined on the second Exchange Rate day (the "Determination
Date") prior to Maturity of the Currency Indexed Note by the Exchange Rate
Agent. The rate of exchange will be based upon the arithmetic mean of the open
market spot offer quotations for the Indexed Currency (spot bid quotations for
the Denominated Currency) obtained by the Exchange Rate Agent from the Reference
Dealers (as defined below) in The City of New York at 11:00 a.m., New York City
time, on the Determination Date, for an amount of Indexed Currency equal to the
aggregate Face Amount of the Currency Indexed Note multiplied by the Base
Exchange Rate, with settlement at Maturity to be in the Denominated Currency.
The "Spot Rate" is the rate of exchange as determined and expressed in
units of the Indexed Currency per one unit of the Denominated Currency. If
quotations from the Reference Dealers are not available on the Determination
Date due to circumstances beyond our control or the control of the Exchange Rate
Agent, the Spot Rate will be determined based on the most recently available
quotations from the Reference Dealers.
As used in this prospectus, the term "Reference Dealers" shall mean the
three banks or firms specified in the applicable pricing supplement or, if any
of them shall be unwilling or unable to provide the requested quotations, other
major money center bank or banks in The City of New York selected by the
Exchange Rate Agent, in consultation with us, to act as Reference Dealer or
Dealers. In the absence of manifest error, the determination by the Exchange
Rate Agent of the Spot Rate and the principal amount of Currency Indexed Notes
payable at Maturity will be final and binding on us and on you if you hold
Currency Indexed Notes.
See "Description of Notes-Payment Currency" for a discussion of the
procedures followed by the Exchange Rate Agent if the Denominated Currency of a
Currency Indexed Note is unavailable for payment because of the imposition of
exchange controls or other circumstances beyond our control or the Denominated
Currency is no longer used as discussed in that section.
The applicable pricing supplement will specify the formula to be used by
the Exchange Rate Agent to determine the principal amount of a Currency Indexed
Note payable at Maturity.
OTHER INDEXED NOTES AND TERMS APPLICABLE TO ALL INDEXED NOTES
We may issue notes as indexed notes, other than Currency Indexed Notes,
and the principal amount payable at Maturity and/or the interest on these notes,
or both, may be determined by reference to the price of one or more specified
securities or commodities, to one or more securities or commodities exchange
indices or other indices or by other methods or formulae ("Indexed Notes"). If
you hold an Indexed Note you may receive a principal amount at Maturity that is
greater than or less than the face amount of the notes depending upon the
fluctuation of the relative value, rate or price of the specified index. The
pricing supplement relating to the Indexed Note will describe the method for
determining the amount of interest and principal payable at the Maturity Date,
tax consequences of the purchase, ownership or disposition which you may
encounter if you hold the notes, risks associated with an investment in the
notes and other information relating to the notes. See "Risk Factors-Investing
in Indexed Notes Involves Additional Risk."
YOU SHOULD CONSULT WITH YOUR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE
RISKS ENTAILED BY AN INVESTMENT IN CURRENCY INDEXED NOTES OR OTHER INDEXED
NOTES. THIS INVESTMENT ENTAILS SIGNIFICANT RISKS THAT ARE NOT ASSOCIATED WITH A
SIMILAR INVESTMENT IN A SECURITY OF WHICH THE PRINCIPAL AMOUNT PAYABLE AT
MATURITY IS NOT DETERMINED BY CURRENCY EXCHANGE RATES OR SECURITIES OR
COMMODITIES EXCHANGE INDICES OR OTHER INDICES. THIS INVESTMENT IS NOT
APPROPRIATE FOR YOU IF YOU ARE UNSOPHISTICATED WITH RESPECT TO THESE
TRANSACTIONS.
Unless otherwise specified in the applicable pricing supplement, (a) to
determine if the requisite holders have made a demand or given a notice or
waiver or taken any other action, the outstanding principal amount of Indexed
Notes, including Currency Indexed Notes, will be the face amount of the notes,
and (b) in the event of an acceleration of the Maturity Date of an Indexed Note,
the principal amount payable to the holder of the note upon acceleration will be
the same principal amount as would be paid at Maturity, if the date of
acceleration were the Maturity Date.
SUBSEQUENT INTEREST PERIODS
The pricing supplement relating to each note will indicate whether we
have, in the case of a Fixed Rate Note, the option to reset the interest rate,
or in the case of a Floating Rate Note, to reset the Spread and/or Spread
Multiplier, and, if so, the date or dates on which we may reset the interest
rate or the Spread and/or Spread Multiplier (each an "Optional Reset Date"). If
we have this option, the following procedures will apply, unless modified in the
applicable pricing supplement.
We may exercise this option by notifying the Trustee 50 to 60 days prior
to an Optional Reset Date. Not later than 40 days prior to the Optional Reset
Date, the Trustee will mail to the holder of the note a notice (the "Reset
Notice") setting forth:
o our election to reset the interest rate, in the case of a Fixed
Rate Note, or the Spread and/or Spread Multiplier, in the case of
a Floating Rate Note,
o the new interest rate or new Spread and/or Spread Multiplier, and
o the provisions, if any, for redemption or repayment during the
period from the Optional Reset Date to the next Optional Reset
Date or, if there is no next Optional Reset Date, to the Maturity
Date of the note (each period being a "Subsequent Interest
Period"), including the date or dates on which or the period or
periods during which and the price or prices at which redemption
may occur during the Subsequent Interest Period.
When the Trustee transmits a Reset Notice to you, the new interest rate or new
Spread and/or Spread Multiplier will take effect automatically, and, except as
modified by the Reset Notice and as described in the next paragraph, the note
will have the same terms as prior to the transmittal of the Reset Notice.
Notwithstanding the foregoing, not later than 20 days prior to an
Optional Reset Date for a note, we may, at our option, revoke the new interest
rate, or the Spread and/or Spread Multiplier provided for in the Reset Notice
and establish a higher interest rate or a Spread and/or Spread Multiplier for
the Subsequent Interest Period commencing on such Optional Reset Date, by
causing the Trustee to transmit a notice of the higher interest rate or higher
Spread and/or Spread Multiplier to you. This notice will be irrevocable. The
notes for which the interest rate or Spread and/or Spread Multiplier is reset on
an Optional Reset Date and which you have not tendered for repayment (or have
validly revoked any tender) pursuant to the next succeeding paragraph will bear
the higher interest rate or higher Spread and/or Spread Multiplier for the
Subsequent Interest Period.
If we elect to reset the interest rate or the Spread and/or Spread
Multiplier of a note, you will have the option to elect that we repay your note
on any Optional Reset Date at a price equal to the aggregate principal amount of
the note outstanding on the Optional Reset Date plus any accrued interest. In
order for a note to be repaid on an Optional Reset Date, you must follow the
procedures set forth below under "Redemption and Repayment" for optional
repayment, except that the period for delivery of the note or notification to
the Trustee will be between 25 and 35 days prior to the Optional Reset Date and
except that if you have tendered a note for repayment pursuant to a Reset
Notice, you may, by written notice to the Trustee, revoke your tender for
repayment until the close of business on the tenth day prior to the Optional
Reset Date.
EXTENSION OF MATURITY
The pricing supplement relating to each note (other than an Amortizing
Note) will indicate if we have the option to extend the maturity of the note for
one or more periods of one or more years (each an "Extension Period") up to the
date (the "Final Maturity Date") set forth in the applicable pricing supplement.
If we have this option with respect to any note (other than an Amortizing Note),
the following procedures will apply, unless modified in the applicable pricing
supplement, which will contain complete details of our option to extend the
maturity of a note (other than an Amortizing Note).
We may exercise our option by notifying the Trustee from 45 to 60 days
prior to the Maturity Date originally in effect (the "Original Maturity Date")
or, if the Maturity Date of the note has already been extended, prior to the
Maturity Date then in effect (an "Extended Maturity Date"). No later than 40
days prior to the Original Maturity Date or an Extended Maturity Date (each, a
"Maturity Date"), the Trustee will mail you a notice (the "Extension Notice")
relating to the Extension Period, setting forth:
o our election to extend the Original Maturity Date,
o the new Maturity Date,
o in the case of a Fixed Rate Note, the interest rate applicable to
the Extension Period or, in the case of a Floating Rate Note, the
Spread and/or Spread Multiplier applicable to the Extension
Period, and
o the provisions, if any, for redemption during the Extension
Period, including the date or dates on which or the period or
periods during which and the price or prices at which redemption
may occur during the Extension Period.
When the Trustee mails you an Extension Notice, the Original Maturity Date will
be extended automatically; and except as modified by the Extension Notice and as
described in the next paragraph, your note will have the same terms as prior to
the mailing of the Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the
Original Maturity Date for a note, at our option, we may, revoke the interest
rate or the Spread and/or Spread Multiplier provided for in the Extension Notice
and establish a higher interest rate or Spread and/or Spread Multiplier for the
Extension Period, by mailing or causing the Trustee to transmit to you, notice
of the higher interest rate or higher Spread and/or Spread Multiplier. This
notice will be irrevocable. All notes whose Maturity Dates are extended and
which you have not tendered for repayment (or have validly revoked any tender),
pursuant to the next paragraph, will bear a higher interest rate or higher
Spread and/or Spread Multiplier for the Extension Period.
If we elect to extend the Maturity Date of a note, you may elect that we
repay your note on the Original Maturity Date at a price equal to the principal
amount plus any accrued interest. In order for a note to be repaid on the
Original Maturity Date, you must follow the procedures under "Redemption and
Repayment" for optional repayment, except that the period for delivery of the
note or notification to the Trustee will be between 30 and 35 days prior to the
Original Maturity Date and except that if you have tendered a note for repayment
pursuant to an Extension Notice you may, by written notice to the Trustee,
revoke your tender for repayment until the close of business on the tenth day
prior to the Original Maturity Date.
REDEMPTION AND REPAYMENT
Unless otherwise provided in the applicable pricing supplement, we may
not redeem the notes prior to the Maturity Date and you may not request
repayment of the notes prior to the Maturity Date. Unless otherwise specified in
the applicable pricing supplement, the notes, except for Amortizing Notes, will
not be subject to any sinking fund.
If applicable, the pricing supplement relating to each note will
indicate that:
(a) unless otherwise specified in the pricing supplement, the note will
be redeemable at our option or repayable at your option at a price equal to 100%
of the principal amount of the note, together with accrued interest to the date
of redemption or repayment, unless the note was issued with original issue
discount, in which case the pricing supplement will specify the amount payable
upon redemption or repayment, and
(b) the note will be redeemable at our option or repayable at your
option on a date or dates specified prior to its Maturity Date.
We may redeem any of the notes that are redeemable and remain
outstanding either in whole or from time to time in part, upon 30 to 60 days
notice. Unless otherwise specified in the applicable pricing supplement, if less
than all of the notes with like tenor and terms are to be redeemed, the Trustee
will select the notes to be redeemed by the method the Trustee deems fair and
appropriate.
Unless otherwise specified in the applicable pricing supplement, in
order for a note to be repaid at your option, we must receive the Global Note
from the depositary with the form entitled "Option to Elect Repayment" duly
completed between 30 and 45 days prior to the repayment date. Exercise of your
repayment option is irrevocable, except as otherwise provided under "Description
of Notes-Subsequent Interest Periods" and "Description of Notes-Extension of
Maturity."
With respect to the notes, the depositary's nominee is the holder of the
notes and therefore will be the only entity that can exercise a right to
repayment. See "Description of Notes-Book-Entry; Delivery and Form." In order to
ensure that the depositary's nominee will timely exercise a right to repayment
with respect to your beneficial interest in a note, you, as the beneficial owner
of the interest, must instruct the broker or other direct or indirect
participant through which you hold a beneficial interest in the note to notify
the depositary of your desire to exercise a right to repayment. Different firms
have different cut-off times for accepting instructions from their customers,
and accordingly, you should consult the broker or other direct or indirect
participant through which you hold an interest in a note in order to ascertain
the cut-off time by which you must give an instruction in order for timely
notice to be delivered to the depositary. Conveyance of notices and other
communications by the depositary to participants, by participants to indirect
participants and by participants and indirect participants to you, as a
beneficial owner of the notes will be governed by agreements among you and them,
subject to any statutory or regulated requirements as may be in effect from time
to time.
If applicable, we will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws or regulations in connection with
any repurchase.
We may at any time purchase notes at any price or prices in the open
market or otherwise. Notes purchased by us may, at our discretion, be held or
resold or surrendered to the Trustee for cancellation.
OTHER/ADDITIONAL PROVISIONS; ADDENDUM
We may modify or supplement any provision of the notes, including the
specification and determination of one or more Interest Rate Bases, the
calculation of the interest rate applicable to a Floating Rate Note, the
Interest Payment Dates, the Maturity Date or any other term relating to the note
as specified under "Other/Additional Provisions" on the face of the note or in
an addendum relating to the note, if so specified on the face of the note. The
provisions will be described in the applicable pricing supplement.
IMPORTANT CURRENCY EXCHANGE INFORMATION
Unless otherwise set forth in the applicable pricing supplement, you are
required to pay for the note in the Specified Currency in immediately available
funds, and we will make payments of principal of, premium, if any, and interest,
if any, on the note in the Specified Currency. Currently, there are limited
facilities in the United States for conversion of U.S. dollars into foreign
currencies or currency units and vice versa, and few banks offer non-U.S. dollar
checking or savings account facilities in the United States. Accordingly, unless
otherwise specified in a pricing supplement or unless alternative arrangements
are made, payments of principal of, premium, if any, and interest, if any, on
notes in a Specified Currency other than U.S. dollars will be made to your bank
account outside the United States. See "Risk Factors-Investing in Notes
Denominated in a Non-U.S. Currency Will Expose You to Exchange Controls Risk"
and "Risk Factors-You May Suffer Losses Related to Judgments Entered in a
Non-U.S. Currency." However, if you request, the agent soliciting the offer to
purchase will use reasonable efforts to arrange for the conversion of U.S.
dollars into the Specified Currency to enable you to pay for the notes. Your
request must be made on or before the third Business Day preceding the date of
delivery of the notes or by another date as determined by the agent. Each
conversion will be made by the relevant agent on the terms and subject to
conditions, limitations and charges as the agent may from time to time establish
in accordance with its regular foreign exchange practice. You will bear all
costs of any exchange.
UNITED STATES FEDERAL TAXATION
GENERAL
The following general summary describes the principal United States Federal
income tax consequences of the ownership and disposition of the notes. This
summary provides general information only. It is directed solely to you, as an
original holder purchasing notes at the "issue price" (as defined below), and
assumes you will hold the notes as capital assets within the meaning of Section
1221 of the Internal Revenue Code of 1986, as amended (the "Code"). It does not
discuss all United States Federal income tax consequences that may be applicable
to you. If you are a bank, insurance company, dealer in securities, a person
holding notes as part of a "straddle," conversion transaction, hedging or other
integrated transaction or a person who has ceased to be a United States citizen
or to be taxed as a resident alien, you may be subject to special rules. In
addition, the United States Federal income tax consequences of a particular note
will depend, in part, on the terms of the note.
We advise you to consult your own tax advisors with regard to the
application of the United States Federal income tax laws to your particular
situation and any tax consequences arising under the laws of any state, local or
foreign tax jurisdiction.
This summary is based on the Code, United States Treasury Regulations
(including proposed and temporary regulations) promulgated under the Code,
rulings, official pronouncements and judicial decisions as of the date of this
prospectus. You should know that the authorities on which this summary is based
are subject to change or differing interpretations, which could apply
retroactively, and could result in United States Federal income tax consequences
for you which are different from those discussed below.
TAX CONSEQUENCES TO U.S. HOLDERS
For purposes of the following discussion, "U.S. holder" means a beneficial
owner of a note that is:
o for United States Federal income tax purposes, a citizen or
resident of the United States;
o a corporation, partnership or other entity created or organized
in or under the laws of the United States or of any of its
political subdivisions;
o an estate the income of which is subject to United States Federal
income taxation regardless of its source;
o a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one
or more United States persons have the authority to control all
substantial decisions of the trust; or
o any other holder whose income is effectively connected with its
conduct of a United States trade or business.
PAYMENTS OF INTEREST
Interest on a note (whether denominated in U.S. dollars or in other than
U.S. dollars) that is not an Original Issue Discount Note will generally be
taxable to a U.S. holder as ordinary interest income at the time it is accrued
or is received in accordance with the U.S. holder's method of accounting for tax
purposes.
All payments of interest on a note that matures one year or less from its
date of issuance will be included in the stated redemption price at the maturity
of the note and will be taxed in the manner described below under "Original
Issue Discount Notes".
Special rules govern the treatment of interest paid with respect to
Original Issue Discount Notes, including certain Floating Rate Notes, Foreign
Currency Notes, Currency Indexed Notes and other Indexed Notes, as described
under "Original Issue Discount Notes", "Foreign Currency Notes" and "Indexed
Notes, Currency Indexed Notes and Other Notes Subject to Contingencies" below.
ORIGINAL ISSUE DISCOUNT NOTES
The following summary is generally based upon the Treasury Regulations
concerning the treatment of debt instruments issued with original issue discount
(the "OID Regulations"). Under the OID Regulations, a note that is issued for an
amount less than its stated redemption price at maturity will generally be
considered to have been issued at an original issue discount. The "issue price"
of a note is equal to the first price to the public, not including bond houses,
brokers or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers, at which a substantial amount of
the notes is sold for money. The stated redemption price at maturity of a note
is generally equal to the sum of all payments to be made on the note other than
"qualified stated interest" payments. With respect to a note, "qualified stated
interest" is stated interest unconditionally payable as a series of payments in
cash or property, other than our debt instruments, at least annually during the
entire term of the note and equal to the outstanding principal balance of the
note multiplied by a single fixed rate of interest.
In addition, stated interest on Floating Rate Notes providing for one or
more qualified floating rates of interest, a single fixed rate and one or more
qualified floating rates, a single objective rate, or a single fixed rate and a
single objective rate that is a qualified inverse floating rate, will generally
constitute qualified stated interest if the stated interest is unconditionally
payable at least annually during the term of the note at a rate that is
considered to be a single qualified floating rate or a single objective rate as
described below.
Subject to certain exceptions, a variable rate of interest is a "qualified
floating rate" if variations in the value of the rate can reasonably be expected
to measure contemporaneous fluctuations in the cost of newly borrowed funds in
the currency in which the note is denominated. A variable rate will be
considered a qualified floating rate if the variable rate equals:
o the product of an otherwise qualified floating rate and a fixed
multiple (i.e., a Spread Multiplier) that is greater than .65 but
not more than 1.35, or
o an otherwise qualified floating rate (or the product described
above plus or minus a fixed rate (i.e., a Spread).
If the variable rate equals the product of an otherwise qualified floating rate
and a single fixed multiplier greater than 1.35, however, the rate generally
constitutes an "objective rate," described more fully below.
A variable rate may not be considered a qualified floating rate if the
variable rate is subject to a Maximum Interest Rate, Minimum Interest Rate or
similar restriction that is reasonably expected as of the issue date to cause
the yield on the note to be significantly more or less than the expected yield
determined without the restriction, unless the restriction is fixed throughout
the term of the note.
Subject to certain exceptions, an "objective rate" is defined as a rate,
other than a qualified floating rate that is determined using a single fixed
formula and that is based on objective financial or economic information. An
objective rate does not include a rate based on information that is within our
control (or the control of a related party) or that is unique to our
circumstances (or a related party), such as dividends, profits, or the value of
our stock. In addition, a variable rate of interest on a note will not be
considered an objective rate if it is reasonably expected that the average value
of the rate during the first half of the note's term will be either
significantly less than or significantly greater than the average value of the
rate during the final half of the note's term.
If interest on a note is stated at a fixed rate for an initial period of
one year or less (e.g., an Initial Interest Rate) followed by a variable rate
that is either a qualified floating rate or an objective rate for a subsequent
period, and the value of the variable rate on the issue date is intended to
approximate the fixed rate, the fixed rate and the variable rate together
constitute a single qualified floating rate or objective rate. If a Floating
Rate Note provides for two or more qualified floating rates that can reasonably
be expected to have approximately the same values throughout the term of the
note, the qualified floating rates together constitute a single qualified
floating rate. Two or more rates will be conclusively presumed to meet the
requirements of the preceding sentences if the values of the applicable rates on
the issue date are within 1/4 of 1 percent of each other. In addition, in order
to be treated as qualified stated interest (rather than contingent payments, as
discussed below), the qualified floating rate or objective rate in effect at a
given time for a note must be set at a value of that rate on any day that is no
earlier than three months prior to the first day on which that value is in
effect and no later than one year following that first day.
Special tax considerations (including possible original issue discount)
may arise with respect to Floating Rate Notes providing for:
o one Base Rate followed by one or more Base Rates,
o a single fixed rate followed by a qualified floating rate, or
o a Spread Multiplier.
Prospective U.S. holders of Floating Rate Notes with any of these features
should carefully examine the applicable pricing supplement and should consult a
tax advisor with respect to these features since the tax consequences will
depend, in part, on the terms of the note.
Notwithstanding the general definition of original issue discount above,
a note will not be considered to have been issued with an original issue
discount if the amount of such original issue discount is less than a DE MINIMIS
amount equal to 0.25% of the stated redemption price at maturity multiplied by
the number of complete years to maturity (or, in the case of a note providing
for payments prior to maturity of amounts other than qualified stated interest,
the weighted average maturity). Holders of notes with a DE MINIMIS amount of
original issue discount will include the original issue discount in income, as
capital gain, on a pro rata basis as principal payments are made on the note.
A U.S. holder of an Original Issue Discount Note (other than certain U.S.
holders of Short-Term Original Issue Discount Notes, as defined below) will be
required to include qualified stated interest in income at the time it is
received or accrued in accordance with such U.S. holder's method of accounting.
A U.S. holder of an Original Issue Discount Note that matures more than
one year from its date of issuance will be required to include original issue
discount in income as it accrues, in accordance with a constant yield method
based on a compounding of interest, before the receipt of cash payments
attributable to such income. The amount of original issue discount includible in
income is equal to the sum of the "daily portions" of the original issue
discount for each day during the taxable year on which the U.S. holder held such
note. The "daily portion" is the original issue discount for the "accrual
period" that is allocated ratably to each day in the accrual period. Generally,
the original issue discount for an accrual period is equal to the excess, if
any, of the product of the "adjusted issue price" of an Original Issue Discount
Note at the beginning of such accrual period and its "yield to maturity" over
the amount of any qualified stated interest allocable to the accrual period. The
"accrual period" is the interval (not to exceed one year) that ends no later
than the date of any scheduled payment of principal or interest.
We will specify the accrual period we intend to use in the applicable
pricing supplement but a U.S. holder is not required to use the same accrual
period for purposes of determining the amount of original issue discount
includible in its income for a taxable year. The adjusted issue price of a note
at the beginning of an accrual period is equal to the issue price of the note,
increased by the aggregate amount of original issue discount with respect to the
note that accrued in prior accrual periods and was previously includible in the
income of a U.S. holder, and reduced by the amount of any payment on the note in
prior accrual periods of amounts other than a payment of qualified stated
interest. Under these rules, U.S. holders generally will have to include in
income increasingly greater amounts of original issue discount in successive
accrual periods.
Under the OID Regulations, a U.S. holder may make an election (the
"Constant Yield Election") to include in gross income all interest that accrues
on a note in accordance with a constant yield method based on the compounding of
interest. Special rules apply to such elections and U.S. holders considering
such an election should consult their own tax advisor.
The OID Regulations contain aggregation rules stating that, in certain
circumstances, if more than one type of note is issued as part of the same
issuance of securities to a single holder, some or all of such notes may be
treated together as a single debt instrument with a single issue price, maturity
date, yield to maturity and stated redemption price at maturity for purposes of
calculating and accruing any original issue discount. Unless otherwise provided
in the applicable pricing supplement, we do not expect to treat any of the notes
as being subject to the aggregation rules for purposes of computing original
issue discount.
In general, a cash method U.S. holder of an Original Issue Discount Note
that matures one year or less from its date of issuance (a "Short-Term Original
Issue Discount Note") is not required to accrue original issue discount on such
note for United States Federal income tax purposes unless it elects to do so.
U.S. holders who make this election, U.S. holders who report income for United
States Federal income tax purposes on the accrual method and other U.S. holders,
including banks and dealers in securities, are required to include original
issue discount (including stated interest, if any) in income on such Short-Term
Original Issue Discount Notes as it accrues on a straight-line basis, unless an
election is made to use the constant yield method (based on a daily
compounding). In the case of a U.S. holder who is not required and does not
elect to include original issue discount in income currently, any gain realized
on the sale, exchange or redemption of the Short-Term Original Issue Discount
Note will be ordinary income to the extent of the original issue discount
accrued on a straight-line basis (or, if elected, according to a constant yield
method based on daily compounding), reduced by any interest received through the
date of sale, exchange or redemption. In addition, the U.S. holder will be
required to defer deductions for any interest paid on indebtedness incurred to
purchase or carry Short-Term Original Issue Discount Notes in an amount not
exceeding the deferred interest income, until such deferred interest income is
recognized.
We may redeem notes at our option prior to the maturity date, or we may
repay notes at the option of the U.S. holder prior to the maturity date. Notes
containing these features may be subject to rules that differ from the general
rules discussed above. U.S. holders intending to purchase notes with any of
these features should carefully examine the applicable pricing supplement.
BOND PREMIUM
If a U.S. holder purchases a note for an amount that is greater than the
stated redemption price at maturity, such holder will be considered to have
purchased such note with "amortizable bond premium" equal in amount to such
excess, and generally will not be required to include any original issue
discount in income. A U.S. holder may elect (in accordance with applicable Code
provisions) to amortize such premium over the remaining term of the Note, based
on the U.S. holder's yield to maturity with respect to the note. A U.S. holder
may generally use the amortizable bond premium allocable to an accrual period to
offset qualified stated interest required to be included in the U.S. holder's
income with respect to the note in that accrual period. If the amortizable bond
premium allocable to an accrual period exceeds the amount of qualified stated
interest allocable to such accrual period, such excess would be allowed as a
deduction for such accrual period, but only to the extent of the U.S. holder's
prior interest inclusions on the note. Any excess is generally carried forward
and allocable to the next accrual period. A U.S. holder who elects to amortize
bond premium must reduce its tax basis in the note as described below under
"Sale, Exchange or Redemption of the Notes."
An election to amortize bond premium applies to all taxable debt
obligations held by the U.S. holder at the beginning of the first taxable year
to which the election applies or thereafter acquired by the U.S. holder and may
be revoked only with the consent of the Internal Revenue Service. If a holder
makes a Constant Yield Election for a note with amortizable bond premium, the
election will result in a deemed election to amortize bond premium for all of
the holder's debt instruments with amortizable bond premium and may be revoked
only with the permission of the Internal Revenue Service.
SALE, EXCHANGE OR REDEMPTION OF THE NOTES
Upon the sale, exchange or redemption of a note, a U.S. holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or redemption (excluding any amounts attributable
to interest not previously included in income) and the U.S. holder's adjusted
tax basis in the note. A U.S. holder's adjusted tax basis in a note will
generally be the cost of the note to the U.S. holder, increased by the amount of
any original issue discount previously includible in income by the U.S. holder
with respect to the note and reduced by any principal payments received by the
U.S. holder, any amortizable bond premium used to offset qualified stated
interest and bond premium allowed as a deduction and, in the case of an Original
Issue Discount Note, by the amounts of any other payments that do not constitute
qualified stated interest.
In general, gain or loss realized on the sale, exchange or redemption of
a note that is not an Indexed Note, a Currency Indexed Note or a Floating Rate
Note that provides for contingent payments will be capital gain or loss (except
in the case of a Short-Term Original Issue Discount Note, to the extent of any
original issue discount not previously included in the U.S. holder's taxable
income). Prospective U.S. holders should consult their tax advisors regarding
the treatment of capital gains (which may be taxed at lower rates than ordinary
income for taxpayers who are individuals, trusts or estates) and losses (the
deductibility of which is subject to limitations).
SUBSEQUENT INTEREST PERIODS AND EXTENSIONS OF MATURITY
If so specified in the applicable pricing supplement relating to a note,
we may have the option to reset the interest rate, in the case of a Fixed Rate
Note, or to reset the Spread and/or the Spread Multiplier, in the case of a
Floating Rate Note and/or to extend the Maturity of such Note. See "Description
of Notes-Subsequent Interest Periods" and "Description of Notes-Extension of
Maturity." These types of notes may be subject to special rules for determining
interest income or gain or loss. A description of the United States Federal
income tax consequences to a U.S. holder of these notes will be contained in the
applicable pricing supplement.
FOREIGN CURRENCY NOTES
The United States Federal income tax consequences to a U.S. holder of
the ownership and disposition of notes that are denominated in, or provide for
payments determined by reference to, a currency or currency unit other than the
United States dollar ("Foreign Currency Notes") will be summarized in the
applicable pricing supplement.
INDEXED NOTES, CURRENCY INDEXED NOTES AND OTHER NOTES SUBJECT TO CONTINGENCIES
The United States Federal income tax consequences to a U.S. holder of
the ownership and disposition of Indexed Notes or other notes that provide for
one or more contingent payments will vary depending on the exact terms of the
notes and related factors, and the proper treatment of principal of and interest
on Currency Indexed Notes is uncertain at this time. The notes may be subject to
rules that differ from the general rules discussed above. U.S. holders intending
to purchase these notes should refer to the discussion relating to taxation in
the applicable pricing supplement.
ELIGIBLE NOTES STRIPPED INTO INTEREST AND PRINCIPLE COMPONENTS
The United States Federal income tax consequences to a U.S. holder of
the ownership and disposition of notes that are stripped into their separate
interest components and principal components will be summarized in the
applicable pricing supplement.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal, premium and interest (including original issue
discount) on a note, and to payments of proceeds of the sale or redemption of a
note, to non-corporate U.S. holders. GMAC, its agent, a broker, the relevant
Trustee or any paying agent, will be required to withhold from any payment a tax
equal to 31 percent of such payment if the U.S. holder fails to furnish or
certify its correct taxpayer identification number to the payor in the manner
required, fails to certify that the U.S. holder is not subject to backup
withholding, or otherwise fails to comply with applicable backup withholding
rules. Any amounts withheld under the backup withholding rules from a payment to
a holder may be credited against the holder's United States Federal income tax
and may entitle such holder to a refund, provided that the required information
is furnished to the United States Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR YOUR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE TO YOUR
PARTICULAR SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO YOU OF THE OWNERSHIP AND DISPOSITION OF THE NOTES,
INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS
AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
CERTAIN COVENANTS AS TO LIENS
We have described below the only financial covenant applicable to the
notes. That covenant requires that the notes be equally and ratably secured in
the specified circumstances but does not apply in the event of material changes
in our debt-to-equity ratio.
We will covenant in the notes that so long as any of the notes remain
outstanding, we will not pledge or otherwise subject our property or assets to
any lien unless the notes are secured by such pledge or lien equally and ratably
with any and all other obligations and indebtedness secured thereby so long as
any such other obligations and indebtedness shall be so secured. This covenant
does not apply to:
o the pledge of any assets to secure any financing by GMAC of the
exporting of goods to or between, or the marketing thereof in,
foreign countries (other than Canada), in connection with which
GMAC reserves the right, in accordance with customary and
established banking practice, to deposit, or otherwise subject to
a lien, cash, securities or receivables, for the purpose of
securing banking accommodations or as to the basis for the
issuance of bankers' acceptances or in aid of other similar
borrowing arrangements;
o the pledge of receivables payable in foreign currencies (other
than Canadian dollars) to secure borrowings in foreign countries
(other than Canada);
o any deposit of assets of GMAC with any surety company or clerk of
any court, or in escrow, as collateral in connection with, or in
lieu of, any bond on appeal by GMAC from any judgment or decree
against it, or in connection with other proceedings in actions at
law or in equity by or against GMAC;
o any lien or charge on any property, tangible or intangible, real
or personal, existing at the time of acquisition of such property
(including acquisition through merger or consolidation) or given
to secure the payment of all or any part of the purchase price
thereof or to secure any indebtedness incurred prior to, at the
time of, or within 60 days after, the acquisition thereof for the
purpose of financing all or any part of the purchase price
thereof; and
o any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien,
charge or pledge referred to in the foregoing four clauses of
this paragraph; provided, however, that the amount of any and all
obligations and indebtedness secured thereby shall not exceed the
amount thereof so secured immediately prior to the time of such
extension, renewal or replacement and that such extension,
renewal or replacement shall be limited to all or a part of the
property which secured the charge or lien so extended, renewed or
replaced (plus improvements on such property). (See section 12.01
of the Indenture.)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting us and the Trustee, with
the consent of holders of not less than 66-2/3% in aggregate principal amount of
notes at the time outstanding under the Indenture, to modify the Indenture or
any supplemental indenture or the rights of the holders of the notes provided
that no such modification shall:
o change the fixed maturity of any note, or reduce its principal
amount, or reduce its rate or extend the time of payment of
interest, without the consent of the holder of each affected
note;
o impair the rights of the holders to enforce action for repayment
by us; or
o reduce the percentage of notes of any series outstanding under
the Indenture required for any modification of the Indenture or
waiver of any default under the Indenture, without the consent of
all holders of notes affected by the reduction and then
outstanding under the Indenture (See section 10.02 of the
Indenture).
EVENTS OF DEFAULT
An Event of Default with respect to the notes is defined in the
Indenture as a:
o default in payment of any principal of, or premium, if any, on
the notes;
o default for 30 days in payment of any interest on any of the
notes;
o default for 30 days after notice in performance of any other
covenant in the Indenture; or
o certain events of bankruptcy, insolvency or reorganization. (See
section 6.01 of the Indenture.)
In case an Event of Default occurs and continues with respect to the
notes, the Trustee or the holders of not less than 25% in aggregate principal
amount of the notes then outstanding may declare the principal amount of the
notes due and payable. Any Event of Default with respect to the notes may be
waived by the holders of a majority in aggregate principal amount of the
outstanding notes except in a case of failure to pay principal of or interest on
the notes for which payment had not been made after the appropriate notice. (See
section 6.06 of the Indenture.) We are required to annually file with the
Trustee a certificate as to the absence of certain defaults under the terms of
the Indenture. (See section 11.04 of the Indenture.)
Subject to the provisions of the Indenture relating to the duties of the
Trustee, if an Event of Default occurs and continues, the Trustee is under no
obligation to exercise any rights or powers under the Indenture at the request,
order or direction of any of the noteholders, unless such noteholders have
offered the Trustee reasonable indemnity or security. (See sections 7.01 and
7.02 of the Indenture.)
Subject to provisions for the indemnification of the Trustee and to
other limitations, the holders of a majority in principal amount of the notes
outstanding have the right to direct the time, method and place of any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee. (See section 6.06 of the Indenture.)
CONCERNING THE TRUSTEE
Citibank, N.A. is the Trustee under the Indenture. Citibank, N.A. acts
as depository for funds of, makes loans to, acts as trustee and performs certain
other services for us and certain of our affiliates in the normal course of
business. It is also one of the investment managers of the pension trust funds
established by General Motors Corporation. As trustee of various trusts, it has
purchased securities of GMAC and certain of our affiliates.
CONCERNING THE PAYING AGENTS
We shall maintain one or more Paying Agents for the payment of principal
of, and premium, if any, and interest, if any, on, the notes. (See section 4.02
of the Indenture.) We have initially appointed Citibank, N.A. as our Paying
Agent for the notes.
PLAN OF DISTRIBUTION
Under the terms of Selling Agent Agreements, each dated as of March 3,
2000, we are offering the notes on a continuous basis through Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Salomon Smith Barney Inc., Morgan Stanley &
Co. Incorporated, Lehman Brothers Inc., J.P. Morgan Securities Inc., Bear,
Stearns & Co. Inc., Warburg Dillon Read LLC, Banc of America Securities LLC and
Chase Securities Inc. who have agreed to use their reasonable best efforts to
solicit orders. We may appoint additional agents to solicit sales of the notes.
Any solicitation and sale of the notes will be on the same terms and conditions
to which the agents have agreed. In addition, we may arrange for the notes to be
sold through other agents, dealers or underwriters or we may sell notes directly
to investors.
Unless otherwise specified in the applicable pricing supplement, we will
pay each agent a commission ranging from .05% to .60% of the initial offering
price of each note sold through that agent, depending upon the Maturity Date of
the note. If we sell notes directly to investors, no commission or discount will
be paid unless otherwise specified in the applicable pricing supplement. We will
have the right to accept orders or reject any proposed purchase in whole or in
part. Each agent will have the right, in its reasonable discretion, to reject
any proposed purchase in whole or in part. We can withdraw, cancel or modify the
offer without notice.
We may also sell notes to any agent as principal for its own account at
a discount equal to the commission the agent would receive if it purchased the
notes as agent, unless otherwise specified in the applicable pricing supplement.
The agent may resell notes to investors and other purchasers at prevailing
market prices as determined by the agent or, if so specified in an applicable
pricing supplement, at a fixed public offering price. In addition, the agents
may offer the notes they have purchased as principal to other dealers. The
agents may sell notes to any dealer at a discount which will not exceed the
discount we paid the agent, unless otherwise specified in the applicable pricing
supplement. After the initial public offering of notes, we may change the public
offering price (for those notes to be resold at a fixed public offering price),
the concession and the discount.
Each agent may be deemed to be an "underwriter" within the meaning of
the Securities Act. We have agreed to indemnify the agents against certain
liabilities, including liabilities under the Securities Act.
The notes will not have an established trading market when issued. We do
not intend to apply for the listing of the notes on any securities exchange. The
agents may make a market in the notes but are not obligated to do so and may
discontinue any market-making at any time without notice. We cannot assure you
that a secondary market for the notes will develop or that any notes will be
sold.
In connection with an offering of notes, the agents may engage in
transactions that stabilize the price of the notes. These transactions may
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the notes. If an agent creates a short position in the notes, i.e.,
if the agent sells notes in an aggregate principal amount exceeding the amount
set forth in the applicable pricing supplement, the agent may reduce that short
position by purchasing notes in the open market. In general, purchases of notes
for the purpose of stabilization or to reduce a short position could cause the
price of the notes to be higher than it might be in the absence of the
purchases.
NEITHER WE NOR ANY OF THE AGENTS MAKES ANY REPRESENTATION OR PREDICTION
AS TO THE DIRECTION OR MAGNITUDE OF ANY EFFECT THAT THE TRANSACTIONS DESCRIBED
IN THE IMMEDIATELY PRECEDING PARAGRAPH MAY HAVE ON THE PRICE OF THE NOTES. IN
ADDITION, NEITHER WE NOR ANY OF THE AGENTS MAKES ANY REPRESENTATION THAT THE
AGENTS WILL ENGAGE IN ANY TRANSACTIONS OR THAT TRANSACTIONS, ONCE COMMENCED,
WILL NOT BE DISCONTINUED WITHOUT NOTICE.
------------------
Dennis Weatherstone, a director of J.P. Morgan & Co. Incorporated, of which
J.P. Morgan Securities Inc. is an indirect, wholly-owned subsidiary, is a
director of General Motors Corporation. In the ordinary course of their
respective businesses, the agents and their affiliates have engaged, and will in
the future engage, in commercial banking and investment banking transactions
with GMAC and certain of our affiliates for which they have received customary
fees and expenses.
LEGAL OPINIONS
The validity of the notes offered in this prospectus will be passed upon
for GMAC by Martin I. Darvick, Esq., Assistant General Counsel of GMAC, and for
the agents by Davis Polk & Wardwell. Mr. Darvick owns shares and holds options
to purchase shares of General Motors Corporation $1-2/3 par value common stock.
Davis Polk & Wardwell acts as counsel to the Executive Compensation Committee of
the Board of Directors of General Motors Corporation and has acted as counsel to
GMAC and certain of its affiliates in various matters.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference from the General Motors Acceptance Corporation Annual Report on Form
10-K have been audited by Deloitte & Touche LLP, independent auditors, as stated
in their report, which is incorporated in this prospectus by reference, and have
been so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
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GMAC FINANCIAL SERVICES
